RECOMMENDATIONS OF SANTHANAM COMMITTEE
(a) “Corruption cannot be eliminated or even significantly reduced unless
preventive measures are planned and implemented in a sustained and
effective manner. Preventive action must include administrative, legal,
social, economic and educative measures” (Santhanam Committee Report,
1964).
(b) During a debate in Parliament in June, 1962 Members of Parliament
expressed concern over corruption in public administration and sought
remedial measures. In response, a Committee was set up under Shri K.
Santhanam, Member of Parliament which identified four major causes
of corruption, namely:
(i) administrative delays,
(ii) Government taking upon itself more than what it could manage by way
of regulatory functions,
(iii) scope for personal discretion in the exercise of powers vested in different
categories of Govt. servants and
(iv) Cumbersome procedures in dealing with various matters which were of
importance to citizens in their day to day affairs.
(c) The Santhanam Committee in its Report observed that the main effort for
checking corruption must come from within the Ministry / Department
and that it is important to be continuously on the watch for sensitive
spots rather than merely taking action when some case comes to notice.
It was suggested that Ministries undertake a systematic and thorough review of the laws, rules, procedures and practices for the purpose of listing discretionary powers, levels at which these are exercised, manner in which they are exercised, control over the exercise of such powers and the points at which citizens come into contact with the Departments and why. It was also recommended that a study should be made by Ministries of the extent, possible scope and modes of corruption, remedial measures prescribed and their effectiveness. (d) The Report deals in detail with the major causes of corruption and steps to deal with each. The Committee observed that: (i) Administrative delays must be reduced to the extent possible and firm action should be taken to eliminate causes of delay. (ii) Each Ministry should undertake a review of existing procedures and practices to find out causes of delay, points at which delay occurs and devise steps to minimize the same. (iii) Time limits should be prescribed and these should be strictly adhered to; those responsible for delays should be called to account. (iv) Levels at which files are to be processed and manner of decision making have also been prescribed. The Committee recommended that: (i) Ministries review their regulatory functions and whether the manner of discharge of those functions can be improved. (ii) while recognising that it may not be possible to completely eliminate discretion, it should be possible to devise a system of administration which would reduce the need for personal discretion, to a minimum. (iii) that a serious attempt be made to educate citizens about their rights and responsibilities and make arrangements to enable citizens’ access to the administration without having to go through intermediaries. Other preventive measures listed in the Report include: - (i) recruitment of officers / officials with high integrity, (ii) informal codes of conduct for different categories of Government servants
having agencies where a genuine complainant can seek redressal and protection from harassment, (iv) easy availability of forms required by the public for obtaining licenses, etc., (v) ban on Government servants accepting private employment after retirement among others. (e) Significant developments have taken place since the recommendations of the Santhanam Committee were made. In 2003, statutory status was conferred upon the Central Vigilance Commission and it also became a multi-member body. In 2004, it was made the designated authority to receive whistle blower complaints and to protect the whistle blowers. The institutional framework for addressing corruption has been progressively strengthened with the establishment of the Central Bureau of Investigation, the Directorate of Enforcement, the Directorate General of Income Tax Investigation, State Anti-Corruption agencies and Lokayuktas and the legal framework has also expanded. There are also elaborate conduct rules which aim to promote integrity in public services and other policies and guidelines for transparency in recruitments and promotions.
