Q57.

Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?

57a. Legal framework

Score

SCORE: NS/100

Assessor Explanation

Assessor Sources

57b. Corruption risks

Score

SCORE: 100/100

Assessor Explanation

Assessor Sources

57c. Effectiveness

Score

SCORE: 100/100

Assessor Explanation

Assessor Sources

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This indicator is not assigned a score in the GDI.

The country has a public procurement law that might cover defence and national security purchases which allows for exemptions. The 2016 Public Procurement Law does not make explicit reference to the defence and security sector (1). A Jane report, from 2014 mentioned that military procurement is exempt from wider public procurement rules (2). Another report notes that tenders related to defence and security are restricted (3). Since Art. 168 makes a clear exemption with regards to external control mechanisms for the Ministry of National Defence, there is some indication that the 2016 Public Procurement Law applies to the Ministry of Defence. The law generally regulates the determination of needs (chapter 2), public procurement (chapter 3), public contracts (chapter 4), controls of the procurement process (chapter 5), and the communication and exchange of information by electronic means (chapter 6). It makes exemptions for certain types of procurements. For example, public contracts of a specifics nature, which cannot be published, are exempted from being published in the Official Procurement Bulletin of the Public Operator (BOMOP) (Art. 158), (1). No further information of what defines a “specific nature” could be found in the law. It seems very likely that it includes sensitive defence and security items.

The country’s last assessment mentioned Executive Decree No. 95-396 (1995) that regulates the procedures for importing firearms on behalf of security companies (4), (5). Another inter-ministerial decree from 1996 referring to Decree 95-396 lays down the procedures for the acquisition and import of firearms and ammunition and the conditions for issuing the relevant authorisation on behalf of security and transport companies (6).

The country has public procurement legislation which refers to corruption risks, and it might cover defence and security procurement (see the answer to question 57A).

Section 8 of the 2016 Public Procurement Law addresses the fight against corruption it states that a code of ethics and professional conduct for officials involved in the control, award and performance of public contracts shall be written (Art. 88), (1). A published copy could be found on the ONPLC’s website. One of the main purposes of the code is to set out the main values that should govern the conduct of public officials responsible for procurement in the performance of their duties (2). A critical newspaper report stated, that “[e]ven if this code is adopted, if there is no real will to fight corruption, it will always persist” (3). The documents make no explicit reference to defence and security procurement.

This indicator has not been assigned a score due to insufficient information or evidence.

The Public Procurement Law mentions some exemptions. It is unclear if defence purchases are procured in line with legislation. For example, tenders in defence and security are restricted (1). According to Art. 12 of the Public Procurement Law, in case of a compelling emergency motivated by an imminent danger to an asset or investment, the minister, the wali or the president of the respective municipal popular assembly may authorize the commencement of performance of services before the conclusion of the public contract. The article only broadly states that an emergency is present when, for example, public order is threatened. No further information with regards to the defence and security sector was found in the law. Art. 45 of the Public Procurement Law does formally allow for restricted tenders and outlines the requirements for such a process (2). No information with regards to the defence sector was provided in Art. 45.

This indicator is not assigned a score in the GDI.

The 2016 Public Procurement Law (Law 9/16 of June 16) governs all public contracts, including in defence and security (Art. 2,c) (1). Notably, however, the law exempts “contracts of acquisition of arms, military and police equipment related to the defence and security of the State”, that “shall be declared secret” (Art. 7, 1, b) (1). In 2014, based on the previous (2010) Public Procurement Law, specific regulations were enacted for military procurement contracts for administrative and logistics expenses (2). The regulations establish rules and procedures for necessity plans, its approval and execution, contracting methods and oversight by the inspector-general of the Defense and the Angolan Armed Forces, and determines the state-owned company Simportex as the exclusive handler of army procurement contracts. It’s unclear whether the regulations are still in force.

It also remains unclear which further areas of defence procurement are not covered by the 2016 Public Procurement Law. In the general state budgets, monitoring and execution of “special internal and external state protection expenses” continues to be under the direct control of the president, which has been repeatedly criticized by the opposition as an open door for corruption (3), (4).

Relevant legislation that covers defence and national security purchases include the Public Contracting Law (2016) and its implementing regulations, the Public Probity Law (2010) and the Law on Public Assets (2010). Both the public procurement law and law on public assets contain exemptions for secret items. The public procurement law and public probity law cover the defence and security sector and contain general anti-corruption provisions (1), (2), (3).

There are regular exceptions to procurement requirements outlined in legislation for the defence and security sector, but their significance in terms of number and scale cannot be assessed (1), (2).

Public audit court records such as opinions on pre-reviews of contracts, feature some, but not all known major defence procurement contracts of the last few years (3).

This indicator is not assigned a score in the GDI.

