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International and pluri-lateral legal instruments
A number of international and pluri-lateral legal instruments provide guidance on public procurement. These have been developed from a trade or anti-corruption perspective.
The World Trade Organisation Government Procurement Agreement (GPA) aims to make laws, regulations and procedures regarding public procurement more transparent and ensure that they do not discriminate against foreign products or suppliers. It includes general rules and obligations, many of which concern the tender process that signatories must build into their legislative frameworks. The agreement applies to contracts worth more than specified threshold values. For central government purchases of goods and services the threshold is SDR 130,000. For purchases of goods and services by sub-central government entities the threshold varies but is generally in the region of SDR 200,000. For utilities, the threshold for goods and services is generally in the area of SDR 400,000 and for construction contracts, in general the threshold value is SDR 5,000,000. The GPA first entered into force on 1 January 1981. Its present version was negotiated in parallel with the Uruguay Round in 1994, and entered into force on 1 January 1996. The agreement has 28 members.
The European Commission (EC) directives on public procurement set out detailed procedural rules based on the principles outlined in the EC Treaty which are intended to support the single market. Two directives exist: Directive 2004/17/EC coordinates the procurement procedures of entities operating in the water, energy, transport and postal services sectors; and Directive 2004/18/EC coordinates the procurement procedures for the award of public works contracts, public supply contracts and public service contracts for all European Union member countries. The directives apply to contracts worth more than specified threshold values. For government and public sector utility purchases of goods and services the threshold is EUR133 000. The threshold for the procurement of works by government and public utilities is EUR5 150 000. The European Commission directives apply to the 27 member states of the European single market.
The United Nations Commission on International Trade Law (UNCITRAL) has developed a Model Law on Procurement of Goods, Constructions and Services, with Guide for Enactment in 1994 which is an international resource to harmonise standards, norms, practices and vocabulary related to procurement regulations. However, the Model Law does not mandate changes in a country’s legislative framework for public procurement. It must be noted that UNCITRAL Model Law is less detailed than the GPA and EC directives. For example, the UNCITRAL Model Law opens up the possibility of a preference for domestic suppliers which violates the GPA and EC directives on public procurement.
The United Nations Convention against Corruption (UNCAC) establishes, among other things, an obligation to establish appropriate and effective systems to prevent corruption in public procurement (Art. 9(1)). Such systems should be based on transparency, competition and objective decision making criteria. UNCAC emphasises public distribution of information related to public procurement procedures and contracts, publicly available pre-established conditions for participation in and award of public contracts, effective review and remedies systems, as well as measures to regulate behaviour of public procurement officials (e.g. declarations of interest in particular public procurements, screening procedures and training requirements).
The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions establishes legally binding standards to criminalise bribery of foreign public officials in international business transactions and provides for a host of related measures that make this effective. The Recommendation of the OECD Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions states that OECD member countries should implement the principles contained in the 2008 Council Recommendation on Enhancing Integrity in Public Procurement (see Box I.A1 above), to adhere to relevant international standards. The 30 OECD member countries and eight non-member countries - Argentina, Brazil, Bulgaria, Chile, Estonia, Israel, the Slovenia and South Africa - have adopted this Convention
The European Commission Procurement Directives is available at: http://ec.europa.eu/internal_market/publicprocurement/legislation_en.htm