Addressing conflicts of interest in public-private partnerships (PPPs)

16-01-2015

The term 'public-private partnership' (PPP) is used to describe a broad and varied spectrum of cooperative relationships between public actors (governments, agencies and international organisations, or a combination thereof) and private actors (companies or not-for-profit entities). There is therefore no standard global definition of precisely what a PPP is. PPPs have increased in number over the past decade. This has given rise to concerns regarding the exposure of PPPs to the risk of conflicts of interest. Such risks may arise, for example, with the possibility that preference is given to national tenderers or applicants whenever a contract is awarded by the public contracting authorities; or through the possibility that weaker actors may be excluded from participating in a PPP because of the preference given a priori to stronger actors. The EU attempts to strike a balance by combining broad definitions of conflicts of interest with a number of legal tools tailored to identifying, managing and resolving specific conflicts. The legal tools currently in place to avoid conflicts of interest in this context can be divided into two broad categories. Hard-law tools include provisions for ensuring that public officials perform their duties in a fair and unbiased way. These rules apply along the entire decision-making process concerning PPPs. To complement such rules, a vast array of soft-law tools is also in place, including criteria to guide decisions of public actors on support to enterprises or financial intermediaries, support for internationally recognised guidelines and principles, and commitment towards voluntary initiatives to increased fiscal transparency.

The term 'public-private partnership' (PPP) is used to describe a broad and varied spectrum of cooperative relationships between public actors (governments, agencies and international organisations, or a combination thereof) and private actors (companies or not-for-profit entities). There is therefore no standard global definition of precisely what a PPP is. PPPs have increased in number over the past decade. This has given rise to concerns regarding the exposure of PPPs to the risk of conflicts of interest. Such risks may arise, for example, with the possibility that preference is given to national tenderers or applicants whenever a contract is awarded by the public contracting authorities; or through the possibility that weaker actors may be excluded from participating in a PPP because of the preference given a priori to stronger actors. The EU attempts to strike a balance by combining broad definitions of conflicts of interest with a number of legal tools tailored to identifying, managing and resolving specific conflicts. The legal tools currently in place to avoid conflicts of interest in this context can be divided into two broad categories. Hard-law tools include provisions for ensuring that public officials perform their duties in a fair and unbiased way. These rules apply along the entire decision-making process concerning PPPs. To complement such rules, a vast array of soft-law tools is also in place, including criteria to guide decisions of public actors on support to enterprises or financial intermediaries, support for internationally recognised guidelines and principles, and commitment towards voluntary initiatives to increased fiscal transparency.