INTEGRITY PACT

Between

Steel Authority of India Limited (SAIL) hereinafter referred to as “The Principal”,

and

…………………………………………… hereinafter referred to as “The Bidder/ Contractor”

Preamble

The Principal intends to award, under laid down organizational procedures, contract/s
for………………………………………The Principal values full compliance with all relevant
laws of the land, rules, regulations, economic use of resources and of fairness /
transparency in its relations with its Bidder(s) and / or Contractor(s).

In order to achieve these goals, the Principal will appoint an Independent External
Monitor (IEM), who will monitor the tender process and the execution of the contract for
compliance with the principles mentioned above.

Section 1 – Commitments of the Principal

(1.) The Principal commits itself to take all measures necessary to prevent
corruption and to observe the following principles:-

a. No employee of the Principal, personally or through family members, will in

connection with the tender for , or the execution of a contract, demand, take
a promise for or accept, for self or third person, any material or immaterial
benefit which the person is not legally entitled to.

b. The Principal will, during the tender process treat all Bidder(s) with equity
and reason. The Principal will in particular, before and during the tender
process, provide to all Bidder(s) the same information and will not provide to
any Bidder(s) confidential / additional information through which the
Bidder(s) could obtain an advantage in relation to the tender process or the
contract execution.

c. The Principal will exclude from the process all known prejudiced persons.

(2) If the Principal obtains information on the conduct of any of its employees
which is a criminal offence under the IPC/PC Act, or if there be a substantive
suspicion in this regard, the Principal will inform the Chief Vigilance Officer
and in addition can initiate disciplinary actions.

Section 2 – Commitments of the Bidder(s)/ contractor(s)

(1) The Bidder(s)/ Contractor(s) commit themselves to take all measures necessary
to prevent corruption. He commits himself to observe the following principles
during his participation in the tender process and during the contract
execution.

a. The Bidder(s)/ Contractor(s) will not, directly or through any other person
or firm, offer, promise or give to any of the Principal’s employees involved in
the tender process or the execution of the contract or to any third person
any material or other benefit which he/she is not legally entitled to, in order
to obtain in exchange any advantage of any kind whatsoever during the
tender process or during the execution of the contract.

Integrity Pact Page 1 of 17 October 2011

 b. The Bidder(s)/ Contractor(s) will not enter with other Bidders into any
undisclosed agreement or understanding, whether formal or informal. This
applies in particular to prices, specifications, certifications, subsidiary
contracts, submission or non-submission of bids or any other actions to
restrict competitiveness or to introduce cartelisation in the bidding process.

c. The Bidder(s)/ Contractor(s) will not commit any offence under the relevant
IPC/PC Act; further the Bidder(s)/ Contractor(s) will not use improperly, for
purposes of competition or personal gain, or pass on to others, any
information or document provided by the Principal as part of the business
relationship, regarding plans, technical proposals and business details,
including information contained or transmitted electronically.

d. The Bidder(s)/Contractors(s) of foreign origin shall disclose the name and

address of the Agents/representatives in India, if any. Similarly the
Bidder(s)/Contractors(s) of Indian Nationality shall furnish the name and
address of the foreign principals, if any. Further details as mentioned in the
“Guidelines on Indian Agents of Foreign Suppliers” shall be disclosed by the
Bidder(s)/Contractor(s).Further, as mentioned in the Guidelines all the
payments made to the Indian agent/representative have to be in Indian
Rupees only. Copy of the “Guidelines on Indian Agents of Foreign
Suppliers” is placed at (page nos. 6-7)

e. The Bidder(s)/ Contractor(s) will, when presenting his bid, disclose any and
all payments he has made, is committed to or intends to make to agents,
brokers or any other intermediaries in connection with the award of the
contract.

(2) The Bidder(s)/ Contractor(s) will not instigate third persons to commit offences
outlined above or be an accessory to such offences.

