Project Anti-Corruption System

GIACC
Global Infrastructure Anti-Corruption Centre /
/ TRANSPARENCY
INTERNATIONAL
(UK)
- PACS -

Project Anti-Corruption System

(Construction Projects)

Template 15

Instructions to Project Owner

for the operation of PACS

Licence to use: This Template may be used and amended, in whole or in part, without consent.
Disclaimer: Professional advice should be taken to ensure that necessary amendments are made to this Template to provide for the requirements of the relevant parties and to reflect the law and circumstances in the relevant jurisdiction. GIACC, TI(UK) and the authors accept no responsibility for the consequences of any action taken in reliance on this Template.
© Catherine Stansbury and Neill Stansbury 2008

-PACS -

TEMPLATE 15

INSTRUCTIONS TO PROJECT OWNER FOR THE OPERATION OF PACS

Contents

Section 1 : General steps

Section 2 : Steps for each Major Contract

Definitions

The definitions set out in [PACS Template 1] apply to these Instructions.

SECTION 1: GENERAL STEPS
Note
The Project Owner should implement Steps 1.1 to 1.15 in this Section prior to commencement of any Pre-qualification, Tender or Nomination Process.
PACS is designed to be implemented at the outset of a Project. However, in certain circumstances, this may not be possible. This does not mean that the Project Owner should not implement PACS at all. Instead, he should proceed to implement PACS as best he can in the circumstances. It is impossible for these Instructions to cater for the different circumstances that might arise. Project Owners will need to use their common sense and discretion in determining how to modify PACS appropriately to suit the circumstances. Some examples of how different situations may be dealt with are as follows:
(1)  A Project Owner may only become aware of PACS, or decide that he wishes to use PACS, sometime after a Project has commenced. As a result, some Major Contractors may have already been appointed without having had to comply with the Anti-Corruption Procurement Requirements [PACS Template 7]. (See Section 2.3 for dealing with this situation.)
(2)  A Project Owner may be unable to find a suitable Independent Assessor and may not wish to delay appointment of certain Major Contractors until a suitable Independent Assessor is found. It would, therefore, be possible (but undesirable) for him to proceed to appoint these contractors without an Independent Assessor. In such circumstances, the Project Owner could proceed to implement PACS, modifying it as necessary to provide for the later appointment of an Independent Assessor. / Tick box
Step 1.1  Determining who is to operate these Instructions on behalf of the Project Owner.
(1)  Where the Project Owner is a single company, then these Instructions should be operated by that company.
(2)  Where the Project Owner is an incorporated joint venture company, then these Instructions should be operated by that joint venture company.
(3)  Where the Project Owner is an unincorporated joint venture, then these Instructions should be operated by the lead partner of that joint venture or by whichever party is nominated by the joint venture to operate PACS.
(4)  The term “Project Owner” in these Instructions refers to the party who has been selected to operate these Instructions.
Step 1.2  Appointment of a senior manager responsible for operating PACS.
The Project Owner must appoint a senior manager with responsibility for ensuring, as far as reasonably possible, that the Project Owner operates PACS in accordance with this [Template]. This person may be the same person as the Integrity Manager appointed by the Project Owner under the Anti-Corruption Programme [PACS Template 10].
Step 1.3  Review of PACS [Templates].
(1)  The Project Owner must determine which [PACS Templates] he wishes to use for the Project.
(2)  He must have the [Templates] reviewed by his legal advisers to ensure, for example, that PACS is adapted for the Project, and that any necessary amendments are made to reflect the relevant law and to provide all necessary rights and remedies.
(3)  He must ensure that the [Templates] he wishes to use conform to his requirements. For example, in a number of [Templates] there is missing information which the Project Owner will need to provide. In addition, the [Templates] make a number of suggestions. The Project Owner will need to consider whether these suggestions are appropriate.
(4)  He must ensure that the Licence to Use (set out on the front sheet of each [PACS Template]) is complied with.
(5)  He must make the [PACS Templates], as adapted and amended, available on the Project Website to be downloaded. (See Project Transparency Policy below.)
Step 1.4  Appointment of an Independent Assessor.
(1)  The Project Owner must appoint an Independent Assessor using the Independent Assessor Agreement [PACS Template 2].