According to Article 6 of Law N° 039 (2016), this Act does not apply to contracts for works, supplies and services and public service delegations, where they relate to the needs of defence and national security that require secrecy or for which protection essential interests of the State is incompatible with publicity measures. A decree issued by the Council of Ministers specifies the rules that govern the acquisition of goods and services (1).

According to Article 6 of Law N° 039 (2016), this Act does not apply to contracts for works, supplies and services and public service delegations, where they relate to the needs of defence and national security that require secrecy or for which protection essential interests of the State is incompatible with publicity measures. A decree issued by the Council of Ministers specifies the rules that govern the acquisition of goods and services (1).

According to Article 6 of Law N° 039 (2016), this Act does not apply to contracts for works, supplies and services and public service delegations, where they relate to the needs of defence and national security that require secrecy or for which protection essential interests of the State is incompatible with publicity measures. A decree issued by the Council of Ministers specifies the rules that govern the acquisition of goods and services (1).

This indicator is not assigned a score in the GDI.

The Cameroon Public Procurement Code (2018) governs procurement in Cameroon. Under Article 71, procurement relating to national defence and security are considered special contracts and not subject to the consideration of any public procurement commission [1]. There is no evidence that separate legislation exists to govern defence and security procurement, and given the lack of transparency around procurement in general [2] and defence and security specifically (owing to the Constitution), it is unlikely that such legislation exists.

Legislation that covers procurement in Cameroon exempts defence and security contracts (‘Special Contracts’) as per Article 71 of the Public Procurement Code (2018) [1].

Legislation that covers procurement in Cameroon exempts defence and security contracts (‘Special Contracts’) as per Article 71 of the Public Procurement Code (2018) [1].Therefore, this indicator has been marked Not Applicable.

This indicator is not assigned a score in the GDI.

On the website of the National Procurement Regulatory Authority (Autorité Nationale de Régulation des Marchés Publics, ANRMP), there are 15 different decrees from June 10, 2014, to November 7, 2018, covering different aspects of public procurement, as well as ANRMP oversight. None of the decrees are specific to the defence and security sector (1). The ANRMP website also has a page dedicated to laws and executive orders regulating aspects of public procurement and ANRMP oversight. These documents date from December 31, 1959, to June 27, 2018. However, there are no laws or executive orders specific to regulating defence and security procurement. The only legislation cited that is related to corruption is Order No. 2013-650 (Relative à la prévention et la lutte contre la corruption) (2).

The 2009 Code of Public Procurement (Décret No. 2009-259, Portant Code des Marchés Publics) incorporates WAEMU Directives on the awarding, executing, monitoring and regulating of public procurement. But it is not specific to purchases for the defence and security sector. Article 8 of the Code exempts purchases covering confidential or secret items (3):

“Art. 8 – Exclusions
This Code does not apply to supplies and services contracts related to national defence and security requirements that require secrecy or for which the protection of essential State interests is incompatible with public dissemination” (3).

Finally, the 2009 Code of Public Procurement also fails to include clauses specific to corruption risks. Based on the evidence on the ANRMP website, Côte d’Ivoire has no defence-specific legislation covering this type of purchases.

Côte d’Ivoire has no defence-specific legislation covering this type of public procurement, as shown in 57A.

Côte d’Ivoire has no legislation regulating defence and security procurement. Therefore this indicator is marked Not Applicable.

Since there is no defence-specific legislation and Art. 8 in the Code of Public Procurement exempts all secret/confidential items related to national security from ANRMP oversight, the State’s actual defence purchases do not conform to any decrees, laws or executive orders.

This is indicator is not assigned a score in the GDI.

According to our sources, no procurement law specifically targets the military and defence sector. However, there are procedural tools within the MoD, but it does not amount to the level of a legal framework. All the present procurement laws are not applied to the defence sector, as the MoD and the army have several economic areas that cover almost every procurement aspect (1), (2), (3), (4), (5), (6), (7).

There no legal framework for defense and military procurement,.

As there is no legal framework for defense and military procurement, this sub-indicator is marked Not Applicable.

This indicator is not assigned a score in the GDI.

Public procurement in Ghana is regulated by the Public Procurement Act (2003) (1). The legislation covers all MDAs, including the Ministry of Defence and GAF. Additionally, the MOD established the Defence Tender Committee, which is mandated to review and approve all procurement activity in the MOD.

There are significant exemptions, in so far as the legislation (Sections 35- 40 of the Act) provides that two procurement methods can be used; (i) tendering (competitive, two-stage, restricted) and (ii) single-source procurement. The single-source procurement can be used by any procurement entity for exceptional reasons (2).

