Bantay Lansangan Forum on Collusion

On March 12, 2009, the BL Secretariat organized a forum on collusion at the Crowne Plaza in Ortigas Center, Pasig City. Prompted by the World Bank’s announcement last January 14 barring seven construction firms from participating in Bankrelated, the activity was meant to bring the issue of collusion to the public’s attention as well as raise the level of discourse, hopefully leading to more constructive action.

Entitled Collusion and the World Bank Findings: Is Government Response Adequate?, the forum began with a paper presentation by UP Law Professor Atty.
Bartolome Fernandez on “Collusion in Public Procurement—Philippine Context.” Using Republic Act 9184 (or the Government Procurement Law) as his frame of reference, Atty. Fernandez stated that the said law has two governing principles, namely: transparency and competitiveness. Because of this situation, the Supreme Court, in Desierto vs. Ocampo (452 SCRA 789), had to adopt the Webster’s definition of collusion as a “secret fraudulent
undertaking; a secret agreement or cooperation for a fraudulent or deceitful purposes.”

According to Atty. Fernandez, collusion may occur between and among officers and employees of the procuring entity;or between BAC and any of the bidders; or between and among the bidders themselves; or between bidders and third parties. In case of conviction, erring colluders and conspirators shall
incur civil liability consisting of restitution for the damage done or forfeiture in favor of the government. In addition, erring bidders may be meted out the
administrative penalty of suspension for one (1) year for the first offense, and a two-year suspension for the second offense.

But despite these stiff penalties, Atty. Fernandez pointed out that “the law does not at all shed light on the kind of evidence that is necessary to prove collusion.” In addition, documentary and testimonial evidence “would not likely be available given the secrecy of the collusion and conspiracy.”
He concluded by saying that the sanctions imposed by law are meant to be curative, rather than preventive, and that “this problem of collusion in the procurement process defies solution at the moment.”

After the presentation of Atty. Fernandez, Mr. Manolito Madrasto of the Philippine Constructors’ Association, took the floor and gave the “Response of the Private Sector.” He was then followed by World Bank Country Director Mr. Bert Hofman, who presented the “Investigative Processes of
the World Bank’s Integrity Vice Presidency” or INT.

According to Mr. Hofman, the INT is an independent unit of the World Bank which reports directly to the Bank’s President. Established in 2001 by former Wolrd Bank President James Wolfensohn, the INT’s mandate is to: investigate allegations of fraud, corruption, collusion coercion and obstruction in the Bank Group operations; and Assist in prevention, to protect Bank Group funds and funds held in trust from misuse and to deter fraud and corruption I Bank Group operations.

The INT, in addition, conducts administrative fact-finding according to the World Bank’s standards, benchmarked against other international organizations. It does not, however, take administrative actions nor does it impose sanctions. Instead, it merely prepares a Notice of Sanctions Proceedings which it then submits to the Evaluation and Suspension Officer (EO) of the World Bank.

The EO, on the other hand, reviews the recommendations of the INT to determine whether there is sufficient evidence to support the allegations of sanctionable practice. In instances of uncontested proceedings, sanctions are imposed by the World Bank’s Sanctions Board, based on the recommendations of the EO. If the proceedings are contested, the Sanctions Board will evaluate all available evidence and determine whether it is “more likely than not” that a respondent has indeed engaged in sanctionable practice and if so, impose the appropriate measures. The Board may also hold hearings if ever these have been requested by the respondent or by the INT.

Last to speak was DPWH Senior Undersecretary Manuel Bonoan who spoke to give the “Government’s Response.” The DPWH according to him is instituting anti corruption efforts including the imposition of sanctions, including the three-strike to policy, against bidders who are in the business of bid rigging and participating without winning. USec Bonoan also mentioned about the DPWH’s anti corruption plan which includes actions that the Department has to take to deal with collusion, bid price rigging, manipulation of bid evaluation processes. Moreover he said that whatever action the Department is doing is being closely monitored. The anti corruption plan also includes reforms against poor quality implementation and cost over runs as well as improving their financial management and procurement systems. They are also currently improving transparency and efficiency in computing the ABC. His presentation on the seven anti corruption measures that are put in place in the implementation of the National Road Improvement Project 2 (NRIMP2) included the hiring of a procurement evaluator tasked to monitor the Department’s internal procurement processes. Through a grant they will also engage the services of a technical auditor who will make sure that the quality of the project being done is in accordance with the specifications. But above all, he said, that he takes pride in their partnership with Bantay Lansangan especially since the DPWH is the first government agency that has worked closely with civil society organizations including all road stakeholders in making sure that all these stakeholders get the best value for their money in the implementation of the Department’s road development programs. He ended by saying that the DPWH cannot fight corruption and collusion alone but needs the help of all road stakeholders.