During the month of June 2006, an online questionnaire was conducted through this website, to allow anonymous feedback on attitudes towards corruption in international construction projects. A total of 41 valid responses were received from respondents in a total of 17 countries. These contain a wealth of interesting structured data, as well as many constructive comments about what can realistically be done to address the problem in an effective manner. The results of the online survey have been combined with the results of a smaller hard copy survey conducted among government officials from Africa and Asia. Future online surveys are planned, probably on a quarterly basis, in order to continue drawing directly on the views of those most likely to understand both the true nature of, and the best ways of curbing, corruption on construction project.

This simple survey was intended to study attitudes towards corruption as it affects construction projects in developing countries. It was carried out in two stages, initially on a pilot basis among participants on a training course in the UK, and subsequently online on the Ethical Edinburgh web site. Individual responses cannot be attributed to individuals, though IP address data indicates the countries from which the online responses were received. This presentation summarises the main findings based on an initial analysis.

Methodology

The hard copy questionnaires were distributed to 31 participants, mostly from Ministries of Finance or Works in Africa or Asia, attending a UK based course related to the financing and management of road projects. 21 completed questionnaires were received, representing a voluntary response rate of 68%.

During the month of June 2006, the online questionnaire was made available here on the Ethical Edinburgh web site, which is dedicated to exploring means of improving transparency in international construction projects. Excluding repeat responses, a total of 41 completed questionnaires were received, representing a response rate of about 10% of those who visited the site during that period.

The same questions were used in each case, though in the online version of question 5 domestic contractors were not mentioned as a category. Due account of this unintended difference is taken in the analysis of responses.

Origin of responses

The 21 hard copy responses cannot be attributed to specific countries, but are known to be predominantly from government officials from a wide range of African and Asian countries.

The 41 online responses are known to have originated from internet service providers based in the following 17 countries:

  • Azerbaijan
  • Bahrain
  • Germany
  • Ghana
  • India
  • Indonesia
  • Kazakhstan
  • Mozambique
  • Norway
  • Serbia and Montenegro
  • South Africa
  • Sudan
  • Tajikistan
  • Tanzania
  • United Kingdom
  • United States of America

Analysis of Responses

Responses are presented below as a series of charts related to each question. Data has been compiled from the 62 completed questionnaires. The y-axis on graphs represents the numbers of responses. Some respondents did not answer all questions.

Q1. What type of organization do you work for?

chart 1

Notes on responses to Question 1:

  1. Not one of the 41 online responses was received from someone categorising themselves as a “Client”. Anecdotal evidence suggests that this is due to a combination of concerns about confidentiality, a lack of awareness that the survey was being conducted, and relatively poor access to internet facilities.

  2. Among the “Other” category are some respondents to the hard copy questionnaire whose comments indicated that they work for Governments, but who do not categorise themselves as a “Client”.

 

Q2. In terms of the source of financing, which infrastructure projects are most prone to corruption?

chart 2

Comments received (Question 2)

Though divergent responses were received, related comments suggest that in general

  • All categories of respondents believe locally funded projects to be most prone to corruption, though the sums involved are relatively small.

  • Donor officials have more confidence than consultants about the effectiveness of anti-corruption controls on loan financed projects.

  • Despite better controls over procurement on grant funded construction projects, they are still viewed as being highly prone to corruption.

  • There is a general view that although controls nominally exist to prevent corruption, they are ineffective, or not applied, in practice.

 

Q3. Which parts of the contractual process are most prone to corruption?

chart 3

Comments received (Question 3)

Both the responses and the related comments highlight the ease with which corruption can affect any stage of the contractual process yet remain undetected. Deals struck at the shortlisting stage can be implemented later in the project. Site supervision was viewed as being a particular area of weakness, aggravated by the insistence by some donors on the use of domestic consultants known to be prone to intense pressure to behave in an unprofessional manner. Specific reference was made by some respondents to the approval by compromised consultants of substandard or otherwise inadequate construction works, suggesting that one way of detecting corruption is use combined technical and financial audits to identify substandard works, and/or inflated unit rates.

 

Q4. Who are the most likely instigators of corruption?

chart 4

Comments received (Question 4)

All categories of respondents viewed political leadership as ultimately instigating corruption, though central government officials tend to view local government as being particularly weak in this regard. Local intermediaries and agents were viewed by many as playing a central role in instigating corrupt deals. The minority who attributed blame to multinational companies tended to express this view in very strong terms. Some donor agencies are still viewed as instigating corruption.

 

Q5. Which of the following external bodies is most likely to be engaged in corrupt activities?

chart 5

Comments received (Question 5)

In the hard copy version of the survey, the domestic contractors, together with local agents, were viewed as being most likely to be engaged in corrupt activities. Domestic contractors were not included as a category in the online survey, so their scores are significantly under-reported in the combined results as presented here.

Several respondents commented that, while corruption is indeed rife with domestic consultants and contractors, the overall amounts involved are very small compared with what happens when international companies are involved, and deals are done involving a significant proportion of the overall contract values. A frequently expressed view was that construction contracts offer significant opportunities for undetectable (“there is no risk involved”) corruption on a very large scale, so that the only companies not involved are those that have made a conscious decision to adopt an ethical approach, which may well drive them out of markets.

