Submitted by: Hélène NSE EYENE
The original article was written in French, this is a translation.
Why has transparency become such an important issue today? What is it that leads international organisations to make transparency a fundamental principle in the implementation of projects? And how has transparency developed in Africa in the PPP sector? To answer these questions, it is necessary to go back a few years, if not a few decades in order to understand the reasons for this strong drive towards transparency in Africa and elsewhere.
It is difficult to envisage infrastructure development and the exploitation of natural resources on the continent by solely making use of public funding. Irrespective of whether it is in the energy, water and sewage, telecommunications, transport or the extractive industries sector, it is often in a country’s interest to partner with private companies. However, the proximity and influence of large enterprises in some African States have sometimes led those States to take decisions against their own interest, notably by allowing investors to enjoy further financial benefits to the detriment of their citizens, consequently leading to improper management of public funds. In the mining sector in particular, the non-transparent management of funds derived from extractive industries and the privileges granted to investors in terms of mining taxes led the extractive industries sector to reveal the necessity to consider this issue.
Transparency provides a tool for prevent corruption. Transparency is also beneficial to stakeholders of a project:
From the States perspective first, transparency, through the sharing of information with the public, will encourage them, on the one hand, to further justify their decision making and their public policies, and on the other hand, to adopt more responsible decisions likely to be better understood by the public. The disclosure of information will also encourage them to maintain efficient management of their information system, with better data retention and the possibility to subsequently improve the accuracy of the information. Lastly, pertinent and quality information will allow them to better define their objectives and improve the services offered to citizens and companies.
Then for the investor, the notion of transparency will mean to have a safer legal environment in procurement processes for which equitable treatment of tenderers is essential. Private partners will feel more confident with clear and pre-established rules. Transparency will also have the advantage of precluding any source of conflict linked to the absence of information, incomplete information or misunderstandings. Its effectiveness will enable companies to obtain a “social licence to operate,” in other words acceptance of the private company by the local community. Lastly, a transparent system will protect the investor from any temptation or attempt at bribery.
Lastly for the citizens, access to information will enable them to participate more in the country's politics. Transparency will play a fundamental role by enabling the public and local communities to ensure that the projects correspond to the population's needs and therefore that the citizen's resources are put to good use. The citizens must be informed for example of the impact of the development of a project, its objectives and estimated costs making it possible to justify the good use of public funds.
More and more international organisations and institutions encourage States and parties involved to be more transparent. The Extractive Industries Transparency Initiative (EITI), created in 2003, aims at proposing tools, rules and standards to facilitate good governance in the sector. The initiative proposes in particular the disclosure of information at certain stages of the implementation of mining projects, with as a main recommendation the publication of the mining contract, including commercial and financial data. One can also mention the Construction Sector Transparency (CoST) Initiative which for its part encourages governments to increase transparency and responsibility for a better return on public investment in infrastructure. The World Bank has also published guidelines called "A Framework for Disclosure in Public-Private Partnership" in which it encourages States to be more transparent. Those guidelines provide a real framework for the disclosure of information in the PPP sector by making recommendations.
The African Legal Support Facility ("ALSF") is currently developing country profiles summarising the legal and institutional framework of the PPPs in Africa. Many of them have adopted special regulatory framework for PPPs. It appears clearly from these legislations that the principle of transparency is becoming a fundamental pillar of any PPP project. Encouraging transparency in the tender process, contract award and implementation of a project is an efficient procedure to fight against corruption.
Adopting a law on PPPs could further induce good governance and transparency. Through their PPP laws, African States are seeking to define a clear and precise legal framework with pre-established laws upon which investors can rely on. Legislation clarifies in particular the role of each institution with most often the creation of a PPP unit with a supporting and advising role for contracting authorities throughout the implementation of a PPP project, or a steering committee to ensure the supervision of the tendering procedure. Similarly, the process for the development of PPPs, selection of the private partner as well as the roles and responsibilities of the public and private partners are clearly defined in the majority of laws.
Besides the law, guidelines, simple recommendations, or even standard documents to be used, when disclosing specific information, may also be elaborated by States in order to strengthen existing legislation. For each one of these instruments, the State may provide clarification with regard to the nature of the information and the manner in which to disclose it.
