TRANSPARENCY IN GOVERNMENT PROCUREMENT
Applying a fundamental WTO principle on how governments buy goods and services
For the last two-and-a-half years the WTO has actively pursued a work programme on the subject of transparency in government procurement. This has been based on a mandate adopted by Ministers at the WTO Singapore Ministerial Conference held in December 1996 to: establish a working group to conduct a study on transparency in government procurement practices, taking into account national policies, and, based on this study, to develop elements for inclusion in an appropriate agreement.
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With the upcoming Ministerial Conference, this work is now entering a critical phase. There are a number of proposals regarding the way in which the WTO work in this area might be pursued in future. One option is the conclusion of a multilateral transparency agreement in the context of a new round, another being the continuation of the work in the Working Group. Moreover, a number of WTO Members have tabled draft agreements and are engaged in intensive consultations with their WTO partners with a view to preparing an agreement on transparency in government procurement that could be adopted by Ministers at Seattle.
The Singapore mandate reflects the heavy emphasis placed throughout the WTO system of rules and practices on transparency. Transparency is often referred to as one of the three fundamental principles of the WTO, the others being most-favoured-nation and national treatment. The role of transparency is perhaps of greatest importance in situations where the extent to which rules of general application determine trading conditions is limited and the scope for discretionary decision-making is greatest. Government procurement is a notable example. The GATT and now the WTO have for a long time had a plurilateral Agreement, presently with 26 Parties out of the 135 WTO Members, with detailed requirements in respect of transparency in government procurement. The object of the transparency provisions in this Agreement is not only to ensure that adequate information on procurement opportunities is made available and that decisions are fairly taken, but also to facilitate monitoring of the commitments made under that Agreement not to discriminate against suppliers and supplies from other Parties.
The focus of the multilateral work presently under way on transparency in government procurement is somewhat different. First, as indicated, this work is multilateral in nature and aimed at drawing up an agreement to which all 135 WTO Members will be parties. Second, the focus is on transparency as such, rather than on transparency as a vehicle for monitoring market-access commitments. It is understood among WTO Members that the work presently under way on transparency in government procurement does not seek to regulate the extent to which governments provide preferences to domestic supplies or suppliers, provided of course that such preferences are transparent. However, some Members have indicated that they would wish future negotiations to keep the door open also to addressing obstacles to market access on a multilateral basis.
The WTO Working Group on Transparency in Government Procurement, since its first meeting in May 1997, has met nine times. The Working Group initiated its work by hearing presentations from other intergovernmental organizations which have international instruments and activities relevant to transparency in government procurement, notably the United Nations Commission for International Trade Law (UNCITRAL) and the World Bank. It then considered a WTO comparative study of the transparency-related provisions in existing international instruments on government procurement procedures as well as in national practices. This covered the procedures under the plurilateral WTO Agreement on Government Procurement, the UNCITRAL Model Law and the World Bank Guidelines, as well as available material on national practices.
The next stage in the work of the Working Group was the systematic study of 12 issues that were identified as important in relation to transparency in government procurement. These are: definition and scope of government procurement; procurement methods; publication of information on national legislation and procedures; information on procurement opportunities, tendering and qualification procedures; time-periods; transparency of decisions on qualification; transparency of decisions on contract awards; domestic review procedures; other matters related to transparency; maintenance of records of proceedings; information technology; language; fight against bribery and corruption; information to be provided to other governments (notification); WTO dispute settlement procedures; and technical cooperation and special and differential treatment for developing countries. Written contributions on national practices, on issues meriting study and setting out ideas for action have been presented by many members to the Working Group.
The work has shown a high degree of common thinking on many of the issues referred to above. The main questions on which further work is required include the scope of the transactions that would be covered by a transparency agreement, the treatment of single tendering practices, which are inherently less transparent, domestic review or challenge procedures and the applicability of WTO procedures for settling disputes between governments concerning allegations of non-compliance with the rules of a transparency agreement.