Fraud hits 40% of companies working abroad

The Fraud in Global Construction report, which was compiled from the results of more than 300 companies in 40 countries, reveals that economic crime is a particular problem in central and eastern Europe, where 41% of firms had been asked to pay bribes.

Overall, Building magazine reported that more than 40% of those surveyed had suffered some kind of economic crime over the past two years, including theft, embezzlement, corruption, money laundering, intellectual property infringement and bribery.

Jonathan Hook, global engineering and construction leader at PWC, commented on the findings: "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."

The report coincides with news that the row between BP and its Russian joint venture partner has led construction companies including Keller, Atkins and WSP to postpone plans to move into Russia. The row, in which BP claimed its partner was trying to gain control of the company, has led to Robert Dudley, chief executive of the joint venture, running the group from a secret location outside Russia.

Meanwhile back in the UK, Building reported that the official leading the Office of Fair Trading's investigation into construction has admitted it has no way of proving that cover pricing and bid rigging added 10% to tender prices. Simon Williams, director of cartel investigations at the OFT, said that the organisation does not have a figure available for price inflation, which is not good news for local authorities seeking to claim damages from the contractors involved in the investigation.