Pricewaterhouse Coopers report reveals eastern Europe is hotspot for corruption in construction

Contractors working in central and eastern Europe have been warned to be vigilant after a report revealed that almost half of firms working in the regions have been asked to pay bribes. 

The Pricewaterhouse Coopers (PwC) Fraud in Global Construction report, which surveyed more than 300 companies in 40 countries, revealed that more than 40% had been victims of economic crime in the past two years. 

The crimes include theft, embezzlement, corruption, money laundering, intellectual property infringement and bribery.  

PwC said a quarter of all those surveyed had been asked to pay a bribe. It added that the problem was particularly prevalent in central and eastern Europe, where 41% of firms said bribes had been solicited.  

The report added that 37% of firms believed they had suffered business setbacks owing to corruption by competitors.

As construction groups expand into new markets, they need to be more vigilant

Jonathan Hook, PWC

The average financial loss due to economic crime per construction company was £1.5m, up sharply from 2005, when the figure was about £600,000.  

Jonathan Hook, global engineering and construction leader at PcW, said: “As construction groups expand into new markets, they need to be more vigilant and wary of the reputational damage that can occur when bribery and corruption issues emerge.” 

Hook added that criminal charges were pressed in half of cases, but one-fifth of firms chose not to pursue wrongdoers. 

 Commenting on the report, a spokesperson for the Construction Confederation advised firms to follow the guidance of the industry’s Anti Corruption Forum to reduce risk. He said: “Economic crime is clearly a concern for UK contractors operating overseas.”