Corruption rife in UK construction industry, says CIOB

Almost half of all construction workers believe that corruption is just part and parcel of the industry, according to a new survey by the Chartered Institute of Building (CIOB).

The survey finds that 48% of construction professionals feel that corruption is commonplace within the UK construction industry. With respondents suggesting that cultural practices and economic conditions are the main reasons behind this.

The survey, of 700 construction professionals, aimed to investigate whether corruption is perceived to be a problem within the UK construction industry, what practices are deemed to be corrupt, and which parts of the construction process may be susceptible to corruption.

Michael Brown CIOB deputy chief executive said: “Our findings reveal that little progress has been made since our first piece of research into corruption in 2006. What we have found is that cultural practices and the consequences of the recession have placed a greater strain on companies to sometimes engage in adverse practices as a survival mechanism.”

The report highlights some depressing trends. More than one in three said they had been offered a bribe or incentive on at least one occasion. And over a thirdhad come across cartel activity in the UK construction industry on at least one occasion. Of those, 29% have witnessed it over the last 12 months.

Nearly half of the respondents were unaware whether their firm had a whistle-blowing policy, and only 7% said that they had used it, reporting varying degrees of success.

More than half of the respondents were unable to estimate the annual cost of fraud or corruption to their organisation, this is despite 45% of the sample describing themselves of senior management or director level. Nearly 10% also indicate annual losses totaling £1 million or more as a result of fraud and corruption.

Graham Hand, Coordinator of the UK Anti-Corruption Forum, said: “This valuable report shows that despite the introduction of a tough new Bribery Act in 2010, corruption is still common in the construction business in this country. That is unacceptable. The law enforcement agencies need to work with the professional and business organisations to educate companies about their responsibilities, and they must act against companies that break the law.”

The CIOB suggests that measures aimed at tackling corruption, such as the Bribery Act, appear to have had a limited effect; with no prosecutions against businesses taking place. And the building body is now calling for the government to take more action to tackle corruption in the industry.

“If the UK is going to live up to its rhetoric of being tough on corruption, both the Government and industry must do more to show proof of progress” said Brown.

The European Commission estimates the economic costs incurred by corruption in the EU amount to EUR 120 billion per year, representing around 1% of total EU GDP. Globally, the economic cost of corruption is estimated to be around US $2.6 trillion, more than 5% of total global GDP.

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