Fighting Corruption in Public Procurement: A Comparative Analysis of Disqualification or Debarment Measures

357 Pages·2012·6.593 MB·English

by  Sope Williams-Elegbe

FIGHTING CORRUPTION IN PUBLIC PROCUREMENT
Anti-corruption measures have firmly taken centre stage in the develop-
ment agenda of international organisations as well as in developed and
developing countries. One area in which corruption manifests itself is in
public procurement and, as a result, states have adopted various meas-
ures to prevent and curb corruption in public procurement. One such
mechanism for dealing with procurement corruption is to debar or dis-
qualify corrupt suppliers from bidding for or otherwise obtaining govern-
ment contracts.
This book examines the issues and challenges raised by the debarment or
disqualification of corrupt suppliers from public contracts. Implementing a
disqualification mechanism in public procurement raises serious practical
and conceptual difficulties, which are not always considered by legislative
provisions on disqualification. Some of the problems that may arise from
the use of disqualifications include determining whether a conviction for
corruption ought to be a pre-requisite to disqualification, bearing in mind
that corruption thrives in secret, resulting in a dearth of convictions.
Another issue is determining how to balance the tension between granting
adequate procedural safeguards to a supplier in disqualification proceed-
ings and not delaying the procurement process. A further issue is determin-
ing the scope of the disqualification in the sense of whether it applies to
firms, natural persons, subcontractors, subsidiaries or other persons related
to the corrupt firm and whether disqualification will lead to the termination
of existing contracts.
The book compares and contrasts the legal, practical and institutional
approaches to the implementation of the disqualification mechanism in
the European Union, the United Kingdom, the United States, the Republic
of South Africa and the World Bank.
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Fighting Corruption in
Public Procurement
A Comparative Analysis of
Disqualification or Debarment Measures
Sope Williams-Elegbe
OXFORD AND PORTLAND, OREGON
2012
Published in the United Kingdom by Hart Publishing Ltd
16C Worcester Place, Oxford, OX1 2JW
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© Sope Williams-Elegbe 2012
Sope Williams-Elegbe has asserted her right under the Copyright, Designs and
Patents Act 1988, to be identified as the author of this work.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted, in any form or by any means, without the prior permission of
Hart Publishing, or as expressly permitted by law or under the terms agreed with the
appropriate reprographic rights organisation. Enquiries concerning reproduction which
may not be covered by the above should be addressed to Hart Publishing Ltd at the
address above.
British Library Cataloguing in Publication Data
Data Available
ISBN: 978-1-84946-020-0
Typeset by Hope Services, Abingdon
Printed and bound in Great Britain by
MPG Books Group Ltd
For my father and mother, Chief F.O Williams CON and
Mrs B.O Williams MON

Preface
The aim of this book is to provide a structured, comprehensive and under-
standable analysis of the law and practice of contractor disqualifications
(also known as debarment) in public procurement. Since the ‘corruption
eruption’ of the mid-1990s when anti-corruption became popular in legal,
political and economic discourse, there has been no end of measures sug-
gested and implemented to prevent, reduce and combat corruption in all
its forms. Corruption in public procurement has of course also received its
fair share of attention, public procurement being one of the areas in which
public corruption manifests. Whilst there is information on the typology
of corruption in public procurement and the kinds of measures that may
be useful in addressing this corruption, there has been little exposition,
analysis and critique of the measures that are adopted against procure-
ment corruption.
This book aims to fill that gap by providing a comparative evaluation of
contractor disqualifications for corruption as they are currently applied in
the European Union, the United Kingdom, the United States, the World
Bank and South Africa. Contractor disqualifications have in the last two
decades become, in most jurisdictions, a preferred way of combating cor-
ruption in public procurement, but there are no studies which examine
the sufficiency of legal rules on disqualification, how disqualifications are
applied in practice, and whether they are an adequate or useful tool to
address procurement corruption.
As a relatively new anti-corruption measure, there is considerable
uncertainty over many of the issues that arise in the disqualification con-
text in most jurisdictions, partly as a result of the fact that the legislation
in most jurisdictions is unclear and does not contemplate many of the
issues that accompany the disqualification mechanism and also because
the procuring authorities who take disqualification decisions are not clear
on the limits of their discretion in the disqualification context. This book
examines the salient issues relating to disqualifications, exposing and
analysing the areas in which the legislation is unclear and providing
clarity on those areas by reference to the general law or the practice in
other jurisdictions. It is hoped that the book will be useful to procurement
officials who are required to take disqualification decisions, lawyers
advising suppliers facing disqualification and all persons interested in
public procurement and corruption more generally.
The work has been a long time in preparation and I am indebted to
several persons who have assisted me over the years. In particular, I am
viii Preface
grateful for the support of the University of Nottingham, where I worked
as a Lecturer between 2003 and 2011, especially the staff at the School of
Law. The Head of School, Professor Stephen Bailey, was supportive and
considerate throughout the duration of this project and I am most grateful
to him. I am also indebted to Professor Sue Arrowsmith, the Director of
the Public Procurement Research Group at the University of Nottingham,
a friend and a mentor, under whom I honed my research skills and inter-
est in public procurement and who will always be the gold standard for
procurement research and teaching. I would also like to thank other
colleagues and friends who took time to discuss ideas with me such as
Dr Ama Eyo, Dr Annamaria La Chimia, Sangeeta Shah, Dr Aris
Georgopoulos, Dr Ping Wang, Professor Geo Quinot, Professor Phoebe
Bolton, Professor Craig Rotherham, Dr Peter Trepte, Dr Ezekiel Alawale,
Funke Adeyemi, Dr Janelle Byran, Aduke Balogun, Professor Adedokun
Adeyemi, Busola Akande, Dapo Akande, Dr Adeline Chong, Bayo
Ademiluyi, Dr Abi Jagun, Lola Kogbodoku, Efe Remawa and Muyiwa
Amodeni.
I am of course grateful for the love and support of my husband, Dayo
Elegbe, my parents, Chief and Mrs Williams and my daughter, Ifeoluwa,
who had to endure many months with me ensconced in my study while I
worked on this book.
I have endeavoured to state the law as at 31 October 2011.
Sope Williams-Elegbe
Table of Contents
Preface vii
Table of Cases xv
Table of Legislation xvii
Table of Conventions, Treaties, etc xlv
1: Introduction 1
2: Corruption, Anti-Corruption Measures and Disqualification 7
2.1 Introduction 7
2.2 The Meaning, Nature and Effects of Corruption 7
2.2.1 Economic Theories on Corruption 9
2.2.2 Political Theories on Corruption 10
2.2.3 Social Theories on Corruption 11
2.3 Anti-Corruption Measures 13
2.3.1 Domestic Measures against Corruption 14
2.3.2 International Measures against Corruption 16
2.4 Public Procurement And Corruption 24
2.4.1 The Incidence of Corruption in Public Procurement 24
2.4.2 The Common Types of Corrupt Activity in Public
Procurement 25
2.4.3 Measures Used in Procurement Regulation to Fight
Corruption 27
2.5 The Use of Disqualifications in Public Procurement 31
3: An Overview of Procurement Regulation, Anti-Corruption
and Disqualification Policy in the Jurisdictions 38
3.1 Introduction 38
3.2 The European Union 38
3.2.1 Public Procurement Regulation in the EU 38
3.2.2 The EU’s Policy Against Corruption 41
3.2.3 Disqualification in the EU 43
3.3 The United Kingdom 47
3.3.1 Public Procurement Regulation in the UK 47
3.3.2 The UK’s Policy Against Corruption 51
3.3.3 Disqualification in the UK 53