Public Procurement in Transition Countries: Major Trends in Provision of Access to Justice

16 July 2014

UNCITRAL Standards for Transparency, Accountability and Good Governance

European Bank for Reconstruction and Development

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€ Bi

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Cumulative business volume of €86 billion

Note: Unaudited as at 31 December 2013

What is the EBRD?

• International financial institution owned by 64 countries and two inter-governmental institutions

• Operating in 34 countries from central Europe to central Asia

• Capital base of €30 billion

Objectives

• Promote transition to market economies by investing mainly in the private sector

• Mobilize significant foreign direct investment• Support privatization, restructuring and better

municipal services to improve people’s lives• Encourage environmentally sound and sustainable

development

Legal Transition Programme

• Aims to improve investment climate in the countries of operations by helping create an investor-friendly, transparent, and predictable legal environment

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EBRD Assessments

2010 Public Procurement Sector Assessment

Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Egypt, Estonia, FYR Macedonia, Georgia, Hungary, Jordan, Kazakhstan, Kyrgyz Republic, Latvia, Lithuania, Moldova, Montenegro, Morocco, Poland, Romania, Russia, Serbia, Slovak Republic, Slovenia, Tajikistan, Tunisia, Turkey, Ukraine, and Uzbekistan

2012 Public Procurement Sector Assessment Update

Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Egypt, Estonia, FYR Macedonia, Georgia, Hungary, Jordan, Kazakhstan, Kyrgyz Republic, Latvia, Lithuania, Moldova, Mongolia, Montenegro, Morocco, Poland, Republic of Kosovo, Romania, Russia, Serbia, Slovak Republic, Slovenia, Tajikistan, Tunisia, Turkey, and Ukraine

2011 UNCITRAL Model Law Diagnostic

Armenia, Azerbaijan, Kyrgyz Republic, Moldova, Mongolia, Russian Federation, and Tajikistan

Countries Surveyed

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1. Can challenges be brought before an administrative review body?

Is administrative review system available?Yes Armenia, Azerbaijan, Belarus, Bosnia and

Herzegovina, Bulgaria, Croatia, Egypt, Estonia, FYR Macedonia, Georgia, Hungary, Kazakhstan, Moldova, Mongolia, Montenegro, Morocco, Poland, Romania, Russia, Serbia, Slovak Republic, Slovenia, Tajikistan, Ukraine, Republic of Kosovo

Yes with reservations Jordan, Kyrgyz Republic, Latvia, Lithuania, Tunisia

No with reservations

No

N/A

84%

16%

Yes

All over the EBRD region, administrative review systems are available as an independent body of the executive branch. However, they seldom employ tribunal due process procedures.

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2. Is the review body independent?

Is the reviewing body of procurement decisions independent?Yes Albania, Armenia, Azerbaijan, Bosnia and

Herzegovina, Bulgaria, Croatia, Egypt, Estonia, FYR Macedonia, Hungary, Kyrgyz Republic, Latvia, Lithuania, Moldova, Montenegro, Poland, Republic of Kosovo, Romania, Russia, Serbia, Slovak Republic, Slovenia, Tajikistan, Turkey, Ukraine

Yes with reservations Belarus, Georgia, Jordan, Morocco, TunisiaNo with reservations KazakhstanNo

N/A

In most jurisdictions, public procurement law stipulates that the review system must be independent, especially from the contracting entity.

81%

16%3%

Yes

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Focus on CIS countries

Does the public procurement law ensure that the review procedure be impartial? Yes ArmeniaYes with reservations

MongoliaTajikistan

No with reservations

AzerbaijanKyrgyz RepublicMoldova

NoN/A Russian Federation

Even structurally independent review bodies may not be impartial in practice.

81%

16%3%14%

29%43%

14%

Yes

Yes with reservations

No with reservations

N/A

UNCITRAL on Impartiality Assessment on Independence

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3. Can challenges be brought before a court?

Is judicial review system available?Yes Armenia, Azerbaijan, Belarus, Bulgaria,

Croatia, Egypt, Georgia, Hungary, Jordan, Kazakhstan, Lithuania, Mongolia, Montenegro, Morocco, Poland, Romania, Russia, Tajikistan, Turkey

Yes with reservations Albania, Bosnia and Herzegovina, Kyrgyz Republic, Moldova, Slovak Republic, Slovenia, Tunisia, Ukraine

No with reservations Estonia, FYR Macedonia, Latvia, SerbiaNo Republic of KosovoN/A

Judicial review is not as widely available as administrative review. In some countries, judicial review is available only after administrative review procedures have been exhausted.

59%25%

13%3%

YesYes with reser-vations

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4. Is monetary compensation available as a remedy?