(2)  This appointment must be made before the commencement of any Pre-qualification, Tender or Nomination Process. This is because the duties of the Independent Assessor include assessing the Pre-qualification, Tender and Nomination Processes, if any, that apply to Major Contracts. Consequently, his appointment must be made sufficiently prior to commencement of those Processes to enable him to carry out his assessment of them.
(3)  The Independent Assessor must be a skilled individual (or an organisation of skilled individuals) who is independent from all parties involved with the Project. He must have experience of the construction industry and a reasonable working knowledge of accounting and the law of bribery and fraud. He should be nominated by a recognised professional association.
(4)  The Independent Assessor may be appointed full time or part time according to the requirements of the parties and the size of the project.
(5)  It may in some situations be felt that the Project is too large or complex to be monitored by one individual Independent Assessor. In such situations, he should be permitted to delegate part of his functions. This could be appropriate in the following situations:
(a)  where the level of work or diversity of skills required from the Independent Assessor is so high or so great that one person would not be sufficient;
(b)  where because of language or accounting differences between the parties, individuals with specific skills need to be appointed to assist the Independent Assessor.
(6)  The amount of the fees will need to be agreed with the Independent Assessor to take account of the extent of his services, and his qualifications and experience. The fees could either be an hourly or daily rate, or could be a fixed fee. These payment terms should be set out in Schedule E to the Independent Assessor Agreement [PACS Template 2]. Schedule E should also state what expenses are reimbursable to the Independent Assessor, and any approvals which the Independent Assessor needs to obtain prior to incurring these expenses.
Step 1.5  Identification of Major Contracts.
(1)  Specific obligations apply in relation to Major Contracts and Major Sub-contracts including:
(a)  Applicants for Major Contracts must sign an Anti-Corruption Agreement [PACS Template 5] and complete a Disclosure Form [PACS Template 3] (as required by the Instructions to Applicants – [PACS Template 18].
(b)  Major Sub-contractors must provide undertakings to the Major Contractor (as required by the Anti-Corruption Agreement) and must complete Disclosure Forms.
(c)  The Independent Assessor has specific duties regarding the monitoring of Major Contracts and Major Sub-contracts. These duties are set out in the Independent Assessor Agreement [PACS Template 2].
(2)  The Project Owner must decide, therefore, which Project contracts are to qualify as Major Contracts and Major Sub-contracts and will, therefore, be subject to the above specific obligations.
(3)  These contracts will normally be chosen according to their anticipated value. Recommended financial thresholds for these contract values are given in the definition of “Major Contract” and “Major Sub-contract” in the Definitions [Template 1], but it is for the Project Owner to decide these thresholds (for both contracts for works and contracts for services).
(4)  Once these thresholds have been decided, the Project Owner must identify the Major Contracts which would fall within those thresholds.
(5)  These Major Contracts:
(a)  must be listed in Schedule D to the Independent Assessor Agreement [PACS Template 2]; and
(b)  will be affected by Section 2 of these Instructions.
Step 1.6  Instructions to Project Owner Joint Venture Members.
Where the Project Owner is a Joint Venture, the Project Owner must send out the Instructions to Joint Venture Members of the Project Owner [PACS Template 16]. These Instructions should be sent out promptly because information will be needed in response from the Joint Venture Members for the purposes of implementing Section 2 of these Instructions. (Note that this step applies whether the Project Owner is an unincorporated joint venture or an incorporated joint venture company.)
Step 1.7  Response from Project Owner Joint Venture Members.
Where the Project Owner is a Joint Venture, the Project Owner must ensure that a complete response is received, from each Joint Venture Member of the Project Owner, to the Instructions to Project Owner Joint Venture Members [PACS Template 16].
Step 1.8  Completion of Disclosure Document.
The Project Owner must complete a Disclosure Form [PACS Template 3]. In completing this Form, the Project Owner may need to get information from other parties. This completed Form, and all information supplied by other parties, will be required for the purposes of Section 2 of these Instructions (in relation to the Pre-qualification, Tender and Nomination Processes of Major Contracts) so it is best to have the Disclosure Form completed well in advance.
Step 1.9  Adoption of an Anti-Corruption Programme.