Section 3- Disqualification from tender process and exclusion from future

contracts

If the Bidder(s)/Contractor(s), before award or during execution has committed a

transgression through a violation of Section 2, above or in any other form such
as to put his reliability or credibility in question, the Principal is entitled to
disqualify the Bidder(s)/Contractor(s) from the tender process or take action as
per the procedure mentioned in the “Guidelines on Banning of business
dealings”. Copy of the “Guidelines on Banning of business dealings” is placed at
(page nos. 8-17).

Section 4 – Compensation for Damages

(1) If the Principal has disqualified the Bidder(s) from the tender process
prior to the award according to Section 3, the Principal is entitled to
demand and recover the damages equivalent to Earnest Money Deposit/
Bid Security.

(2) If the Principal has terminated the contract according to Section 3, or if

the Principal is entitled to terminate the contract according to Section 3,
the Principal shall be entitled to demand and recover from the

Integrity Pact Page 2 of 17 October 2011

 Contractor liquidated damages of the Contract value or the amount
equivalent to Performance Bank Guarantee.

Section 5 – Previous transgression

(1) The Bidder declares that no previous transgressions occurred in the last
three years with any other Company in any country conforming to the
anti-corruption approach or with any Public Sector Enterprise in India
that could justify his exclusion from the tender process.

(2) If the Bidder makes incorrect statement on this subject, he can be

disqualified from the tender process or action can be taken as per the
procedure mentioned in “Guidelines on Banning of business dealings”.

Section 6 – Equal treatment of all Bidders / Contractors / Subcontractors

(1) The Bidder(s)/ Contractor(s) undertake(s) to demand from his

subcontractors a commitment in conformity with this Integrity Pact.

(2) The Principal will enter into agreements with identical conditions as this
one with all Bidders and Contractors.

(3) The Principal will disqualify from the tender process all bidders who do
not sign this Pact or violate its provisions.

Section 7 – Criminal charges against violating Bidder(s) / Contractor(s) /

Subcontractor(s)

If the Principal obtains knowledge of conduct of a Bidder, Contractor or

Subcontractor, or of an employee or a representative or an associate of a Bidder,
Contractor or Subcontractor which constitutes corruption, or if the Principal has
substantive suspicion in this regard, the Principal will inform the same to the Chief
Vigilance Officer.

Section 8 – Independent External Monitor / Monitors

(1) The Principal appoints competent and credible Independent External

Monitor for this Pact. The task of the Monitor is to review independently
and objectively, whether and to what extent the parties comply with the
obligations under this agreement.

(2) The Monitor is not subject to instructions by the representatives of the

parties and performs his functions neutrally and independently. It will
be obligatory for him to treat the information and documents of the
Bidders/Contractors as confidential. He reports to the Chairman, SAIL.

(3) The Bidder(s)/Contractor(s) accepts that the Monitor has the right to
access without restriction to all Project documentation of the Principal
including that provided by the Contractor. The Contractor will also grant
the Monitor, upon his request and demonstration of a valid interest,
unrestricted and unconditional access to his project documentation. The
same is applicable to Subcontractors. The Monitor is under contractual

Integrity Pact Page 3 of 17 October 2011

 obligation to treat the information and documents of the Bidder(s)/
Contractor(s)/ Subcontractor(s) with confidentiality.

(4) The Principal will provide to the Monitor sufficient information about all
meetings among the parties related to the Project provided such
meetings could have an impact on the contractual relations between the
Principal and the Contractor. The parties offer to the Monitor the option
to participate in such meetings.

(5) As soon as the Monitor notices, or believes to notice, a violation of this

agreement, he will so inform the Management of the Principal and
request the Management to discontinue or take corrective action, or to
take other relevant action. The monitor can in this regard submit non-
binding recommendations. Beyond this, the Monitor has no right to
demand from the parties that they act in a specific manner, refrain from
action or tolerate action.

(6) The Monitor will submit a written report to the Chairman, SAIL within 8
to 10 weeks from the date of reference or intimation to him by the
Principal and, should the occasion arise, submit proposals for correcting
problematic situations.

