Putting It In Context - Commonwealth Caribbean Procurement Law

Governing Principles & Common Themes
CARICOM Perspective

‘Putting it in Context’
MARGARET ROSE
Executive Director
Caribbean Procurement Institute

Presentation Summary

 Sources of Procurement Law
 Hard & Soft Law
 Preventative & Punitive Law
 Public & Private Law
 International Treaties & Conventions
 Multi-lateral and Bilateral Investment Treaties (BITS)
 CARIFORUM EC EPA – Chapter III
 CARICOM Draft Framework for Integration of Public Procurement
Policy (FRIP)
 National Procurement Frameworks

.

Materials included in Conference Package – CD ROM

Topic will be dealt with in greater detail over the course of the next five days

Defining Procurement Law ….

Procurement Law is the composite of the rules, regulations,
guidelines and policies emanating from international, multilateral
and bilateral agreements, statutes, administrative guidelines and
codes governing the process by which goods, works and services
are acquired.

Putting it in Context..
 Identifying the nature, scope and application of the
rules, regulations, guidelines, codes and best
practices

 Identifying regional and national relevance

Distinguishing Soft Law and Hard Law..
SOFT LAW – Rules, guidelines, commitments and
commitments which are not legally binding

HARD LAW
- Binding Laws - To constitute law, a rule, instrument or
decision decision must be authoritative and prescriptive.

Soft Law ..
 Some UN General Assembly Resolutions and
Declarations
 Policy statements, principles, objectives,
 Guidelines, standards,
 Some administrative codes
 Action plans
 Some Case Law

Hard Law ..
 Treaties & BITs (also known as conventions or international
agreements)
 UN Security Council Resolutions
 Customary international rules
 Statutes
 Regulations
 Some Case Law

Soft Procurement Law..
 UN Model Law on Procurement of Goods, Works
and Services (UNCITRAL)
 World Bank, IDB Procurement Rules & Guidelines
in non-WB/IDB funded projects
 National Procurement Policies & Guidelines
 Internal Corporate Procurement Policies &
Guidelines
 Some „best practices‟ e.g. – three quote rule

Hard Procurement Law ..
 World Trade Oganization - Government Procurement Agreement
(WTO-GPA) for signatory countries
 Procurement Rules in BITs
 WB/IDB Rules on WB/IDB Funded Projects
 Procurement Statutes
 Procurement Regulations
 Commonwealth Case Law

Distinguishing Preventative & Punitive
Law..
Preventative Law – Rules governing the process
i.e. the manner in which something is done

Punitive Law
Rules imposing sanctions for conduct

Preventative Procurement Law..

 Institutional & Process Rules (how an
organization buys)
 Discretion limiting Requirements
(Demand side only)
 Codes of Conduct & Ethics Programmes
 Transparency Requirements

Institutional & Process Rules
This approach is based on the rationale that where procurement
personnel have too much leeway in performing their tasks and
making decisions the opportunity is created for corrupt acts.
Some of the approaches here include:
 staff rotation,
 separation of functions,
 standardization of rules and procedures,
 internal and external audits
 four eye principle.

Discretion Limiting Requirements
This is characterized by the limiting of subjective criteria (eg, use of
past performance of contractors). Fears that performance evaluations
might be subjective and therefore less susceptible to review make it
easier to make improper decisions. It should be noted that this could
have negative effects on quality since

(1) one cannot take advantage of sometimes very useful
knowledge of the performance of one contractor vs.
another and

(2) it can even operate as a disincentive for good performance since contractors
will have limited interest in achieving same if they know it will not be taken into
consideration in the future.

Codes of Conduct & Ethics Programmes

 Creation of integrity systems which establish values and provide guidance
where rules are lacking. Ethics training can help in communicating conflicts of
interests unique to specific industries, countries and cultures. It fosters an
atmosphere of transparency and stewardship among an institution‟s employees.

