Mumbai: Gail India has signed a memorandum of understanding (MoU) with Transparency International India (TII) for an ''integrity pact programme'' aimed at enhancing operational transparency in its contracts and procurements process.

U D Choubey, CMD of the company, signed the pact with Admiral R H Tahiliani, former Chief of Naval Staff and the present chairman of TII.

TII is among the first few Indian corporates to introduce ''integrity pact'' in procurement and contracts. Integrity pact is a tool devised by TII worldwide to fight corruption in public procurement and thereby help in improve the credibility of public procedures and administration.

Under the MoU, the company is committed to implement the integrity pact programme in all its major procurement activities. Gail (principal) will enter into a pact with those companies submitting a tender for a specific activity (bidders). The principal will give an undertaking that its officials will not demand or accept any bribes, gifts etc., with appropriate disciplinary or criminal sanctions in case of violation.

Each bidder will give a statement to the effect that it has not paid, and will not pay, any bribes. Bidders will also undertake to disclose all payments made in connection with the contract in question to anybody (including agents and other middlemen as well as family members, etc., of officials).

The disclosure would be made either at the time of tender submission or upon demand by the principal, especially when a suspicion of a violation by that bidder emerges.

The explicit acceptance of the no-bribery commitment and the disclosure obligation as well as the attendant sanctions shall remain in force for the winning bidder until the contract is fully executed.

Failure to implement IP will attract penal action and bidders will have to face cancellation of contract, forfeiture of bond, liquidated damages and blacklisting. The integrity pact will form part of bid document and will come into effect from the moment bidders submit documents to the company and would end after the complete execution of the contract to the satisfaction of both the contracting parties.

External independent monitors (EIMs) would oversee the entire bidding process from day one and resolve all disputes by any party as and when referred to them. The EIMs will be drawn from a panel of eminent personalities.