The Public Procurement Act recognises the risks of corruption. Section 93 of the Act states that “entities and participants in a procurement process shall, in undertaking procurement activities, abide by the provisions of article 284 of the Constitution. An act amounts to a corrupt practice if so construed within the meaning of corruption as defined in the Criminal Code, 1960 (Act 29)” (1).

Article 284 of the Constitution of Ghana states that “a public officer shall not put himself in a position where his personal interest conflicts or is likely to conflict with the performance of the functions of his office”; while the definition of corruption incorporated in the Criminal Code is broad and consistent (see question 44).

The Public Procurement Authority is the institution mandated with ensuring efficiency and transparency in public procurement, including in the GAF (1).

However, the exception provided by the Procurement Act, “national security concerns”, which allows the GAF to procure directly from a single-source is broad (2). There are also gaps between the stated strategic need of the GAF and the actual procurements practice. The lack of competitive tendering has resulted in numerous reports of losses of funds (3).

This indicator is not assigned a score in the GDI.

Military Supplies Law No. 3 of the year 1995 is the only law available in relation to defence and security procurement [1]. The law defines a procurement cycle, however, it also allows for exceptions, such as those listed in Article 12, paragraph B, which allows the Prime Minister to make purchases outside of this cycle, when the need arises. The law also stipulates the formation of a central tenders committee, within the General Command of the Armed Forces (Article 15). However, the law does not include any clauses specific to corruption risks. Despite the existence of a legal framework that governs defence and security purchases, this law is missing important aspects such as corruption, misuse and some aspects of the procurement process for instance checking the quality of the goods and purchased assets.

It has become clear so far that Jordan has a legal framework that covers defence procurement, namely for the Armed Forces. However, a close look into Military Supplies Law No. 3 of the year 1995 shows that it makes reference to corruption risks in a superficial way [1]. In the law, corruption is not mentioned, but measures to avoid corruption are taken and specified: members of procurement committees must not serve in the committee for more than two years, and they cannot be members of quality control, as well as stocktaking. In fact, corruption is not treated as a strategic issue within defence [2]. The only piece of legislation that prohibits corrupt activities, such as bribery and facilitation payments is Law No. 35 of the year 1966, Officers Service Law of the Armed Forces [3].

In light of available information and evidence, it is impossible to assess the effectiveness of Military Supplies Law No. 3 of the year 1995 [1], as there is no evidence of defence purchases scrutiny. There is, for example, no evidence that the armed forces have ever been audited by the Audit Bureau [2]. There is also little information available online about defence operations and purchases in general. In 2016, the Jordanian Armed Forces prohibited publishing news or information about the force, except for official statements by the media spokesperson for the armed forces [3]. There is also no evidence that major arms deals follow these policies, and there is no evidence to support whether this policy is being implemented at all levels or not. According to other sources, the law procedures are followed superficially, but the majority of purchases are treated as exceptional, which allow the Commander-in-Chief to disregard the law [4].

This sub-indicator is not assigned a score in the GDI.

Kuwait has legislation that explicitly covers all defence and national security purchases and agreements and, as discussed in Q23 B, pre-procurement approval is required from Parliament. But Kuwaiti laws allow for secret spending.

Article 2 and 3 of Law no. 25 of 1996, which is concerned with the agreements in which the state is part, say that procurement deals and any kind of agreement that the defence and security agencies enter must give an explicit breakdown that shows what exactly has been given to the state and how much for (1). Article 5 says that parties that fail to report, or misreport, any payment or favour they received in relation to the deal (within 30 days of receiving it) could be sentenced to up to three years in prison and given a fine that is in equal in value to whatever they received. They also have to give the state whatever they recieved.

The problem is this law only applies to agreements worth 330,000 USD or more, and the law casually mentions that the parties involved could avoid prosecution so long as they report kickbacks they recieved to the SAB.

Another problem is these institutions are exempt from the scrutiny of the Public Tenders Authority, according to article 3 of its law (2), which allows them to form their own special committees to oversee these operations.

Secret spending is also allowed and Kuwait has no laws (that are publicly available at least) which limits or sets clear critrea for when secrecy is justified or how to audit secret agreements. Article 80 of the SAB’s law simply says that ministries with secret projects must deliver a report to the SAB every three months, written by the Minister himself, which should say how much money has been spent on these projects and the Minister must sign a statement vowing that the funds were spent on approved matters only (3).

This means, however, that auditors do not have access to the actual agreements between these ministries, defence contractors and other companies, auditors said (4, 5 and 6).

The country has no legislation covering defence and security procurement that makes reference to corruption risks.

It is difficult to assess how thoroughly these laws are implemented because officials refused to speak about these deals, and defence contractors are also equally tight-lipped, but it would not be unreasonable to assume that implementation is weak because state auditors say these institutions constantly flout the law (1,2,3).

This sub-indicator is not assigned a score in the GDI.

