Sri Lanka’s Poor Record in Blacklisting Corrupt Contractors Revealed in New Report by Verité Research
A new report by Verité Research unveils Sri Lanka’s alarming status as the worst performer among South Asian nations regarding the blacklisting of corrupt contractors in public procurement processes.
The findings highlight two critical issues. Firstly, Sri Lanka stands alone in South Asia for not recognizing engagement in corrupt and fraudulent activities during procurement as grounds for blacklisting. Secondly, despite having the necessary provisions, Sri Lanka has failed to blacklist contractors who have defaulted on contractual obligations.
The root of the first issue lies in the gaps present in the 2006 procurement guidelines, which govern almost all public procurement activities in Sri Lanka, with few exceptions such as pharmaceutical procurement. The report underscores the urgent need to address these gaps to effectively combat corruption and restore fiscal governance.
The second issue, the failure to blacklist defaulting contractors, indicates a lack of compliance with existing regulations. Sri Lanka not only possesses provisions to blacklist defaulters but also to publish their names in a public online database, currently empty. In contrast, as of July 2023, Nepal had 629 entries, and Bangladesh had 510 entries in their respective online databases.
The prevalence of corruption in procurement and the imperative to rectify it have also been highlighted in civil society governance diagnostics and the International Monetary Fund (IMF) governance diagnostic on Sri Lanka. Notably, one of the key IMF recommendations is the enactment of a public procurement law in Sri Lanka reflecting international best practices by December 2024.
The report titled “Backwards in Blacklisting: Gaps in Sri Lanka’s Procurement Framework Enable Corruption” by Verité Research is accessible on the Verité Research website at https://www.veriteresearch.org/publication/sri-lanka-procurement-corruption-gaps/.