 Compliance industry has escalated in the last decade spawning
companies and consultants charging high fees to assist organizations in
establishing an ethical culture.

 In addition professional associations have established integrity systems
and codes of ethics for their members (for example see the FIDIC Business Integrity Management
System (BIMS), CAPP Code of Conduct).

Codes of Conduct & Ethics Programmes

 Statutory Codes of Conduct/Integrity Legislation

 Too early to measure the effectiveness of these responses –
see the example of ENRON which scored high for its ethics
management prior to its collapse (EIRIS 2005).

 Note as well the paradoxical effect of ethics training and
anti-corruption codes on corporate criminal liability

Access Regimes

Freedom of Information (FOI) and Access To Information (ATI)
Legislation also called “right to know” legislation.

Provisions based on:
 principles of disclosure
 promoting a culture of openness
 limited exemptions
 records management
 and a right of review

Access Regimes

CARICOM member States which have implemented
access regimes:

 Belize – Freedom of Information Act 1994
 Trinidad and Tobago – Freedom of Information Act 1999
 Jamaica – Access to Information Act 2002
 Antigua & Barbuda – Freedom of Information Act 2004
 Guyana – Access to Information 2011 (17th September)

See also US FOIA1966 & Electronic FOIA1996; Australia ATI1982; Canada ATI1983; UK
FOI2000

Punitive Procurement Law..

 This is the primary approach to anti-corruption reform and
is based on the increasing of rules, penalties for
wrongdoing and strengthening detection methods and
enforcement mechanisms.


 The philosophy behind this approach is that corrupt actors
are fully rational and opt for criminal behaviour when the
expected benefit exceeds the sanction multiplied by the
probability of being convicted. It is argued that even if this
formula is imperfect it promises to capture the incentives
motivating the vast majority of corrupt actors.


When :
Sanction x Probability of Detection < Benefit
= Corruption

 When one considers the high degree of sophistication, skills
and long term planning necessary to engage in bribery, fraud and
embezzlement, it seems supportive of the contention that the
offences are more rational than emotional or passionate.


 Criminal Offences – Bribery, Extortion, Collusion,
Bid-rigging, Fraud, Embezzlement, Money Laundering

 All Commonwealth Caribbean territories criminalize these
offences either through the application of UK Common Law or
Statute

Prevention of Corruption Acts
 Antigua & Barbuda
 Bahamas
 Belize
 Grenada
 Jamaica
 Trinidad and Tobago

Integrity in Public Life Legislation
 Belize
 Grenada
 Guyana
 Dominica

Proceeds of Crime & Money Laundering Legislation
 Bahamas
 Barbados
 Belize
 Dominica
 Guyana
 Jamaica
 St.Kitts & Nevis


Major International Anti-Corruption Treaties and Conventions
The Inter-American Convention against Corruption (IACAC),
Organisation of American States, March 1997

Convention on Combating Bribery of Foreign Public Officials
in International Business Transactions, OECD, February 1999

Criminal Law Convention on Corruption, Council of
Europe (COE) July 2002

Convention Against Corruption (UNCAC), UN, December 2005;

Convention on Preventing and Combating Corruption,
African Union (AU), August 2006


Major International Anti-Corruption Treaties and Conventions

All CARICOM nations are members of the Organization of American States (OAS) and of the
United Nations (UN)

The Inter-American Convention against Corruption (IACAC),
Organization of American States, March 1997

Most have signed and ratified IACAC

 Convention Against Corruption (UNCAC), UN, December 2005

Few CARICOM members have joined. In fact, as of May 2007, only Barbados, Haiti,
Jamaica and Trinidad & Tobago had signed the UNCAC and only Trinidad & Tobago
and Jamaica had ratified it.

Distinguishing Public Law and Private Law

Public Law – Rules governing relationship
between the private citizen and the State

Private Law
Rules governing relationships between private citizens

Public Procurement Law...