10.2 THE CONCEPT OF PREVENTIVE VIGILANCE (i) Concept: It is adoption of a package of measures to improve systems and procedures to eliminate / reduce corruption, promote transparency and ease of doing business. (ii) Who is required to implement preventive vigilance measures? Preventive vigilance involves systemic improvements which besides reducing corruption also lead to better operational results. It is a tool of management and good governance and therefore, it is the duty of the management as a whole, and not of the CVO alone. Indeed, it can be said that it is the duty of every employee. 10.2.1 Causes of corruption: Preventive vigilance is aimed at identifying, tackling / addressing the root cause of corruption within the organisation. The common causes of corruption, inter alia, could be:
(a) Excessive regulation & licensing. (b) Complicated rules and regulations. (c) Monopoly over delivery of goods / services. (d) Lack of transparency. (e) Lack of accountability. (f) Too much discretionary power. (g) Poor regulatory framework. (h) Poor grievance redressal mechanism. (i) Very low rate of detection of corruption. (j) Lack of condemnation of corrupt practices by the public. (k) Absence of a formal system of inculcating values, ethics & integrity. (l) Inadequacy of regular / periodic / surprise checks. (m) Rigid bureaucratic framework / processes. (n) Lack of awareness about rights, duties, procedure to complain, rules, laws, etc. 10.3 POTENTIAL AREAS OF CORRUPTION Preventive vigilance is aimed at tackling the areas vulnerable to corruption within the organisation. Although potential areas of corruption are specific to organisations / sectors, there are some broad areas common to all organisations, which need special attention while putting in place a system of preventive vigilance. These relate to: - (a) Procurement: Procurement is a vast area ranging from procurement of store materials & services to execution of infrastructure projects. It is one of the major corruption prone areas in all organisations. (b) Sale of goods and services: The disposal of goods (the reverse of procurement) and services is also a major area of corruption in some organisations. Similarly, allocation of scarce and / or precious natural resources is an area of corruption. (c) Human resource management: Human resource management is common to all organisations and the processes relating to recruitment, promotion, transfer and posting are prone to manipulation and corruption.
Delivery of services to public: Although not common to all Public Sector Organisations, major Government Departments are involved in delivery of services which are a potential area of corruption. (e) Enforcement: The enforcement of Acts, Rules and Regulations is also an area vulnerable to corruption mainly due to lack of awareness among citizens and ineffective grievance redressal mechanism. 10.4 PREVENTIVE VIGILANCE MEASURES Preventive vigilance measures can broadly be categorized as: - (a) Simplification and standardisation of rules: Simplification and standardisation of rules and procedures results in elimination of discretion and arbitrariness, which in turn reduces corruption. Identifying areas involving exercise of discretion which are not governed by guidelines together with a complete review of existing rules and regulations needs to be undertaken to introduce clarity and accountability. Similarly, simplification and standardisation of forms / application also reduces scope for corruption. (b) Leveraging technology: Technology as an enabler for fighting corruption has been effectively demonstrated. E-procurements, E-payments, use of websites for dissemination of information and creating awareness, use of CCTV in places of public dealing, use of GPS enabled devices / RFIDs, use of appropriate analytical tools, computer assisted audit techniques for detecting frauds are examples of how technology strengthens the system of preventive vigilance. (c) Automation: Using IT as an enabler for reducing corruption along with business process re-engineering is recognized as an effective tool of preventive vigilance. Automation reduces interface / interaction between public officials and common public. It also removes monopoly in delivery of services and personal discretion, reducing the opportunities for discretion thus leading to reduction in corruption. Therefore, the organisations should strive to reduce interface of officials with common public / customers by way of automation / online services. However, IT systems are not an end in themselves; they are the means to an end. It
follows therefore that there is a need to develop a system of alerts as also a response mechanism. (d) Business Process Re-engineering (BPR): BPR is very important as it helps the organisations rethink how they do their work and in the process, encourages a full-scale re-creation of processes in order to meet the objectives of the organisation. Existing processes may be re-engineered to even prevent leakage of revenue. (e) Transparency: Transparency removes the information gap between the public and public officials which in turn reduces corruption. The website of the Department / Organisation should contain rules & regulations, contact details of officials and all other information useful for common public / customers. (f) Accountability: There is no fear of punitive action due to lack of accountability. A system with clear accountability and assigned responsibility at each level is necessary not only for smooth functioning but increased transparency, efficiency and for ensuring effective punitive action in case of misconduct. (g) Control & Supervision: Regular and routine