The United Nations spends more than $773 million on air services, worldwide, in a year. Seven-hundred-and-seventy-three million dollars! Can you imagine the issues U.N. procurement officers face in acquiring goods worth that much money? In so many diverse markets (the U.S through Estonia and Rwanda to Kenya and Western Sahara), dealing with so many wildly-different providers, suppliers and cultures.

Of course, the United Nations has robust, dynamic procurement regimes and constantly reviews the processes, oversight, guidelines, operations and reality of its procurement. Still, despite the enormous good the organisation does, sometimes, things do go wrong, including bribery allegations, sex scandals (prompting the Secretary General, Ban Ki-moon, to describe the numerous sexual abuse scandals reported over the last few years as “a cancer in our system”), and talk of fraud on a massive scale.

The U.N guidebook on anti-corruption in public procurement starts out: “Implementing an effective public procurement system based on transparency, competition and integrity is not simple. A procurement system that lacks transparency and competition is the ideal breeding ground for corrupt behaviour and thus most important international codes on anti-corruption and public procurement rest heavily upon these fundamental principles, in order to discourage corruption.”

This guidebook cites case studies on subjects such as the use of ‘electronic government procurement to fight corruption in Georgia’, and ‘social witnesses in the area of public procurement in Mexico’.

For many years procurement was considered a transaction-oriented back-office function, and was often fragmented and managed in a haphazard manner.
– United Nations Joint Inspection Unit

Anti-corruption is also a big part of the United Nations Global Compact, which is helping alter perceptions, practices and outcomes around the world. More than a decade ago, the United Nations Global Compact operational phase started, with world business leaders being challenged to “embrace and enact” the Global Compact, both in their individual corporate practices and by supporting appropriate public policies to advance the U.N’s sustainable development goals.

This Global Compact reminds me a bit of the starfish story. A man walking on the beach saw a young boy repeatedly bending down, picking something up and throwing it into the water. As they drew alongside, the boy told him “I am throwing these washed up starfish back into the ocean, or else they will die.”

The man told him he couldn’t save the thousands on this beach, much less those stranded on other beaches. “You can’t possibly make a difference,” he told the boy. The boy bent down to pick up a starfish, smiling as he threw it back into the sea. “I made a huge difference to that one!” The UNGC is a way for individual companies to show their commitment to making a difference by advancing the U.N’s goals, and as outlined in a recent CourtHeath blog, many companies are getting on board.

In considering worldly procurement – in addition to the U.N. – we look at the Organisation for Economic Co-operation and Development, which is heavily involved in assessing procurement practises. Describing public procurement as “the purchase by governments of goods, services and works”, the OECD has a strong warning – “It is the government activity most vulnerable to waste, fraud and corruption due to the size of the financial flows involved”, though it goes on to outline some positives, including: “An efficient and effective public procurement system is the backbone of a well-functioning government. Public procurement contributes to promoting a level playing field for the private sector and delivering effective services to the public.”

Having funded about 12,000 projects across more than 100 countries, the World Bank also focuses on public procurement. It’s involved in a massive ‘benchmarking public procurement’ project, aiming to identify good public procurement practises from 189 economies, so “economies will be able to learn from each others’ success stories in establishing efficient public procurement policies and practices.”

In fact, these two (the World Bank and the OECD) collaborated on the Project Checklist for Public-Private Partnerships (prepared by the staff of the World Bank Group, with inputs from the OECD, for the G20 Investment and Infrastructure Working Group last year). This is the result of incredibly detailed analysis, including “over 60 separate documents reviewed, including PPP checklists of various countries, lessons from 73 failed PPP transactions between 2004-14 compiled by the International Finance Corporation, the Quality at Entry document used by the IFC PPP Advisory Services, Deal Entry Checklists of transaction teams in ten different sectors compiled by the IFC, Learning by Doing notes in 15 projects by IFC staff, several generic and customized checklists prepared by the Public-Private Partnerships in Infrastructure Resource Center of the World Bank, comprehensive country-specific PPP laws, regulations, policies, toolkits and standardised documents, as well as gateway review processes, and procurement and commercial guidance from various countries. In addition, the conclusions and discussions of the World Bank’s Internal Evaluation Group have been considered in depth”.

We mention the checklist simply to alert you to its existence, even though – as the authors state – it has its limitations. They do go on to say, however, “While the checklist is primarily for the public sector decision-makers involved in assessing the robustness and readiness of projects, it can also enhance the understanding of the private sector on the complexities inherent in the development, procurement and execution of projects as well as the political, economic and institutional drivers which need to be kept in mind throughout the project process. It can also be useful for other stakeholders giving them a holistic view of the pre-requisites and requirements of projects and an enhanced understanding of their respective roles in the project process”.

CourtHeath is a participant in the United Nations Global Compact, the world’s largest corporate social responsibility initiative.

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