 Public International Law (Treaty Obligations &
Commitments)
 National Procurement/Corruption/
Access legislation
 Judicial Review
 Constitutional Law

Private Procurement Law...
Common Law of Competitive Bidding

 Contract
 Implied Tender Contract Doctrine

 Tort
 Negligent Misrepresentation
 Misfeasance in Public Office
 Deceit
 Conspiracy

 Protection of Reliance Interests
 Estoppel
 Good Faith Bargaining


 Public International Law

 WTO – GPA
 UN Model Law on the Procurement of Goods, Works
& Services (UNCITRAL)
 CARIFORUM EC EPA
 CARICOM Draft FRIP


 National Procurement Law

 Trinidad and Tobago, Barbados & OECS
 Guyana
 Jamaica & Belize


 Judicial Review

 Natural Justice
 Illegal, Irrational, Unreasonable, Unfair decisions
 Legitimate Expectations


 Constitutional Law

 Right to Equality before the Law – Non Discrimination
 Note alternatively Equal Opportunities legislation and duty of
non-discrimination on the grounds of race, religion, gender etc. Note
as well the interplay between UK Race Equality Act 2000 and Public Procurement Policy.
 Right to Equality of Treatment from a Public Authority
 See sections 4(b) and (d) of the Republican Constitution of Trinidad and Tobago 1976
 Note all Commonwealth Caribbean territories have similar constitutional provisions


Constitutional Law – Equality of Treatment
 The principle of equality of treatment requires that public
authorities take all the measures necessary to ensure that all
tenderers are treated in an equal manner.

 This requires that similar situations shall not be treated differently
unless differentiation is objectively justified.
 Specialists
 Compatibility
 Incumbency

 Public Contracting authorities are therefore bound to ensure that all
applicants in a tendering procedure are aware of the rules in advance and are
obliged to apply the rules to each applicant in the same way.

 No Commonwealth Caribbean jurisprudence yet on the point

 The ECJ (European Court of Justice) has held that the duty to observe the principle of equal treatment of tenderers is
fundamental to the public procurement rules.

 The ECJ has also held that the principle of equality of treatment and the transparency of the procurement procedure is
breached when an awarding entity takes account of changes to the initial offers of one tenderer who thereby obtains an
advantage over his competitors.

Public International Law

Two Modalities for PP Policy in International
Agreements

 Transparency
 Non-Discrimination/National Treatment

WTO – GPA

 The WTO Agreement on Government Procurement
(WTO-GPA) came into force at the conclusion of the
Uruguay Round of multilateral trade negotiations in
1994 and seeks to provide an international legal
framework for the liberalization and governance of public procurement markets.

 Full Text Available for Download at www.wto.org

WTO – GPA Main Elements
Deals with both modalities :

 Guarantees of National Treatment and Non-Discrimination
for the suppliers of Parties to the Agreement with respect to
procurement of covered goods, services and construction
services as set out in each Party‟s schedules and subject to various exceptions and
exclusions noted therein;
 Detailed requirements regarding Transparency and procedural aspects of the
procurement process, in general, designed to ensure that covered procurement
under the Agreement is carried out in a transparent and competitive manner that
does not discriminate against the goods, services or suppliers of other Parties;

 Additional requirements regarding transparency of
procurement-related information;
 Provisions regarding modifications and rectifications of
Parties‟ coverage commitments;
 Requirements regarding the availability and nature of
domestic review procedures for supplier challenges which
must be put in place by all Parties to the Agreement;
 Provisions regarding the application of the WTO Dispute Settlement Understanding in
this area
 Provisions regarding accession to the Agreement and the availability of Special and
Differential Treatment for Developing and Least Developed Countries; and
 A “built-in-agenda” for improvement of the Agreement, extension of coverage and
elimination of remaining discriminatory measures through further negotiations


 Currently forty (40) WTO Members are covered. These
comprise Canada, the European Community (27 member states),
Hong Kong, China, Iceland, Israel, Japan, Korea Liechtenstein,
the Netherlands including Aruba, Norway, Singapore, Switzerland
and the United States.

