Out to get you?

Neill Stansbury has encountered more hostility in the last year than he has in all his 20 years as a construction lawyer. Some have turned him away, others have resorted to table-thumping. But his reaction is the same: a quiet but steely determination to achieve what he has set out to do.

Stansbury, 45, is devoting 100 per cent of his time to stamping out corruption in construction. He is working on a voluntary basis with Transparency International UK, part of a now world-wide organisation set up in 1993 in Germany to combat dishonest practice in business.

His definition of corruption is a broad one: from multi-million dollar backhanders on international infrastructure projects to inflated claims on a £1m office job. The latter type of fraud is the biggest problem for the UK he says, an opinion he has formed from conversations with around 10 major consulting and contracting firms.

Is bumping up a claim when you know your counter-claimant will be doing it really fraudulent? Stansbury thinks it is. But while people agree that bribes are wrong, this broader definition clashes with the views of much of the industry.

CIOB chief executive Chris Blythe, with whom Stansbury has met, suggests that this wide definition is "radical". He says: "Transparency International is extending the term corruption into areas which for many are the normal set of business activities, areas which have been typically resolved through our adversarial approach to doing business, competitive tender, negotiating, bargaining, claiming and counter claiming, reverse auctions etc. "

Stansbury has spent a year knocking on the doors of contractors, consultants, banks, auditors, export credit agencies, government, trade associations and institutions. He has produced a series of reports, one of which contains a series of corruption case studies, gathered largely through his own experience which he reckons chalks up to 75 projects in 20 countries for 12 different nationalities. "Virtually everywhere and in most projects I have come across corruption," he says. (See box, overleaf, for a precis of a few of these).

In person Stansbury radiates integrity and an enthusiasm for the gargantuan task. "I'm working on this seven days a week. It's so fascinating," he says earnestly, blushing slightly, and admitting in his soft South African accent – he came to the UK to study law when he was 20 – that he may be naïve.

He's not naïve. His gentle and earnest manner allows him to engage with industry leaders on the subject. Going in guns blazing, or rubbing people up the wrong way leads to doors in the face. This approach fits with the ethos of Transparency International which is that it should be non-confrontational. The organisation's aim is to get agreement within a sector to act honestly rather than to expose wrongdoers.

Some are compelled to bribe because they will lose the job if they don’t

Neill Stansbury

"Contractors on the whole, consultants on the whole, do not want to bribe," says Stansbury. "They are compelled to bribe because they will not win the job if they don't.

"Bribery requires a payer and a recipient. If you stop the payers paying, if you can create an environment where nobody pays a bribe, then bribery has been eliminated."

He is doing it, he says, because he got tired of sitting there saying something should be done about this. He feels very strongly that corruption, which can account for up to 30 per cent of a project's value going on backhanders, is killing development in third world countries. "There is an enormous development catastrophe," says Stansbury. " I have a desire to see the world being developed, and being a fairer place. I don't believe it will happen unless corruption is eliminated. It's the main restraint in international development."

Fraudulent behaviour also frustrated him. He would be sent into projects to sort out claims and find out that both the side he was working for and the other claimant had little proper evidence to support their claims. His approach was to examine each case in detail, pare them down to what could honestly be proved and then go to the side and say 'This is what we think we are owed, we think your claim is fraudulent because...so how about it?'. "For years I used to sit there and think 'why on earth is this happening?" he says.

Stansbury's career has afforded him a panoramic view of international construction - and corruption. Having qualified as a lawyer in the UK, Stansbury worked for a London law firm London for three years before spending four years with a big UK engineering company.

He then spent four years in Hong Kong, working on infrastructure projects for clients, M&E firms, contractors, before teaming up with his Kenyan wife, also a construction lawyer, in 1992 to form their own business. They then spent over a decade working on a variety of large infrastructure jobs, mostly in Asia in countries including Malaysia, Hong Kong, Singapore and Sri Lanka.

A year ago Stansbury approached Transparency International, because he saw it as the highest profile anti-corruption organisation, and now has the title of project director, construction and engineering. He stresses that his role is that of an unpaid consultant. There could be a job for him at some point though. Eventually he may seek funding from government to further the cause, but he says that it is important to form a case and create some momentum, before going cap-in-hand.

Institutions need to say corruption is wrong, it’s happening and we need to stop it

Neill Stansbury

Stansbury's goal for his first year was to air the subject, get some debate going, get some support for his cause. His tactic is to write to a company or organisation to request a meeting. In some cases he has been successful; others just ignore his letters, So he keeps on writing, politely: "I am very persistent," he says.

The banks have a role
He believes each player in a project must be tackled in order to stamp out corruption, and has been talking to banks and their auditors, presenting what he calls his 'catastrophe scenario'. Here it is: a power station project, procured with the help of substantial bribes to the client (the government), is forced to supply electricity at a higher-than-market rate. The government changes and the new client refuses to pay the inflated tariff; the station closes; receivers go in and corruption is uncovered. Although the project will have been covered by an export credit agency, this will be null and void if bribery is involved. So the bank pays. And its auditors are under the spotlight for doing a less-than-thorough job.

Trade associations and institutions are also a target for the quiet crusader. Interest levels have varied, says Stansbury, although he won't name names. A common line is that it's difficult to address, since no one ever reports cases of possible corruption. "There seems to be a gap between the ethical codes and the action they take. I think they need to be much more outspoken, to say 'this is wrong, it's happening and we need to stop it'."

In reality, however, there may be only so much an institute can do. The CIOB's rules of professional competence and conduct say that members guilty of a criminal offence would lose their membership. Chris Blythe says that cases of suspected corruption should be reported to the authorities. "It is not the job of professional bodies to usurp the authority of courts of law," he says. "If people are aware of corrupt practices it should be reported to the authorities first."

Big boys' backing
The tide is turning against bribery on international projects. In January at Davos, Switzerland, 19 international engineering and construction firms signed up to anti-corruption principles which set zero tolerance for bribes and committed the companies to setting up internal systems to prevent a bribes culture. The firms were part of the Engineering and Construction task force of the World Economic Forum, a club for the international big boys of business, and developed the agreement with help from Transparency International. Among the signatories were CEOs of Amec, US firm Fluor, Skanska and Biwater.

The question of ethics is taxing people too. The Society of Construction Law formed an ethics group last September to look at these issues. Its chairman, Peter Higgins, a director of PD Consult, says that the fact that 46 people – including Stansbury – have signed up to the group demonstrates there is concern out there. The lawyers will not necessarily take action. At the moment the group is defining what ethical behaviour is and whether SCL should or could do anything to stamp out unethical practices.

Unethical behaviour is not necessarily against the law, and Stansbury has an almighty struggle if he hopes to change ingrained business practices. The last 12 months have been tough, he admits: "It's been very difficult getting past the first post." Next year will be equally tough.