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New standard on Zero tolerance to corruption will help to unlock potential of Public-Private Partnerships for achieving the Sustainable Development Goals

Published: 23 November 2017

A new standard on zero tolerance to corruption in Public-Private Partnerships (PPPs) developed by UNECE will help to catalyze countries’ efforts to strengthen transparency, accountability and effective governance of investment in public infrastructure and service delivery, which will be key to achieving the Sustainable Development Goals (SDGs).

Corruption constitutes a major barrier to economic development and significantly undermines the implementation of the UN 2030 Agenda for Sustainable Development. It presents a particular challenge to investment in infrastructure, for which the SDGs identify financing in the form of PPPs as essential in order to fill the estimated USD 3.3 trillion per year investment gap worldwide.

OECD estimates that bribery consumes 10.9 per cent of the total transaction value in public procurement globally, while Transparency International has estimated that corruption in construction could add as much as 50 per cent to a project’s cost. It further estimated that 10 to 30 per cent of investment in a publicly funded construction project might be lost through mismanagement or corruption.

The new international standard on zero tolerance to corruption in PPPs adopted at the intergovernmental session of UNECE’s Working Party on PPPs on 22 November 2017 aims to improve governance, reduce risks – and therefore costs – and strengthen trust and accountability in PPP procurement. The standard will not only help to save money but will also foster sustainable partnerships between governments and the private sector.

At this session, National “PPP Units” and infrastructure agencies from 43 countries in Europe, Africa, Asia, Latin America, North America and the Middle East have signed a declaration in support of the SDGs, aiming to ensure transparency, inclusiveness, access, equity and a people-first approach in PPPs, including commitment to the implementation of the standard. Countries further underline the need to ensure the active involvement of multilateral development banks, the private sector, civil society and intergovernmental bodies in advancing its use.

UNECE Executive Secretary Olga Algayerova stated, “Scaling up investment in key infrastructure will be essential to meet the ambitious objectives of the 2030 Agenda for Sustainable Development. Countries’ adoption of the standard on Zero Tolerance to Corruption in PPPs serves as a powerful symbol of their commitment to building sustainable partnerships underpinned by accountability and good governance in the financing of vital public development projects.”

The standard includes principles and recommendations on PPP procurement that can be incorporated within national legal and administrative systems. To facilitate compliance with the standard, governments may consider making its conditions binding and subject to judicial or administrative review for all public and private actors involved, imposing penalties in the case of infringement.

Above all, the standard will help countries put these commitments into action, thanks to a concrete roadmap for implementation providing guidance on tackling corruption and improving effective coordination at all stages of PPP procurement, from the conceptual phases through to bidding, contract finalization and performance monitoring.

The standard’s recommendations have been developed in response to key challenges facing governments in navigating successful PPP procurement, which include among others avoiding conflicts of interest, protecting whistle-blowers, and ensuring compliance with laws and codes of ethics.

The standard comes as the latest development in UNECE’s work to promote “People first” PPPs, which stress the value of social and environmental sustainability considerations in addition to financial criteria in PPP procurement, as well as the need to build capacities to improve project governance and engage a wider range of stakeholders.

The full text of the standard is available at: http://www.unece.org/fileadmin/DAM/ceci/documents/2017/PPP/WP/ECE_CECI_WP_PPP_2017_04-e.pdf

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