 Twenty (20) other WTO Members have observer status :
Albania, Argentina, Australia, Cameroon, Chile, China, Columbia,
Croatia, Georgia, Jordon, the Kyrgyz Republic, Moldova, Mongolia,
Oman, Panama, Saudi Arabia, Sri Lanka, Chinese Taipei and Turkey.

 Four (4) intergovernmental organisations also have observer status: the International Monetary Fund (IMF), the
Organization for Economic Co-operation and Development (OECD), the United Nations Conference on Trade and
Development (UNCTAD) and the International Trade Centre (ITC).

 At present, there are eight (8) WTO Members which are in the process of acceding to the GPA: Albania, Georgia,
Jordon, the Kyrgyz Republic, Moldova, Oman, Panama and Chinese Taipei.

 Note Limited execution by ACP Developing States

WTO – GPA
SOFT LAW
OR
HARD LAW?

WTO – GPA

Preventative Law
OR
Punitive Law?

WTO – GPA

Public Law
OR
Private Law?

UN Model Law on Procurement - Main Elements

 Provides a Model regulatory framework for Public
Procurement which states can elect to adopt

 Covers scope (Articles 1-3), qualifications (Articles 6-8),
specifications (Article 16), procurement methods and their
operation (Articles 18-51), and review (Articles 52-57)

 Does not deal with planning, feasibility and budgeting phase OR post award phase,
contract administration or implementation

 1994 Model Law did not expressly provide for electronic reverse auctions, supplier
lists, framework agreements, competitive dialogue

UN Model Law on Procurement - Main Elements

The 2011 Model Law replaces the 1994 UNCITRAL Model
Law on Procurement of Goods, Construction and Services.
While the 1994 text was recognized as an important
international benchmark in procurement law reform, in 2004,
the Commission agreed that the 1994 Model Law would
benefit from being updated to reflect new practices, in particular those resulting from the
use of electronic communications in public procurement, and the experience gained in
the use of that Model Law as a basis for law reform. Nonetheless, the principles and
main procedures from the 1994 text, the foundation of its success, have not been
changed.
- Both the 1994 and 2011 Full Texts included in CD Rom Materials

Public Procurement Frameworks Based on
UN Model Law

 Central and Eastern European Countries : Poland, Albania,
the Slovak Republic, Kosovo;
 Former Soviet Union countries: Russia, Estonia, Georgia,
Azerbaijan, Lativia, Kazakhstan, the Kyrgyz Republic;
 African States : Uganda, Kenya, Tanzania, Nigeria, Ghana, Malawi, Ethiopia;
 Caribbean : Guyana
 Draft FRIP is expressed to be based in part on the UNCITRAL Model Law 1994
 NOTE: NO DEVELOPED COUNTRIES – only developing and transition economies

UN Model Law
SOFT LAW
OR
HARD LAW?

UN Model Law

Preventative Law
OR
Punitive Law?

UN Model Law

Public Law
OR
Private Law?

CARIFORUM EC EPA 2008
Title IV Chapter III Public Procurement

 Landmark Treaty in the history of Euro-ACP
Relations.

 First Euro-ACP Multi-Lateral Agreement
dealing with public procurement

 CRNM asserts that the provisions are Transparency provisions only and do not allow
for National Treatment and Non-Discrimination (Argument – to be used as a driver for
national reform initiatives).

 However see Article 167.1.2 which obliges parties not to discriminate against foreign
companies that have a commercial presence in a CARIFORUM State and as such
qualify as a domestic company for public procurement bids.


