- Kenya
Keeping a Watch over Government Spending
Corruption Type
Embezzlement, Procurement
Geothermal energy is considered a cornerstone of Kenya's green growth, with the government embarking on an ambitious expansion plan in 2011 to increase national geothermal generation capacity.
But in 2015, six top managers of Kenya’s state-owned Geothermal Development Company (GDC) were charged with inflating procurement costs so they could steal the excess. A whistleblower revealed that in 2012, they awarded a US$19.5 million contract to Bonafide Clearing and Forwarding to move equipment. In 2011, the same contractor charged another client US$230,000 for similar work.
Exposing corruption in geothermal energy
In response, Kenya's Parliament ordered the country's Ethics and Anti-Corruption Commission to investigate whether GDC conspired with contractors to inflate the value of contracts. Following this order, GDC's managing director, acting CEO and tender committee members were arrested for corruption allegations.
When Kenya's media uncovered the case, Transparency International Kenya responded to the scandal with a press release that received national media coverage. It offered help to GDC's new management to strengthen the company’s procurement processes and limit the risks of corruption. Since then, Transparency International Kenya has worked with GDC managers to improve the company's practices and the wider procurement context for renewable energy.
Civic engagement to prevent corruption
When the scandal broke, GDC was an applicant for accreditation to the UN's Green Climate Fund, which helps developing countries adapt to climate change and mitigate its impacts. In 2018, Transparency International and the Open Contracting Partnership profiled the GDC case in a major report exposing loopholes in Green Climate Fund procurement processes. The report recommended greater community consultation, civic engagement and monitoring of compliance.
In countries like Kenya, civil society must unite to demand transparent procurement and hold governments accountable for their spending of climate funds.
Key lessons
- Civil society organisations and other stakeholders seeking to ensure the effective expenditure of climate funding must work together to highlight the importance of open contracting. This includes holding governments to account for the commitments they have made.
- National procurement entities in countries receiving climate finance should disclose all procurement and contracting information. They should use standardised formats to enable monitoring, preferably adopting the Open Contracting Data Standard.
- Open contracting starts by enabling stakeholders to participate in the planning phase, analyse tendering and awarding of contracts, and monitor the implementation and delivery of public goods, works and services.
- Strong reporting mechanisms and a culture supportive of whistleblowing are essential to ensure integrity in public procurement so people feel safe and supported to speak up against wrongdoing.
Sources
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