(7) If the Monitor has reported to the Chairman SAIL, a substantiated

suspicion of an offence under relevant IPC/ PC Act, and the Chairman
SAIL has not, within the reasonable time taken visible action to proceed
against such offence or reported it to the Chief Vigilance Officer, the
Monitor may also transmit this information directly to the Central
Vigilance Commissioner.
(8) The word ‘Monitor’ would include both singular and plural.

Section 9 – Pact Duration

This Pact begins when both parties have legally signed it. It expires for the Contractor
12 months after the last payment under the contract, and for all other Bidders 6
months after the contract has been awarded.

If any claim is made / lodged during this time, the same shall be binding and
continue to be valid despite the lapse of this pact as specified above, unless it is
discharged / determined by Chairman of SAIL.
Section 10 – Other provisions

(1) This agreement is subject to Indian Law. Place of performance and

jurisdiction is the Registered Office of the Principal, i.e. New Delhi.

(2) Changes and supplements as well as termination notices need to be made

in writing. Side agreements have not been made.

(3) If the Contractor is a partnership or a consortium, this agreement must be

signed by all partners or consortium members.

(4) Should one or several provisions of this agreement turn out to be invalid, the
remainder of this agreement remains valid. In this case, the parties will strive
to come to an agreement to their original intentions.

Integrity Pact Page 4 of 17 October 2011

 (5) In the event of any contradiction between the Integrity Pact and its Annexure,
the Clause in the Integrity Pact will prevail.”

_______________________________ ______________________________
(For & On behalf of the Principal) (For & On behalf of
Bidder/ Contractor)

(Office Seal) (Office Seal)

Place --------------
Date --------------

Witness 1:
(Name & Address) _____________________________
_____________________________
_____________________________
_____________________________

Witness 2:
(Name & Address) _____________________________
_____________________________
_____________________________
_____________________________

Integrity Pact Page 5 of 17 October 2011

 GUIDELINES FOR INDIAN AGENTS OF FOREIGN SUPPLIERS

1.0 There shall be compulsory registration of agents for all Global (Open) Tender
and Limited Tender. An agent who is not registered with SAIL Plants/Units
shall apply for registration in the prescribed Application –Form.

1.1 Registered agents will file an authenticated Photostat copy duly attested by a
Notary Public/Original certificate of the principal confirming the agency
agreement and giving the status being enjoyed by the agent and the
commission/remuneration/salary/ retainer ship being paid by the principal to
the agent before the placement of order by SAIL Plants/Units.

1.2 Wherever the Indian representatives have communicated on behalf of their

principals and the foreign parties have stated that they are not paying any
commission to the Indian agents, and the Indian representative is working
on the basis of salary or as retainer, a written declaration to this effect should
be submitted by the party (i.e. Principal) before finalizing the order

2.0 DISCLOSURE OF PARTICULARS OF AGENTS/ REPRESENTATIVES IN

INDIA. IF ANY.

2.1 Tenderers of Foreign nationality shall furnish the following details in their offer:

2.1.1 The name and address of the agents/representatives in India, if any and the
extent of authorization and authority given to commit the Principals. In case
the agent/representative be a foreign Company, it shall be confirmed whether it
is real substantial Company and details of the same shall be furnished.

2.1.2 The amount of commission/remuneration included in the quoted price(s) for

such agents/representatives in India.

2.1.3 Confirmation of the Tenderer that the commission/ remuneration if any,

payable to his agents/representatives in India, may be paid by SAIL in Indian
Rupees only.

2.2 Tenderers of Indian Nationality shall furnish the following details in their offers:

2.2.1 The name and address of the foreign principals indicating their nationality as
well as their status, i.e, whether manufacturer or agents of manufacturer
holding the Letter of Authority of the Principal specifically authorizing the agent
to make an offer in India in response to tender either directly or through the
agents/representatives.

2.2.2 The amount of commission/remuneration included in the price (s) quoted by

the Tenderer for himself.

