23/01/2020 - Governance | Mainstorming

IAS Parliament 5 years

KEY POINTS

· The Integrity Pact is an agreement between the contracting government agency and private companies that they will abstain from bribery and ensure accountability through a monitor.

· Defence contracts can be a touchstone to examine the efficacy of the IP, as it is necessary for all procurements of and above Rs 100 crore.

· Oaths are private behaviour that are impossible to detect in a bribery-conducive environment. This reduces the IP as a window-dressing for the benefit of a third party.

· If someone is willing to commit a crime, then breaking one’s word by signing an honesty pledge and not abiding by it is a minor inconvenience. This is the central credibility problem of the IP.

· In highly-corrupt environments where it is an impossibility to win a contract without bribery, alongside a low probability of detection of bribery and/or low penalties for bribery, an IP serves no useful purpose.

· In February 2010, the Indian government contracted to purchase 12 AgustaWestland AW101 helicopters for the Indian Air Force (IAF).

· In 2014, India cancelled the AgustaWestland chopper deal on the ground that they violated the IP.

· If the IP had been an effective instrument, the monitor should have raised the red flag when the IAF changed the technical specification of the tender to enable AgustaWestland to re-enter the bidding process.

· Furthermore, when India cancelled the deal in January 2014 for the breach of the IP by AgustaWestland, the latter challenged the cancellation through the launch of an arbitration against India.

· The amended Prevention of Corruption Act (PCA), 1988, which penalises the supply side of corruption (the private sector), also renders the IP infructuous.

· Section 9 of the amended PCA penalises commercial organisations for bribing public servants for obtaining/retaining business or an advantage in the conduct of business.