The watchdog group Transparency International says on a worldwide basis, corruption is greater in the construction industry than in any other economic sector. Transparency International says money that is diverted into bribes plunders economies and can in some cases cost lives.
On a global scale, there is more corruption in the construction trade than in the arms or energy sectors.
And Transparency International has found that corruption can be found in every phase of construction - from the preliminary planning stage, to the awarding of contracts, to the employment of subcontractors, to the operation and maintenance of projects.
Speaking at the launch of the report in London, the Chairman of Transparency International, Peter Eigen said money that is siphoned off for corruption carries with it very real social consequences.
"We consider this damage done to economic management as probably one of the most important aspects and reasons for the poverty in many parts of the world, for the desperation, misery and hopelessness which leads very often to violence and conflict and in the final analysis, the breeding ground of course for terrorism and the other aspects which make our life so unbearable," he said.
Mr. Eigen says post-war areas are often breeding grounds for corruption and Iraq he points out is no exception.
"We are concerned about the fact that the passing of huge, billion-dollar contracts were organized under relatively closed and un-transparent circumstances," Mr. Eigen said. "Looking forward we hope that the large amounts of money which are still undispersed for the reconstruction of Iraq, that they will be spent under circumstances either under these contracts which already have been signed with accountability, with auditing - independent auditing with financial reporting and hopefully also with contract procedures which are competitive and open."
The head of the anti-corruption group says openness in both the public and private sectors of the construction trade is the ultimate goal."Transparency is the magical word. If decision are taken openly, the people will have confidence, the business community will have confidence, the government will have confidence but if things are done secretly and behind closed doors then very often the breach of these rules leads to tremendous damages in the economic management of these countries," he said.
Transparency International is urging countries to adopt minimum standards of accountability in the construction trade to begin redressing the corrosive social effects corruption inherently brings with it.