The Project Owner must adopt, within its own organisation, an Anti-Corruption Programme [PACS Template 10] and must implement that Programme for the duration of the Project. As well as being a step required under these Instructions, the adoption of an Anti-Corruption Programme is an obligation under the Anti-Corruption Agreements which the Project Owner will be required to sign when implementing Section 2 of these Instructions.
Step 1.10  Anti-Corruption Notice to Government Departments.
The Project Owner must send out an Anti-Corruption Notice to Government [PACS Template 8] to each government department who will be involved with the Project. Such Notices should be sent out as and when, through the course of the Project, the Project Owner becomes aware that a government department will be involved in the Project. This step applies even where the Project Owner is itself a government department.
Step 1.11  Anti-Corruption Government Commitment.
The Project Owner must ensure, as far as possible, that an Anti-Corruption Government Commitment [PACS Template 9] is received from each government department to whom an Anti-Corruption Notice has been sent under step 1.10 above. If any government department refuses to provide such a commitment, then the Project Owner should notify the Funders. If the Project Owner is itself a government department, then it should also provide such a Commitment (which will then, with the other Commitments, be made available on the Project Website in accordance with the Project Transparency Policy).
Step 1.12  Project Transparency Policy.
The Project Owner must appoint an employee to be responsible for operating the Project Transparency Policy [PACS Template 13] for the duration of the project. This involves setting up a Project Website and in-putting information on that Website as specified in the Policy. The in-putting of the specified information must continue throughout the Project.
Step 1.13  Instructions to Funders.
The Project Owner must send out the Instructions to Funders [PACS Template 17] to each Funder.
Step 1.14  Response from Funders.
The Project Owner must ensure that a complete response is received, from each Funder, to the Instructions to Funders [PACS Template 17].
Step 1.15  Anti-Corruption Procurement Requirements.
These Requirements [PACS Template 7] apply to any Pre-qualification, Tender or Nomination Process for a Major Contract. However, a number of these Requirements involve preparatory steps for those Processes (see Steps 1 to 5 of the Anti-Corruption Procurement Requirements). The Project Owner must carry out these steps in advance of the commencement of any such Pre-qualification, Tender or Nomination Process.
Step 1.16  Information to Funders.
The Project Owner should send to Funders information requested by them as and when it becomes available through the course of the Project.
Step 1.17  Replacement of Independent Assessor.
If the Independent Assessor is removed from his appointment, or if the Independent Assessor terminates his appointment, the Project Owner must as soon as possible request an appropriate independent institution to nominate a suitable replacement Independent Assessor. Upon receipt of the nomination, and provided that the Project Owner has no reasonable grounds for objecting to the nomination, the Project Owner must as soon as possible appoint the nominated person as Independent Assessor under the Independent Assessor Agreement [PACS Template 2] and notify all parties who have entered into Anti-Corruption Agreements [PACS Template 5] of the new appointment and provide them with a copy of the Independent Assessor Agreement.
SECTION 2: STEPS FOR EACH MAJOR CONTRACT
The Project Owner should take the steps listed in this Section in respect of each Major Contract.
2.1  The selection of the Major Contractor. In selecting a Major Contractor for a Major Contract, the Project Owner must comply with the Anti-Corruption Procurement Requirements [PACS Template 7].
2.2  Following selection of the Major Contractor. Once the Major Contractor has been selected, both the Project Owner and the Major Contractor will remain bound by the terms of the Anti-Corruption Agreement [PACS Template 5] that they signed in accordance with the Anti-Corruption Procurement Requirements [PACS Template 7]. The Project Owner will also remain bound by the terms of the Independent Assessor Agreement [PACS Template 2].
2.3  For Major Contractors that have been appointed prior to the implementation of PACS. If a Major Contractor has been appointed prior to the implementation of PACS on the Project, this will mean that the Major Contractor will not have had to comply with the Anti-Corruption Procurement Requirements [PACS Template 7] and so will not have signed an Anti-Corruption Agreement [PACS Template 5] or completed a Disclosure Form [PACS Template 3]. In such a case, the Project Owner must, as soon as possible, require, where possible, the Major Contractor to sign an Anti-Corruption Agreement and complete a Disclosure Form.

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PACS (Construction Projects) - Template 15 - Instructions to Project Owner for the operation of PACS

GIACC/TI(UK) - First Edition – May 2008