Why corruption occurs

This section examines why corruption occurs in the infrastructure, construction and engineering sectors.

Corruption usually occurs because some individuals are willing to use illicit means to maximise personal or corporate profit. However, in order for these individuals to become involved in corrupt activity, circumstances must exist which do not prevent or discourage them from doing so. This section considers the motivation for corruption, and examines the factors which make it easier for corruption in the infrastructure, construction and engineering sectors to take place and which are, therefore, largely responsible for corruption occurring. These factors exist at project, national and international level.

The motivation for corruption

Voluntary. In some cases, the corrupt practice may be a voluntary act undertaken by the relevant party with the deliberate intention of gaining a competitive advantage or obtaining additional unjustified compensation.

To level the playing field. In other cases, the practice may be undertaken so as to “level the playing field”. For example, a contractor may feel compelled to offer a bribe during tendering if it believes that its competitors will be offering a bribe. Alternatively, a contractor may feel that it is necessary to inflate a claim artificially if it believes that the project owner will automatically and unjustifiably reduce the contractor’s claim or raise artificial counter-claims against the contractor.

How corruption occurs

This section examines how corruption occurs in the infrastructure, construction and engineering sectors.

In relation to an infrastructure project, corruption can occur:

• In the identification of the project;
• In the financing of the project;
• During the planning and design phases;
• During the pre-qualification and tendering phases;
• During the project execution phase;
• During the operation and maintenance phase.

Corruption in these phases can involve the representatives of any one or more of the government, project owner, funders, contractors, consulting engineers, their associated and subsidiary companies, agents, joint venture partners, sub-contractors and suppliers. Each of these parties will be represented by individuals.

Why avoid corruption

This section examines why corruption should be avoided in the infrastructure, construction and engineering sectors.

Corruption should be avoided for the following reasons:

• The risk of criminal prosecution
• The risk of financial loss;
• The moral argument.

The order of priority of the above will depend on the personal values of an individual.

As explained in What is corruption, The term "corruption" in the wider sense to include bribery, extortion, fraud, deception, collusion, cartels, abuse of power, embezzlement, trading in influence and money laundering.   Consequently, the discussion in this section applies to all such criminal activity.

Management Systems

• Resources
• Anti-Corruption Initiatives
• Anti-Corruption Conventions & Instruments

Various organisations have developed recommended good practice for anti-corruption management systems.

The Global Infrastructure Anti-Corruption Centre(GIACC) has published various anti-corruption management systems with supporting tools designed for:

• government departments
• funders
• project owners
• construction and engineering companies
• infrastructure projects

Transparency International's Business Principles for Countering Bribery
Transparency International has produced, in conjunction with several leading international organisations, a suite of documents designed to assist organisations to implement and manage an effective anti-bribery system.

Anti-Corruption Initiatives

• Resources
• Management Systems
• Anti-Corruption Conventions & Instruments

Anti-Corruption Conventions & Instruments

• Resources
• Management Systems
• Anti-Corruption Initiatives

Summaries and full texts of the following anti-corruption conventions and instruments can be found at www.transparency.org.

Global and Inter-Regional Level

• UN Convention against Corruption
• UN Convention against Transnational Organized Crime
• OECD Convention on the Bribery of Foreign Public Officials in International Business Transactions
• Revised Recommendations of the Council of the OECD on Combating Bribery in International BusinessTransactions