inspections, surprise inspections, audit and reviews keep a check on aberrant and corrupt behaviour. A list of points and areas prone to corruption will facilitate the purpose of organising checks and streamlining procedures. A structured interaction between vigilance and internal audit will enable better monitoring and also help identify potential problem areas. (h) Early detection of misconducts: Early detection of misconducts apart from bringing to light the damages to the system, will enable recouping the loss wherever possible and facilitate control of further damage. (i) Time-bound and effective punitive action: Punitive (disciplinary or criminal) action within short period of occurrence of misconduct and finalisation of such cases in a time-bound manner resulting in award of exemplary and adequate (commensurate with gravity of misconduct) punishment deters others from committing such misconduct. Delays and inefficiencies in such proceedings encourages and emboldens others to
take risk of committing misconduct under the belief that nothing would happen to them. (j) Providing necessary infrastructural facilities: Non-provision of adequate infrastructural facilities such as accommodation, conveyance, utilities, etc. also induce corruption. (k) Training & Awareness: Capacity building and sensitization at all levels and across all functional areas is important. Public officials should be made aware of their duties and responsibilities, code of conduct, rules and regulations through regular training and awareness programmes. A list of Dos & Don’ts for employees / officials is a simple yet effective tool. Likewise, familiarization with Standard Operating Procedures relating to different spheres of activity will enhance awareness and reduce procedural violations / inadvertent errors arising out of a lack of awareness. Knowledge sharing initiatives such as publishing / circulating information relating to areas where fraud / misconduct has been detected and sharing information on best practices are other effective awareness generation methods for more effective preventive vigilance. There should also be an effort to create awareness among all stakeholders. (l) Conducive work environment: Conducive work environment for preventive vigilance may include drawing up a list of sensitive posts, rotation policy for sensitive posts, identification of persons of doubtful integrity and keeping them away from sensitive posts / public dealing. It would be necessary also to create an environment that promotes ethical behaviour. Protection to Whistle Blowers must be ensured in order to bring to light cases of corruption. (m) Awareness among public: If public is made aware of their rights, and also of the rules and regulations, then they are able to resist unfair treatment and arbitrary behaviour by public officials. Public should be encouraged to demand the services due to them and to raise their voice when their rights are denied or powers are misused by public officers. Organisations should prominently display information relevant / useful to the common public on their office notice board / website.
Inculcating Moral Values: Inculcating ethical behaviour among public, particularly the younger generation is an important tool of preventive vigilance. Vigilance Awareness Week (VAW), celebrated every year during the last week of October is aimed at creating such awareness. This opportunity should be utilized by all CVOs / Organisations to create awareness among public as well as among its own officials regarding need for imbibing right values. 10.5 INTEGRITY PACT 10.5.1 Integrity Pact (IP) is an important tool of preventive vigilance which is aimed at preventing corruption and ensuring integrity in public procurement. The Central Vigilance Commission is the nodal authority for the implementation of Integrity Pact in India. It addresses not only bribery, but also other corrupt practices such as collusion and bid rigging. IP is a written agreement between the Government / Government Department / Government Company, etc. and all the bidders agreeing to refrain themselves from bribery, collusion, etc. If the written agreement is violated, the pact describes the sanctions that shall apply. These include:- (i) Loss or denial of contract; (ii) Forfeiture of the bid or performance bond; (iii) Liability for damages; (iv) Exclusion from bidding on future contracts(debarment); and (v) Criminal or disciplinary action. 10.5.2 Integrity Pact has a monitoring system which provides for independent oversight. The Central Vigilance Commission nominates Independent External Monitors (IEMs) to monitor implementation of Integrity Pact. Thus, IP in its present form has three players – (i) The Principal or the Company / Department, (ii) The Vendor, and (iii) The Independent External Monitor (IEM). Vigilance Manual 2017 271 Chapter - X Preventive Vigilance 10.5.3(a) In order to ensure transparency, equity and competitiveness in public procurement, the Commission has been recommending adoption of Integrity Pact (IP) and implementation by Government organisations. CVC through its Office Order No. 41/12/07 dated 04.12.2007 and No. 43/12/07 dated 28.12.2007 as well as Circular and No. 24/08/08 dated 05.08.2008 recommended adoption of Integrity Pact to all the organisations and provided basic guidelines for its implementation in respect of major procurements in Government Organisations. A Standard Operating Procedure (SOP) was issued by the Commission vide Office Order No. 10/5/09 dated 18.05.2009. (b) The Commission issued clarifications regarding the appointment, tenure and eligibility criteria of IEMs vide Circular No. 008/CRD/013 dated 11.08.2009 