Apparent Conflicts of Interest in State Contracts

Implementation of transparency and citizen participation tools under Executive Order 202/2017 for the Management of Apparent Conflicts of Interest in State Contracts (Executive Order 202/2017).

Completion Status:
Partially fulfilled

Commitment filtering:

Specific: ✔ yes
The commitment focuses on introducing an obligation by the Anti-Corruption Office to establish a specific procedure for managing situations that could constitute an apparent conflict of interest. This procedure requires anyone who wants to contract with the state to submit a “Sworn Declaration of Interests”, including declaring any link with members of the government’s highest authorities. Failure to do so will incur strict sanctions, including being barred from contracting with the state. Links with an official which potential contractors must declare include:[1]

  • a blood relationship to the fourth degree and in-law-relationship to the second degree
  • a company or association
  • pending legal action
  • being a debtor or creditor
  • having received significant benefits
  • ·         having a public friendship evidenced by greater familiarity or frequent interaction.

If the declaration of interests suggests the existence of any of these links, the following process must be applied:

a) Submit the “Sworn Declaration of Interests” to the Anti-Corruption Office and the Office of the Auditor-General within three days of receipt.

b) The Anti-Corruption Office must publish every step of the procedures on its website.

(c) The state agency wishing to enter a contract should adopt, in a well-founded manner and involving the Anti-Corruption Office and the General Syndicate of the Nation (SIGEN), at least one of the following mechanisms:[2]

I. Signing of integrity pacts: An agreement in which the parties commit to acting with transparency, ethics and integrity, subject to the responsibilities established in each case. The parties involved must refrain from giving or offering money or any gift to influence public officials or employees. The signed pact may establish as a sanction exclusion from the bidding procedure or the corresponding process in case of non-compliance.

II. Participation of social witnesses: Any person or group of people belonging to civil society, the scientific or academic community, or professional associations, designated by organisations or entities to exercise control over the development and execution of public contracting procedures. The witnesses must verify whether the process is carried out in accordance with legal criteria and international standards of transparency and integrity.

III. Special oversight by control agencies: One or more national public-sector control bodies (for example, the Anti-Corruption Office and the Attorney General’s Office of Administrative Investigations) carries out a control procedure over an apparent conflict of interest. In response to a public information request about what kind of control procedures are carried out, the Anti-Corruption Office clarified that the respective control agency should make recommendations to actively encourage more transparency in public contracting.

IV. Public hearings: These seek to allow and promote effective citizen participation, addressing in a transparent and public manner the opinions, proposals, experiences, knowledge and existing information on the issues raised for consultation. Any person who invokes a right or interest related to the issue to be discussed may participate in a public hearing. Neither Executive Order N° 202/2017 nor a request by Poder Ciudadano for public information specifies how or where the public hearings should take place. In an interview for this report, the Director of Transparency Policy Planning at the Anti-Corruption Office, revealed that this mechanism has never been implemented.

[1] Boletín Oficial de la República Argentina, Executive Order Nº 202/2017, https://www.boletinoficial.gob.ar/detalleAviso/primera/160466/20170322?busqueda=1. These mechanisms were specified in more detail in response to a request by Poder Ciudadano for access to public information.

[2] Annex 3, https://iaccmonitor.org/wp-content/uploads/2020/08/IACC-Monitor-Report-Argentina-2018-2022.pdf.

Measurable: ✔ yes

The commitment can be measured by monitoring whether the procedure and any of the control mechanisms were applied after a “Sworn Declaration of Interests” was submitted.

Last updated: 22 October 2022
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Evaluation:

This commitment adds to existing legislation, Executive Order Nº 202/2017,[1] and introduces an obligation for the Anti-Corruption Office to carry out a specific procedure for managing situations that could constitute an apparent conflict of interest. In a first step, anyone who wants to contract with the state must submit a “Sworn Declaration of Interests” to make transparent any link with members of higher government authorities. If the declaration of interests suggests the existence of any links, Executive Order 202/2017 mandates that the contracting agency must use one of the following mechanisms to manage the conflict of interests: 1) signing an integrity pact – a formal transparency, ethics and integrity agreement 2) appointing social witnesses 3) enabling special oversight by a control agency, or 4) holding a public hearing.

According to the answers given by the Anti-Corruption Office to our request for access to public information for this report, 48 declarations of interests were submitted to the Anti-Corruption Office between November 2018 and April 2022 by people wanting to enter contracts with the state.[2] The list of declarations of interest that reported any of the links specified in Decree 202/2017 is published on the Anti-Corruption Office website.[3]

Regarding the mechanisms included in the executive order, the Anti-Corruption Office does not publish every step of the procedures on its website. When asked about the procedures in a public information request for this report, the Anti-Corruption Office gave no response. In an interview, it stated that “the most frequently used mechanisms were special oversight by control agencies and signing of integrity pacts”. There is no evidence as to how often the different kinds of mechanism were used.

We therefore consider this commitment only partially fulfilled.

 

Challenges to effective commitment implementation
The executive order does not distinguish between the different mechanisms and when to use them. This has resulted in only a few instances where mechanisms that include citizen participation have been used. In addition, the integrity pact mechanism often translates into the mere signing of a “declaration of integrity” that may not have the intended effect.

There is a lack of transparency over the rules and procedure manuals for the different mechanisms, as well as over which procedures are carried out after the declarations of interest were received. This creates a lack of traceability for civil society, journalists and citizens when monitoring the proposed mechanisms to hold the government accountable.

 
Opportunities to accelerate commitment implementation
Argentina could benefit from the experience of the OECD as a global anti-corruption and integrity standard-setter, and from the OECD Guidelines for Managing Conflict of Interest in the Public Service.[4] The government could seek support to improve Argentina’s approach for managing conflicts of interest by mapping areas and positions of risk within the public service.

 
Recommendations
  • Improve the visibility of declarations of interest published on the Anti-Corruption Office website, which are currently difficult to find. Rearrange the order in which they are listed, as the oldest declarations are positioned first and the more recent ones later, resulting in the better availability of increasingly outdated information.
  • Train public officials and private-sector actors contracting with the state in how to complete the “Sworn Declaration of Interests”. The Anti-Corruption Office should give guidance and offer training material to the parties involved.
  • Publish the rules and procedures manual for each of the mechanisms specified in the executive order, in every case that requires their use.
  • Publish the steps carried out by the Anti-Corruption Office after submission of the declaration, so it is clear which mechanism was chosen and why.

 

[1] Boletín Oficial de la República Argentina, Executive Order Nº 202/2017, https://www.boletinoficial.gob.ar/detalleAviso/primera/160466/20170322?busqueda=1

[2] See Annex 9, https://iaccmonitor.org/wp-content/uploads/2020/08/IACC-Monitor-Report-Argentina-2018-2022.pdf.

[3] Argentinian Republic, List of Informed Cases, https://www.argentina.gob.ar/anticorrupcion/prevencion/decretos-intereses/casos-informados

[4] OECD, Recommendation of the Council on OECD Guidelines for Managing Conflict of Interest in the Public Service, https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0316