Relaxation of normal monitoring and procurement procedures ups corruption risk.

LATINVEX SPECIAL
The Lawyers Council

The COVID-19 pandemic and resulting economic crisis have led to an unprecedented assertion of power by governments across Latin America and the world. Unfortunately, exceptional or emergency powers intended to expedite crisis response, including as to health services, economic relief, and other critical needs, have also opened up opportunities for abuse that have the potential to significantly setback the fight against corruption. Even though governments have been operating under these exceptions for a relatively short time, in at least 12 of the 14 countries analyzed, there have been allegations of, or announced investigations into, corruption relating to public procurement directly linked to the pandemic response. Indeed, the relaxation of normal monitoring and procurement procedures threatens long-fought-for anti-corruption safeguards.

The reality is that, far from impairing an effective response to crisis, transparency and active monitoring of the allocation of relief funds and procurement activities are critical to an effective use of resources and to preserving public confidence and support in this crisis. Corruption generates or increases distrust of citizens in the government, causing governance problems in a time when complying with governmental edicts can be lifesaving.

Civil society organizations and the media have made public the misuse of resources destined to combat the pandemic, leading to administrative and criminal investigations for corruption. In several countries, corruption cases have resulted in resignations and dismissals of high-level politicians and public officials. The crisis has also presented an opportunity to test the division of powers and checks and balances, both political and judicial. Only in a few countries are the legislative branches acting as an important political counterweight and monitoring the actions of the executive helping to guarantee good governance and clean public spending. Continued vigilance to uncover potential misallocation of funds and commitment to investigating allegations of corruption as they arise will be essential in each of our societies to signal whether there is real political will to continue this essential struggle against corruption.

Despite efforts in the region, it is clear that the mechanisms to combat corruption are insufficient. Most countries in the region already have serious corruption risks, and the fact that relaxing the provisions of public procurement creates immediate spaces for corruption, shows that there are no efficient means to prevent corruption and that many governments have not developed their anti-corruption commitment to a culture of integrity.

The Lawyers Council for Civil and Economic Rights is calling on the legal community throughout the region, including lawyers in the private sector (both law firms and companies), bar associations, pro bono clearinghouses and law schools, to be vigilant and active in support of anti-corruption efforts relating to COVID-19 and to work in support of civil society actors who are leading the fight for transparency and fairness. The legal community can help in many ways including: filing for release of public records; making public statements on the importance of the continued fight against corruption; publishing articles and op-eds; demanding accountability of government leaders and prosecutors; supporting watchdog organizations; and analyzing laws and bidding procedures to make sure that they comply with basic transparency requirements and integrity standards.

INTRODUCTION

On March 11, 2020, the World Health Organization characterized the COVID-19 outbreak as a pandemic. As of May 18, 2020, more than 4.7 million cases of COVID-19 have been reported in 187 countries and regions. On February 26, the pandemic came to Latin America when Brazil confirmed a case in São Paulo.

To limit the spread of the virus, countries across the region have implemented unprecedented actions through executive order and including various regulations and enforcement mechanisms. Particularly in the Global South, where health systems face substantial resource constraints, people are more economically vulnerable, and millions live in densely populated areas, the virus could devastate the developing world and then re-emerge where it was previously brought under control.

Aside from the health crisis, the pandemic also has a large negative economic impact. According to the International Monetary Fund, the economy in the region is expected to suffer an historic contraction in 2020. The World Bank has predicted that the coronavirus is pushing 40-60 million people into extreme poverty. The UN General Assembly recognized in Resolution A/74/L.52, "Global solidarity to fight the coronavirus disease 2019 (COVID-19)," that due to the unprecedented effects of the pandemic, the poorest and most vulnerable are the hardest hit. Indeed, as this crisis lengthens, early estimates of harm appear likely to substantially understate the costs and resulting human suffering.

In response, governments throughout the region, as in the rest of the world, have sought exceptional or emergency powers to expedite administrative decision-making, including providing health services, economic relief, and other critical needs. These emergency powers often bypass procurement rules and other standard processes to make exceptional use of public resources, creating imminent risks of increased corruption and waste of public resources in the midst of the response to the pandemic.

Civil society organizations in the region have expressed concern about the corruption risks, as the government's extraordinary powers threaten misuse of funds and setbacks in the fight against corruption. Transparency International (TI) has warned that emergency legislation often allows governments to bypass the usual checks and balances on public spending." TI's Corruption Perceptions Index 2019 stated that the Americas region has failed to make significant progress in the fight against corruption, particularly as the region faces significant challenges from political leaders acting in their self-interest at the expense of the citizens they serve. The Inter-American Commission on Human Rights (IACHR) has expressed its concern for the situation of corruption and impunity in the region. According to the AICHR's Report on Corruption and Human Rights, corruption affects the enjoyment and exercise of human rights and increases inequality.

