Corruption killing construction industry

CORRUPTION has become a predominant factor in the local construction industry, especially in public tenders where Chinese companies are involved, according to findings by the Institute for Public Policy Research (IPPR).

The IPPR on Monday presented the findings and recommendations of its anti-corruption research programme. Key themes included the legislative environment of fighting corruption; managing conflict of interest; public procurement and the tender board; the role of codes of conduct; and corruption and the construction industry.According to IPPR research associate Frederico Links, the Construction Industry Federation claims that 60 to 70 per cent of tendered work goes to Chinese companies because they have a reputation of working quickly, efficiently and cheaply.’There are concerns though, but we need to avoid being xenophobic. We live in a free economic system where everyone has the privilege to work based on legislative conditions,’ said Links.Concerns are that many of the Chinese companies that may eventually get a major project allegedly ignore regulations to cut costs. They are also accused of having poor labour relations.’These are all concerns that come from the local industry, but the State is hesitant to address the concerns because China is such a good friend. All we are asking is that exemptions must end, and that Chinese companies should be treated like all others,’ said Links.He said the need for transparency is crucial when it comes to the application of tender regulations, and therefore the Chinese companies, as others, should pro-actively participate in anti-corruption measures.Architect Kerry McNamara, who also presented research findings on alleged corruption in construction tender processes, blamed it on a lack of political will by Government.He pointed out that all companies applying for construction tenders are supposed to present an affirmative action certificate. According to his findings though, Chinese companies have failed to do so, yet their applications were approved. He also charged that Chinese companies do not include certain salary deductions such as pension contributions in order to save costs.’As a result, what I have gathered so far, N$480 million has been siphoned out of Namibian workers’ pockets,’ McNamara stated. ‘This is wilful, deliberate and conscious criminal practice.’He said the Chinese companies pay Namibian workers a third of the minimum wage because, according to the companies, Namibian workers are not worth the effort to train or pay more – even though the law demands it. IPPR research associate Ellison Tjirera said the public procurement process is corruption-prone by its very nature, as it involves major capital projects.’Corruption could penetrate the procurement process through public service officials and the suppliers. Officials might restrict tender information, breach confidentiality of suppliers’ offers, present improper pre-qualifications, or take bribes. The suppliers on the other hand could fix bids, offer bribes or promote discriminatory techniques,’ he explained.Although Namibia has good laws, enforcement is a problem.For instance, Tjirera pointed out the major difference in penalties for similar national and regional tender offences. The penalty for a national offence may be a fine not exceeding N$500 000 or not more than ten years’ imprisonment. For the same offence on a regional level, the sentence is a fine not more than N$2 000 or more than six months’ imprisonment.A clear, comprehensive, watertight regulatory environment for dealing with these issues would be an important component in mitigating the potential damage, the IPPR emphasised.