Evidence has been coming thick and fast recently that despite the introduction of the UK’s supposedly harsh Bribery Act in 2010, corruption is still endemic in construction. Corruption is endemic in life generally, it has to be said, and in no way should construction be regarded as anything unique in this respect. But a lot of the industry’s workload is for the public sector, both in the UK and overseas, so the spotlight will shine particularly harshly on any wrongdoing uncovered.
Corrupt activity is never excusable, whether the loser is a public or a private sector organisation, but how bad is the problem? Th e Chartered Institute of Building has just surveyed 700 construction professionals and almost half of them said that corruption is common.
Of the 300 or so senior managers surveyed one in three had been off ered a bribe, some more than once. It is not clear how many would have said they had accepted an inducement if asked; presumably some of those who had would not admit it, so the problem is likely to be even worse than the survey suggests. Nearly 38% of the 700 had come across cartel activity at least once, and almost 30% of them had seen it within the past year. Low margins and reduced workloads were assumed to be the drivers of corrupt behaviour that was most prevalent at the prequalifi cation and tendering stages.
Around half of the respondents thought that the industry itself and the government need to do more. Perhaps action will be at another level than national governments though. New research commissioned by the European Anti Fraud Offi ce (OLAF) fi nds that as much as £1,840m was lost through corruption in eight European randomly selected countries alone – France, Hungary, Italy, Lithuania, Netherlands, Poland, Romania and Spain.
Construction was not singled out for investigation, although the fi ve industry areas looked at – road and rail, water and waste, urban/utility construction, training and R&D – are mostly key construction clients.
OLAF’s study – carried out by PwC and Ecorys supported by the University of Utrecht – identifi ed four main types of procurement corruption – bid rigging, kickbacks, confl icts of interest and ‘other’, which includes deliberate mismanagement or ignorance. Losses amounted to 18% of project budgets, 13% of which was due to corruption.
OLAF says measures that need to be taken include an increase in transparency to make public procurement documents and data easily available. Contracting authorities need to ensure that procurement is market based, with a suffi ciently large number of tenderers. Investment is needed in professional procurement training and staff should be ‘adequately’ paid, regularly screened and jobs should be rotated.
The UK has already recognised that it has a problem with a lack of properly trained and experienced procurement professionals and measures have been adopted to better train civil servants in these complicated roles. More professionalism holds out better prospects of detecting and combatting corruption than more laws. Better enforcement of the laws that we already have – like the so far toothless Bribery Act – should be a fi rst priority.
Nick Barrett
Editor