WRITTEN QUESTION E-0619/98 by Gijs de Vries (ELDR) to the Commission (9 March 1998)

Subject: Fighting corruption in international public procurement

Corruption tends to play a role in the award of contracts for public sector infrastructure in developing countries. Companies sometimes are reluctant to desist from offering bribes for fear of losing contracts to competitors.

Corruption could be dealt a serious blow if EU Member States were to agree that certain classes of sales would be subjected to supervised competitive bidding practices. Under these procedures, the World Bank, for example, could be asked to supervise open competitive bidding for all sales supported by EU export credit and guarantee agencies in certain agreed project categories. The Bank already has in-house expertise in handling such procedures for Bank-funded projects and could develop a fee-based service for export credit agencies. Similar screening arrangements could be envisaged for direct suppliers of equipment and services to public sector projects.

In the interest of good governance, fair competition, and the fight against international crime, will the Commission explore the is idea - supported by the Intergovernmental Group of Twenty-Four on International Monetary Affairs - with the EU Member States?

Answer given by Mrs Gradin on behalf of the Commission (19 May 1998)

The Commission in its communication of 21 May 1997 on a Union policy against corruption ((COM(97) 192 final. )) advocated a comprehensive anti-corruption strategy covering areas such as public procurement, tax deductibility for bribes, financial transactions, blacklisting and external aid and cooperation.

The Commission has been discussing with the World Bank ways to work together to combat corruption in the context of assistance to third countries. The Commission and the World Bank share the view that corruption is a systemic problem that needs to be addressed at various levels, including procurement practices. The Commission is currently in the process of identifying countries in Africa and in Central and Eastern Europe where it could co-operate more actively in tackling corruption.

The Commission, in its communication of 11 March 1998 on public procurement ((COM(98) 143 final. )), has undertaken to ensure that external aid contracts financed from Community resources, as well as those established within the framework of bilateral or regional agreements concluded by the Union are awarded by recipient countries in the best possible respect of Community rules on procurement.

Conventional instruments, various conventions, protocols and regulations set certain standards of protection against fraud and corruption when the Community's interests are involved. These standards constitute an important element of reference when these issues are discussed with third countries, in particular in the context of 'good governance'.

A multilateral working group of the World trade organisation is discussing certain aspects of public procurement with a view to a binding multilateral agreement providing for transparent procurement policy and practices which would greatly enhance the fight against corruption in the award of procurement contracts.

The Organisation for economic co-operation and development (OECD) export credit working group, in which all Member States and the Commission participate, holds discussions concerning the manner in which the OECD Convention on combating bribery of foreign public officials in international business transactions will be applied to the provision of export credits.