The role of business in cracking corruption

We do not need to look further than today’s news to see that
corruption is a far-reaching issue throughout the world – from a
recent survey in Turkey that estimates corruption increases
costs by 10% , to Hong Kong, where the guilty verdict against a
billionaire property developer is highlighting citizen anger at the
city’s elite, to countless local US corruption charges in Florida,
Ohio and Pennsylvania – and that is just the tip of the iceberg.
We know that bribery and corruption exist across all industries,
but the engineering, construction and real estate sectors are
particularly at risk, given the size, complexity and strategic
importance of major infrastructure and development projects in
both advanced and emerging economies. Colliers International
was the first commercial real estate firm to sign the World
Economic Forum’s Partnering Against Corruption Initiative three
years ago. As a leader in the commercial real estate industry, we
want to stand up for what’s right and take action to break the
corruption chain.
Corruption’s pervasive myths
The recent Organisation for Economic Co-operation and
Development ( OECD) Foreign Bribery Report finds that in
corruption cases involving the construction sector, bribes
amounted to about 4% of the entire transaction value (not
including indirect costs and negative external costs caused by
corruption), which illustrates the burden on the industry – and
the potential great benefit if we could eliminate this
unacceptable siphoning of critical resources.
The OECD report also reveals that senior business officials,
including C-suite executives, often know about and even engage
in corrupt practices, debunking a pervasive myth that incidents
are typically isolated or committed by a small group of rogue
employees. In a recent industry survey, 92% of respondents
believed that corruption impacts the brand of a company, while a
similar percentage indicated that it has negative impact on the
entire industry. A substantial proportion of business leaders –
86% – said corruption imposes additional costs of business and
negatively impacts profitability. Beyond the ethical imperative to
address corruption head on, these represent very compelling
business reasons for strong CEO-level engagement to ensure
that the negative effects of corrupt practices are understood and
addressed at all levels of the company.
From ethics to action
Moving beyond organizational ethics and compliance, how can
companies unite to address the most critical corruption
challenges in their sector? Collective action is the vehicle to do
this, bringing together traditional competitors to learn, discuss
and drive forward the solutions we need. More than 50
infrastructure- and urban development-related companies are
participating in a Forum-driven initiative to create an
infrastructure collective action agenda. The effort began in 2014
with the mapping of corruption risks across the life cycle of a
typical project to help determine where transparency issues
arise and focusing industry-wide engagement on the most
important areas.
We have discovered that permitting and licensing processes are
some of the most important corruption risks to address, as well
as infrastructure procurement reform, which is also a key topic
of the B20 dialogue on anti-corruption at this week’s Annual
Meeting in Davos. Structured dialogue with government leaders
around a common agenda will help to identify ways to share
resources and support policies that will prevent corruption risk
and drive industry growth for everyone’s benefit.
Our efforts and our commitment to a collective action agenda
with governments, other industries and representatives of civil
society will provide meaningful benefits in tackling corruption
and ensure that the engineering, construction and real estate
sectors remain competitive and inclusive, and continue to create
growth worldwide. I encourage all business leaders to move in
the same direction.