Transparency Provisions Article 168 :

 Member States to publish any law, regulation, judicial
decision and administrative ruling, and procedures regarding procurement
 Covered Procuring Entities to disseminate effectively all covered tendering
opportunities, providing all eligible suppliers with all necessary information required to
take part in such procurement


Transparency Provisions Article 168 :

 Covered entities are required to publish Notice of Intended
Procurement. Each notice must be accessible during the entire time period established for
tendering for the relevant procurement

 Procuring entities encouraged to publish as early as possible in each fiscal year a notice
regarding their future procurement plans. Notice should include the subject matter of the
procurement and the planned date of the publication of the Notice of intended procurement

 Utilities can rely on the publishing of the annual Notice as a Notice of Intended Procurement
provided that it includes all the relevant information


Other Relevant Provisions:
 Does not regulate choice of procurement method - Article 169

 Allows selective tendering Article 170 and limited/sole select tendering Article 171

 Provides for technical specifications Article 173

 Guidance on Qualification of Suppliers, allows multi use and supplier lists Article 174


Other Relevant Provisions:

 Allows negotiated procurement formats - Article 175

 Provides for award of tender to the supplier who has been determined on the basis of the
information presented to be fully capable of undertaking the contract and whose tender is
either the lowest tender or the tender which in terms of the specific evaluation criteria set
forth in the notice or tender documentation is determined to be the “most advantageous”.
Allows for non award in the public interest but awards “shall” be made in accordance with
the criteria and essential requirements specified in the notice of intended procurement or in
the tender documentation. Article 176 - Note alignment with contract a modality.

 Provides for the establishment of a bid review process. - Article 179


Note Limitations :

 Coverage
 Thresholds

International and regional frameworks for public procurement reform will not necessarily
foster greater accountability and good governance in public procurement.

CARIFORUM EC EPA
SOFT LAW
OR
HARD LAW?

CARIFORUM EC EPA

Preventative Law
OR
Punitive Law?

CARIFORUM EC EPA

Public Law
OR
Private Law?

CARICOM DRAFT FRAMEWORK for the
INTEGRATION OF PUBLIC PROCUREMENT
POLICY – Legal Basis :

 Article 239 of the Revised Treaty of Chaguaramas establishing
the Caribbean Community and Caribbean Single Market and Economy
(CSME) 2001 provides the justification for the establishment of the
regional procurement protocol. The Article obliges Member States “to elaborate….. a
Government Procurement Protocol”.

 That this is essential for the objectives of the CSME to be achieved is unquestioned.


IDB/CIDA/CARICOM Procurement Reform Project

 In 2003 the CARICOM Secretariat commissioned a Project with a
grant from the IDB and CIDA to support CARICOM in its efforts
(i) to establish an effective regional regime for Public
Procurement which would facilitate the full implementation of the CSME and
(ii) to participate effectively in external trade negotiations relating to Public
Procurement.

Project Components

 There were three main components of the project
identified

Component 1 National Government Procurement
Frameworks: Analysis, Comparison and Recommended Improvements

Component 2 Collection and Analysis of Government Procurement
Statistics; and

Component 3 Recommendations for a Regional Best-practice
Regime for Government Procurement.


Project Findings

 Competitive public procurement regimes in the CARICOM Member
States are in a disarray and dysfunctional

 Public Procurement accounts for a significant percentage of public expenditure

 In 2003, 14 of the 15 CARICOM Member States ranked in the top 30 of the World‟s
highly indebted emerging market economies (Guyana, St. Kitts & Nevis, Jamaica,
Antigua and Barbuda, Dominica, Grenada and Belize were in the top ten). In 2010,
Bahamas, Barbados and Trinidad and Tobago were the only ones exempt.


