Construction Industry: Corporate Crimes

Construction Industry

Fraud

A report by Transparency International listed the construction industry as the business sector most prone to bribery - ahead of even the arms, defence, oil and gas industries. ^[1] The National Audit Office estimates that £6.5bn pre annum is lost to fraud. ^[2]

Corruption takes the form of cash or the exchange of gifts, the granting of loans, and the provision of services to those being bribed. Examples of 'off-site' work being conducted for those awarding contracts include the provision and building of houses, extension of property, and gifts of other accommodation or assets to spouses, lovers, relatives or friends. The practice of bribing to obtain orders is most common in relation to international infrastructure projects.

Prior to the Anti-terrorism, Crime and Security Act 2001, it was a crime to receive or pay a bribe, but the courts did not have jurisdiction if the offence was committed wholly overseas.

The extent of bribes paid on construction projects depends on the country and the project. Many countries have a known 'tariff' of the level of bribe required. A bribe of 5% of the project cost would be considered quite low. Bribes as high as 30% are not unknown. ^[3]

Environmental Destruction

Find a place of natural beauty and you can bet someone from the construction industry has also found it - and is putting in a bid. Greenbelt sites, protected woodlands and habitats, traditional homelands - the industry wants them all. When local councils refuse planning applications the company simply appeals, and if it wins, the council foots the legal costs. It wouldn't be so bad but for each company putting in numerous applications for each project.

Building dams is a favourite of the construction industry. The bigger the better. The Ilisu dam in Turkey, for instance, will vastly decrease the ability of the Tigris to purify itself, which will jeopardise water quality downstream and ultimately create a major health hazard for the larger dowstream towns (the Berne Declaration states that the Ilisu reservoir will 'infest the area with Malaria and Leishmaniasis') - towns where the infrastructure is already breaking under the influx of Kurds forced from their rural homes. ^[4]

Sixty percent of all tropical timber coming into the UK is sourced from companies involved in illegal logging. The construction industry accounts for 50%-70% of all timber consumed by the UK timber industry. ^[5]

Greenwash

Engineers Against Poverty was formed after the 1997 publication of the UK Government's modestly titled White Paper: 'Eliminating World Poverty: A Challenge for the 21st Century'. It claims, and rightly so, that "the goal of development should be to empower those who are weak and subordinate to bring about improvements that are meaningful to them."

"Civil society is distinct from state and private sectors because it is motivated primarily by values," the charity's site helpfully informs us. "We share this distinction with our civil society partners and will attempt to work with those who hold similar values." They obviously haven't made much of an "attempt". Two of their major sponsors are AMEC and Balfour Beatty. But this is somehow excusable given that "the support of engineering services majors such as AMEC and Balfour Beatty, increases our credibility with the private sector." ^[6]

References

1. ^ 'Anti-Corruption Initiative in the Construction and Engineering Industry', Neil Stansbury, Transparency International, 01/09/04, http://www.transparency.org.uk/ti-uk-cei.pdf viewed: 19.01.04
2. ^ 'Construction and Fraud', Tom Crowley, 01/03/03, http://www.maxima-group.com/a-0509.shtml
3. ^ 'Anti-Corruption Initiative in the Construction and Engineering Industry', Neil Stansbury, Transparency International, 01/09/04, http://www.transparency.org.uk/ti-uk-cei.pdf viewed: 19.01.04
4. ^ 'Campaign: Ilisu Dam', Linda Little, 25/05/01, http://www.suite101.com/article.cfm/green_home/69623
5. ^ 'Partners in Crime: the UK and destruction of the Forest of the Great Apes', Greenpeace, April 2002, http://www.greenpeace.org.uk/node/681
6. ^ 'Our unique position', Engineers Against Poverty, http://www.engineersagainstpoverty.org/index.asp?PageID=41