Part of the European Investment Bank’s Guide to Procurement is the Covenant of Integrity at Annex 3. The EIB requires any company bidding in a project’s procurement process (e.g., for a construction contract or the supply of goods/services) to submit a Covenant of Integrity.
The Covenant of Integrity provides an undertaking that the bidder will not engage in Prohibited Conduct (defined in the EIB Anti-Fraud Policy as including fraud, corruption, and collusion); requires the disclosure of a sanction by other MDBs (Multilateral Development Banks) or the EU; and gives EIB or the borrower access the company’s relevant books and records.
Declaration Not to Engage in Prohibited Conduct
The bidder is required to sign a declaration that they will not engage in Prohibited Conduct (defined in EIB’s Anti-Fraud Policy as including fraud, corruption, collusion, and money laundering) in connection with the procurement process or in the execution of (or supply of any works, goods or services for) the contract.
The company also covenants:
(1) to inform the promoter if any instance of Prohibited Conduct comes to the attention of any person in the organization having responsibility for ensuring compliance with the Covenant; and
(2) for the duration of the tender process (and if successful, for the duration of the contract), to appoint an officer to ensure compliance with the Covenant.
This declaration covers not just the company’s directors and employees but also extends to others acting on the entity’s behalf, such as agents, joint venture partners, or subcontractors, where they exist.
Sanctions by the EU or other MDBs
The bidding company and those acting on its behalf are also required by the Covenant of Integrity to declare:
(i) if it is listed or otherwise subject to EU/UN Sanctions; or
(ii) in connection with the execution or supply of any works, goods or services for the contract, will act in contravention of EU/UN Sanctions; and to inform the promoter if any instance shall come to their attention.
Also, the entity or any director or employee (or those acting on its behalf, including agents or a joint venture partner) has to declare if:
(iii) they have been convicted in any court or sanctioned by any authority for Prohibited Conduct in the five years preceding the date of the Covenant;
(iv) any director, employee, agent or a representative of a joint venture partner has been dismissed or has resigned from employment after being implicated in any Prohibited Conduct; or
(v) the company has been, or any directors, employees (or agents or joint venture partners) excluded or otherwise sanctioned by the EU Institutions or any major Multilateral Development Bank (including World Bank Group, African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank or Inter-American Development Bank) from participation in a tendering procedure on the grounds of Prohibited Conduct.
If so, then they have to provide details of the conviction, dismissal or resignation, or exclusion/debarment together with details of measures they have taken to ensure that neither the company nor any of their directors, employees (or agents) commits Prohibited Conduct in the future.
The entity also is required to acknowledge that if they are subject to an exclusion decision by the European Investment Bank (EIB), they will not be eligible to be awarded a contract to be financed by the EIB.
Access to Books and Records
The bidding company and those acting on its behalf are also required by the Covenant of Integrity to allow the Project Promoter, the EIB and auditors appointed by either of them (as well as any authority or European Union institution, such as OLAF) to inspect and copy the books and records and those of the subcontractors.
Further, the entity accepts to preserve the books and records in accordance with applicable law but in any case for at least six years from the date of tender submission (and in the event the company is awarded the contract, at least six years from the date of substantial performance of the contract).
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The EIB’s Guide to Procurement (including the Covenant of Integrity at Annex 3) is available here.