Analytics, Corruption, Estonia, EU – Baltic States, Financial Services, Legislation

The study showed that of Estonian municipalities, the highest risk for corruption was recorded in Tallinn and Vaivara, while municipalities with the smallest corruption risk were the Harku rural municipality and the city of Maardu, the Estonian Ministry of Justice said. Spokespeople for the ministry clarified that the corruption risk index does not refer to actual corruption, but shows how transparently and openly the municipality organizes public tenders.

The study covers the public tenders with a limit exceeding 130,000 euros that were carried out in EU countries and Norway from 2009 to 2015. Estonia's index on a scale of 0 to 1 was 0.33. The average EU index was 0.28. Estonian municipalities with the highest corruption risk were Tallinn with an index of 0.4 and Vaivara with 0.33, while the lowest risk was recorded in the Harku rural municipality, where the index stood at 0.05.

Commenting on the study, Estonian Minister of Justice Urmas Reinsalu said that the public sector in OECD countries spends approximately a third of its budget of public tenders, which at the same time is one of the fields most at risk of corruption.

"It is clear that municipalities have not used all existing options for preventing corruption. This is why guidelines are being prepared, which will help municipalities assess and mitigate corruption risks and create their own internal control system with the help of practical examples. New councils to be elected soon can then organize tenders more transparently with the help of those guidelines," Reinsalu said.

Compiled under the leadership of Mihaly Fazekas, a scholar at the University of Cambridge, the corruption risk index brings together five indicators which show the transparency of public tenders: the number of bidders, the type of tender procedure, the time period between the tender announcement and the deadline for tenders, assessment criteria, and the time for deciding. Compared with others, the most risky examples include tenders with unannounced negotiations as well as tenders with one bidder, where the time period between the announcement and the deadline for tenders is either too long (reference to legal confusion) or too short (possibility of earlier agreements) and the assessment criteria are not measurable.

As when analyzing data about Estonia, the analysis unit of the Ministry of Justice also took into account the tenders of the institutions of the municipalities, the average index may be impacted in addition to the tenders of municipalities themselves by tenders of the companies and governed bodies of the municipalities, spokespeople for the ministry said. The analysis did not take into account those municipalities with less than four tender agreements signed. It must also be taken into account that in the EU public tender database there is no possibility to differentiate if the data presented concerns rural municipalities or cities with the same name.