As much as 400 billion dollars, or 10% of annual spending on engineering and construction worldwide, is thought to be lost to corruption. Internationally, publicly-funded construction projects, including roads, are among the most corrupt of all sectors, sharing thepodium with defence and the oil industry. A recent World Bank publication confirms that in many developing countries, even when no wrongdoing can be 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 their 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 using closely specified procurement and financial management procedures.
In contrast to the necessary, but in themselves inadequate, regulatory approaches favoured by donors, we now have sources 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