In order to be effective, transparency must also be present throughout the project: at the time of the preparation of the project, the tender procedure, the evaluation of the candidates or at the time of the implementation of the PPPs. For each phase the scope and nature of the information will mostly be subject to discussions that will be better controlled if they are based on a well-defined legal framework.
The States must first of all carefully plan their PPP projects in order to avoid the selection of a project which may not meet with the country's needs, and to be able to justify their choices to their population. At this stage transparency could for example take the form of the publication of the countries' investment programmes.
It is nevertheless at the tendering stage that the notion of transparency becomes apparent by requiring the publication of the tender procedure for effective competition or even, subsequently, the publication of the successful tenderer's provisional award report. The publication of the request for qualification or the request for a proposal often includes evaluation criteria and even the draft contract. Similarly, the publication of the tenderers' evaluation and the results of the tender will make it possible to prove that the tender process is fair and complies with the law. Some laws even stipulate the cancellation of the tender procedure if it is not advertised. Another example of the implementation of the principle of transparency is the Zambian law which provides for retention of data on the tendering procedure. These pre-defined rules of the game will avoid any subsequent conflicts linked to contract award disputes.
Thus, in a general manner, public authorities could provide information on projects under development, the estimated cost of the project, or even the provisional schedule for awarding the tender. For example, PPP projects of Ivory Coast are accessible on the site of the National Public Private Partnership Steering Committee (CNP-PPP) and are classified per sector (http://www.ppp.gouv.ci). In Morocco, the law indicates that notification of PPP tendering procedures is published on the website of the relevant public person, on the public procurement portal (https://www.marchespublics.gov.ma/pmmp) and in the Official Gazette of legal, judicial and administrative announcements.
The choice of the private partner selection procedure is a key issue. Transparency is appreciated on the level of treatment of tenderers and access to information on the project. Evaluation criteria must therefore be clearly defined up front.
In the PPP laws adopted in Africa, the call for tender is emerging as a basic principle whereas direct negotiation or unsolicited offers becoming exceptions and are subject to a rigorous framework and strict control. These exceptional procedures which are characterised by an absence of prior competition, require much greater vigilance and must force governments to organise the disclosure of information in such a manner that transparency is guaranteed. Egyptian law goes even further in closing the door to any other procedure than a public tender, while others such as Gambia, Senegal or Togo require that unsolicited proposals be put to tender under certain conditions. In order to ensure an efficiency in the selection procedure of tenderers, the State could, like in some European or Latin American countries, require the signature of an integrity pact where the stakeholders commit to respect the procedure rules to avoid all risks of corruption.
Lastly, in the project implementation phase, the main issue is whether the PPP contract will be published or not. Some think that the contract must be published in its entirety, whereas others think that some information regarded as sensitive (essentially of a commercial or financial nature) cannot be disclosed. When contracts are standardised, governments tend to publish the contract. On the contrary, for contracts negotiated on a case-by-case basis, publication will be less spontaneous. Other information, such as the project's progress or reports, may also be published to guarantee certain transparency. Moroccan law states for example that on the application of the principle of transparency and the right to information, relevant data on the partnership contract must be published. Tunisian law provides that the public authority have to publish its decision to award the partnership contract on its website and at places allocated for central and regional administrative notices related to it. The entry into force of the contract could even, in some cases, be subject to its publication.
To conclude, the effective implementation of transparency within the PPP framework relies on mechanisms the State is prepared to implement to ensure effectiveness throughout the PPP project. Reading the PPP legislations, it appears that although the principle of transparency is clearly spelt out in most African countries, the States have not yet gone far enough in developing the principle and corresponding legal provisions remain timid. Some countries like Morocco and Tunisia play the transparency game more openly whereas others limit themselves to simply stating its principle. Various countries such as Benin, Guinea and Mali are currently defining a new PPP legal framework. It can only be hoped that they show initiative and determination in order to offer an efficient framework for better transparency that will allow the implementation of PPP projects that better respond to the expectations of their citizens.
O’ Leary Donal. “The Role of Transparency International in Fighting Corruption in Infrastructure”, May 2006
Reynaers & Grimmelikhuijsen. “Explaining transparency in Public–Private Partnerships. Not so bad after all”, September 2015
World Bank Group. "A Framework for Disclosure in Public-Private Partnerships”, August 2015
UNECE, Marc Frilet. “Zero tolerance to corruption in PPP procurement, A checklist of key issues”, November 2014