Lebanon requires a public tender for all goods and services above $535. The Public Procurement Directorate approves contracts higher than $50,000 and supervises the procurement process (1). However, the ISF and the LAF are exempted from that procedure and are subject for special procurement procedure (1). Decrees no. 11573 and 11574 from 1968 layout the procurement procedures for LAF’s works and goods, respectively (2). The LAF’s General Directorate for Administration is responsible for facilitating the procurement process and issuing licenses to participants (3).

The research found no specific legislation related to corruption risks in defence and security procurement. Furthermore, only those registered and listed can access military procurement contracts (1).

No concrete evidence was found that showed defence procurement legislation was thoroughly implemented and followed for all defence procurement contracts (1). However, a source indicated that rules are strictly applied in the military (2).

This indicator is not assigned a score in the GDI.

The government introduced a new public procurement code (Code des Marchés Publics et des Délégations de Service Public) in September 2015, replacing the 2008 code. However, article 8 of the Code remains unchanged, meaning that certain defence purchases are exempt from standard procurement requirements: “This decree does not apply to contracts for works, supplies or services when they relate to the needs of national defence or security, which require secrecy or for which the protection of essential national interests is incompatible with the publication of such contracts. The system under which these contracts operate is fixed by decree of the Council of Ministers”.¹ In 2014, the BVG determined that the former Minister of Defence, Soumeylou Boubeye Maïga, and the Minister of the Economy had effectively broken the law by incorrectly interpreting this clause, which existed in the previous version of the Code² (see Q28 and Q29). There is no alternate legislation for procurements that are exempt under Article 8.

The legislation new public procurement code (Code des Marchés Publics et des Délégations de Service Public) directs procurement authorities to be aware of corruption related risks and outlines various procedures and conditions to mitigate these risks. The legislation recognises the risks of corruption and makes clear and comprehensive provisions to mitigate these risks. Yet Mali has no specific legislation that covers defence and national security procurement.
Article 3 of the code sets out the fundamental principles of public procurement processes. Among them are:
– free access to competition for public contracts
– the equal treatment of candidates
– transparency of procedures, and through that, the rationality, modernity and traceability of procedures.¹
Moreover, article 29 is dedicated to mitigating the risks of corruption.
Entitled, “De l’engagement de la lutte contre la corruption” (Concerning the commitment to fight against corruption), the article stipulates that:
“Offers and submissions must contain a commitment by the candidate or tenderer to:
– neither grant nor promise to grant to any person involved in the process of awarding a contract an improper advantage, financial or otherwise, directly or via an intermediary, with the intention of securing the contract.
– inform the contracting authority of any payment, advantage or privilege accorded to the benefit of any person, acting as an intermediary or an agent, to recompense them for any service provided.
– to respect, in general, legal provisions, notably those outlawing acts of passive corruption or trading of favours or any constituting offences of this nature”.¹

The assessor found evidence that numerous military expenditures are not subject to legal procurement requirements and that violations of procurement processes are widespread within the MDAC.
When the IMF, the World Bank and the EU suspended their aid programmes to Mali following reports of the off-budget purchase of a new presidential jet in 2014, it was the BVG that audited the account (see Q16C). The BVG determined that the former Minister of Defence, Soumeylou Boubeye Maïga, and the Minister of the Economy incorrectly interpreted a legal clause that allows for certain acquisitions to be off-budget (see Q29A) .⁸
The audit found that the government had spent 87.77 billion CFA (USD 163.44 million) on defence items that were not declared in the official budget.⁸ In addition to the presidential jet, which grabbed all the headlines, the audit also looked at the purchasing of equipment for the armed forces. The report found that 18.59 billion CFA went towards the presidential jet, while a further 69.18 billion CFA was spent on other military equipment, primarily transport vehicles.⁸ The BVG found that the MDAC had failed to respect the 2014 Finance Law requiring it to register these contracts and submit them as part of the annual budget. Moreover, many of the contracts were found to be heavily overpriced, strongly suggesting that these acquisitions involved substantial illicit activity.¹¹
– Lorries that can transport up to 5 tonnes of goods that normally cost 28.5 million CFA were priced at 78 million CFA in the contract.
– Lorries that can transport up to 10 tonnes that normally cost 34 million CFA were priced at 115 million CFA.
– Petrol-tankers that can carry up to 6 cubic metres of fuel, normally costing 29 million CFA were billed at 120 million CFA.
– And petrol-tankers that can carry up to 18 cubic metres of fuel, normally worth 38.5 million CFA were billed at 210 million CFA.¹¹
As of April 2018, it has yet to be determined what happened to the money overspent on these contracts, which would have amounted to 393 million CFA had the government not subsequently cancelled them. But the Defence Minister responsible for signing these contracts has since returned to government as Prime Minister.
Substantial sums of military expenditures are routinely spent off-budget and are thus highly unlikely to be subject to the standard procurement requirements. The published budget of the armed and security forces does not include the intelligence service, whose annual spend is kept entirely secret and thus is not subject to auditing.¹ There have been no mentions of intelligence spending in recent annual budgets or defence plans,² ³ ⁴ leaving a large chunk of spending entirely opaque. Neither the BVG nor any other public body has the power to oversee DGSE operations, organisation, budget or activities.⁵
Moreover, the World Bank’s 2013 study notes that the maintenance of a special account for operations in the country’s “Northern Zone” is a major source of vulnerability.⁹ This spending similarly does not appear in the government’s annual budget. The account has no de facto spending ceiling, the purpose and operating conditions of the special account are not adhered to, budget charges display anomalies and lack transparency, and the controls performed on expenditures from the special account are less rigorous than the country’s normal budget procedures.⁹
Finally, there are reports in the Malian media, based on sources within the defence sector, alleging that fraudulent practices are commonplace at the Directorate of Finance and Equipment (DFM).¹³ Defence contracts are not subject to open and competitive tenders: instead they are often awarded to family members or close associates of defence officials.¹³ The acquisitions and sales of fixed assets are not supported by any justification or assessment of needs.¹³

