Turning off the tap on Thailand's graft pipeline

[webfact]

Turning off the tap on Thailand's graft pipeline
Daniel J Mitterhoff
Special to The Nation


Labourers at work on a construction project in Bangkok.//EPA

Renewed emphasis on mega-projects and counter-corruption needs renewed emphasis on public procurement law

BANGKOK: -- Prime Minister Prayuth Chan-ocha has quickly embraced infrastructure development as the Kingdom's economic salvation, and counter-corruption as the country's political deliverance. But will the government's sweet-sounding words and grandiose plans alone break the cycle of government officials and their cronies exploiting Thai public expenditure for personal gain? Absolutely not. Real change will only come through deep and comprehensive administrative and technical reforms to the way the government purchases goods, construction and services. For this, Thailand needs an overhaul of its public procurement system.

It is heartening to read that in response to recent mega-project mania, Thailand's State Policy Office is seeking outside assistance in setting rules and regulations governing procurement by state-owned enterprises ("CoST help sought to set standards for procurement", The Nation, August 28). Nevertheless, Thailand's renewed emphasis on infrastructure development calls for a more ambitious plan for controlling corruption, enhancing competition for contract opportunities, and obtaining the best value for public expenditure. Thailand's current political and economic context presents a unique opportunity to forego tinkering with lower-level rules and instead engineer broad-based reform of the Kingdom's entire public purchasing regime. The Prayuth government must seize this opportunity by prioritising the passage of a national government procurement law covering purchasing by all Thai public agencies.

Development of Thailand's modern procurement regime lags behind that of many other countries. Indeed, the key rules for Thai government purchasing derive from stale Prime Minister Regulations dating back to 1992.

And the absence of a national law serves the lesser urges of civilian agencies, as it perpetuates the Cabinet regulating itself on government purchasing with little outside oversight - a known recipe for corruption.

This is certainly no way to run a system valued at 10-20 per cent of GDP in most countries. Vietnam passed a new government procurement law last year. Thailand needs to do so this year - and before the money starts flooding to the mega-projects touted by the Prayuth government.

Among other things, public procurement law sets out strict rules for how governments plan projects, advertise project opportunities to the public, handle public biddings, award projects to bid winners, prevent conflicts of interest and corruption, and allow unsatisfied bidders to file complaints with the government and courts. It is an important tool for maintaining system transparency, fostering open competition for contract opportunities and ensuring that public monies are spent to gain maximum value for taxpayers. Properly-structured public procurement reform may also reduce the perils of Thai administrative decentralisation, limiting local officials' capabilities to create self-enriching fiefdoms. Moreover, it ensures better project quality by preventing contractors from substituting inferior materials into critical infrastructure (with or without the conspiring of official inspectors) in an attempt to squeeze ever more profit from publicly funded projects. Best to avoid the recent fate of the Vietnamese badminton arena, the roof of which collapsed for lack of construction quality. (The arena was obviously built prior to the advent of Vietnam's new government procurement law.)

A draft public procurement law has been collecting dust in the Office of Thai Council of State for some time now, its timely passage undermined by jostling of government departments who want to retain discretionary power over this very lucrative part of the administrative state. The delay is inexcusable, especially when one considers that government procurement corruption was cited as grounds for both the 1991 and 2006 military coups. The Prayuth government's invigorated and combined focus on promoting good governance and speeding up infrastructure projects for the future economic health of the country creates the conditions to set Thailand's procurement system on a new course with well drafted rules, good oversight, a properly trained procurement workforce and fair opportunity for ("unconnected") suppliers to compete for public contracts. Thai civilian governments have long demonstrated that they are unwilling to limit (their own) opportunities for procurement corruption. Perhaps a military government can get this done.

Thailand cannot afford to squander any more public resources, nor endure the scourge of further repeated procurement scandals (for the latest allegations, see "Graft suspected in Buri Ram solar cell project", The Nation, September 7). The forthcoming spending binge to transform Thailand's infrastructure requires a stronger expenditure and procurement oversight regime, and it must come soon. The open competition afforded by technical reform of the country's procurement methods will serve to lessen the gap between rich and poor, weakening the grip of vested interests over public contract opportunities.

Without serious public procurement reform now, the coming years will see a repeat of government insiders devising ways to gain personally from the expenditure of budgetary monies, if not the further outright diversion of public funds to their personal use without any public benefit. If properly seized, however, this may be one opportunity for a military-sponsored government to lay the foundations to constrain the behaviour of future civilian governments and ensure that public monies are spent only for public benefit. And importantly, when civilian government is restored, it can return the favour by expanding public procurement reform to set up proper controls over purchases by the Thai military.

