As much as 400 billion, or 10% of annual spending on engineering and construction worldwide, is thought to be lost to corruption. Internationally, publicly-funded construction, including road projects, is thought to be one of the most corrupt of all sectors, alongside defence and the oil industry. A recent World Bank publication confirms that in many developing countries, even when no evident wrongdoing is detected, 20% to 40% of the value of a construction project can still be lost through bribery and fraud. Economic and social costs are higher still. Planning decisions are skewed, quality compromised, maintenance neglected, and economic viability undermined. The result is wasted investment, increased indebtedness and continued suffering of the most vulnerable.
Up to ten years ago corruption was widely accepted as being a regrettable
but inevitable feature of international development. Western companies
using (often through third parties) corrupt practices were unlikely
to be penalised by the own governments. Sometimes they were even offered
tax incentives to offset the cost of bribes. Officials within many
host governments saw international development projects as their major
source of funds for political and personal gain, while staff in international
financial institutions at worst participated in, and at best turned
a blind eye to, corrupt practices. It was even argued that corruption
was necessary in order to oil the wheels of economic development.
Those speaking out against corruption were generally the poor themselves,
with little voice and less influence.
In the face of increased scrutiny, it eventually proved impossible
to go on defending this position. Since the mid-1990s we have become
aware that corruption is not only bad for the poor, but bad for development
in general, bad for government, bad for peace, and bad for business.
The 1997 OECD Convention on Combatting Bribery of Foreign Public Officials
marked the starting point of a process that has now transformed the
international legal position, to the point that there remains almost
no jurisdiction in which bribery, fraud or other forms of corruption
are viewed as acceptable. The UN Convention against Corruption, which
entered into force in 2005, provides the basis for international cooperation
on issues of prevention, criminalisation, and asset recovery. In Africa
a specific focus on combatting corruption forms a key component of
the Peer Review Mechanism formulated under NEPAD, the New Partnership
for Africa's Development.
Corruption still remains a major problem in road construction and maintenance, with globalisation having perhaps exacerbated the problem. Though bribery, intimidation and fraud remain rife within the sector, they hide themselves beneath a veneer of apparent compliance with specified procurement and financial management procedures.
In contrast to the necessary, but in themselves inadequate, regulatory approaches favoured by donors, numerous examples now exist of practical guidance and tools to reduce the risk of corruption. Most of these build on the growing convergence of views between the private sector, civil society, and host governments. Some of the best initiatives have been developed jointly by civil society and the private sector, and include the Principles for Countering Bribery, of Transparency International (TI), the UN Global Compact, and the WEF Partnering Against Corruption Initiative. Specific tools developed for the construction sector include the FIDIC Business Integrity Management System (designed for engineering consultants), and various practical tools developed by TI's Preventing Corruption on Construction Projects initiative for use at the project or programme level.
Click here for the Vietnamese version of this page
This page has been prepared with support, in a personal
capacity, from Hamish Goldie-Scot, member of the UK
Anti-Corruption Forum