2.2.3 Confirmation of the foreign principals of the Tenderer that the

commission/remuneration, if any, reserved for the Tenderer in the quoted
price (s), may be paid by SAIL in India in equivalent Indian Rupees on
satisfactory completion of the Project or supplies of Stores and Spares in case
of operation items .

Integrity Pact Page 6 of 17 October 2011

2.3 In either case, in the event of contract materializing, the terms of payment will
provide for payment of the commission /remuneration, if any payable to the
agents/representatives in India in Indian Rupees on expiry of 90 days after the
discharge of the obligations under the contract.

2.4 Failure to furnish correct and detailed information as called for in paragraph-
2.0 above will render the concerned tender liable to rejection or in the event of
a contract materializing, the same liable to termination by SAIL. Besides this
there would be a penalty of banning business dealings with SAIL or damage or
payment of a named sum.

*******

Integrity Pact Page 7 of 17 October 2011

 Guidelines on Banning of Business Dealing

CONTENTS

[Link]. Page(s)

1. Introduction 9

2. Scope 9

3. Definitions 10-11

4. Initiation of Banning / Suspension 11

5. Suspension of Business Dealings 11-12

6. Ground on which Banning of Business Dealing can be 13-14

initiated

7. Banning of Business Dealings 14-15

8. Removal from List of Approved Agencies-Suppliers/ 16

Contractors etc.

9. Show-cause Notice 16

10. Appeal against the Decision of the Competent 16

Authority

11. Review of the Decision by the Competent Authority 17

12. Circulation of the names of Agencies with whom 17

Business Dealings have been banned

Integrity Pact Page 8 of 17 November 2014

1. Introduction
1.1 Steel Authority of India Limited (SAIL), being a Public Sector Enterprise
and ‘State’, within the meaning of Article 12 of Constitution of India, has
to ensure preservation of rights enshrined in Chapter III of the
Constitution. SAIL has also to safeguard its commercial interests. SAIL
deals with Agencies, who have a very high degree of integrity,
commitments and sincerity towards the work undertaken. It is not in the
interest of SAIL to deal with Agencies who commit deception, fraud or
other misconduct in the execution of contracts awarded / orders issued to
them. In order to ensure compliance with the constitutional mandate, it is
incumbent on SAIL to observe principles of natural justice before banning
the business dealings with any Agency.

1.2 Since banning of business dealings involves civil consequences for an

Agency concerned, it is incumbent that adequate opportunity of hearing is
provided and the explanation, if tendered, is considered before passing any
order in this regard keeping in view the facts and circumstances of the
case.

2. Scope
2.1 The General Conditions of Contract (GCC) of SAIL generally provide that
SAIL reserves its rights to remove from list of approved suppliers /
contractors or to ban business dealings if any Agency has been found to
have committed misconduct and also to suspend business dealings pending
investigation. If such provision does not exist in any GCC, the same may
be incorporated.

2.2 Similarly, in case of sale of material there is a clause to deal with the
Agencies / customers / buyers, who indulge in lifting of material in
unauthorized manner. If such a stipulation does not exist in any Sale
Order, the same may be incorporated.

2.3 However, absence of such a clause does not in any way restrict the right of
Company (SAIL) to take action / decision under these guidelines in
appropriate cases.

2.4 The procedure of (i) Removal of Agency from the List of approved
suppliers / contractors; (ii) Suspension and (iii) Banning of Business
Dealing with Agencies, has been laid down in these guidelines.

2.5 These guidelines apply to all the Plants / Units and subsidiaries of SAIL.

2.6 It is clarified that these guidelines do not deal with the decision of the
Management not to entertain any particular Agency due to its poor /
inadequate performance or for any other reason.

