Problem

Unethical construction practices


Experimental visualization of narrower problems
Other Names:
Irresponsible building
Malpractice by building companies
Criminal involvement in the construction industry
Illegal building
Corruption in the construction industry
Building project scandals
Negligent building construction
Bribery by construction firms
Incidence:

In the UK there has been continuing concern at the growing number of tax fraud cases involving building sub-contractors. In 1986 it was reported that the construction industry in New York, in a boom worth $2 billion a year, was riddled with extortion, vandalism, bribery, bid-rigging and inefficiency. This was causing at least half of excessive construction costs, which were 25% to 35% higher than those of any other big city in the USA. There was widespread "featherbedding" (e.g. benefits, perks, tips, pay whilst on holiday) of constructors income in return for no stoppages or vandalism on the construction site. At one construction site stolen materials and goods totalled $500,000.

The massive corruption investigation in many Italian cities had by 1993 revealed a deep-rooted system of kickbacks and illicit donations paid by businessmen to politicians of all major political parties in return for public works contracts. Hundreds of those involved had been arrested or placed under investigation. Few of the largest construction companies had escaped direct involvement, and even those tended to have shareholding links to those involved. Businessmen and mangers in the industry claimed that they were victims of procedures where paying bribes was the only way to win a contract.

In 1993 in Japan evidence indicated that many major government construction contracts were awarded under suspicious circumstances involving screening of potential bidders and bribery of politicians. Construction companies were believed to be the principal source of the US$50 million in funds located in the offices of the principal power broker of the Liberal Party. The awarding of public works contracts was acknowledged to be non-transparent and characterized by a hotbed of bid-rigging and cozy relations among, politicians, bureaucrats and members of the construction industry which was a strong barrier to external competitors. In 1994 a former cabinet minister in Japan was jailed on charges of taking a bribe from a major construction company in exchange of bid-rigging.

In 1992 there were allegations in France that millions of pounds in "phantom" construction contracts were used as overt payments to right-wing political parties. One group had allegedly formed a ring to deal in false invoices for non-existent construction work or for contracts already paid for.

Problem Type:
D: Detailed problems
Date of last update
21.06.2018 – 09:34 CEST