International Federation of Consulting Engineers
Session 10: Integrity/Corruption
Dr. Jorge Díaz Padilla
Framework
Framework
 As project delivery turns more
complex, sustainability, quality
and integrity become critical.
 Document harmonisation and
transparency are solid steps to
combat corruption.
 However, sustainable solutions
need to involve all stakeholders.
FIDIC Tools for Integrity Management
The FIDIC Integrity Management System
FIDIC believes that a scalable
approach is the roadmap for
the future of integrity systems
and that alternatives for the
design of an IMS should take
into account the size, capacity
and specific needs of each
company.
The FIDIC Integrity Management System
Part I of the FIMS
Guidelines
(2011)refers to a set
of integrity
management
policies and
principles that
should be adopted
by all firms.
The FIDIC Integrity Management System
 Zero tolerance toward bribery,
extortion, coercion, fraud,
collusion and conflicts of interest.
 Member firms should formulate
and subscribe to an internal
“Code of Conduct”.
 Member firms should develop
and implement their own FIMS.
The FIDIC Integrity Management System
Part II of the FIMS
Guidelines
(draft)explores
various ways that
may be used to
develop an
Integrity
Management
System.
Procedures
The FIDIC Integrity Management System
The scope and
details of the FIMS
procedures will
vary from company
to company and
must be tailored to
the specific needs
of each firm.
Implementing a FIMS
The particular details of a FIDIC
Integrity Management System (FIMS)
will vary for every company but the
general structure will be the same.
Implementing a FIMS
The firm will have to identify the critical
projects with high potential corruption risk that
need to be monitored depending on:
(1) geographical coverage; (2) perceived
corruption; (3) type of client; (4) type of
contract; (5) subcontractors, etc.
Implementing a FIMS
Work Activities Contracting
Corrupt Conducts
Subcontracts Execution
Bribery
Giving or
Engagement of
offering
a corrupt agent
kickbacks to
bidding officers
Giving
facilitation
payments to
client
Collusion
Arranging price
fixing among
project bidders
Fixing
quantities or
unit prices with
contractor
Fraud
Concealing
information
Extortion
Threatening
client regarding
job assignment
Conflict of Interest Bid officer is a
former firm’s
employee
* Illustration
Delivering false Manipulating
credentials for project design
agent
Receiving
threats from
client regarding
future jobs
Existing
relationship
between the
agent and the
client
The FIDIC Integrity Management System
“FIMS light” might
be quite appropriate
for small to medium
size firms that
deliver projects in a
low risk
environment.
The FIDIC Integrity Management System
“FIMS
comprehensive”
might be designed
to be equivalent to
a full flown FCPA or
Bribery Act
Compliance
System.
Contracts
The Rep Agreement
The FIDIC “Model
Representative
Agreement” (2012)
is designed for firms
who engage an
“agent” to develop
business or provide
assistance in a
foreign country.
The Rep Agreement
Clause 15 Anti-Corruption
Sub-Clause 15.1
(a) The Representative hereby represents,
warrants and covenants that it will not
participate, directly or indirectly, in
bribery, extortion, fraud, deception,
collusion, cartels, abuse of power,
embezzlement, trading in influence,
money laundering, or any other criminal
activity.
The Rep Agreement
Clause 15 Anti-Corruption
Sub-Clause 15.2
In conjunction with the requirements
under Sub-Clause 15.1, the
Representative at the Consultant’s
election, shall either:
(a) demonstrate to the satisfaction of the
Consultant, that it adheres to a
documented Code of Conduct and
associated compliance programme; or
The Rep Agreement
Clause 15 Anti-Corruption
Sub-Clause 15.2
(b) Confirm its specific agreement to the
principles of the Consultant’s Integrity
Policy Statement and the Consultant’s
Code of Conduct by confirming annually
in writing throughout the duration of the
Agreement acceptance of the Particular
Conditions.
The MDB Harmonised Contract
Clause 15.2 of the
“MDB Harmonised
Contract” (2011)
entitles the
Employer to
terminate the
Contract if the
Contractor:
The MDB Harmonised Contract
(f) gives or offers to give to any person
any bribe, gift, gratuity, commission or
other thing of value, as an inducement or
reward for: (i) doing or forbearing to do
any action in relation to the Contract, or
(ii) for showing or forbearing to show
favour or disfavour to any person in
relation to the Contract.
The MDB Harmonised Contract
Sub-Clause 15.6
Corrupt or Fraudulent Practices
If the Employer determines, based on
reasonable evidence, that the Contractor
has engaged in corrupt, fraudulent,
collusive or coercive practices, in
competing for or in executing the
Contract, the Employer may terminate
the Contract.
The MDB Harmonised Contract
Sub-Clause 15.6
Corrupt or Fraudulent Practices
Reciprocity and the role of
“Dispute Boards” need to be
reviewed by the MDBs and taken
into account.
Integrity Management at a cross roads
Framework
The Humboldt-Viadrina School of
Governance recently (2012)
applied a global survey on anticorruption incentives and
sanctions to a stakeholder group
from business, the public sector
and members of civil society.
The Humboldt-Viadrina Survey
Key finding:
“92% of respondents agreed that
preferential treatment should be
applied to companies that
demonstrate adherence to anticorruption principles” (e.g. grant
preferred supplier status).
The Humboldt-Viadrina Survey
Key finding:
“73% of respondents agreed that
independent third-party
assurance of a business’ anticorruption program is needed to
grant incentives”.
International Federation of Consulting Engineers
Thank you for your attention