ࡱ> hg K( `/ 0DArial,0(0(B 0 DTahoma,0(0(B 0 @ .  @n?" dd@  @@`` H(i"      !"#$%&' 0AA`33!@<ʚ;ʚ;g4AdAd@B 0ppp@ <4ddddlpC 00 A9___PPT10 6*F  VNeed for Openness & Transparency in the Procurement & Delivery of Engineering ServicesWWG William P. Henry, P.E., D.WRE Chair, AAES; Past President, ASCE UPADI 2006 Build a Better World Atlanta, GA September 19,2006 <bBB&$VNeed for Openness & Transparency in the Procurement & Delivery of Engineering ServicesWWG  Background What is the Problem? What is Corruption? Red Flags Indicating Corruption Corruption Exists Filling the Need for Openness & Transparency What Can You Do?^ 332-! Background $World construction spending for 2004 = $3.9 trillion (USD)  ENR, January 10, 2005 10 percent +/- is lost to bribery and corruption  more than $390 billion (USD) annually!  TI,2005 2015 - 80% of infrastructure $ spent in developing countries  U N forecast 2020  2/3 of major cities in the world will be in developing countries  AT Kearny, Inc forecast pf=\? JWhat is the Problem?$Insufficient number of local engineers to do that quantity of work More global practices than ever before in history More teaming arrangements with new partners New relationships mean learning new ways of doing business  good or bad! The developing countries rate lowest in openness and transparency in decision making The potential for corruption is high hhWhat is the Problem?$CORRUPTION KILLS! Poorer quality structures and equipment put people at risk Needed projects go unbuilt People die due to lack of food and poor health care Neill Stansbury, Transparency International:ZZ,,a? What is the Problem?$Corruption Undermines Sustainable Development Project quality decreases Required maintenance increases Project useful life is shortened People are not served well @/u/uWhat is Corruption?$33Kickbacks & Fraud Front Companies Bid Rigging / Collusion Loan Brokers Conflicts of Interest Maarten de Jong, GORGWELL Group&] ,` What is Corruption?$33VKickbacks & Fraud $ payments or wire transfers disguised  no trail Lots of middlemen  may work with numerous contractors Appears to be legitimate relationship  hard to decipher illegitimate relations from legitimate ones Forged documents Conspiracy of silence Maarten de Jong, GORGWELL Group LPP$P!,  What is Corruption?$33Front Company Company with no history Often offers diverse, disconnected services Few ownership records  hidden owners (Government officials?) Great interest in company by Project officials May be subcontractor hired as local agent Maarten de Jong, GORGWELL Group N# ,  What is Corruption?(33Bid Rigging / Collusion Excluding unfavored bidders Tipping off favored bidders Profits come in change orders Short bid period Bidders agree who will get the work May be a component of a larger corruption scheme Maarten de Jong, GORGWELL Group T  >#   What is Corruption?(33$Loan Brokers / Commissioners Acts as agent for corrupt officials Can operate behind shell companies Extort $ from contractors Set up front companies Help rig contract awards Take their cut and forward project officials cut May be hired as project advisors Maarten de Jong, GORGWELL Group PGPKPTP!PGKR    , What is Corruption?(Conflicts of Interest Per se conflict  having a personal stake Project officials, friends, relatives, family members involved Corruption may be a co-existing element Disclosures not made up front Maarten de Jong, GORGWELL Group D" , Red Flags Indicating Corruption (Recurring use of 1 company Close personal relationships among project parties Vague, incomplete or non-existent terms of reference Firms use false qualifications and  ghost employees Shared addresses / phone numbers among firms A firm does business under lots of different names One firm does diverse tasks Maarten de Jong, GORGWELL Group (W6 ,6 Corruption Exists> ((vThat s the way the world is Woe is me We re helpless X77  Corruption Exists> ((That s the way the world is Woe is me We re helpless OR 7Z ZZZZZ6    Corruption Exists> ((:That s the way the world is Woe is me We re helpless OR Act now & act together to get the NEEDED OPENNESS AND TRANSPARENCY in our projects 6P PVPPPP5 T Corruption Exists(Fighting corruption means improving the openness and transparency of the decision-making processes in all phases of a project: Procurement Of the project design team Of subcontractors Of all materials and equipment  M1 L  Corruption Exists(Fighting corruption means improving the openness and transparency of the decision-making processes in all phases of a project: Performance of the work By the project design team By subcontractors By all materials and equipment suppliers W1V  ,Filling the Need for Openness & Transparency--(-Who are the key players? What are they doing?..,Filling the Need for Openness & Transparency--$6Key Players Governments FIDIC  consulting engineers World Economic Forum  constructors Lenders  World Bank, IADB Evaluators  Transparency International*  ,Filling the Need for Openness & Transparency--$4Key Players Professional Organizations  UPADI, Pan American Academy of Engineers, and societies in the U.S., Puerto Rico, Bahamas, Mexico, Panama, Bolivia, Brazil, Colombia, Argentina, Canada, UK, Spain, Italy, Finland, Austria, Romania, Hungary, France, Poland, Belgium, Portugal, Belgium, Ireland, Egypt, South Africa, Zimbabwe, Nigeria, Korea, India, China, Thailand, Sri Lanka, Taiwan, Iraq and Australia.