Last week, the Open Contracting Partnership released a new report, Mythbusting Confidentiality in Public Contracting, during the Open Government Partnership meetings in Georgia. The report is a fascinating and helpful read, based on a review of recent contract publication practices in eight countries as well as legal frameworks in another seven. It presents 10 commonly given reasons against publishing contracting information and lays out the case for thinking those reasons are partial, over-blown or, in some cases, simply wrong. For example, it suggests that the fear that publication leads to collusion or reduced competition is belied by the available data. And it provides a lot of evidence both that proactive publication isn’t expensive or time consuming, and that transparency improves contracting outcomes—building trust, attracting more bidders, getting greater value for money, and providing scrutiny against corruption.
A new CGD Working Group is taking a deeper dive into one of the issues the Mythbusting report looks at: commercial confidentiality. The working group is looking at cases where there may be legitimate exceptions to the general principle of publishing the complete text of public contracts based on commercial confidentiality concerns. Chaired by Caroline Anstey, who led the push for greater transparency when she was Managing Director at the World Bank, the group brings together individual experts with experience in business, government agencies, and civil society to try to build consensus around a set of principles regarding when information might justifiably be redacted on the grounds of commercial confidentiality and how the process should work.
The Mythbusting report notes that even those countries that disclose the most information and publish contracts by default (including Georgia, Slovakia, Ukraine, Chile, and Columbia) have a commercial confidentiality exemption covering information such as internal financial details of firms and technical details of work delivery plans. The report suggests some general rules apply around redacting information—it should be limited to commercially sensitive information which could cause harm if it were disclosed; it should be in the public interest (not only the firm’s interest) to keep that information secret; and redaction should be time-bound. Our first Working Group meeting last week discussed many of those general rules and we hope that they can become part of a broad consensus.
The meeting focused on sectors and contract types where commercial confidentiality seemed like it might be a major issue—including pharmaceuticals, where there is an argument that price transparency works against access to medicines by driving companies not to offer significant discounts to low income country governments, for fear that higher income patients and higher income countries would demand these same lower prices. We also discussed contracting forms that might be more likely to contain commercially sensitive information—including those which contained significant information about how a company would deliver a product or service in addition to what it was going to deliver.
The hope is that, by the end of the year, the Working Group will have agreed upon a set of recommendations on commercially sensitive content, the public interest test, and the mechanism of redaction that would be acceptable to firms, government, and civil society alike. And because the goal is to build recommendations that can represent widespread consensus, we’ll be sharing drafts as we go through the Working Group process.
Please stay tuned for that, and we very much welcome any comments.