and No. 009/VGL/016 dated 19.04.2010. The review system for IEMs was modified vide Circular No. 008/CRD/013 dated 13.8.2010 and clarification regarding tenure of IEMs was issued by the Commission vide its Circular No. 011/VGL/053 dated 23.07.2012. (c) Department of Expenditure vide OM No. 14 (12)/2008– E-II (A) dated 19.07.2011, issued guidelines to all Ministries / Departments / Organisations including their attached / subordinate offices and autonomous bodies for implementation of IP. Also, vide OM No. 14 (12)/2008 – E- II (A) dated 20.07.2011, the Department of Expenditure requested Department of Public Enterprises for issuing directions to the Central Public Sector Enterprises for use of IP. (d) Further, in view of the increasing procurement activities of Public Sector Banks (PSBs), Insurance Companies (ICs) and Financial Institutions (FIs), the Commission vide Circular No. 02/02/2015 dated 25.02.2015 advised that all PSBs, PSICs and FIs shall also adopt and implement the Integrity Pact. 10.5.4 Adoption of Integrity Pact–Standard Operating Procedure; Independent External Monitor: The Commission appointed a Committee in December, 2015 under the Chairmanship of Shri P. Shankar, the former Central Vigilance Commissioner to review the entire scheme of Integrity Pact. After considering the report of the Committee, the Commission has issued a Vigilance Manual 2017 Chapter - X Preventive Vigilance 272 revised Standard Operating Procedure for adoption of Integrity Pact in Government Departments / Organisations vide Circular No. 02/01/2017 dated 13.01.2017. The salient points are as under: (A) Integrity Pact (1) The Pact essentially envisages an agreement between the prospective vendors / bidders and the buyer, committing the persons / officials of both sides, not to resort to any corrupt practices in any aspect / stage of the contract. Only those vendors / bidders, who commit themselves to such a Pact with the buyer, would be considered competent to participate in the bidding process. In other words, entering into this Pact would be a preliminary qualification. The essential ingredients of the Pact include: (a) Promise on the part of the principal not to seek or accept any benefit, which is not legally available; (b) Principal to treat all bidders with equity and reason; (c) Promise on the part of bidders not to offer any benefit to the employees of the Principal not available legally; (d) Bidders not to enter into any undisclosed agreement or understanding with other bidders with respect to prices, specifications, certifications, subsidiary contracts, etc. (e) Bidders not to pass any information provided by Principal as part of business relationship to others and not to commit any offence under PC Act or IPC; (f) Foreign bidders to disclose the name and address of agents and representatives in India and Indian Bidders to disclose their foreign principals or associates; (g) Bidders to disclose the payments to be made by them to agents/brokers or any other intermediary; (h) Bidders to disclose any transgressions with any other company that may impinge on the anti-corruption principle. (2) Integrity Pact, in respect of a particular contract, would be operative from the date IP is signed by both the parties till the final completion of the Vigilance Manual 2017 273 Chapter - X Preventive Vigilance contract. Any violation of the same would entail disqualification of the bidders and exclusion from future business dealings.
INTEGRITY INDEX 10.6.1
Commission is working on the development of a Comprehensive Integrity Index for organisations. It will be launched shortly. Through the Integrity Index for public organisations the Central Vigilance Commission has decided to adopt a strategy which will ensure transparent, accountable and efficient governance. The Index will be based on bench marking internal processes and controls within an organisation as well as management of relationship and expectation of outside stake holders.The main objectives for which the Integrity Index is to be established are: (i) Define what constitutes Integrity of Public Organisations (ii) Identify the different factors of Integrity and their inter-linkages (iii) Create an objective and reliable tool that can measure the performance of organisations along these above factors (iv) Validate the findings over a period of time to improve upon the robustness of the tool that measures Integrity (v) Create an internal and external ecosystem that promotes working with Integrity where public organisations lead the way. 10.6.2 The Commission has appointed Indian Institute of Management, Ahmadabad as a Consultant for a period of one year to develop the Integrity Index. Based on the survey and extensive consultation with the organisation, the Consultant will: (i) Provide a benchmark of good governance mechanisms needed to combat corruption. (ii) In the preparation of the Index effort will be made to check the existence Vigilance Manual 2017 279 Chapter - X Preventive Vigilance of rules, SOPs and transparency mechanisms designed to deter, prevent or curb corruption and their implementation and enforcement. 10.6.3 The project is designed to cover all the CPSEs and Central Government Ministries / Departments in five years. It is expected that while expansion will take place in the first 2-3 years, the mechanism will stabilise in 2-3 years following that. 10.6.4 In the first year, the Commission has identified 25 CPSEs and Central Government Ministries / Departments to be covered. [Annexure-I] 10.6.5 The organisation in consultation with the consultant will be required to collect data from the internal and external stake holders, conduct workshops and surveys to gather information, evaluate and bench mark the organisations against the Index so developed