2.7 The banning shall be with prospective effect, i.e., future business dealings.

Integrity Pact Page 9 of 17 November 2014

3. Definitions
In these Guidelines, unless the context otherwise requires:

i) ‘Party / Contractor / Supplier / Purchaser / Customer/Bidder/Tenderer’

shall mean and include a public limited company or a private limited
company, a firm whether registered or not, an individual, a cooperative
society or an association or a group of persons engaged in any commerce,
trade, industry, etc. ‘Party / Contractor / Supplier / Purchaser / Customer/
Bidder / Tenderer’ in the context of these guidelines is indicated as
‘Agency’.

ii) ‘Inter-connected Agency’ shall mean two or more companies having any
of the following features:

a) If one is a subsidiary of the other.

b) If the Director(s), Partner(s), Manager(s) or Representative(s) are
common;
c) If management is common;
d) If one owns or controls the other in any manner;

iii) ‘Competent Authority’ and ‘Appellate Authority’ shall mean the following:

a) For Company (entire SAIL) Wide Banning

The Director (Technical) shall be the ‘Competent Authority’ for
the purpose of these guidelines. Chairman, SAIL shall be the
‘Appellate Authority’ in respect of such cases except banning of
business dealings with Foreign Suppliers of imported coal/coke.

b) For banning of business dealings with Foreign Suppliers of

imported coal/coke, SAIL Directors’ Committee (SDC) shall be the
‘Competent Authority’. The Appeal against the Order passed by
SDC, shall lie with Chairman, as First Appellate Authority.

c) In case the foreign supplier is not satisfied by the decision of the

First Appellate Authority, it may approach SAIL Board as Second
Appellate Authority.

d) For Plants / Units only

Any officer not below the rank of General Manager / Addl Director
appointed or nominated by the Chief Executive of concerned Plant
/ Unit shall be the ‘Competent Authority’ for the purpose of these
guidelines. The Chief Executives of the concerned Plants / Unit
shall be the ‘Appellate Authority’ in all such cases.

e) For Corporate Office only

For procurement of items / award of contracts, to meet the
requirement of Corporate Office only, Head of CMMG shall be the
Competent Authority” and Director (Technical) shall be the
“Appellate Authority”.

Integrity Pact Page 10 of 17 November 2014

 e) Chairman, SAIL shall have overall power to take suo-moto action
on any information available or received by him and pass such
order(s) as he may think appropriate, including modifying the
order(s) passed by any authority under these guidelines.

iv) ‘Investigating Department’ shall mean any Department or Unit

investigating into the conduct of the Agency and shall include the
Vigilance Department, Central Bureau of Investigation, the State Police or
any other department set up by the Central or State Government having
powers to investigate.

v) ‘List of approved Agencies - Parties / Contractors / Suppliers / Purchasers

/ Customers / Bidders / Tenderers shall mean and include list of approved /
registered Agencies - Parties/ Contractors / Suppliers / Purchasers /
Customers / Bidders / Tenderers, etc.

4. Initiation of Banning / Suspension

Action for banning / suspension business dealings with any Agency should be
initiated by the department having business dealings with them after noticing the
irregularities or misconduct on their part. Besides the concerned department,
Vigilance Department of each Plant / Unit /Corporate Vigilance may also be
competent to advise such action.

5. Suspension of Business Dealings

5.1 If the conduct of any Agency dealing with SAIL is under investigation by
any department (except Foreign Suppliers of imported coal/coke), the
Competent Authority may consider whether the allegations under
investigation are of a serious nature and whether pending investigation, it
would be advisable to continue business dealing with the Agency. If the
Competent Authority, after consideration of the matter including the
recommendation of the Investigating Department, if any, decides that it
would not be in the interest to continue business dealings pending
investigation, it may suspend business dealings with the Agency. The
order to this effect may indicate a brief of the charges under investigation.
If it is decided that inter-connected Agencies would also come within the
ambit of the order of suspension, the same should be specifically stated in
the order. The order of suspension would operate for a period not more
than six months and may be communicated to the Agency as also to the
Investigating Department. The Investigating Department may ensure that
their investigation is completed and whole process of final order is over
within such period.

5.2 The order of suspension shall be communicated to all Departmental Heads

within the Plants / Units. During the period of suspension, no business
dealing may be held with the Agency.

5.3 As far as possible, the existing contract(s) with the Agency may continue
unless the Competent Authority, having regard to the circumstances of the
case, decides otherwise.

