Can the private sector afford to fall short on transparency?
Private companies in receipt of development aid funding have a great opportunity to steal a march on their currently vociferous critics – by publishing details of their publicly funded activities in line with the standards of the International Aid Transparency Initiative (IATI).
The UK has for the past two years led the field in aid transparency. DfID was the first to publish detailed information on all its activities to the IATI. It is also one of only a handful of IATI signatories currently updating its data on a monthly basis, providing transaction-level expenditure and forward-looking annual (soon to be quarterly) budgets for the lifetime of all current activities.
In June this year DfID published an Open Data Strategy in which it went one step further: “We want to be able to trace the flow of aid from donor to implementation – so that we are able to see the impact and results of aid spending. This will provide clear visibility to taxpayers in the UK and to citizens of countries where DfID is providing development assistance”. Traceability involves tracking funds all the way down the aid delivery chain from origin to point of spend. DfID already accounts to IATI for all funds that leave its bank account. Any contractor or sub-contractor in receipt of these funds is, sooner or later, going to be asked to do the same.
This commitment had already been set in motion last year when DfID’s Civil Society Department asked all civil society organisation (CSO) recipients of grants to report the details of their DfID funding to IATI. Over 60 NGOs have now published their data to IATI, with more in the pipeline. This has been an impressive, unsung initiative that is now paving the way for other governments and CSOs to follow suit. In due course this ask is likely to be extended so that organisations who sub-contract will be made responsible for ensuring that the sub-contracted organisation also reports to IATI.
Looking through DfID’s inventory of projects around the world you would be hard-pressed to distinguish between those carried out by CSOs and those by the private sector. It would seem unfair to place the burden on NGOs while making no demands on the private sector. There is no logic to it. The main reason used to exempt the private sector is that transparency is incompatible with competition. This is just not true. Exclusions have a clearly defined place in IATI’s standard. Firstly, IATI recognises that the exclusions specified in an organisation’s national freedom of information legislation apply by default. Secondly, every publisher has the right to specify its own exclusion policy. Clearly there are business processes that are commercially sensitive. DfID, for example, does not publish its budgeted value of outsourced projects until procurement is complete.
Much of the information pertaining to the pre-contract phase of a project’s life may well be commercially sensitive. Much of the subsequent history of actions and transactions is not, particularly where public funds are involved. It should not be difficult for the private sector to collectively call on their legal teams to come up with a workable exclusion policy that is fair to both public and company: but this needs to be more specific than simply “commercially sensitive”.
Bill Anderson is a Data Standards and Systems Advisor at Development Initiatives.