*  ,Filling the Need for Openness & Transparency--$ What Governments are doing U.N. Convention against Corruption OECD Convention on Combating Bribery Inter-American Convention against Corruption 2 Council of Europe Conventions on Corruption 2 EU Conventions African Union Convention on Preventing & Combating Corruption*,Filling the Need for Openness & Transparency--$What Governments are doing (cont.) ADB OECD Anti-Corruption Action Plan for Asia & the Pacific G8 Communique to reduce bribery OECD prosecutions Anti-bribery laws Anti-money laundering regulations Disbarments Neill Stansbury, Transparency International F##-,b l ,Filling the Need for Openness & Transparency--$FIDIC Guidelines for Business Integrity Management in the Consulting Industry How to develop a business integrity management system in your firm Uniform, transparent and accountable practices Kris Nielsen, PhD, JD, Pegasus Global HoldingsJHHu/,Filling the Need for Openness & Transparency--$World Economic Forum (WEF) Major engineering/construction, oil & gas, and mining & minerals companies Partnering Against Corruption Initiative (PACI) No bribery Effective anti-corruption practices T{0{0,Filling the Need for Openness & Transparency--$VLenders World Bank Department of Institutional Integrity Voluntary Disclosure Program T C C,Filling the Need for Openness & Transparency--$mEvaluators Transparency International Corruption Perception Index Business Principles for Countering Bribery T G G  ,Filling the Need for Openness & Transparency--$Professional Organizations ASCE New Canon 6 of our Code of Ethics Engineers shall act in such a manner as to uphold and enhance the honor, integrity, and dignity of the engineering profession and shall act with zero-tolerance for bribery, fraud, and corruption. Engineers shall: Not knowingly engage in business or professional practices of a fraudulent, dishonest or unethical nature; .ZZ"ZZkZZ"  k    !,Filling the Need for Openness & Transparency--$% Canon 6 (continued) : Act with zero-tolerance for bribery, fraud and corruption in all engineering or construction activities in which they are engaged; Be especially vigilant in maintaining appropriate ethical behavior where payments of gratuities or bribes are institutionalized practices; >" ,Filling the Need for Openness & Transparency--$I Canon 6 (continued) : Strive for transparency in the procurement and execution of projects, including disclosure of names, addresses, purposes and fees or commissions paid for all agents facilitating projects; and Encourage the use of certifications specifying zero-tolerance for bribery, fraud and corruption in all contracts ^2q#!,Filling the Need for Openness & Transparency--$EWFEO Anti-corruption Task Group Representatives from every continent 6@A$"What Can You Do?$!$Act! Remember that ignoring corruption is the same as condoning it Join our 3-Part Program Shine a bright spotlight on corrupt activities wherever you see them Make it socially unacceptable to be involved in corruption Educate the next generation of engineers on the real cost of corruptionh?=%#VNeed for Openness & Transparency in the Procurement & Delivery of Engineering ServicesWWG $ Questions?(# (  ` 33` Sf3f` 33g` f` www3PP` ZXdbmo` \ғ3y`Ӣ` 3f3ff` 3f3FKf` hk]wwwfܹ` ff>>\`Y{ff` R>&- {p_/̴>?" dd@,|?" dd@   " @ ` n?" dd@   @@``PR    @ ` ` p>> f(    6z  `}  T Click to edit Master title style! !  0}  `  RClick to edit Master text styles Second level Third level Fourth level Fifth level!     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Henry, P.E., D.WRE   .-@Arial-. 92 i!Chair, AAES; Past President, ASCEr     .. 92 h!Chair, AAES; Past President, ASCEr     .-@Arial-. 2  UPADI 2006 .. 2  UPADI 2006 .-@Arial-. %2 .Build a Better World    .. %2 -Build a Better World    .-@Arial-. 2 e  Atlanta, GA  .. 2 d Atlanta, GA  .-@Arial-. !2 xSeptember 19,2006r  .. !2 wSeptember 19,2006r  .-՜.+,D՜.+,     jPresentacin en pantallao esÝ! $ArialTahomaDefault DesignWNeed for Openness & Transparency in the Procurement & Delivery of Engineering ServicesWNeed for Openness & Transparency in the Procurement & Delivery of Engineering Services BackgroundWhat is the Problem?What is the Problem?What is the Problem?What is Corruption?What is Corruption?What is Corruption?What is Corruption?What is Corruption?What is Corruption? 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