Memorandum from Bob McKittrick, President
of the Institution of Structural Engineers (DCB 4)
1.1 My name is Bob McKittrick and I am the
current President of the Institution of Structural Engineers (IStructE).
1.2 The IStructE has about 21,000 members
in 105 countries around the world. Corporate membership is achieved,
normally following a university degree, by passing an examination
of seven hours duration in the concepts, theory, detail and practice
of structural engineering. Very high standards are maintained
and the pass rate is normally between 30 and 40 per cent.
1.3 In my President's address at the beginning
of October 2002, I said the following:
I have intentionally left the trickiest one to the
end and that is corruption. This to me is the biggest evil in
society, our profession and industry at large and one which we
as a professional body should take very seriously. Albert Camus,
the twentieth century French existentialist and writer, said "integrity
needs no rules". Whilst I agree with his theory, the practice
is somewhat different.
Many people wish to avoid talking about the subject
and others simply do not want to know, and yet one search engine
alone on the Internet throws up 2.4 million references to corruption
so someone somewhere wants to talk about it. Those of you who
work solely in the UK are probably astonished that I am even referring
to this topic but there will be others from the larger firms who
work overseas, both for private clients as well as funding agencies,
who know exactly what I am talking about and you are probably
wishing that I had finished my address with the previous topic.
Well, life is not that easy and as it said on a wayside pulpit
outside our church many years ago "if you do not stand for
something you might fall for anything".
The major funding agencies such as the World Bank,
the Asian Development Bank and others claim to be taking a much
tougher line on corruption and "the World Bank has identified
corruption as the single greatest obstacle to economic and social
development. It undermines development by distorting the rule
of law and weakening the institutional foundation on which economic
So why do I raise corruption here? It is because
I consider that the Council of this Institution should get together
with the Councils of the other major institutions to pledge our
support for trying to rid the world of corruption. Maybe we need
to declare an amnesty and start afresh at the end of it. Maybe
we need to brainstorm the whole issue, but I firmly believe that
we need to start and we need to start now.
1.4 My personal position is as a Main Board
Director and Divisional Chairman of an international firm of consulting
engineers. I am 58 years of age and have been employed in consultancy
since graduating from University in 1967.
2. GENERAL COMMENTS
2.1 The amount of time given for submission
of written evidence (four weeks including the Easter weekend)
is very short for what is an extremely serious issue. The evidence
may not therefore be as useful as it should be.
2.2 I understood that the Government was
committed to the use of layman's language in the writing of new
laws so as to reduce the need for ongoing interpretation of words,
sentences and paragraphs. It is, therefore, extremely disappointing
to see that it has been found necessary to produce 11 pages of
Explanatory Notes relating to a Bill which runs to only 12 pages,
excluding the contents pages. The wording of the Bill needs to
be clear, simple and unambiguous, otherwise it will not have the
2.3 As part of my drive to start to try
to outlaw corruption in the construction industry, I have been
trying to organise a conference to discuss the issue. I have invited
the Presidents and Secretaries from 23 major professional institutions.
All have expressed an interest, but in the event most have been
unable to attend. This is very disappointing but I will continue
to strive for a conference.
3. SPECIFIC COMMENTS
3.1 These comments relate to consultancy
commissions in countries outside the UK where the fees are paid
directly by funding agencies such as the World Bank, Asian Development
Bank, European Commission etc. The comments also relate to the
governments of countries that receive loans from these agencies
and then pay consultants directly before drawing down the loans.
The Department for International Development has been excluded
from the list as there is no direct evidence of corruption in
3.2 Clauses 1, 2 and 3 are perfectly clear.
3.3 Clause 4(1)(a) gives an example of doing
something which confers an advantage but does not give an example
of omitting to do something. An example here would help to clarify
this clause. Examples of this nature throughout the Bill would
be a major advantage in helping people understand the Bill.
Clause 4(2) as written is too vague and unclear.
It needs the example, or similar, given in the explanatory notes.
3.4 Clauses 5(1) and 5(2) are clear but
again Clause 5(3) is too vague and unclear.
3.5 Clauses 6 and 7 and the Explanatory
Notes to these clauses, are unclear. Without adequate clarity
they will simply be ignored and hence an offence will not be reported.
3.6 Clause 8(1) is clear but again Clause
8(2) is too vague and unclear.
3.7 Clauses 9 and 10 are clear.
3.8 Clause 11 is a problem. Consider the
situation where a consultancy submits a fee bid to a funding agency,
or to a country in receipt of a loan from a funding agency, for
a commission. In order to have a chance of winning the work, the
consultancy invariably uses, as a sub-consultant for some of the
work, a firm from the country receiving the aid or loan. The sub-consultant
normally specifies how much of the overall fee it wants for its
input. The output provided by the sub-consultant is often of a
value much lower than their proportion of the fee with some of
the remainder being used to bribe the client. The main consultant
does not generally query this practice.
A perfect example of this occurred a few years
ago when, in a tender known personally to me, a sub-consultant
told the main consultant that they would win the job provided
the fee bid was US$ 950,000 and provided 15 per cent of this was
paid through them directly to the Minister for Transport of the
client. This was in a former Eastern European country.
I do not think that the sub-consultant would
be considered as an Agent under the proposed Bill.
3.9 I have no further comments under this
4. IS THE
4.1 I do not consider that the proposed
new Corruption Bill will have any effect on the current practices
of corruption that take place in consultancy outside of the UK.
My reason for this is that, because of the way in which the Draft
Bill is written, I do not believe that the drafters of the Bill
understand the workings of corruption. Until they understand the
workings they will be unable to draft a meaningful Bill.
4.2 In addition, it is stated in the Press
Notice dated 26 March 2003 that one of the themes on which the
Joint Committee expects to concentrate its inquiry is the treatment
of "facilitation payments" I can find no reference to
such payments in either the Draft Bill or the Explanatory Notes.
However, included in the Anti-terrorism, Crime
and Security Act 2001 was new UK legislation on bribery and corruption.
This came into force on 14 February 2002 to deter UK companies
and nationals from committing acts of bribery overseas.
Under Frequently Asked Questions No 5 on the
Trade Partners UK website the following is quoted:
. . . we do not think it appropriate to make an exemption
for "facilitation payments". However, we do not envisage
any circumstances in which the making of a small "facilitation
payment", extorted by a foreign official in countries where
this is normal practice, would of itself give rise to a prosecution
in the UK. . .
This statement to me is intolerable. What is
"small"? A payment of 1 per cent may be considered to
be small, but it certainly is not small if it is 1 per cent of
a project worth £5,000,000. What is "normal practice"
and who will define "normal"?
Facilitation payments must be outlawed.
4.3 My final point is that many people to
whom I speak say that if they stop offering payments on overseas
work they will simply lose work as the remainder of the EC States
will simply carry on as before. It is vital, therefore, that the
UK Government enjoins the rest of Europe, and hopefully the rest
of the World, in this drive to outlaw corruption.