Integrity Pact Page 11 of 17 November 2014

 5.4 If the gravity of the misconduct under investigation is very serious and it
would not be in the interest of SAIL, as a whole, to deal with such an
Agency pending investigation, the Competent Authority may send his
recommendation to ED (CMMG), SAIL Corporate Office alongwith the
material available. If Corporate Office considers that depending upon the
gravity of the misconduct, it would not be desirable for all the Plants /
Units and Subsidiaries of SAIL to have any dealings with the Agency
concerned, an order suspending business dealings may be issued to all the
Plants / Units by the Competent Authority of the Corporate Office, copy of
which may be endorsed to the Agency concerned. Such an order would
operate for a period of six months from the date of issue.

5.5 For suspension of business dealings with Foreign Suppliers of imported

coal/coke, following shall be the procedure :-

i) Suspension of the foreign suppliers shall apply through out the

Company including Subsidiaries.

ii) Based on the complaint forwarded by ED (CIG) or received

directly by Corporate Vigilance, if gravity of the misconduct under
investigation is found serious and it is felt that it would not be in
the interest of SAIL to continue to deal with such agency, pending
investigation, Corporate Vigilance may send such recommendation
on the matter to Executive Director, Coal Import Group (ED, CIG)
to place it before a Committee consisting of the following :

1. ED (F&A)/Head of Corporate Finance,

2. ED, CIG/Head of CIG – Convenor of the Committee
3. ED, CMMG/Head of CMMG, Corporate Office
4. ED (Law)/Head of Corporate Law

The committee shall expeditiously examine the report, give its

comments/recommendations within twenty one days of receipt of
the reference by ED, CIG.

iii) The comments / recommendations of the Committee shall then be

placed by ED, CIG before SAIL Directors’ Committee (SDC)
constituted for import of Coal. If SDC opines that it is a fit case for
suspension, SDC may pass necessary orders which shall be
communicated to the foreign supplier by ED, CIG.

5.6 If the Agency concerned asks for detailed reasons of suspension, the
Agency may be informed that its conduct is under investigation. It is not
necessary to enter into correspondence or argument with the Agency at
this stage.

5.7 It is not necessary to give any show-cause notice or personal hearing to the
Agency before issuing the order of suspension. However, if investigations
are not complete in six months time, the Competent Authority may extend
the period of suspension by another three months, during which period the
investigations must be completed.

Integrity Pact Page 12 of 17 November 2014

6. Ground on which Banning of Business Dealings can be initiated
6.1 If the security consideration, including questions of loyalty of the Agency
to the State, so warrants;

6.2 If the Director / Owner of the Agency, proprietor or partner of the firm, is
convicted by a Court of Law for offences involving moral turpitude in
relation to its business dealings with the Government or any other public
sector enterprises or SAIL, during the last five years;

6.3 If there is strong justification for believing that the Directors, Proprietors,
Partners, owner of the Agency have been guilty of malpractices such as
bribery, corruption, fraud, substitution of tenders, interpolations, etc;

6.4 If the Agency continuously refuses to return / refund the dues of SAIL
without showing adequate reason and this is not due to any reasonable
dispute which would attract proceedings in arbitration or Court of Law;

6.5 If the Agency employs a public servant dismissed / removed or employs a

person convicted for an offence involving corruption or abetment of such
offence;

6.6 If business dealings with the Agency have been banned by the Govt. or
any other public sector enterprise;

6.7 If the Agency has resorted to Corrupt, fraudulent practices including

misrepresentation of facts and / or fudging /forging /tampering of
documents;

6.8 If the Agency uses intimidation / threatening or brings undue outside

pressure on the Company (SAIL) or its official in acceptance /
performances of the job under the contract;

6.9 If the Agency indulges in repeated and / or deliberate use of delay tactics
in complying with contractual stipulations;

6.10 Willful indulgence by the Agency in supplying sub-standard material

irrespective of whether pre-despatch inspection was carried out by
Company (SAIL) or not;

6.11 Based on the findings of the investigation report of CBI / Police against
the Agency for malafide / unlawful acts or improper conduct on his part in
matters relating to the Company (SAIL) or even otherwise;

6.12 Established litigant nature of the Agency to derive undue benefit;

6.13 Continued poor performance of the Agency in several contracts;

6.14 If the Agency misuses the premises or facilities of the Company (SAIL),
forcefully occupies, tampers or damages the Company’s properties
including land, water resources, forests / trees, etc.