It was suggested that Ministries undertake a systematic and thorough review of the laws, rules, procedures and practices for the purpose of listing discretionary powers, levels at which these are exercised, manner in which they are exercised, control over the exercise of such powers and the points at which citizens come into contact with the Departments and why. It was also recommended that a study should be made by Ministries of the extent, possible scope and modes of corruption, remedial measures prescribed and their effectiveness. (d) The Report deals in detail with the major causes of corruption and steps to deal with each. The Committee observed that: (i) Administrative delays must be reduced to the extent possible and firm action should be taken to eliminate causes of delay. (ii) Each Ministry should undertake a review of existing procedures and practices to find out causes of delay, points at which delay occurs and devise steps to minimize the same. (iii) Time limits should be prescribed and these should be strictly adhered to; those responsible for delays should be called to account. (iv) Levels at which files are to be processed and manner of decision making have also been prescribed. The Committee recommended that: (i) Ministries review their regulatory functions and whether the manner of discharge of those functions can be improved. (ii) while recognising that it may not be possible to completely eliminate discretion, it should be possible to devise a system of administration which would reduce the need for personal discretion, to a minimum. (iii) that a serious attempt be made to educate citizens about their rights and responsibilities and make arrangements to enable citizens’ access to the administration without having to go through intermediaries. Other preventive measures listed in the Report include: - (i) recruitment of officers / officials with high integrity, (ii) informal codes of conduct for different categories of Government servants
having agencies where a genuine complainant can seek redressal and protection from harassment, (iv) easy availability of forms required by the public for obtaining licenses, etc., (v) ban on Government servants accepting private employment after retirement among others. (e) Significant developments have taken place since the recommendations of the Santhanam Committee were made. In 2003, statutory status was conferred upon the Central Vigilance Commission and it also became a multi-member body. In 2004, it was made the designated authority to receive whistle blower complaints and to protect the whistle blowers. The institutional framework for addressing corruption has been progressively strengthened with the establishment of the Central Bureau of Investigation, the Directorate of Enforcement, the Directorate General of Income Tax Investigation, State Anti-Corruption agencies and Lokayuktas and the legal framework has also expanded. There are also elaborate conduct rules which aim to promote integrity in public services and other policies and guidelines for transparency in recruitments and promotions.
10.2 THE CONCEPT OF PREVENTIVE VIGILANCE (i) Concept: It is adoption of a package of measures to improve systems and procedures to eliminate / reduce corruption, promote transparency and ease of doing business. (ii) Who is required to implement preventive vigilance measures? Preventive vigilance involves systemic improvements which besides reducing corruption also lead to better operational results. It is a tool of management and good governance and therefore, it is the duty of the management as a whole, and not of the CVO alone. Indeed, it can be said that it is the duty of every employee. 10.2.1 Causes of corruption: Preventive vigilance is aimed at identifying, tackling / addressing the root cause of corruption within the organisation. The common causes of corruption, inter alia, could be:
(a) Excessive regulation & licensing. (b) Complicated rules and regulations. (c) Monopoly over delivery of goods / services. (d) Lack of transparency. (e) Lack of accountability. (f) Too much discretionary power. (g) Poor regulatory framework. (h) Poor grievance redressal mechanism. (i) Very low rate of detection of corruption. (j) Lack of condemnation of corrupt practices by the public. (k) Absence of a formal system of inculcating values, ethics & integrity. (l) Inadequacy of regular / periodic / surprise checks. (m) Rigid bureaucratic framework / processes. (n) Lack of awareness about rights, duties, procedure to complain, rules, laws, etc. 10.3 POTENTIAL AREAS OF CORRUPTION Preventive vigilance is aimed at tackling the areas vulnerable to corruption within the organisation. Although potential areas of corruption are specific to organisations / sectors, there are some broad areas common to all organisations, which need special attention while putting in place a system of preventive vigilance. These relate to: - (a) Procurement: Procurement is a vast area ranging from procurement of store materials & services to execution of infrastructure projects. It is one of the major corruption prone areas in all organisations. (b) Sale of goods and services: The disposal of goods (the reverse of procurement) and services is also a major area of corruption in some organisations. Similarly, allocation of scarce and / or precious natural resources is an area of corruption. (c) Human resource management: Human resource management is common to all organisations and the processes relating to recruitment, promotion, transfer and posting are prone to manipulation and corruption.