Project Findings

 The current legislation governing procurement in CARICOM Member
States is made up of poorly coordinated and outdated enactments,
regulations and decrees – (Trinidad and Tobago and OECS territories
contrast Jamaica, Belize and Guyana)

 The weakness of legislation and/or their enforcement breeds many abusive and
manipulative practices in public procurement

 Enforcement of procurement rules is extremely weak and sometimes non-existent due
to the absence of a single regulatory authority


Project Findings

 The rights of bidders are not adequately protected
 Capacity to conduct procurement is extremely weak
 Internal and external procurement controls are inadequate
 Procurement related corruption is a major problem
 Due to small size of individual economies, the private sector actively seeks public
procurement opportunities, albeit with little or no confidence in the integrity of the
public procurement system
 Public Procurement is severely under-developed and rated as high risk
 The general conclusion was that the present procurement regimes are counter
productive towards the efforts of CSME

Draft FRIP

 In 2005 the First Draft of the Regional Protocol was concluded and
disseminated to Member States

 After consultation with Member States in 2006 the Second Draft of the Regional
Protocol was concluded at we are presently now at the stage of the Third Draft

 The Draft Protocol is primarily based on the 1994 UNCITRAL Model Law and the
Policy recommends that all CARICOM Member States consider enacting national
public procurement laws/Acts based on the UNCITRAL Model Law

 In 2010 the Fourth Draft was concluded, negotiations ongoing on the issue of
thresholds


National Procurement Frameworks in
Commonwealth Caribbean

 Trinidad and Tobago, Barbados & OECS
 Jamaica & Belize
 Guyana

Public Procurement Law…
Trinidad and Tobago, Barbados & OECS

 Multiplicity of legal texts, outdated Central Tenders Board
Frameworks, Finance & Audit Acts
 Many Public Entities operating outside statutory frameworks
(Note in TT in particular)
 Reform Efforts underway

Trinidad and Tobago, Barbados & OECS – Reform Efforts

 Antigua and Barbuda – procurement bill before Parliament 2011;
 Barbados – Draft legislation and standard bid documents;
 Dominica- Draft legislation before cabinet since 2007; 2010, 2011
 Grenada- Draft legislation taken to Cabinet on multiple occasions. It is currently being revised;
 Saint Lucia – Procurement Strategic Plan in place – 2007, 2011 Procurement bill revised and
before cabinet;
 St. Kitts and Nevis – Procurement Act in Draft
 Montserrat - New draft Procurement Act
 Trinidad and Tobago – Public Procurement & Disposal of Property Bill 2010 and National Tenders
Board Bill 1997 currently before Joint Select Parliamentary Committee. Note PP & DP Based on
the White Paper on Reform of Public Sector Procurement 2004 – Principle Model. Note
eProcurement and use of P3 models fairly well established in public sector.
 Note OECS PPS and OECS EGRIP Programmes

Jamaica & Belize

 Institutional Reform Model (eschewed in the White Paper 2004)
 Establishment of Contractor General Office – Independent Commission reporting to Parliament
(not Cabinet). Jamaica Contractor General Act 1983 (For full text See
http://www.ocg.gov.jm/ocg/contractor_general_act.php ; Belize Contractor General Act 2000.
 Powers to monitor, have access to records, investigate and suspend processes.
 Note New Public Procurement Regulations passed in Jamaica 2008
 Note Jamaica developing eProcurement and professional qualification for staff.

Guyana

 Guyana Constitution was amended in 2000 to provide for a
Public Procurement Commission. The Procurement Act 2003 followed.

 The Commission is tasked with a number of functions, including investigating
complaints from both bidders and public entities, proposing remedial action in this
connection and enforcing remedies using powers to be invested by Parliament.

 The regime includes a Public Procurement Commission Tribunal created to hear
appeals against decisions of the Commission. Further appeals lie to the Court of
Appeal. There is a secretariat to help carry out its functions.

.

For your attention
THANK YOU!

Putting It In Context - Commonwealth Caribbean Procurement Law

Recomendados

Recomendados

Más contenido relacionado

Similar a Putting It In Context - Commonwealth Caribbean Procurement Law

Similar a Putting It In Context - Commonwealth Caribbean Procurement Law (20)

Putting It In Context - Commonwealth Caribbean Procurement Law