Various surveys around the world including Transparency International’s Bribe Payers Index indicate that the arms trade and construction are sectors that experience especially high risks of corruption. Public Contracting plays a key role in these areas and therefore special efforts are required to curb corruption in their contracting processes.

Below you will find examples of TI’s activities and brief information on other initiatives in the following key sectors.

Transparency International has been keen to work with governments and industry to address the problems of corruption in the arms industry. Since 2001, Transparency International (UK) with its ‘Defence Against Corruption’ programme has been working to improve anti-corruption capability in defence ministries and in their procurement practices.

Since the beginning of 2004, the UK Government, through the Department for International Trade and Development, has provided support to Transparency International (UK) to build an international coalition that together can combat corruption in the official arms trade. Defence Integrity Pacts (DIP) have, for example, been implemented in Colombia and India.

For more information, please see

• Navigating Corruption risks in Defence Contracts
• Defence Against Corruption

In the construction industry, the scale of corruption is magnified by the size and scope of the sector, estimated globally at some USD 3,200 billion per year. The lack of transparency in contracting processes for large-scale infrastructure projects can have devastating consequences for economic and social development. This is especially apparent in the context of post-conflict reconstruction and relief projects after humanitarian catastrophes.

Corruption in the construction sector not only plunders economies; it actually shapes them. Corrupt government officials steer social and economic development towards large capital-intensive infrastructure projects that provide fertile ground for corruption, and in doing so neglect health and education programmes. The opportunity costs are tremendous, and they hit the poor hardest.

Corruption also steers public spending towards environmentally destructive projects. Huge construction projects have gone ahead only because bribes were paid, and environmental standards were not applied. Too frequently, corruption results in redundant infrastructure projects.

TI’s GCR 2005 (Global Corruption Report 2005) focused on corruption in this sector and also contains a special feature on corruption in post-conflict reconstruction.

For more information on Transparency International's anti-corruption work in the construction sector, please also see:

• In Focus on the TI website
• Tools section on the TI website

Fair, transparent and effective blacklisting systems are one of the most effective deterrents of corrupt activities. In 2010 the World Bank along with four major regional development banks signed a cross-debarment agreement which meant that any company blacklisted for over a year would also be prevented from doing business with any of the four other banks. For more information consult the following press release.

Cross-debarment is a very effective mechanism for ensuring that blacklisted companies are not able to continue being awarded public contracts once they have committed an act of misconduct. On the European level, in collaboration with OLAF, the European Anti-Fraud Office, TI organised a Round Table in January 2006 to discuss the further implementation of the European Commission’s debarment system with key stakeholders. As a result of this Roundtable, TI has put together a series of recommendations for the EU debarment system that can be accessed here (see also press release of 6th of April 2006). TI has, in response to the 2011 European Commission Green Paper on modernising Public Procurement policy in the EU, reiterated the need for increased communication of debarment information and misconduct by companies between EU Member States.

Local governments are key areas for anti-corruption work. From big cities to small towns, local governments seen as closed administrative units provide ample opportunity to effectively implement far-reaching anti-corruption tools. Moreover, the increased tendency of decentralisation needs to be followed with strategies that ensure local governance, thus avoiding the displacement of corruption from the centralised to the decentralised level. In the area of procurement/contracting, local governments play a key role because they usually deal with projects and purchases that are meant to benefit the local community directly, and are therefore of great impact and easier to monitor.

Several TI Chapters have undertaken work in procurement at the local government level, introducing tools that benefit not only procurement processes, but also the transparency of broader public management processes.

For further reference, see for example TI and UN-HABITAT’s “Tools to Support Transparency in Local Governance”.