This sub-indicator is not assigned a score in the GDI.

Morocco has legislation covering procurement, which consists of the « Décret n° 2-13-656 modifiant le décret n° 2-12-349 relatif aux marchés publics » (Decree modifying the decree relating to public markets, last updated in 2013) (1).

However defence and security procurements are exempt from most of the transparency requirements, either by not being included in the list of sectors concerned, or through explicit exemptions. Examples of exemptions include:

– Article 86: Procurement contracts for the Armed Forces can be agreed without prior publicity and bidding for tenders.

– Article 129: Procurement contracts for architectural consultancy can be agreed without prior publicity and bidding for tenders.

– Article 171: The National Defence Administration is exempt from the following conditions: budget restraints (Article 6), opening of the offers in public (Articles 17, 36, 46, 63, 104 and 121), publication of the estimated programme, market achievement report and a number of other documents (Article 147), use of electronic exchange procedures for documents and reverse electronic bids (Articles 148, 149 and 151), market audits and controls (Article 165), control over military equipment, weaponry and ammunition procurement contracts (Article 156).

Moreover, a number of military procurement contracts can benefit from the following conditions that usually do not apply: restricted bidding for tenders, no budget limit, no need for an administrative certificate.

This significant lack of transparency and important exceptions made to procurement contracts for the Armed Forces specifically imply corruption risks (2)(3)(4). Yet, no NGO reports concrete cases of corruption in this situation, but one interviewee (5) implied that the complete lack of access to information concerning the armed forces -including for NGOs- and not the absence of potential corruption explained this absence of reports on the subject.

Morocco has no procurement legislation that maes reference to corruption risks.

There are significant exceptions to the procurement law as applied to the defence sector.

This indicator is not assigned a score in the GDI.

The Ministry of Defence includes the Department for Public Procurement, responsible for covering the defence and security needs of the Ministry. All purchases for the MoD fall under the 2016 Code for Public Procurement (1) or under the 2013 Decree (2) regulating security and defence acquisitions. The 2016 Code provides guidelines on the tendering process, the execution of procurements, implementation, control, and regulation (1). However, Article 7.1 excludes purchases related to national security and defence for “the sake of the protection of the State interests”. Therefore, sensitive or secret items are exempt from the 2016 Code for Public Procurement (Decree No. 2016/641/PRN/PM). To cover these type of purchases there is a 2013 Decree regarding “infrastructure, equipment, items and services for the defence and security needs of the State” (2). The Decree covers all defence and national security purchases, including those that are “declared secret” (2). It includes 77 articles that cover different phases of the acquisition process. It also provides article clauses that are specific to corruption risks, such as Article 29 (conflicts of interest), Article 30 (code of ethics), and Article 72 (description of corruption risks).

Niger passed legislation that covers defence and security procurement with particular attention to corruption risks. Article 8 of the 2016 Code defines corruption as “the action of the one offering, giving, receiving or soliciting, directly or indirectly, anything of value to influence improperly the actions of another person or entity” (1). The first article of the 2013 Decree regarding defence and security acquisitions repeats this definition of corruption (2). It also identifies specific corruption risks in its Chapter XIII, Article 72 through the following points:

“1) acts of corruption, coercive, collusive, fraudulent and occlusive practices regarding the preparation, awarding, control, regulation and execution of contracts;
2) Usurpations of the official function during the procurement process; 3) False bidding and fictitious competition;
4) Illegal use of confidential information;
5) False invoices and false attestations of delivered services;
6) Payment orders, after the issuance of a certificate on delivered services, which does not correspond to goods or services actually provided or where the work has not been completed or has been unsatisfactory” (2).

