Within the framework of the prevention and fight against corruption, the National Directorate of Public Procurement (the “DNCP”) approved on June 24 the integrity and compliance policy in the field of public contracting (the “Policy”), addressed to State institutions and agencies -including municipalities- as well as private sector companies.
Through this Policy, which proposes the implementation of plans, programs and actions, the entire national public procurement system seeks to ensure that the following are guaranteed in all public procurement procedures:
1- Prevention and detection of use of irregular financial resources in the execution of public contracts, including all forms of money laundering.
Every party involved in a public contracting process must demonstrate that their assets do not come from any illicit activity, including but not limited to money or property laundering, financing of terrorism. Also, it must be ensured that resources received upon execution of public contracts are not used for illicit activities.
2- Promotion of the implementation of business compliance programs (compliance) and Good Corporate Governance and consolidation of a contracting policy for the private sector.
Creation and maintenance of a Risk Management and Internal Control System should be addressed in order to identify and mitigate risks related to corruption and fraud in public contracting, oriented towards a more sustainable, ethical and responsible way of contracting.
According to the provisions of the Policy, the compliance management system should not be limited only to establish a model for the prevention of crimes and/or money laundering, as it also must include the monitoring of all commitments undertaken by bidders.
3- Information transparency.
Mechanisms and tools will be promoted, encouraged and designed to ensure:
- i) Honesty in the exchange of information (prohibited acts such as forgery, disclosure of privileged information by public officials to bidders, attempts by a bidder to unduly influence the decision-making process of the convener, obtaining confidential information that may confer undue advantages in the contracting procedure, among others).
- ii) The traceability and transparency of decision-making in public contracting procedures, promoting the signing of integrity agreements, anti-corruption clauses in contracts and transparency.
4- Prevention, detection and effective solution of conflicts of interest in the relationships between private sector parties and public officials.
Special attention should be paid to:
- i) Non-involvement in any conflict of interest or situations that appear to become a potential conflict of interest on the part of the public servant and the party from the private sector participating in the public contracting procedure.
- ii) Integrity in dealing with public officials, expressly prohibiting any promise, offering or reward to them, as well as significant gifts or benefits that may give rise to a conflict of interest.
iii) Timely and adequate disclosure of any conflicts of interest circumstance.
5- Promotion of fair competition.
Anti-competitive practices must be prevented, avoiding the participation of bidders in the contracting procedures, and signing of anti-competitive agreements aimed at undermining free competition to obtain undue benefits.
This Policy, whose implementation will be led by the DNCP, is aligned with the United Nations Convention against Corruption (UNCAC), which calls on each State Party to promote and strengthen measures to prevent and fight corruption in the public and private sectors, the United Nations 2030 Sustainable Development Goals and the National Plan for Integrity, Transparency and Anticorruption (PNI 2021-2025).
In addition, a public supply and contracting bill is currently under study at the National Congress which would replace the current Law No. 2051/2003 on Public Contracting and could include certain issues related to integrity and anti-corruption in public contracting.
For more information, you may contact
Adriana Ocampos (adriana.ocampos@berke.com.py) and/or Martin Carlevaro (martin.carlevaro@berke.com.py).
