'Under Corruption' – Minimising Your Exposure To The Risks Of Bribery And Corruption Within The Construction Industry

In recent months, the media has been awash with headlines that suggest that the UK, and the London property market in particular, has become a safe haven for money launderers. Aside from the inevitable hyperbole, these headlines carry an element of truth and, more importantly, act as a cautionary reminder of the pervasive nature of corruption, particularly within the construction industry.

In 2011, Transparency International's Bribe Payers Index indicated that, out of the 19 different business sectors it surveyed across 28 of the world's largest economies (including the UK), bribery was perceived to be most common in the public works contracts and construction sector. This perception of the construction industry remains and is not confined to jurisdictions that are seemingly more corrupt than the UK1. A report produced by the Chartered Institute of Building (CIOB) in September 2013 found that 49% of the 701 UK based construction professionals it surveyed considered that corruption was either extremely or fairly common within the UK construction industry. This sentiment was reinforced by a subsequent report published by the Organisation for Economic Cooperation & Development (OECD) in December 2014, which analysed 427 bribery enforcement actions across 17 countries (including the UK) between February 1999 and June 2014 and noted that almost two thirds of the cases occurred in just four sectors, with the construction industry ranking as the joint second most corrupt of those sectors.

Arguably, these findings should come as no great surprise. The nature, scope and scale of the construction industry inevitably make it more susceptible to corruption than other business sectors. It is a universal industry that spans the public and private sectors, often experiencing pressures on time and cost, normally requiring some form of government or local authority approval (for example planning permission, licences etc) and increasingly involving large sums of money, cross-border transactions, as well as multiple parties from multiple jurisdictions with, quite often, differing attitudes towards or laws on bribery and corruption. Undoubtedly, these factors will increase the external and internal threats of corruption, whether they be from organised crime or from individuals and organisations within the industry itself. So, with so many potential risk factors, what can organisations do to minimise their exposure to bribery and corruption risks?

First, a...

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