We believe that maintaining or adapting existing anti-corruption measures or creating new measures where inadequate is crucial to ensure that the government response is effective. While corruption risks always exist, the costs of these risks are higher during the emergency as already limited public resources are syphoned off due to corruption. In times of crisis our civil and economic rights are most at risk, and especially of those among us who are most vulnerable.

Recommendations to the legal community

The struggle for good government and against corruption is a central challenge in the world and transcends political or ideological differences. As professionals trained to uphold the law and committed to the administration of justice, lawyers have a unique role in combatting corruption. The Lawyers Council urges and encourages members of the legal community in the region, including the private legal sector, bar associations, clearinghouses, and law schools, to engage in critical efforts to initiate or reinforce initiatives combating corruption. These efforts might include:

1) Utilize public information rights to file requests for release of public records as to governmental decisions made in the context of the pandemic, particularly decisions related to public spending. Demanding accountability of government leaders and prosecutors, analyzing and publishing information about which of and how these resources are being spent is particularly important where governments fail to assure such transparency.

2) Make public statements, publish articles and op-eds to defend the progress made in transparency and other mechanisms to prevent corruption, as well as demanding accountability from the government, including calling for inspection, ombudsperson and audit bodies, as well as special prosecutors, to receive the resources required. Additionally, it is important to assure that investigations and prosecutions not related to the pandemic continue to be vigorously pursued.

3) Encourage and support citizens to report any corruption or unethical practices. The private legal sector has a legitimate role to support its clients to update corruption risks assessment maps to prevent acts such as bribery and collusion during the emergency.

4) Analyze laws, regulations, and bidding procedures to make sure that they comply with international standards, including open government and transparency principles, as well as integrity and anti-corruption standards.

5) Support the work of civil society organizations and the media. Supporting watchdog organizations includes not only activating the national, regional, and international mechanisms to guarantee the exercise of freedom of association and freedom of expression, but also providing legal support to specific anti-corruption efforts. The legal community should defend the press, protecting against attacks from governments and other actors.

Integrity and anti-corruption recommendations

In relation to anti-corruption generally and specifically in the context of the pandemic, the Lawyers Council recommends critical policy focus on the following:

1) Transparency and Access to Information. Emergency powers and exceptions to the law do not require or justify rescinding or suspending laws and regulations requiring transparency. On the contrary, transparency and access to information are the most critical components in combating corruption and, especially at this time, it is essential to implement and assure measures of enhanced transparency in accordance with open government practices, including open data, plain and understandable language and accessible location of the information. Governments in the region must provide clear, consistent, and accurate information on decisions made in the context of the pandemic, particularly decisions related to public spending. A specific website for this purpose is recommended. Lawyers should hold government accountable if it fails to assure this basic foundation of good government.

2) Integrity and Transparency in Procurement Practices. To maintain public confidence in the use of the resources allocated to prevent the COVID-19 spread and alleviate the crisis, the governments should put in place tailored mechanisms to monitor contracting and procurement around COVID-19 response effort. Governments, often encouraged by the private sector, will use a crisis to shift from electronic bidding requirements to direct contracting. Crisis response requires rapid decisions but procedures can be adjusted while still assuring integrity in procurement. These mechanisms include controls to: prevent and avoid conflicts of interest; publicize information regarding the ultimate beneficial ownership of the suppliers of the goods and services; update corruption risks assessment maps; conduct a real-time review of the use of the resources by inspection and audit bodies; and provide training for public officials on early warning signs to detect corruption cases.

3) Citizen Watchdogs and Whistleblowers. The governments should encourage citizens to report any corruption or unethical practices, and, to protect responsible citizens, to implement whistleblowing channels, confidentiality and protection, as well as incentive schemes for whistleblowers. Each citizen has a responsibility to be vigilant to help assure a more just and virtuous government and society.

The Lawyers Council expresses its solidarity with those who have fallen ill or who are otherwise suffering as a result of the COVID-19 pandemic. In a time of momentous and tragic events that strain individual and societal resources, it is imperative that lawyers work to preserve hard-earned rights and fragile gains in the struggle against corruption. A crisis of this scale, scope and duration is likely to yield meaningful changes in our societies. It is up to each of us to work to assure that changes in governance should be for the advancement of the common good.

Excerpt from Corruption In Times Of Covid-19: A Regional Perspective On Public Procurement, a new report by The Lawyers Council for Civil and Economic Rights at The Vance Center. Republished with permission.

EDITOR’S NOTE: The full report provides a detailed country-by-country breakdown for Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Mexico, Panama, Peru, Uruguay, Venezuela and the United States with input from local law firms (Shearman & Sterling and Simpson Thacher from the United States).

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