Delivery of services to public: Although not common to all Public Sector Organisations, major Government Departments are involved in delivery of services which are a potential area of corruption. (e) Enforcement: The enforcement of Acts, Rules and Regulations is also an area vulnerable to corruption mainly due to lack of awareness among citizens and ineffective grievance redressal mechanism. 10.4 PREVENTIVE VIGILANCE MEASURES Preventive vigilance measures can broadly be categorized as: - (a) Simplification and standardisation of rules: Simplification and standardisation of rules and procedures results in elimination of discretion and arbitrariness, which in turn reduces corruption. Identifying areas involving exercise of discretion which are not governed by guidelines together with a complete review of existing rules and regulations needs to be undertaken to introduce clarity and accountability. Similarly, simplification and standardisation of forms / application also reduces scope for corruption. (b) Leveraging technology: Technology as an enabler for fighting corruption has been effectively demonstrated. E-procurements, E-payments, use of websites for dissemination of information and creating awareness, use of CCTV in places of public dealing, use of GPS enabled devices / RFIDs, use of appropriate analytical tools, computer assisted audit techniques for detecting frauds are examples of how technology strengthens the system of preventive vigilance. (c) Automation: Using IT as an enabler for reducing corruption along with business process re-engineering is recognized as an effective tool of preventive vigilance. Automation reduces interface / interaction between public officials and common public. It also removes monopoly in delivery of services and personal discretion, reducing the opportunities for discretion thus leading to reduction in corruption. Therefore, the organisations should strive to reduce interface of officials with common public / customers by way of automation / online services. However, IT systems are not an end in themselves; they are the means to an end. It
follows therefore that there is a need to develop a system of alerts as also a response mechanism. (d) Business Process Re-engineering (BPR): BPR is very important as it helps the organisations rethink how they do their work and in the process, encourages a full-scale re-creation of processes in order to meet the objectives of the organisation. Existing processes may be re-engineered to even prevent leakage of revenue. (e) Transparency: Transparency removes the information gap between the public and public officials which in turn reduces corruption. The website of the Department / Organisation should contain rules & regulations, contact details of officials and all other information useful for common public / customers. (f) Accountability: There is no fear of punitive action due to lack of accountability. A system with clear accountability and assigned responsibility at each level is necessary not only for smooth functioning but increased transparency, efficiency and for ensuring effective punitive action in case of misconduct. (g) Control & Supervision: Regular and routine inspections, surprise inspections, audit and reviews keep a check on aberrant and corrupt behaviour. A list of points and areas prone to corruption will facilitate the purpose of organising checks and streamlining procedures. A structured interaction between vigilance and internal audit will enable better monitoring and also help identify potential problem areas. (h) Early detection of misconducts: Early detection of misconducts apart from bringing to light the damages to the system, will enable recouping the loss wherever possible and facilitate control of further damage. (i) Time-bound and effective punitive action: Punitive (disciplinary or criminal) action within short period of occurrence of misconduct and finalisation of such cases in a time-bound manner resulting in award of exemplary and adequate (commensurate with gravity of misconduct) punishment deters others from committing such misconduct. Delays and inefficiencies in such proceedings encourages and emboldens others to
take risk of committing misconduct under the belief that nothing would happen to them. (j) Providing necessary infrastructural facilities: Non-provision of adequate infrastructural facilities such as accommodation, conveyance, utilities, etc. also induce corruption. (k) Training & Awareness: Capacity building and sensitization at all levels and across all functional areas is important. Public officials should be made aware of their duties and responsibilities, code of conduct, rules and regulations through regular training and awareness programmes. A list of Dos & Don’ts for employees / officials is a simple yet effective tool. Likewise, familiarization with Standard Operating Procedures relating to different spheres of activity will enhance awareness and reduce procedural violations / inadvertent errors arising out of a lack of awareness. Knowledge sharing initiatives such as publishing / circulating information relating to areas where fraud / misconduct has been detected and sharing information on best practices are other effective awareness generation methods for more effective preventive vigilance. There should also be an effort to create awareness among all stakeholders. (l) Conducive work environment: Conducive work environment for preventive vigilance may include drawing up a list of sensitive posts, rotation policy for sensitive posts, identification of persons of doubtful integrity and keeping them away from sensitive posts / public dealing. It would be necessary also to create an environment that promotes ethical behaviour. Protection to Whistle Blowers must be ensured in order to bring to light cases of corruption. (m) Awareness among public: If public is made aware of their rights, and also of the rules and regulations, then they are able to resist unfair treatment and arbitrary behaviour by public officials. Public should be encouraged to demand the services due to them and to raise their voice when their rights are denied or powers are misused by public officers. Organisations should prominently display information relevant / useful to the common public on their office notice board / website.
