Transparency International says construction most vulnerable to corruption

Joe De Capua
Voice of America
March 16, 2005

A new report says construction, more than any other segment of a nation’s economy, is prone to corruption. Global graft watchdog Transparency International in its Global Corruption Report says that corruption is often so bad it “plunders the economy . . . and ravages the environment.” According to the report, “the scale of corruption is magnified by the size and scope of the construction sector.” The construction sector is valued at about $3.2 trillion a year. “Corrupt practices,” said the TI report, “are found at every phase in construction projects.” The report cites fierce competition, numerous levels of official approvals and permits, and large numbers of sub-contractors as reasons why the sector is so vulnerable. It also says some projects are unique, making them prone to delays and cost overruns. “What we notice is that most of the contracting processes that are used in this particular sector are not transparent. So, this gives the possibility for corrupt activities to take place. It’s more so in this sector than most others,” said TI official Muzong Kodi, the group’s director for Africa and the Middle East.

Mr. Kodi says corruption can lead to environmental damage because bribes are paid to “ignore environment and social hazards.” He says, “Corruption is a big, big obstacle to sustainable development. We’ve seen in many countries resources being diverted from very crucial and basic sectors like education and health, which are needed by the population. And therefore, changing the whole economy and shaping it in a way that would make it possible for corrupt activities to continue and to thrive in countries.” The TI report also featured a list of what it called “Monuments to Corruption” which included several African projects, such as the Lesotho Highlands Water Project in which $2 million in bribes were allegedly paid. That case is currently in the courts. The TI report also makes a number of recommendations to help curb corruption and urges authorities to ensure contracts are subject to open and competitive bidding. The report also recommends establishing a “blacklist” of companies that are caught bribing, as well as public disclosure of the procurement process and monitoring by independent oversight agencies and civil society. The report says, “the challenges faced by conflict-affected countries are formidable . . . and . . . the need for anti-corruption measures is particularly acute in the first years after war.” For example, Transparency International calls on the international community to ensure transparency in the rebuilding of Iraq.

Categories: Africa, Corruption, Odious Debts

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