Integrity Pact Page 13 of 17 November 2014

 (Note: The examples given above are only illustrative and not exhaustive.
The Competent Authority may decide to ban business dealing for
any good and sufficient reason).

7 Banning of Business Dealings

7.1 Normally, a decision to ban business dealings with any Agency should
apply throughout the Company including Subsidiaries. However, the
Competent Authority of the Plant / Unit except Corporate Office can
impose such ban unit-wise only if in the particular case banning of
business dealings by respective Plant / Unit will serve the purpose and
achieve its objective and banning throughout the Company is not required
in view of the local conditions and impact of the misconduct / default to
beyond the Plant / Unit. Any ban imposed by Corporate Office shall be
applicable across all Plants / Units of the Company including Subsidiaries.

7.2 There will be a Standing Committee in each Plant / Unit to be appointed

by Chief Executive for processing the cases of “Banning of Business
Dealings” except for banning of business dealings with foreign suppliers
of coal/coke. However, for procurement of items / award of contracts, to
meet the requirement of Corporate Office only, the committee shall be
consisting of General Manager / Dy. General Manager each from
Operations, Finance, Law & CMMG. Member from CMMG shall be the
convener of the committee. The functions of the committee shall, inter-alia
include:

i) To study the report of the Investigating Agency and decide if a

prima-facie case for Company-wide / Local unit wise banning
exists, if not, send back the case to the Competent Authority.

ii) To recommend for issue of show-cause notice to the Agency by the

concerned department.

iii) To examine the reply to show-cause notice and call the Agency for
personal hearing, if required.

iv) To submit final recommendation to the Competent Authority for

banning or otherwise.

7.3 If companywide banning is contemplated by the banning Committee of

any plant/ unit, the proposal should be sent by the committee to ED
(CMMG) through the Chief Executive of the Plant/ Unit setting out the
facts of the case and the justification of the action proposed along with all
the relevant papers and documents. CMMG shall get feedback about that
agency from all other Plants / Units and based on this feedback, a prima-
facie decision for banning / or otherwise shall be taken by the Competent
Authority. At this stage if it is felt by the Competent Authority that there is
no sufficient ground for companywide banning, then the case shall be sent
back to the Chief Executive of the Plant/ Unit for further action at the
Plant/ Unit level.

Integrity Pact Page 14 of 17 November 2014

 If the prima-facie decision for Company-wide banning has been taken, ED
(CMMG) shall issue a show-cause notice to the agency conveying why it
should not be banned throughout SAIL.

After considering the reply of the Agency and other circumstances and
facts of the case, ED (CMMG) will submit the case to the Competent
Authority to take a final decision for Company-wide banning or otherwise.

7.4 If the Competent Authority is prima-facie of view that action for banning
business dealings with the Agency is called for, a show-cause notice may
be issued to the Agency as per paragraph 9.1 and an enquiry held
accordingly.

7.5 Procedure for Banning of Business Dealings with Foreign Suppliers of

imported coal/coke.

i) Banning of the agencies shall apply through out the Company

including Subsidiaries.

ii) Based on the complaint forwarded by ED (CIG) or received

directly by Corporate Vigilance, an investigation shall be carried
out by Corporate Vigilance. After investigation depending upon the
gravity of the misconduct, Corporate Vigilance may send their
report to Executive Director, Coal Import Group to be placed
before a Committee consisting of the following :-

1. ED (F&A)/Head of Corporate Finance,

2. ED, CIG/Head of CIG – Convenor of the Committee
3. ED, CMMG/Head of CMMG, Corporate Office
4. ED (Law)/Head of Corporate Law