Inculcating Moral Values: Inculcating ethical behaviour among public, particularly the younger generation is an important tool of preventive vigilance. Vigilance Awareness Week (VAW), celebrated every year during the last week of October is aimed at creating such awareness. This opportunity should be utilized by all CVOs / Organisations to create awareness among public as well as among its own officials regarding need for imbibing right values. 10.5 INTEGRITY PACT 10.5.1 Integrity Pact (IP) is an important tool of preventive vigilance which is aimed at preventing corruption and ensuring integrity in public procurement. The Central Vigilance Commission is the nodal authority for the implementation of Integrity Pact in India. It addresses not only bribery, but also other corrupt practices such as collusion and bid rigging. IP is a written agreement between the Government / Government Department / Government Company, etc. and all the bidders agreeing to refrain themselves from bribery, collusion, etc. If the written agreement is violated, the pact describes the sanctions that shall apply. These include:- (i) Loss or denial of contract; (ii) Forfeiture of the bid or performance bond; (iii) Liability for damages; (iv) Exclusion from bidding on future contracts(debarment); and (v) Criminal or disciplinary action. 10.5.2 Integrity Pact has a monitoring system which provides for independent oversight. The Central Vigilance Commission nominates Independent External Monitors (IEMs) to monitor implementation of Integrity Pact. Thus, IP in its present form has three players – (i) The Principal or the Company / Department, (ii) The Vendor, and (iii) The Independent External Monitor (IEM). Vigilance Manual 2017 271 Chapter - X Preventive Vigilance 10.5.3(a) In order to ensure transparency, equity and competitiveness in public procurement, the Commission has been recommending adoption of Integrity Pact (IP) and implementation by Government organisations. CVC through its Office Order No. 41/12/07 dated 04.12.2007 and No. 43/12/07 dated 28.12.2007 as well as Circular and No. 24/08/08 dated 05.08.2008 recommended adoption of Integrity Pact to all the organisations and provided basic guidelines for its implementation in respect of major procurements in Government Organisations. A Standard Operating Procedure (SOP) was issued by the Commission vide Office Order No. 10/5/09 dated 18.05.2009. (b) The Commission issued clarifications regarding the appointment, tenure and eligibility criteria of IEMs vide Circular No. 008/CRD/013 dated 11.08.2009 and No. 009/VGL/016 dated 19.04.2010. The review system for IEMs was modified vide Circular No. 008/CRD/013 dated 13.8.2010 and clarification regarding tenure of IEMs was issued by the Commission vide its Circular No. 011/VGL/053 dated 23.07.2012. (c) Department of Expenditure vide OM No. 14 (12)/2008– E-II (A) dated 19.07.2011, issued guidelines to all Ministries / Departments / Organisations including their attached / subordinate offices and autonomous bodies for implementation of IP. Also, vide OM No. 14 (12)/2008 – E- II (A) dated 20.07.2011, the Department of Expenditure requested Department of Public Enterprises for issuing directions to the Central Public Sector Enterprises for use of IP. (d) Further, in view of the increasing procurement activities of Public Sector Banks (PSBs), Insurance Companies (ICs) and Financial Institutions (FIs), the Commission vide Circular No. 02/02/2015 dated 25.02.2015 advised that all PSBs, PSICs and FIs shall also adopt and implement the Integrity Pact. 10.5.4 Adoption of Integrity Pact–Standard Operating Procedure; Independent External Monitor: The Commission appointed a Committee in December, 2015 under the Chairmanship of Shri P. Shankar, the former Central Vigilance Commissioner to review the entire scheme of Integrity Pact. After considering the report of the Committee, the Commission has issued a Vigilance Manual 2017 Chapter - X Preventive Vigilance 272 revised Standard Operating Procedure for adoption of Integrity Pact in Government Departments / Organisations vide Circular No. 02/01/2017 dated 13.01.2017. The salient points are as under: (A) Integrity Pact (1) The Pact