Professional resistance against competitive public procurement in Iran
| DOI | https://doi.org/10.1108/JOPP-06-2018-011 |
| Pages | 165-181 |
| Date | 04 June 2018 |
| Published date | 04 June 2018 |
| Author | Mehran Sepehri,Mohsen Qadiri |
| Subject Matter | Public policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public finance/economics,Taxation/public revenue |
Professional resistance against
competitive public procurement
in Iran
Mehran Sepehri and Mohsen Qadiri
School of Management and Economics,
Sharif University of Technology, Tehran, Iran
Abstract
Purpose –This study aim to examine the roots of professionalresistance of procurement in Iran. Public
procurement (PP) contracts, in developing countries, hide the structural problems of governmental
managementbecause of the lack of bureaucratic processes.
Design/methodology/approach –A two-phase qualitative study offers contextual and critical
understandings on why Iranian PP experts, who are aware of the philosophies behind internationally
endorsed principles, prefer to resist against the use of those principles. They help, unexpectedly, their
traditionalist companions to resolve the difficulties of the PP contracts by the use of local methods and
routines.
Findings –Evidence, from in-depth interviews with procurements professionals in Iran Oil industry,
provides four specific themes of “professional disorder,”“anti-internationalism,”“resistance mentality”and
“politicized procurement.”Apreemptive resistance is characterized to guaranteethat the national benefits in
Iran are preferredover the international economic interests.
Originality/value –Iran has been in isolation due to politicalsanctions, for two decades. There are many
diverse politicaland social reasons for resistance againstprofessional public procurement.
Keywords Public procurement, Iran
Paper type Research paper
Introduction
Public procurement (PP) accountsfor at least 15 per cent of gross domestic products around
the world (Semple, 2015,p.2;Thai, 2008, p. 20; Arrowsmith and Anderson, 2011,p.1;Elgar,
2011, p. 141). It is a critical field of profit making, tempting and threating of waste and
corruption. Internationalorganizations have failed to address institutional difficulties of PP
contracts in developing countries. These countries have willingly joined the global
programs of fighting corruption, but some remained in isolation from the international
community of PP[1],[2], [3].
The World Bank, Transparency International, Organization of Economic Cooperation
and Development and several other internationalorganizations have been ardently active in
recent decades to provide the world, especially the developing and underdeveloped
countries, with guides and instructions on fighting corruption in PP. They have published
The authors express sincere gratitude to erudite colleagues at Faculty of Management and
Economics, Sharif University of Technology, and managers and professionals at Iran National Oil
Company, who kindly were always there to solve with difficulties of breaking the silence and talking
about corruption in Iranian procurement.
Public
procurement
in Iran
165
Journalof Public Procurement
Vol.18 No. 2, 2018
pp. 165-181
© Emerald Publishing Limited
1535-0118
DOI 10.1108/JOPP-06-2018-011
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1535-0118.htm
many reports, periodically,to present what has been achieved and learned in this continuous
global battle. Still many countrieshave been unable to tackle their own internal problems.
“Corruption perception index”(CPI)of Iran has been lower than 3 since 2003, keeping it
in the group of corrupt countries in the world(TI, 2006). However, corruption in Iranian PP
system has never been studied either regionally or internationally. As billionsof dollars are
annually spent in Iranian PP contracts, it would be crucial to focus on what has been
neglected by both Iranian state and international entities and to discuss some of the
complexities to fight corruptionin Iranian PP.
Iran, as one of the main oil-exportingcountries, is ultimately dependent upon itsMinistry
of Petroleum (MoP). MoP is in charge of all productive and commercial affairs, including
exploration, extraction, exploitation, distribution and exportation related to the Iranian
wealth of oil and the petrochemical products.MoP’s enormous revenues make it a target of a
variety of corruptions. However, a cause of such deviations may be an in-depth belief that
the universal PP principles are not applicablehere.
Iranian PP system makes a good example of both the need to check the applicability of
those universalities and the promise to analyze the problems of PP organizations with
respect to contextual factors. Despitethe fact that Iranian tender law was recently updated,
PP professionals remain conservative and resistive againstcompetitive choices. This is due
to their awareness of low financial and bureaucraticcapacities of the government and their
preference for controllingthe competitions and granting the contracts to particular bidders.
This article aims to analyze the main internalobstacles, preventing Iranian procurement
system from functioning properly andgradually adapting to the globally known principles
of PP. Based on the tradition of PP, the contracts should be awarded in a competitive
manner and the government must refrain from any kind of interventionist practice which
might overshadow the healthy atmosphere of competitions. Evidence from in-depth
interviews, in four selected cases within Iran oil industry, are used to extract and propose
underlying themes on why professional resistance occurs against competitive PP in Iran oil
companies.
International and professional public procurement
International approach
Article 9 of UN convention against corruption (2004, p.12) calls on the member countriesto
establish appropriate procurement systems and transparent and competitive arrangements
including objective criteria and effective methods of handling the irregularities. OECD
(2009) goes into more details by categorizing the principles of integrity into five main
chapters: transparency, good management, prevention of misconduct, compliance and
monitoring and accountability.The “Risk for corruption”(OECD, 2005, p. 1) is addressed by
a focus on standards and principles essential to fight corruption in PP. The misuse of
entrusted power for private gain, TI (2006) defines and lists the main threats of corruption
and mismanagement in each of the five phases of procurement cycle, a practical approach
which adds to the tacit knowledgeof practitioners.
The international approachis characterized by a didactic essence accentuating the global
need to be united, both in form and content, against the threat of corruption. Thus, a
reference model of PP contracts is used to continuously address the already-defined and
categorized types of corruption. By TI (2006, p. 17) and OECD (2009, p. 52), it is wise to
detect either the risks or the manifestations of corruptionin each phase of PP contracts. Red
flags are deliberately used to call for due diligence, because preventing and controlling
corruption is the first and foremost priority of international agencies. OECD (2007, p. 15)
embraces the change in the organizational roles of PP officials from the process-based
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