High Level Reporting Mechanism (HLRM)

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About the HLRM

Concerted efforts are required to address both the supply and demand sides of corruption. Collective Action generally focuses on the supply side, with companies and governments making efforts to address the payment of bribes. Bribery solicitation and extortion do however, present serious concerns for companies in many parts of the world, and international organizations including the Organisation for Economic Co-operation and Development (OECD), the UN, the G20 and B20 regularly call on governments to take effective measures to address the demand side.

Addressing demand side issues of corruption

The aims of high level reporting mechanisms (HLRMs) include establishing prevention-oriented approaches to address demand side issues. Companies are given a constructive means to tackle solicitation and extortion, with public procurement being one of the areas that lends itself to this type of arrangement. In practice this involves a process that allows companies to report bribery solicitation to a dedicated and high-level institution that is tasked with responding swiftly and in a non-bureaucratic manner. These reporting mechanisms are not meant to replace existing structures and processes offering legal redress, or investigative bodies that have to examine allegations of illegal conduct. These processes inevitably take longer however, and do not necessarily offer swift responses to business critical issues.

Resolve issues while the tender is still open

In the example of a procurement process, the HLRM seeks to resolve matters while the tender is still open so as to prevent further attempts at improper activity from occurring and thereby securing the transparency and fair conclusion of the concerned procurement process. It allows the company to continue participating in the tender without breach of integrity. Businesses may also require a speedy response to reports of solicitation and extortion in situations where time is of essence such as the processing of a licensing application, release of goods from customs, etc. The prompt handling response may also act as a deterrent to bribery in the first place, and prevents damage to the reputation of the tender processes and related agencies.

In response to businesses calls for a practical approach for handling solicitation and extortion, the B20 included the following in their recommendations issued in June 2012 and issued in parallel to the G20 meeting in Los Cabos, Mexico:

Governments should (…) “Establish appropriate forms of ‘high level reporting mechanisms’ to address allegations of solicitation of bribes by public officials. In particular, governments should ensure the involvement of top authorities and set up such a mechanism, in close cooperation with the support of the private sector and civil society. A pilot project could be set up in a country willing to test such a mechanism.”

The HLRM in practice

The Basel Institute and OECD offer support to governments to ensure an efficient approach to developing HLRMs which may include identifying relevant domestic stakeholders, evaluating different institutional and legal options in a given jurisdiction, as well as accompanying the develop ment, implementation and monitoring of the HLRM to get it up and running in a reasonable time frame.

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In addition to the information listed here, the Publications section of this website contains various studies and background information on current experiences with the HLRM:



HLRM Country Examples

Colombia | Ukraine | Panama

Pilot Country: Colombia

The first country to pilot the HLRM, initially with a particular focus on public procurement in infrastructure, is Colombia. The National Infrastructure Agency selected several projects relating to national road building procurement and launched their pilot in mid-2013.

Like Collective Action, reporting mechanisms involve multi-stakeholders and may also be voluntary - at least in an initial phase. Similarly, just as creating trust is important in Collective Actions involving companies, it is also an important element to the success of a reporting mechanism. Another crucial aspect to be carefully considered when establishing a reporting mechanism is the legal framework and cultural context in which it will operate.

The HLRM in Colombia may offer learning opportunities for other countries that are considering such a mechanism and it will be interesting to track the evolution of these tools and their acceptance and effectiveness. The animation below provides an example of the Colombia HLRM in action.

The Ukrainian Anti-Corruption Initiative

Website: Business Ombudsman Council

During a meeting in early 2013 between the President of the European Bank for Reconstruction and Development (EBRD) and the President of Ukraine, it was agreed that measures should be taken to tackle corruption issues in Ukraine, in particular where business and investment are hampered. The EBRD therefore mandated the Basel Institute on Governance to develop a mechanism to address unfair business practices in order to improve the overall business climate, as well as the prospects for foreign investment into the country. The outcome was the development of a Memorandum of Understanding (MoU) which establishes the Anti-Corruption Initiative. Due to technical reasons and unrest in the country, the originally-planned November 2013 signing was delayed, however the process was taken up again with vigour by the new Government and signed in May 2014 by the Ukrainian Government, business associations and international financial institutions, including the EBRD.

The Memorandum outlines the roles and responsibilities of a new independent Business Ombudsman Institution that will serve as a first point of contact for businesses enabling them to lodge complaints arising from unfair treatment or issues of corruption. This independent and independently funded position is the first of its kind in Ukraine. Apart from the Business Ombudsman, the Institution will also include two deputies, and together they will seek to determine the principal causes of corruption and provide this information to the wider public and appropriate authorities in government through the use of public reports. Whilst the Business Ombudsman Institution is not a law enforcement agency, and has no criminal investigation powers, it will transmit criminal matters to the relevant authorities. The agreement also outlines obligations for the other signatory parties, including the government, creating a Group of Parties that shares responsibility for the implementation of the MoU and the governance of the newly formed Institution.

For a report on the signing of the MoU please visit: https://www.ebrd.com/news/2014/ukraine-and-ebrd-launch-initiative-to-combat-corruption.html

HLRM in the Health Sector in Panama

The Government of Panama jointly with the Basel Institute on Governance established the country’s first High Level Reporting Mechanism (HLRM) in March 2016. When it starts operating in May 2016, it will allow businesses bidding to provide medical equipment and undertake constructions of the Social Insurance Fund (CSS) to file a grievance or complaint with the Corruption Prevention Secretariat (SEPRECO) in relation to potential unfair practices and bribery. The SEPRECO will then prepare timely reports and recommendations for fair resolution of any concerns. When necessary, the HLRM will employ the services of an ad-hoc Expert Committee involving representatives of civil society, private sector and health public procurement expertise to provide further technical assistance. The first pilot of the HLRM will be managed under the auspices of the National Authority of Transparency and Access to Information (ANTAI).

The HLRM in Panama is the third such mechanism, drawing on the examples established in Colombia and Ukraine. Representatives from the Basel Institute’s International Centre for Collective Action worked with ANTAI throughout 2015 on the development of the HLRM, including through consultations with representatives from the Panamanian business community, civil society and other government institutions.  Funding support for this endeavour was received from the UK Foreign & Commonwealth Office (Panama) and the Siemens Integrity Initiative.