Without prejudice to the penal code, Articles 73, 74 and 75 of the Decree provide for different sanctions regarding “contractor, supplier, service provider, candidate or holder of a public contract author, co-author and/or accomplice of the infringements” (2). Scoring for this indicator is based on both the 2016 Code and 2013 Decree, provided that only “secret” items are regulated by 2013 Decree. Furthermore, 2013 Decree (as developed in the explanation) provides for an important legislative framework on corruption risks as well as provisions on how to mitigate them (through, for example, Art. 30 on the code of ethics).

It is difficult to evaluate the effectiveness both of the 2016 (1) and 2013 Decrees (2). However, some indirect evidence shows that the procurement process may have improved since the State Inspectorate General audited the Ministry of Defence expenditures in 2016 (3). According to an interviewee, procedures are closely followed and purchases of items that do not fall under “classified” security and defence category (for instance spoons, pencils, but also government fleet vehicles) are not covered by the 2013 Decree, but by the general 2016 Code for Public Procurement (3). Moreover, Art. 2 of the 2013 Decree specifically states that the defence and security procurement process requires confidentiality and is not compatible with publicity for the sake of protection of state interests (2). Therefore, given the confidentiality of the procurement procedures, corruption risks remain high. Hence, there may be exceptions to defence purchases. The assessor found no evidence of how significant these may be.

This indicator is not assigned a score in the GDI.

Nigeria has a Public Procurement Act (PPA) which governs all procurements by public entities. However, the military and security establishments and institutions are expressly excluded from the scope of the legislation subject to the discretion of the president. There is no clarity on how that discretion is to be exercised in practice. “The provisions of this Act shall apply to all procurement of goods, works, and services carried out by: The Federal Government of Nigeria and all procurement entities” (1), (2).

The Public Procurement Act of 2007 expressly excludes the defence sector and is subject to the president’s discretion (1). In practice, this suggests that some aspects of the legislation may be followed while other aspects are not followed. Therefore, no general procurement rules exist in the defence sector. However, there is no express reference to corruption risks in the issues dealt with by the Procurement Department of the MOD (2).

The case of the NIA Director and the IKOYI money suggests that there are regular exceptions to the procurement requirements in legislation and that they are significant in terms of the number and scale (1). “In relation to the procurement of defense-related goods, it must be noted that the exclusion for national defense appears to be related only to what is often referred to as “hard [defense] material” or weapons and ammunition; the PPA will apply to procurements by the MOD and the armed forces when the procurement is not for special goods involving national defense or security” (2, p.69). In other words, the PPA regulates the purchase of civil or commercial items by the MOD and the armed forces. Weapons acquisitions are treated differently.

Furthermore, where the approval of the president has been sought and obtained, a procuring authority is required to use the appropriate procurement procedure under the PPA (2).

This indicator is not assigned a score in the GDI.

Oman has no legislation within the country that covers defence and national security purchases. However, there is an internal policy of defence purchases that covers some part of logistics and small weapons, but no major purchases (1), (2), (3). There is no legislation concerning defence spending; no information is available on defence and national security spending (4), (5), (6). The independent tender board overseeing procurement and contracts does not apply to the Ministry of Defence or the Royal Oman Police, which have separate tender boards (7). Within the office of secretary-general of the Ministry of Defence, there is a Directorate-General Procurement and Contracts which includes a Directorate of Purchasing, however, no information regarding the legal mandate of this directorate is available (8).

Oman has no defence specific legislation that covers defence and national security procurement; therefore assessing its comprehensiveness is irrelevant in this context.

This sub-indicator has been marked as Not Applicable, as Oman has no legislation that covers defence and national security procurement.

This indicator is not assigned a score in the GDI.

Palestine has no military or defence legislation that covers defence and national forces purchases. Instead (since 2006), there is the general supplies and procurement law within MoF, which manages defence purchases within the national forces and other PA institutions (2). As the there is no Ministry of Defence, and no stand-alone military budget, the budget of the military and security agencies are included within MoF’s PA budget and falls under the law of the MoF of the PA. The only security agency that has a separate law is the intelligence agency, which has legislation No. 4 (2007) and No. 5 (2007). The rest of the security apparatuses follow the general regulations. None of the laws mentions corruption explicitly as a risk; instead, they have articles that focus on procedural issues such as conflict of interest (1).

Palestine has no legislation covering the security and national forces apparatuses (except the intelligence agency), which refers to corruption risks. The general law of the PA does not mention corruption explicitly as a severe risk (1).

