WTO Begins to Address Corruption in Government Procurement

News & Insights
May 1, 2013
Last month the parties to the World Trade Organization’s (WTO) Agreement on Government Procurement (GPA) adopted non-binding revisions that incorporate anti-corruption provisions into the GPA. These revisions will become binding if at least ten of the current fifteen parties ratify them.

On a globally-derived average, corruption increases the price of government procurement contracts by twenty five percent. This suggests a prevalence of corruption that local laws are inadequate to address. In supporting anti-corruption amendments to the GPA, certain WTO members have demonstrated their willingness to address corruption issues in a multilateral system with a functioning dispute resolution system.

The preamble of the Revised GPA “recogniz[es] the importance of…avoiding conflicts of interest and corrupt practices” and explicitly references the United Nations Convention against Corruption. WTO jurisprudence makes clear that while preambular language itself is generally not binding, it can be used to inform an agreement’s binding provisions by serving as interpretive guidance. Additionally, Article IV of the Revised GPA requires parties to conduct procurements in a “transparent and impartial manner that…prevents corrupt practices.” Therefore, the Revised GPA contains provisions that could provide a forum to both prevent and police corruption in the government procurement process.