Bribery in construction
Bribery is a form of corruption and is seen as being more prevalent in construction and engineering than any other sector [1]. It is more likely to occur during the tendering and procurement stages of contracts although it can occur at any stage. This is mainly because on large contracts, individuals within organisations can influence or even decide on the procurement of goods. This provides the opportunity for corruption, compounded by a lack of transparency and governance and inaccurate recording in financial statements.
An example would be a payment by a supplier ‘A’ to a client employee in order to influence a purchase decision in favour of A’s product. A further example would be a subcontractor bribing an employee of the main contractor to gain their favour over a rival subcontractor. Bribery can ultimately affect the quality of the final construction – if an inferior product is used as a result of bribery, an inferior construction will almost certainly result.
The nature of building can make bribery easy to conceal. For instance, bribes might be made to ensure the inclusion of cheap, sub-standard materials on a building project. The money saved may be paid as a further bribe to ensure that the checkers sign-off the finished construction. This can then be difficult to discover, as works on construction projects are often covered up by other materials or embedded deep in hard to inspect places.
Bribes can be paid directly. But they are more likely to be paid through third-parties and intermediaries, something that is more prone to occur when companies move into new markets and place more of their operations with third parties, especially overseas.
The scope for bribery is greater on large, international projects due to:
- The scale involved.
- The complexity of projects allowing concealment of illegal activities.
- The myriad contractual links and supply chains involved.
- The reliance on local agents abroad.
- The acceptance of bribery in some cultures.
- The involvement of corrupt officials.
Many large companies, mindful of complying with the UK Bribery Act 2010, forbid or place strict restrictions on their employees receiving gifts from suppliers that may be construed as bribes. This includes lavish lunches and other forms of ‘entertainment'.
Notes
- PwC’s Global Economic Crime Survey found that 49% of all respondents experienced bribery and corruption, compared to the 27% of the overall sample covering other industries. 64% of engineering and construction executives saw bribery and corruption as the highest risk of operating globally. 29% said they were asked to pay a bribe while 38% said they lost an opportunity to a competitor who they suspect paid a bribe. Ref Fighting corruption and bribery in the construction industry. PwC 2014 Global Economic Crime Survey.
- Functional Standards Common Glossary, published by the Cabinet Office, defines bribery as: ‘The offering, promising or giving of a financial or other advantage to induce or reward improper performance and/or the request, or receipt of such an advantage. It includes the corporate offence of failing to prevent bribery (as set out in the Bribery Act 2010).’
[edit] Related articles on Designing Buildings
Featured articles and news
A briefing on fall protection systems for designers
A legal requirement and an ethical must.
CIOB Ireland launches manifesto for 2024 General Election
A vision for a sustainable, high-quality built environment that benefits all members of society.
Local leaders gain new powers to support local high streets
High Street Rental Auctions to be introduced from December.
Infrastructure sector posts second gain for October
With a boost for housebuilder and commercial developer contract awards.
Sustainable construction design teams survey
Shaping the Future of Sustainable Design: Your Voice Matters.
COP29; impacts of construction and updates
Amid criticism, open letters and calls for reform.
The properties of conservation rooflights
Things to consider when choosing the right product.
Adapting to meet changing needs.
London Build: A festival of construction
Co-located with the London Build Fire & Security Expo.
Tasked with locating groups of 10,000 homes with opportunity.
Delivering radical reform in the UK energy market
What are the benefits, barriers and underlying principles.
Information Management Initiative IMI
Building sector-transforming capabilities in emerging technologies.
Recent study of UK households reveals chilling home truths
Poor insulation, EPC knowledge and lack of understanding as to what retrofit might offer.
Embodied Carbon in the Built Environment
Overview, regulations, detail calculations and much more.
Why the construction sector must embrace workplace mental health support
Let’s talk; more importantly now, than ever.
Ensuring the trustworthiness of AI systems
A key growth area, including impacts for construction.