Security sector and national forces purchases are procured in line with the legislation of the MoF (2). However, there are a few exceptions that are procured apart from this legislation. Such as acquiring materials that are less than a specific amount of money (not identified and changeable based on a PM decree). Additionally, the intelligence agencies have their own decree that covers procurement and the financial management of the agency. It was issued by presidential order in 2007 (1).

This indicator is not assigned a score in the GDI.

Qatar has no defence legislation that covers defence and national security purchases [1,2]. The defence and military sectors are excluded from state Law Governing and Auctions (The Tender Law) Law No. 24 (2015), and defence institutions report directly to the Emir [3,4,5]. Article 1 of the law states that: ’the provisions of the annexed Law regulating tenders and auctions shall come to force and shall apply to all ministries, other prospective governmental bodies, and all public institutions and authorities, provided that these provisions do not conflict with the laws and decisions establishing thereof. The following shall be excluded from the scope of the application thereof: ‘(1) the Armed Forces and the Police, in respect of procurement of materials and contracts deemed to be of a confidential nature, for their identification and regulations of conditions of tenders and contracts thereof a decision from the Emir, and (2) Qatar Petroleum’ [4]. There is also no evidence of an independent defence legislation governing defence and security procurement. There are internal guidelines within the MoD and the armed forces, but not legislation [1,2].

Qatar has no procurement legislation that covers defence and national security procurement [1,2,3,4,5].

This sub-indicator has been marked as Not Applicable, as Qatar has no procurement legislation that covers defence and national security procurement [1,2,3,4,5], and thus assessing its effectiveness is irrelevant in this context.

This indicator is not assigned a score in the GDI.

Saudi Arabia has legislation that addresses defence procurement, in its Government Tenders and Procurement Law (1), (2), which was issued by royal decree in 2006 (3). The country also became a party to the WTO’s Government Procurement Agreement in 2007, which establishes rules requiring free and transparent competition in government procurement bidding practices (4). However, Article 47 of the Government Tenders and Procurement Law exempts weapons and military equipment sales, stating that,
“Weapons and military equipment and their spare parts by direct purchase from manufacturers. The best offer serving public interest shall be selected by a ministerial committee formed for this purpose by a royal decree of at least three members in addition to its chairman. It shall then bring its recommendations before the President of the Council of Ministers for approval.” (3)
Our sources confirm that this law covers all purchases, except weapons and military equipment, but in many cases, the process which the law defines is also used when buying weapons (2). There is also legislation prohibiting the use of intermediaries in defence procurements. Specifically, Council of Ministers Resolution No. 1275 (1975) bans the use of agents or any kind of broker in sales of armaments or military equipment, regardless of whether the contract has been concluded between the foreign entity and the Saudi Arabian government directly or via a third-party State (5), (6).

There is no mention of corruption risks in Saudi-based legislation that covers defence and national security procurement. According to our sources, there are mentions of corruption and corruption risks in the legislation (1), (2), (3).

According to our sources, there are consistent and common exceptions within defence procurements in the defence sector. This includes strategic purchases, and the more usual logistical, and routine purchases such as food and clothes. The exceptions are issued by senior commanders, crown prince and head of brigades and operations, especially in the field in Yemen and the borders of Yemen (1), (2), (3). There have been regular exceptions to the requirements outlined in Saudi legislation covering defence and security procurement. As laws governing military and defence procurement are incomprehensive, disaggregated, and contain significant exemptions. In reality, most Saudi defence procurement is not subject to general procurement decrees and regulations. Most procurement deals are negotiated on a case-by-case basis (4). As referenced in the 2015 report, a notable example is the case of Prince Khalid bin Sultan (then-deputy defence minister), who made a large purchase of missiles from China in 2013, apparently without the knowledge of other officials in the Ministry of Defence (5). This eventually led to his resignation but demonstrates the degree to which major decisions are often made autonomously and are not part of a formal process (6).

Furthermore, in practice, the use of intermediaries in defence procurement has historically been widespread in Saudi Arabia, contrary to what is stipulated in the Council of Ministers resolution No 1275. Prominent examples include high-profile former intermediaries who were close to power brokers in Saudi Arabia, such as Adnan Khashoggi and Wafic Said, and more recently Salah Fustok (7), (8), (9). Nonetheless, there is evidence that Crown Prince, Minister of Defence and de facto ruler Mohammed bin Salman has actively been side-lining some of these erstwhile key figures and intermediaries that were responsible for negotiating major contracts between the Saudi military and foreign companies. This is in line with his overall efforts to both consolidate power while overhauling and streamline key government ministries, sectors and processes as part of his Vision 2030 reform program. As part of this, he is seeking to streamline procurement processes by establishing two new military industry bodies: Saudi Arabian Military Industries (SAMI) in May 2017, and the General Authority for Military Industries in August the same year (10), (11). In theory, GAMI will be a one-stop-shop for procurement, and all deals will have to go through that body. It is unclear if there is any legislation governing GAMI’s powers, or to what extent it will supersede the use of intermediaries in military procurement.