Do the aggrieved complainants have a right to seek monetary compensation?Yes Armenia, Bosnia and Herzegovina, Bulgaria,

Croatia, Egypt, Estonia, FYR Macedonia, Georgia, Hungary, Kazakhstan, Kyrgyz Republic, Latvia, Lithuania, Mongolia, Montenegro, Morocco, Poland, Republic of Kosovo, Romania, Serbia, Slovenia, Tunisia, Turkey

Yes with reservations Moldova, Russia, Slovak RepublicNo with reservations Azerbaijan, Jordan, UkraineNo Albania, Belarus, TajikistanN/A

In many jurisdictions, monetary compensation is available if a complainant can prove that the contracting entity violated a specific provision and as a result lost the substantial chance it had at winning the challenged contract.

72%

9%

9%9%

YesYes with reservationsNo with reservationsNo

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5. Is remedial action available as a remedy?

Do the aggrieved complainants have the right to seek remedial action in lieu of monetary compensation?

Yes Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Estonia, FYR Macedonia, Hungary, Kazakhstan, Kyrgyz Republic, Latvia, Lithuania, Moldova, Mongolia, Montenegro, Morocco, Poland, Republic of Kosovo, Romania, Russia, Serbia, Slovak Republic, Slovenia, Tajikistan, Tunisia, Turkey, Ukraine

Yes with reservations CroatiaNo with reservations Georgia, JordanNo EgyptN/A

Remedial action is more widely available than monetary compensation as an available remedy.

88%

3%6%3%

YesYes with reservationsNo with reservationsNo

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Focus on CIS region: Suspension measures

Is the award procedure suspended?Yes Armenia

AzerbaijanMongoliaRussian Federation

Yes with reservations Kyrgyz RepublicMoldova

No with reservations

No TajikistanN/A

Is the contract award suspended? Yes Armenia

AzerbaijanMongolia

Yes with reservations Kyrgyz RepublicMoldova

No with reservations

No Russian FederationTajikistan

N/A

57%29%

14%

YesYes with reservationsNo

43%

29%

29%

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6. Are procurement proceeding records accessible?

Does the law require written records of the procurement proceedings to be maintained?Yes Albania, Armenia, Azerbaijan, Bosnia and

Herzegovina, Bulgaria, Croatia, Egypt, FYR Macedonia, Georgia, Hungary, Jordan, Kazakhstan, Latvia, Lithuania, Montenegro, Poland, Romania, Russia, Serbia, Slovak Republic, Slovenia, Tajikistan, Tunisia, Turkey, Ukraine

Yes with reservations Belarus, Estonia, MoldovaNo with reservations Kyrgyz Republic, MongoliaNo Morocco, Republic of KosovoN/A

In most countries, records are maintained and accessible through online publication. Advancement in IT has made it cheaper to gather and publish procurement records to a broader audience.

78%

9%

6%6%

YesYes with reservations

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7. Does the public procurement law have specific confidentiality provisions?

Does the public procurement law contain specific requirements on confidentiality of information?

Yes Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Estonia, FYR Macedonia, Hungary, Jordan, Kyrgyz Republic, Latvia, Lithuania, Moldova, Mongolia, Montenegro, Morocco, Poland, Republic of Kosovo, Romania, Russia, Serbia, Slovak Republic, Slovenia, Tajikistan, Tunisia, Turkey, Ukraine

Yes with reservations GeorgiaNo with reservations Egypt, KazakhstanNo

N/A

In almost all jurisdictions, public procurement laws stipulate specific requirements on confidentiality of information in tender processes.

91%

3%6%

YesYes with reservationsNo with reservations

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8. Is the reviews process accessible to SMEs?

Does the public procurement law stipulate that the remedies system be inexpensive?Yes Armenia, Egypt, Georgia, Kyrgyz Republic,

Latvia, Moldova, Mongolia, Montenegro, Romania, Russia, Tunisia, Turkey

Yes with reservations Albania, Belarus, Bosnia and Herzegovina, Estonia, FYR Macedonia, Lithuania, Serbia, Slovenia, Tajikistan

No with reservations Georgia, Jordan, Kazakhstan, Poland, Slovak Republic, Ukraine

No Azerbaijan, Bulgaria, Hungary, Jordan, Morocco, Republic of Kosovo

N/A Croatia

Procurement reviews and remedies system remains costly in many jurisdictions, restricting SME suppliers’ access to justice.

38%

28%

13%

19%3%

YesYes with reservationsNo with reservationsNoN/A

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Conclusion

Review and remedies system should be affordable, timely, and effective

1. Administrative review is widely available but lacks due process procedures

2. Judicial review is not widely available and where available, often lacks

suspension measures to effectively implement remedies

3. Public procurement decisions and actions are still largely insulated from public

scrutiny because review and remedies system remains expensive for wide use

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Contacts

For all further enquiries, please contact:

Michel NussbaumerChief CounselLegal Transition TeamTel: +44 20 7338 7631NussbauM@ebrd.com

EBRDOne Exchange SquareLondon, EC2A @JNUnited Kingdomwww.ebrd.com