Increased Corruption and Possible Measures

In an article in the newspaper Tidningen Näringslivet, Olle Lundin, a professor of administrative law and an expert on corruption, describes how corruption in Swedish municipalities and authorities is worsening.

Given Sweden's historical position as one of the world's least corrupt countries, the development is very disappointing. The trend was confirmed, among other things, in connection with Transparency International's latest index on perceived corruption, where Sweden recorded its worst ranking since the measurement began in 1995. Additionally, it's one of the five EU countries with the worst performance in the index.

In the news reporting, we see plenty of examples of clear violations and often a dubious attitude towards improper benefits or gifts. However, it is difficult to draw far-reaching conclusions from individual cases. Corruption is generally difficult to measure, but the trend in perceived corruption must be considered as clear evidence of actual underlying corruption.

Olle Lundin argues that the reasonable reaction to a request for a bribe should be to call the police, but his conclusion based on recent legal cases is that reality is far from that.

Swedish Industry recently published a report highlighting several deficiencies in public procurement. Together with the company Tendium, they have identified patterns such as a troublingly high percentage of recurring procurement winners. A whopping 65.2 percent of all procurements turned out to have recurring or partially recurring winners.

The report author, Ellen Hausel Heldahl, describes that the figure indicates that authorities satisfied with an existing supplier in some cases may be influenced by the inconvenience of changing suppliers, but it could also be a more direct issue of competition being sidelined or reflecting some form of corruption, often friendship corruption.

She states that Swedish Industry's surveys suggest that procurements are often perceived as targeted towards a specific supplier in advance and that in such cases, it may be decided even before any bids are submitted.

Olle Lundin is not surprised by the picture painted, but shares the view of a high percentage of pre-determined procurements. He describes a trend where procurements are very specific and can hardly be fulfilled by anyone other than the local supplier.

Both Lundin and Hausel Heldahl see increased transparency as an obvious part of the solution and a prerequisite for scrutinizing transactions or accessing obstruction from officials. Lundin would like to see the Parliamentary Ombudsman sanctioning authorities more often for deficiencies regarding the principle of public access to information.

From Swedish Industry, several proposals have been presented to address deficiencies in, among other things, procurement. Among the proposals are:

Higher requirements for direct procurements: Introduce provisions for reprisals against procuring organizations that do not follow guidelines for direct procurement according to the Public Procurement Act 19 a chapter 15 §.

Increase transparency: Instruct the Procurement Agency to annually collect and publish the procurement values from all procuring organizations, including direct procurements.

Requirements for procurement analyses: Task the National Financial Management Authority with analyzing the conditions for mandatory use of spend analysis/procurement analysis in the financial systems of authorities and publicly owned companies with a purchasing volume of more than 150 million SEK.

Make e-commerce mandatory: Develop a legislative proposal for the introduction of an e-commerce law for all procuring organizations, including publicly owned companies.

Strengthen the rules on conflicts of interest: Develop a legislative proposal for the implementation of the provisions on conflicts of interest in the Swedish procurement laws.

Clarify volume rules: Reintroduce the aggregation rule that previously existed in the Public Procurement Act, the Procurement Act for the Defence and Security Sector, and the Procurement Act for the Utilities Sector, regarding "goods and services of the same kind during one fiscal year."

Review the direct procurement thresholds: Instruct the Competition Authority to analyze the effects of the raised direct procurement thresholds. The analysis should include the impact on efficient financial management, competition, and risks of corruption.

Strengthen municipal auditing: Appoint a commission to propose a strengthened municipal audit, with the aim of abolishing the current system of lay auditors appointed by the municipal council and instead design a system based on the Companies Act as a model. The commission should also propose a clearer budget process and stricter accounting requirements for municipalities.

Enact legislation on preclusion in public procurement: There is a need for legislative changes that clarify the requirement for damages and issues of preclusion in Swedish law. The current status where companies that feel that the procurements favor a specific supplier do not have an opportunity to have it tried in court.