The Committee shall examine the report and give its comments /
recommendations within 21 days of receipt of the reference by ED,
CIG.

iii) The comments / recommendations of the Committee shall be

placed by ED, CIG before SAIL Directors’ Committee (SDC)
constituted for import of Coal. If SDC opines that it is a fit case for
initiating banning action, it will direct ED (CIG) to issue show-
cause notice to the agency for replying within a reasonable period.

iv) On receipt of the reply or on expiry of the stipulated period, the

case shall be submitted by ED (CIG) to SDC for consideration &
decision.

v) The decision of the SDC shall be communicated to the agency by

ED (CIG).

Integrity Pact Page 15 of 17 November 2014

8 Removal from List of Approved Agencies - Suppliers /
Contractors, etc.
8.1 If the Competent Authority decides that the charge against the Agency is
of a minor nature, it may issue a show-cause notice as to why the name of
the Agency should not be removed from the list of approved Agencies -
Suppliers / Contractors, etc.

8.2 The effect of such an order would be that the Agency would not be
disqualified from competing in Open Tender Enquiries but LTE may not
be given to the Agency concerned.

8.3 Past performance of the Agency may be taken into account while
processing for approval of the Competent Authority for awarding the
contract.

9 Show-cause Notice
9.1 In case where the Competent Authority decides that action against an
Agency is called for, a show-cause notice has to be issued to the Agency.
Statement containing the imputation of misconduct or mis-behaviour may
be appended to the show-cause notice and the Agency should be asked to
submit within 15 days a written statement in its defence.

9.2 If the Agency requests for inspection of any relevant document in

possession of SAIL, necessary facility for inspection of documents may be
provided.

9.3 The Competent Authority may consider and pass an appropriate speaking
order:
a) For exonerating the Agency if the charges are not established;

b) For removing the Agency from the list of approved Suppliers /

Contactors, etc.

c) For banning the business dealing with the Agency.

9.4 If it decides to ban business dealings, the period for which the ban would
be operative may be mentioned. The order may also mention that the ban
would extend to the interconnected Agencies of the Agency.

10 Appeal against the Decision of the Competent Authority

10.1 The Agency may file an appeal against the order of the Competent
Authority banning business dealing, etc. The appeal shall lie to Appellate
Authority. Such an appeal shall be preferred within one month from the
date of receipt of the order banning business dealing, etc.

10.2 Appellate Authority would consider the appeal and pass appropriate order
which shall be communicated to the Agency as well as the Competent
Authority.

Integrity Pact Page 16 of 17 November 2014

11 Review of the Decision by the Competent Authority
Any petition / application filed by the Agency concerning the review of the
banning order passed originally by Chief Executive / Competent Authority under
the existing guidelines either before or after filing of appeal before the Appellate
Authority or after disposal of appeal by the Appellate Authority, the review
petition can be decided by the Chief Executive / Competent Authority upon
disclosure of new facts / circumstances or subsequent development necessitating
such review. The Competent Authority may refer the same petition to the
Standing Committee for examination and recommendation.

12 Circulation of the names of Agencies with whom Business

Dealings have been banned
12.1 Depending upon the gravity of misconduct established, the Competent
Authority of the Corporate Office may circulate the names of Agency with
whom business dealings have been banned, to the Government
Departments, other Public Sector Enterprises, etc. for such action as they
deem appropriate.

12.2 If Government Departments or a Public Sector Enterprise request for more

information about the Agency with whom business dealings have been
banned, a copy of the report of Inquiring Authority together with a copy of
the order of the Competent Authority / Appellate Authority may be
supplied.

12.3 If business dealings with any Agency has been banned by the Central or
State Government or any other Public Sector Enterprise, SAIL may,
without any further enquiry or investigation, issue an order banning
business dealing with the Agency and its inter-connected Agencies.

12.4 Based on the above, Plants / Units may formulate their own procedure for
implementation of the Guidelines and same be made a part of the tender
documents.

*******

Integrity Pact Page 17 of 17 November 2014