Draft bill 36.

Summary.

The draft bill would require comprehensive audits of concessions granted by the State. It covers administrative concessions, public-private partnerships and other arrangements for operating public assets or services. It defines, among other concepts, a comprehensive audit, compliance levels, critical noncompliance and possible decisions concerning the contract. Implementation would follow principles of institutional coordination, economic efficiency, the primacy of the public interest, legality, accountability, sustainability and transparency. Assessments and decisions would be public, subject to exceptions under existing legislation.

Each concession would be assessed before award, every two years during performance, before addenda and before extension or amendment. The audit would examine legal, economic, technical, social and environmental matters. Each entity would be directly responsible for planning, conducting, monitoring and documenting the assessment and for decisions based on its results. Responsibility for the outcome could not be delegated, although internal technical tasks could be assigned to others. Failure to meet this duty could give rise to administrative, civil or criminal liability.

Entities would form interdisciplinary teams of qualified professionals who are independent and free of conflicts of interest, giving priority to internal personnel and their continuing training. An entity lacking technical capacity could seek assistance from other State institutions, public universities or specialized centers through cooperation arrangements that ensure objectivity, transparency and traceability, without transferring responsibility. Reports would identify the concession and methodology, examine each dimension, substantiate findings and risks, assign a compliance level and make clear recommendations. Decisions would have to connect their technical and legal grounds to the findings; absent or insufficient reasons would be grounds for administrative liability.

Granting entities would coordinate with other institutions as the concession requires, while respecting their respective powers. The provision addressing the Office of the Comptroller General of the Republic of Panama (Contraloría General de la República de Panamá) allows reports to be sent to the Office of the Comptroller General of the Republic (Contraloría General de la República) as technical input for its oversight functions. These assessments would not constitute fiscal oversight, replace audits by the Comptroller’s Office (Contraloría), or amount to endorsement or approval of administrative acts. The draft bill would operate consistently with Law 22 of 2006 (Ley 22 de 2006) on contractual performance, supervision and public servants’ responsibility, without changing procurement procedures or oversight powers. The granting entity would have to consider the reports; any departure from their recommendations would require reasons and inclusion in the administrative file. A technical report would support grounds for recommending amendment, suspension, termination or non-extension, including contractual breaches, significant environmental harm and an economic imbalance detrimental to the State.

Reports would verify compliance with the governing principles and use a mandatory technical matrix with indicators, percentage weighting, verifiable measures and qualitative criteria where appropriate. Assessments would cover legal, economic and financial, technical, social and environmental dimensions and classify results as high, medium or low compliance, or critical noncompliance. Recommendations could lead to continuation, amendment, suspension, termination or non-extension. Assessments and decisions would be recorded in the administrative file. The compliance level would guide the decision: continuation for high compliance; amendment for medium compliance; amendment or suspension for low compliance; and suspension or termination for critical noncompliance. Extension would require high compliance or verifiable correction of observations associated with medium compliance. An unjustified departure from the prescribed correspondence would create administrative liability; departure from an assessment would require documented grounds and be subject to subsequent review.

Omitting an assessment, altering results or making a decision without technical support would constitute serious misconduct by the public servants involved. Entities would implement continuous risk monitoring during performance. The draft bill calls for implementing regulations within no more than six (6) months after promulgation and would take effect upon promulgation. Its provisions would concern public granting entities, oversight institutions, concessionaires, public-private partnerships and sectors that operate public assets or provide public services.