TANZANIA CIVIL ENGINEERING CONTRACTORS ASSOCIATION (TACECA)‏ TACECA ANTICORRUPTION INITIATIVES IN THE CONSTRUCTION INDUSTRY Presented by: Kazungu Magili Vice – Chairman TACECA

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 2 1.P REAMBLE

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 3 ESTABLISHMENT ☺ Civil Engineering Contractors in Tanzania established the Tanzania Civil Engineering Contractors Association (TACECA) on 17th May ☺ The Association was officially registered in October 1996.

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 4 VISION & MISSION ☺VISION:  To become an Association of high quality conscious contractors wishing to develop and maintain their services to a standard of excellence that will make them the preferred services providers of the industry. ☺MISSION:  To enable members to access works opportunities by developing capacity and competence to competitively undertake construction works within and outside the country.

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 5 2.M EMBERSHIP

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 6 MEMBERS ☺To-date the association has over 283 members in 16 branches located in Arusha, Dar es Salaam, Dodoma, Iringa, Kagera, Kilimanjaro, Lindi, Mara, Mbeya, Morogoro, Mwanza, Ruvuma, Shinyanga, Singida, Tabora and Tanga regions. ☺Full membership is open to civil engineering contracting companies registered with CRB; other institutions can join the Association as Affiliate members.

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 7 3.ANTI-CORRUPTION I NITIATIVES IN THE CONSTRUCTION INDUSTRY

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 8 ANTI-CORRUPTION I NITIATIVES 3.1 TACECA InitiativesANTI-CORRUPTION I NITIATIVES 3.1 TACECA Initiatives

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 9 a) TACECA STUDY ON THE STATE OF CORRUPTION IN THE CONSTRUCTION INDUSTRY 2006 ☺Study coverage The study reviewed the following aspects and made proposals for mitigation: Nature and extent of corruption in the procurement of construction contracts;Nature and extent of corruption in the procurement of construction contracts; Transparency and accountability;Transparency and accountability; Existing anti-corruption measures; andExisting anti-corruption measures; and

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 10 a) TACECA STUDY ON THE STATE OF CORRUPTION IN THE CONSTRUCTION INDUSTRY 2006 ☺Study coverage (cont….)‏ Role of TACECA in combating corruption in the procurement of construction contracts.

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 11 a) TACECA STUDY ON THE STATE OF CORRUPTION IN THE CONSTRUCTION INDUSTRY 2006 ☺Findings of the study  Significant corruption exists at various stages of the procurement process, from prequalification of contractors through the construction supervision up to the final account stages.  The majority of contractors interviewed during the course of this study (83.5%), indicated that the major contributing factor is the high level of competition for jobs amongst contractors; due to the fact that available job opportunities are few compared to the number of contractors competing for these jobs. This situation results into a scramble by many contractors for a very small cake of available job opportunities which everyone wants to get.

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 12 a) TACECA STUDY ON THE STATE OF CORRUPTION IN THE CONSTRUCTION INDUSTRY 2006 ☺Findings of the study  The study has also revealed that:  corruption has wide ranging effects on political and socio- economic development in Tanzania.  It introduces uncertainties in the economic environment that affects the way contractors do business.  It inflates project costs and reduces competition.  It also undermines capacity building of local contractors and creates projects that are white elephants in the sense that they are chosen not on the basis of their intrinsic economic worth but on the opportunity they present for bribes and kickbacks.

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 13 a) TACECA STUDY ON THE STATE OF CORRUPTION IN THE CONSTRUCTION INDUSTRY 2006 ☺Findings of the study  The study further indicated that:  The financial loss incurred through corruption is significant % of the respondents indicated that the amount of money normally paid directly to clients’ representatives through corruptive practices is to the tune of 10% - 15% of the contract sum.  On the other hand, findings of the desk study indicate that per cent of expenditure on public works contracts is, on average, lost through corruption and improper use of project funds.

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 14 a) TACECA STUDY ON THE STATE OF CORRUPTION IN THE CONSTRUCTION INDUSTRY 2006 ☺Findings of the study  The study further indicated that(cont…..):  However, there are many loopholes in the existing legislation that provide favourable environment for corruption to flourish. There is also weak enforcement of the existing legislation and inadequate transparency and accountability which favour corrupt practices.

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 15 a) TACECA STUDY ON THE STATE OF CORRUPTION IN THE CONSTRUCTION INDUSTRY 2006 ☺Study recommendations  The study recommended measures to be undertaken to:  To enhance compliance with existing public procurement procedures;  To enhance transparency in the procurement of construction contracts;  To promote professionalism and high ethical standards in the procurement of construction contracts;  To strengthen the enforcement of existing anti-corruption measures in the procurement of construction contracts;  To encourage aggrieved parties and the general public to report cases of corrupt malpractices in the procurement of construction contracts; and  To improve existing anti-corruption legislation

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 16 b) Design of system for monitoring effectiveness of anti-corruption initiatives TACECA has designed a system which involves a two-pronged monitoring approach is proposed whereby: ☺ ongoing and planned initiatives can be monitored on a routine basis (primarily in terms of outputs and activities) and ☺ the overall impact of the combined initiatives (government, donor etc.) is monitored to ascertain if they have resulted in a reduction in the levels of corruption.

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 17 b) Design of system for monitoring effectiveness of anti- corruption initiatives Initiatives will be monitored through an 8 step process:

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 18 b) Design of system for monitoring effectiveness of anti- corruption initiatives

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 19 b) Design of system for monitoring effectiveness of anti- corruption initiatives The system will be implemented in the near future after securing funding.

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 20 a)(Construction Sector Transparency Initiative (CoST)‏ CoST is about increasing transparency. Enhanced transparency in the construction sector has two main benefits. First, corruption is reduced since persons intending illegality would perceive a greater risk of getting caught thus modifying their behaviour; and second, management would improve since slack practices would come to light and more care would be taken. 1.ANTI-CORRUPTION INITIATIVES 3.2 Other Initiatives

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 21 1.ANTI-CORRUPTION INITIATIVES 3.2 Other Initiatives In Tanzania CoST has the following structure:

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 22 1.ANTI-CORRUPTION INITIATIVES 3.2 Other Initiatives b) Project Anticorruption System (PACS)‏ (PACS), according to Transparency International (TI) is an integrated and comprehensive system specifically designed by TI to assist in the prevention of corruption on construction projects. It uses a variety of measures which impact on all project phases, on all major participants, and at a number of contractual levels.

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 23 1.ANTI-CORRUPTION INITIATIVES 3.2 Other Initiatives b) Project Anticorruption System (PACS) (cont….)‏ There are ten components to the PACS Standards, which cross-refer to the relevant PACS templates. These components are: PS 1.Independent assessment PS 2.Pre-contract disclosure of information PS 3.Contractual anti-corruption commitments PS 4.Government anti-corruption commitments PS 5.Project transparency PS 6.Raising awareness PS 7.Funder involvement PS 8.Compliance programme PS 9.Reporting PS 10.Enforcement

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 24 1.ANTI-CORRUPTION INITIATIVES 3.2 Other Initiatives b) Project Anticorruption System (PACS) (cont….)‏ The system is being implemented in Tanzania by PPRA

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 25 1.ANTI-CORRUPTION INITIATIVES Conclusion: Corruption in the Construction Industry can be substantially alleviated through collaboration of all stakeholders, i.e. government and its institutions, Civil society, the private sector and the public at large.

September 26, 2008TACECA ANTICORRUPTION INITIATIVES 26..thank you for your attention..!