 

Q6. Which of the following client-side positions are most likely to be engaged in corrupt activities?

chart 6

Comments received (Question 6)

The most common comment in response to this question was that everyone is involved, and that junior staff have no choice but to play their part in the system that has been established at a more senior level. Site supervision is where deals are done to turn a blind eye to sub-standard or poor quality work or materials.

 

Q7. Do you agree with the following statement?:

“Given the choice, most client-side government officials involved directly or indirectly in corrupt activities on infrastructure projects would prefer not to be. In practice, such a choice rarely exists.”

chart 7

Comments received (Question 7)

Most of those who disagreed with this statement did so because they felt that some client-side officials apparently trapped in a corrupt system in reality do have a choice, but that this would entail leaving their jobs. Many have understandably, and some would say responsibly, chosen the safe option of remaining in their post because they know that they can earn a good income to provide for their families while running little risk of being held to account.

 

Q8. What do you believe should be done, and by whom, to curb the problem of corruption on internationally financed infrastructure projects? Suggest just one priority action.

Suggested priority actions are presented below, in no particular order:

  • Tackle poverty first, then corruption will be reduced;
  • Undertake genuine reform of the civil service reform in recipient countries;
  • Give real powers to independent anti-corruption bodies;
  • Provide higher pay for officials working on internationally financed projects;
  • Make more widespread use of proper tender procedures;
  • Require more disclosure of project details to local media;
  • Confidentially involve individual recipient government officials in formulating reforms;
  • Simplify procurement procedures. Many ‘safeguards’ simply open up new possibilities for corruption;
  • Check unit prices against Engineer’s estimates derived from first principles;
  • Use Integrity Pacts to improve transparency;
  • Withhold follow-on funding if there is evidence of corruption affecting earlier contracts;
  • Develop simple anticorruption codes of conduct and provide associated training;
  • Lending agencies should include genuine anti-corruption provisions in loan agreements, rather than paying lip service to them and pretending there is no problem just because there is no proof;
  • Repeal the Secrecy Act introduced in 1923 by the British (comment from Bangladesh);
  • Improve transparency and stakeholder participation at the local level;
  • Close down a common channel of payment of bribes by checking that agents and domestic consultants are providing professional services commensurate with the fees paid to them;
  • Increase aid to countries genuinely showing improved governance in the construction sector. This should be objectively measured by specialists in this sector, rather than by political representatives who are following a different agenda;
  • Simplify bidding documents and related site supervision in order to reduce scope for falsifying re-measured quantities.
  • Adopt a common, effective approach to curbing corruption among the various Donor Agencies;
  • Raise awareness of the damaging effects of corruption, particularly on the poor.
  • Make more use of independent external supervision and/or audits;
  • Crack down on the corruption that still exists in some of the donor agencies;
  • Use educational channels to raise awareness of the issues;
  • Make routine comparisons of unit costs for construction. The rates currently published online by the World Bank do not compare like for like so are very misleading;
  • Ensure more international coordination through the UN;
  • Ensure more enforcement of existing regulations. Many parties have a vested interested in not responding to allegations or suspicions of corruption; and
  • Reward countries, and companies, that can demonstrate proven effective anti-corruption policies and related procedures.
 

Q9. Any further relevant information you wish to provide.

Most of the comments received in this section simply served to reinforce points made in response to previous questions. However, some additional fresh perspectives are presented below.

  • International development is big business, and will continue to be undermined by corruption provided the current model, which tends to reward sharp commercial practices, is allowed to persist;

  • The starting point for reform may be with those paying the bribes, rather than those receiving them. However, for this to succeed it must be possible for reformed companies to win work, which at present is rarely the case;

  • Although corruption is not stopped by following best practice in terms of procurement procedures, such best practice nevertheless represents a marked improvement on what would otherwise occur;

  • There is a need to distinguish between petty corruption that involves paying an underpaid official a bonus to do their job properly, and grand corruption that entails much larger sums and undermines professional and technical standards.

  • The professional institutions are implicated in the problem, through having failed to take action to uphold professional standards;

  • The whole system is corrupt because of the western values system in which most parties are educated. This would be less of a problem if more people were Madrassah educated.

  • The really big money passes from the major contractors to senior government officials;

  • The use of agents by international companies should arouse suspicion, and be carefully monitored;

  • The IFI’s use confidentiality clauses as an excuse for not disclosing the financial information that is needed to identify suspected corruption; and

  • Donors are to blame, for having built their empires around a system that seems designed to encourage corruption.

 

Conclusions and future plans

  1. This anonymous survey has helped to provide valuable insights into the problems of corruption in construction in developing countries, as perceived by those most closely associated with it. A broadly consistent view of the problem has emerged, though there are important differences of emphasis, with some respondents adopting a very radical approach. In particular, the survey (albeit from a largely self-selected group of those who chose to respond) suggests that little will be achieved through minor adjustments to the current system of financing and managing construction projects in developing countries. Rather, a step change of attitude and approach is called for, that will challenge what is perceived to be a comfortable status quo that is largely accepted by all parties except the intended beneficiaries, who suffer the most as a result of corruption.

  2. Future similar surveys could be improved by more careful wording of the questions, and enhanced efforts to obtain responses from those representing contractors, financers, and recipient governments.

  3. It is intended to conduct follow-up online surveys through www.ethicaledinburgh.org. If you would like to receive details of such surveys, which will probably be conducted on a quarterly basis, please email surveys@ethicaledinburgh.org, or register for the Ethical Edinburgh mailing list. Please feel free to suggest corruption-related topics to be addressed in future surveys.