Daniel J Mitterhoff teaches Comparative Government Procurement Law at Yunnan University (YNU) in Kunming, China. He is in charge of the Lancang-Mekong College of Law Project at the YNU Law School, a programme designed to bring together graduate-level students from throughout the Greater Mekong Subregion for the study of regional legal problems and their solutions. He can be reached at [email protected]

Source: http://www.nationmultimedia.com/opinion/Turning-off-the-tap-on-Thailands-graft-pipeline-30242980.html

-- The Nation 2014-09-11

[surinderek]

try investlgating the road building contracts. road resurfaced 3 months ago, nowfull of holes after rain,

[ramrod711]

And the absence of a national law serves the lesser urges of civilian agencies, as it perpetuates the Cabinet regulating itself on government purchasing with little outside oversight - a known recipe for corruption.

I can hear Chalerm muttering to himself, "This country is going to hell, what's the point in being an MP if you can't steal"

[tomacht8]

They must do reforms for changes: Simply to rule out, that criminals can run the country.

I.

They must urgently change the law that exclude all persons from the Parliament, from electoral lists and from civil servant posts, which

a have criminal records.

b running free on bail (mandatory suspension until the sentence in the last instance is present)

c were already banned from parliament in the past.

d against are corruption / crime cases opened (mandatory suspension until the sentence in the last instance is present)

No criminals and/or corrupt people in government, parliament or as a civil servant!

II.

Like for all future budgeting processes they make it compulsory for all future governments, that

- the use of money for project proposals are accurately represented in detail and coherent on the last baht.

- the use of money for project proposals is described in detail for all people publicly documented and visible

- Public monthly or quarterly reports on Finance and project progresses.

- Public invitation for project proposals and at least three competitive compare offers.

- Project completion reports including all expenses with receipts.

- a strong supervisory committee composed of members is formed by all parties,

to control the entire investment process without disabilities and time delay restrictions.

The results of the process and progress checks are presented to the parliament.

The members of the supervisory body should rotate so that corruption is impossible or more difficult.

When public funds are used, then the public has the right to see what the representatives of the people plan to do with the money and how it was used.

It must be prevented that a country can be completely plundered by a few unethical people just because they are currently in power.

III.

- Strengthen the independent monitoring bodies.

- Decentralization of authorities, including the police

- Introduction of a independent tax police, which checks all unexplained asset increases.

- Change in the bail system.

- Fast processing of 25.000 open corruption cases

- Abolition of the immunity of Members of Parliament

- Fixed periods for court proceedings. (Indictment to judgment within 90 days)

[Suriya4]

No shin no corruption. Since yingluck was removed, corruption have to a sudden halt. What thailand need is a watchdog to stop future shin into politics. This is the best anti corruption measures.

[NongKhaiKid]

Talking about reform be it corruption, education etc. etc is one thing but making it happen is very difficult not the least because there are so many vested interests that don't want reform and for many and varied reasons ranging from loss of face to stopping the gravy train.

[chainarong]

The tendering process , just turn to a western government to find out how the tender process is managed , the methods used are too complex to start a 8 page recommendation, Thailand has to come up to speed in most areas, whether Thailand has the intestinal fortitude to embrace anything decent is debatable , they seem to fence sit with an attitude of a little here and a bit for me. Until Thailand proves otherwise End result: It Can't be trusted.

[Prbkk]

No shin no corruption. Since yingluck was removed, corruption have to a sudden halt. What thailand need is a watchdog to stop future shin into politics. This is the best anti corruption measures.

Whatever the level of corruption under the Shins, it is small beer, chicken feed, trivia, pennies, relative to that ripped out of the country by the old guard ( ie, those now in positions of such wealth and power, they can just sit on their mega billions). When the regime starts going after some of those families, as well as the more publicised cases of late, they will earn some credibility.

[kevvy]

No shin no corruption. Since yingluck was removed, corruption have to a sudden halt. What thailand need is a watchdog to stop future shin into politics. This is the best anti corruption measures.

corruption have to a sudden halt

Really? Go to the land office and have a look . It is everywhere.

[rwhoov]

No shin no corruption. Since yingluck was removed, corruption have to a sudden halt. What thailand need is a watchdog to stop future shin into politics. This is the best anti corruption measures.

Where did you get those rose colored glasses? To think that corruption was invented by and ended with one dynasty is perhaps the most delusional statement about Thailand I've heard in a long time. Corruption in its highest form exists on both sides of the colored shirt aisle.

[airconsult]

No shin no corruption. Since yingluck was removed, corruption have to a sudden halt. What thailand need is a watchdog to stop future shin into politics. This is the best anti corruption measures.

Where did you get those rose colored glasses? To think that corruption was invented by and ended with one dynasty is perhaps the most delusional statement about Thailand I've heard in a long time. Corruption in its highest form exists on both sides of the colored shirt aisle.

Indeed - when one particular airport (not owned or operated by Aot) was being refitted to comply as a commercial passenger airport, many companies which had worked successfully on Aot run projects enquired about bidding for the work.

As I understand it, all were asked to supply 30% of their total contract price back immediately as part of the bidding process. I will not speculate as to whether any accepted.

NB. this was not run or funded by Aot or Ministry of Transport.

EDIT - modified to avoid defamation lawsuit - as the parties involved have another suit in the courts right now.