essentially envisages an agreement between the prospective vendors / bidders and the buyer, committing the persons / officials of both sides, not to resort to any corrupt practices in any aspect / stage of the contract. Only those vendors / bidders, who commit themselves to such a Pact with the buyer, would be considered competent to participate in the bidding process. In other words, entering into this Pact would be a preliminary qualification. The essential ingredients of the Pact include: (a) Promise on the part of the principal not to seek or accept any benefit, which is not legally available; (b) Principal to treat all bidders with equity and reason; (c) Promise on the part of bidders not to offer any benefit to the employees of the Principal not available legally; (d) Bidders not to enter into any undisclosed agreement or understanding with other bidders with respect to prices, specifications, certifications, subsidiary contracts, etc. (e) Bidders not to pass any information provided by Principal as part of business relationship to others and not to commit any offence under PC Act or IPC; (f) Foreign bidders to disclose the name and address of agents and representatives in India and Indian Bidders to disclose their foreign principals or associates; (g) Bidders to disclose the payments to be made by them to agents/brokers or any other intermediary; (h) Bidders to disclose any transgressions with any other company that may impinge on the anti-corruption principle. (2) Integrity Pact, in respect of a particular contract, would be operative from the date IP is signed by both the parties till the final completion of the Vigilance Manual 2017 273 Chapter - X Preventive Vigilance contract. Any violation of the same would entail disqualification of the bidders and exclusion from future business dealings.
INTEGRITY INDEX 10.6.1
Commission is working on the development of a Comprehensive Integrity Index for organisations. It will be launched shortly. Through the Integrity Index for public organisations the Central Vigilance Commission has decided to adopt a strategy which will ensure transparent, accountable and efficient governance. The Index will be based on bench marking internal processes and controls within an organisation as well as management of relationship and expectation of outside stake holders.The main objectives for which the Integrity Index is to be established are: (i) Define what constitutes Integrity of Public Organisations (ii) Identify the different factors of Integrity and their inter-linkages (iii) Create an objective and reliable tool that can measure the performance of organisations along these above factors (iv) Validate the findings over a period of time to improve upon the robustness of the tool that measures Integrity (v) Create an internal and external ecosystem that promotes working with Integrity where public organisations lead the way. 10.6.2 The Commission has appointed Indian Institute of Management, Ahmadabad as a Consultant for a period of one year to develop the Integrity Index. Based on the survey and extensive consultation with the organisation, the Consultant will: (i) Provide a benchmark of good governance mechanisms needed to combat corruption. (ii) In the preparation of the Index effort will be made to check the existence Vigilance Manual 2017 279 Chapter - X Preventive Vigilance of rules, SOPs and transparency mechanisms designed to deter, prevent or curb corruption and their implementation and enforcement. 10.6.3 The project is designed to cover all the CPSEs and Central Government Ministries / Departments in five years. It is expected that while expansion will take place in the first 2-3 years, the mechanism will stabilise in 2-3 years following that. 10.6.4 In the first year, the Commission has identified 25 CPSEs and Central Government Ministries / Departments to be covered. [Annexure-I] 10.6.5 The organisation in consultation with the consultant will be required to collect data from the internal and external stake holders, conduct workshops and surveys to gather information, evaluate and bench mark the organisations against the Index so developed
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