Perspectives 2019 2020 Public Sector

8 New Transparency Principles for Infrastructure The administrator would only be given rights equivalent to those of the equity shareholder in question. In other words, the administrator would only be able to influence management and board decisions to the same extent of the accused equity holder. Operationally, the shares and cash flows of the equity in question can be held in a trust until final adjudication, to be made available for debt service and fines or penalties ultimately rendered. To make subrogation of rights to the administrator uncontested and more expeditious, all equity contributions could be held in a trust from the beginning of the project. In all cases, an integrity framework to address MIEs should have three main guiding principles: 1. Flexibility to determine the materiality of an integrity event and the corresponding remediating measures. Isolated integrity events, committed by an employee for example, can be remedied by the equity holders through discretionary actions such as termination of employment and fines, among others. In comparison, MIEs would require the appointment of an administrator as explained above. 2. Guaranteed due process for equity through full representation of its rights in arbitration procedures. 3. Adherence to international transparency law , to the extent possible, through the adoption or modeling of laws similar in scope and consequence to the US Foreign Corrupt Practices Act and the UK Bribery Act, in particular in relation to personal liability. The ideas laid out in this article constitute the basis for the creation of the New Transparency Principles for Infrastructure . They are a starting point for discussion to tackle and address corruption in infrastructure projects. Leveraging existing best practices in public procurement and anti-corruption, third party integrity auditing and a framework to address post-integrity events are a solid basis for discussion by the wider infrastructure community. Action is required to address the most pressing issues relating to infrastructure and guarantee the continuity of strategic infrastructure projects that are critical for Latin America and beyond. Joaquin Jugo Head of LATAM Public Sector, Citi Jorge Ordonez LATAM Public Sector, Citi