Edited September 11, 2014 by airconsult

[ratcatcher]

No shin no corruption. Since yingluck was removed, corruption have to a sudden halt. What thailand need is a watchdog to stop future shin into politics. This is the best anti corruption measures.

Your post, like your avatar, is charmingly disingenuous. That's about as polite as I can be. If you honestly think that the door on corruption in this country, since the coup, has been slammed shut on the Shinawatras, you are terribly naive.

Had you stated that you think P.M. Prayuth will attempt to reduce the amount of blatant corruption in all government departments, you would have been more credible.

The Shinawatras were merely perfecting the process and there are legions of others ready to assume their role. Corruption is what drives Thailand at the moment and most other countries too.

[Krataiboy]

No shin no corruption. Since yingluck was removed, corruption have to a sudden halt. What thailand need is a watchdog to stop future shin into politics. This is the best anti corruption measures.

The member may be Advanced, but the thinking is retarded. Or did you miss the story about the purchase of obscenely expensive audio equipment and LED screens for the new Cabinet?

[DrLom]

I recently saw (can't say how) a contract between Thailand and a neighbouring country to build a road. It was actually written into the contract about how much graft would be exchanged between the project manager and the company receiving the building contract, and how suit-cases of loot would be exchanged! The graft was 10% - but the project was in the hundreds of millions of Baht range, if not over 1 billion in my estimation. Simply one contract amongst thousands being signed daily. Believe me, graft is rampant even until this very day, and will unknowingly continue despite Prayuth's efforts.....

[Cake Monster]

Graft is from the very top to the very bottom, and is not just confined to Government procurements of microphones and plasma TV,s.

Corruption goes right through society here, with the street vendors and small business owners still having to pay " protection money " to the Police, and the Chanots are still being " modified " to suit needs - thats also corruption.

Any person that thinks corruption has been eradicated since the Shins have lost power in Thailand needs to get a reallity check, and I am sure the wider world is looking on with baited breath, waiting for the Junta to start getting results, and making significant inroads into the issue.

[heybruce]

A good article with many good ideas. However reforming procurement would involve stepping on the toes of many important people of all political persuasions, some of them in uniform. Also, true transparency requires a free press that is allowed to criticize important people and institutions. This means allowing the press to criticize the government and changing the ridiculous libel laws used to intimidate reporters, investigators and whistle-blowers. That doesn't seem to be on the agenda.

Edited September 11, 2014 by heybruce

[laocowboy2]

try investlgating the road building contracts. road resurfaced 3 months ago, nowfull of holes after rain,

Of course it is silly If they had done a proper job there would have been no new resurfacing tender for years. This way they get to bid (probably in another name) on a new contract to take place before year end. You should see roads in India - a collection of pot holes marred by the occasional scrap of tarmacadam. And anyway, after they have paid all the bribes, there is no money left for proper materials so .....

[lvr181]

"Turning off the tap on Thailand's graft pipeline" - not going to happen any time soon.

The Prime Minister and his colleagues may wish and strive for that (and I hope they can achieve it) but it is endemic to Thai and probably many other Asian cultures. Many corrupt people need to be made an example of. Prison, strip all assets and lose face!

[rickirs]

This article brings to mind another procurement pipeline that may operate at less than full disclosure and accountability - military procurements. This may be an even more sensitive subject when the PM is active military, most of the cabinet is active military, and the Defense Minister is the PM. In response to previous concerns about corruption in military procurements, the response has been that there has never been corruption in the military and so it can be TRUSTED not to become corruptable. There are other "recepients" of taxpayer funds who may stand outside of the scrutiny of mandatory government supervised accountability that might fairly be called to transparency as well. A government without complete uniform and enforceable anti-corrpution policies is a government that is not a good example for its constituents - the Thai People.

[airconsult]

This article brings to mind another procurement pipeline that may operate at less than full disclosure and accountability - military procurements. This may be an even more sensitive subject when the PM is active military, most of the cabinet is active military, and the Defense Minister is the PM. In response to previous concerns about corruption in military procurements, the response has been that there has never been corruption in the military and so it can be TRUSTED not to become corruptable. There are other "recepients" of taxpayer funds who may stand outside of the scrutiny of mandatory government supervised accountability that might fairly be called to transparency as well. A government without complete uniform and enforceable anti-corrpution policies is a government that is not a good example for its constituents - the Thai People.

Ah - well it was explained to me a few years ago that in new equipment purchases, it is entirely legal within the Thai Armed forces to claim a commission.

The reasoning is that the research of what is needed, the evaluation of different types, etc - is all outside their normal job, so they are entitled to be rewarded for that.

In fact in 2012, the Admiral proposing the purchase of the refurbished German submarines noted that it was a very good deal - he wasn't even asking for commission on it.

Cynical people might think this commission system (only on equipment purchases) is the reason much of the older equipment gets very little maintenance. I'm sure they'll propose extending commission to maintenance agreements soon - then everything will be fine.