This indicator is not assigned a score in the GDI.

According to our sources, there is a legislation that clearly provides mandates for the purchase of military equipment. However, this legislation can be vague and unclear in cases when purchases need equipment or weapons (1,2). General legislation covers general defence and security procurement. Decree n°1039-2014, dated 13 March 2014, organising public procurement, applies to most defence and security procurement (3). Article 49 of this decree provides that procurement can be made by direct negotiation for public security and national defence reasons. Some purchases within defence and security procurements are governed by Decree n° 88-36, dated 12 January 1988, on the special procedure of control of expenditure of the Ministries of Defence and Interior (4). This decree established a specific procedure, namely a Special Committee, in each of those two ministries, chaired by the concerned minister or his representative. This committee is responsible for multiple phases of exempt procurement, which relates to sensitive equipment and supplies. These, for security reasons, do not follow the general defence procurement protocols but appear only on a secure list established by the President of Government.

According to our sources, the legislations mentioned in 57A recognise the risk of corruption and provide a path for handling these corruption risks (1,2). Decree n°1039-2014, dated 13 March 2014, organising public procurement, which is applicable to most defence and security procurement, clearly directs procurement authorities to be cognisant of corruption-related issues. Article 144 states that the National Council of public procurement (Conseil National de la Commande Publique) present all proposals relating to the prevention and fight against corruption in the field of public procurement in consultation with the authority in charge of the fight against corruption. Article 173 of the same decree provides that all parties involved in public procurement are subject to the laws and regulations relating to the fight against corruption and conflicts of interest in public procurement. Title IV of this decree provides for sanctions in case of corruption (3). Decree n° 88-36, dated 12 January 1988, on the special procedure of control of expenditure of the Ministries of Defence and Interior, does not make reference to corruption risks (4).

According to the Ministry of Defence, there are no items exempt from the control of the different procurement committees, no expenses can be executed without the approval of the different procurement committees and the services of public expenditure and the Ministry of Finance (1). No evidence of exceptions made to the legislation could be found through media stories (2). According to our sources, there is a strict following of the legislation and its annex(3).

This indicator is not assigned a score in the GDI.

The UAE has Federal Procurement Resolution No. 32 of 2014, amended in resolution No. 43 of 2016, which is the country’s legislation concerning procurement across all governmental departments. The legislation covers all aspects of procurement including purchases, supplies, and services provided. However, Resolution No. 43 of 2016 explicitly excludes the Ministry of Defence, the Supreme Council for National Security and the Ministry of Interior (1), (2). Sources indicate there are internal guidelines concerning procurement within the armed forces (3), (4).

No evidence shows that the UAE has legislation covering defence and security procurement with clauses specific to corruption risks. Defence institutions are generally exempt from federal laws governing procurement and contracting (1), (2). For this reason, this sub-indicator has been marked as Not Applicable, as an assessment of the legislation covering corruption risks is irrelevant in this context.

This sub-indicator is marked Not Applicable because no evidence shows that the UAE has legislation covering defence and security procurement. Defence institutions are generally exempt from federal laws governing procurement and contracting (1), (2). For this reason, this sub-indicator has been marked as Not Applicable, as an assessment of the legislation covering corruption risks is irrelevant in this context.

Country Sort by Country 57a. Legal framework Sort By Subindicator 57b. Corruption risks Sort By Subindicator 57c. Effectiveness Sort By Subindicator
Algeria NS 25 / 100 NEI
Angola NS 50 / 100 0 / 100
Burkina Faso NS 0 / 100 0 / 100
Cameroon NS 0 / 100 NA
Cote d'Ivoire NS 0 / 100 NA
Egypt NS 0 / 100 NA
Ghana NS 50 / 100 50 / 100
Jordan NS 0 / 100 0 / 100
Kuwait NS 0 / 100 0 / 100
Lebanon NS 0 / 100 0 / 100
Mali NS 0 / 100 0 / 100
Morocco NS 0 / 100 0 / 100
Niger NS 100 / 100 50 / 100
Nigeria NS 0 / 100 0 / 100
Oman NS 0 / 100 NA
Palestine NS 0 / 100 50 / 100
Qatar NS 0 / 100 NA
Saudi Arabia NS 0 / 100 0 / 100
Tunisia NS 100 / 100 100 / 100
United Arab Emirates NS 0 / 100 NA

With thanks for support from the UK Department for International Development and the Dutch Ministry of Foreign Affairs who have contributed to the Government Defence Integrity Index.

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