1) Ethical lapses in its entire ramification are some of the greatest challenges of the

construction industry. Every phase in the construction process is vulnerable to

corruption and this adversely affects the infrastructures and general wellbeing of the
people. Outline the most critical ethical issues faced by the construction industry of
Ethiopia.

The most critical ethical issues faced by the construction industry of Ethiopia are listed
as follows

Political influence or lobbying by private firms that biases selection to suit political
or private (individual or company) interests
Political influence to favor large projects and new construction over maintenance
Low estimate of costs to get projects approved without economic justification
Poor planning & inadequate compensation for loss of land and livelihoods
Costly designs which increase consultants’ fees and contractors’ profits
Design to favor a specific contractor
Incomplete designs leaving room for changes which can be manipulated
High estimate of costs to provide a cushion for later diversion of funds
Bribery to obtain contracts, (which means costs have to be recovered at the next
stage)
Bribery to gain access to contracts is colluding with other bidders to ‘fix’ the
competition. Evidence of collusion among contractors during the tender process -
whereby it is agreed to let one contractor win in return for a percentage payment or
similar support on another contract - is overwhelming
Deliberate under-estimation of costs to win tender
Collusion among bidders to allocate contracts and/or raise price (may be with
assistance from procurement officers)
Interference by procurement officers to favor specific firms or individuals
 Agreement between contractor and the supervising engineer (with or without
knowledge of the client) to accept lower quality materials, overlook substandard
work
Agreement between contractors and supervising engineer to increase the contract
sum or reduce the scope of work through variations, in order to make extra profit,
cover potential losses or recover money spent on bribes
Agreement by the supervising engineer to accept poor quality work or work below
the specification, leading to rapid deterioration of assets
Problem exacerbated by lack of funds for maintenance as new construction takes
precedence in project identification stage.

2) Ethics, social responsibility, and trust are critical issues for all professions in the built
environment including architecture, engineering and construction. Being an Architect,
an Engineer or a CM professional, outline discipline specific issues that are important to
create codes of ethics and professional conduct pertaining to each of built environment
professions.

i. Being an Architect
Costly designs which increase consultants’ fees and contractors’
profits
Design to favor a specific contractor
Incomplete designs leaving room for changes which can be
manipulated
Not originality on design
ii. Being an Engineer
Low estimate of costs to get projects approved without economic
justification
Poor planning & inadequate compensation for loss of land and
livelihoods
Costly designs which increase consultants’ fees and contractors’
profits
Design to favor a specific contractor
Incomplete designs leaving room for changes which can be
manipulated
High estimate of costs to provide a cushion for later diversion of
funds
Bribery to obtain contracts, (which means costs have to be
recovered at the next stage)
Bribery to gain access to contracts is colluding with other bidders
to ‘fix’ the competition. Evidence of collusion among contractors
during the tender process - whereby it is agreed to let one
contractor win in return for a percentage payment or similar
support on another contract - is overwhelming
Deliberate under-estimation of costs to win tender
Collusion among bidders to allocate contracts and/or raise price
(may be with assistance from procurement officers)
Interference by procurement officers to favor specific firms or
individuals
Agreement between contractor and the supervising engineer (with
or without knowledge of the client) to accept lower quality
materials, overlook substandard work
Agreement between contractors and supervising engineer to
increase the contract sum or reduce the scope of work through
variations, in order to make extra profit, cover potential losses or
recover money spent on bribes
 Agreement by the supervising engineer to accept poor quality work
or work below the specification, leading to rapid deterioration of
assets
Problem exacerbated by lack of funds for maintenance as new
construction takes precedence in project identification stage
iii. Being an CM professional
Political influence or lobbying by private firms that biases selection
to suit political or private (individual or company) interests
Political influence to favor large projects and new construction over
maintenance
Low estimate of costs to get projects approved without economic
justification
Poor planning & inadequate compensation for loss of land and
livelihoods
High estimate of costs to provide a cushion for later diversion of
funds
Bribery to obtain contracts, (which means costs have to be
recovered at the next stage)
Bribery to gain access to contracts is colluding with other bidders
to ‘fix’ the competition. Evidence of collusion among contractors
during the tender process - whereby it is agreed to let one
contractor win in return for a percentage payment or similar
support on another contract - is overwhelming
Deliberate under-estimation of costs to win tender
Collusion among bidders to allocate contracts and/or raise price
(may be with assistance from procurement officers)
 Interference by procurement officers to favor specific firms or
individuals
Agreement between contractor and the supervising engineer
(with or without knowledge of the client) to accept lower quality
materials, overlook substandard work
Agreement between contractors and supervising engineer to
increase the contract sum or reduce the scope of work through
variations, in order to make extra profit, cover potential losses or
recover money spent on bribes
Agreement by the supervising engineer to accept poor quality
work or work below the specification, leading to rapid deterioration
of assets
Problem exacerbated by lack of funds for maintenance as new
construction takes precedence in project identification stage

2) Discuss on the perception of the international community about Ethical lapses in

Ethiopia
 There are a number of reports and publications which give an overview of
Ethiopia’s political, legal and institutional background. Those include
information on the state of corruption and anti-corruption, providing Useful
information on underlying causes of corruption in Ethiopia
 1. Transparency Corruption Perceptions Index (CPI)

The CPI is an “index of indices” composed of nine different sources that all provide a
ranking of countries based on expert assessments and opinion surveys. In2009, Ethiopia
scored 2.7 and was ranked 120 out of the 180 assessed countries, suggesting widespread and
endemic corruption.

2. Corruption Perceptions Index 2008: 2.6 (126th out of 180 countries)

Conventions

African Union Convention on Preventing and Combating Corruption (signed June 2004;
ratified September 2007)

UN Convention against Corruption (signed December 2003; ratified November 2007)

UN Convention against Transnational Organized Crime (signed December 2000; ratified

July 2007) complex

Ethiopia’s economy has grown considerably over the last five years the current government,
which came to power in 1991, has made signify cant progress in building the legislative and
institutional framework needed to control and guide this boom. The rapidity of the growth
and the increase in sums of money at stake, however, has enhanced opportunities and
incentives for corruption. Although the private sector has grown rapidly during this period,
signify cant number of businesses continue to operate outside the formal sector.

According to the Central Statistical Agency, the urban informal sector in Ethiopia
comprised 997,379people in 2003, with an initial capital of US$4billion.

Examples

i. Banking

In early 2008 some of the NBE’s gold that was ready to be exported was discovered to be
gold-plated iron bars.13 the discovery prompted an extensive investigation, which
eventually revealed a complicated system of corruption and fraud involving officials at both
the bank and the GSE. Gold-plated iron or steel bars were

being sold to the NBE by buying certificates from corrupt GSE staff, who allegedly used
forged documents or paid off bank staff.14 The scheme had been in operation since at least
early 2005, and in 2006 a single dealer had been paid approximatelyUS$3 million for the
239 kg of fake gold

i. Land distribution and administration

In July 2007 the FEAC released a study in which it examined five of Addis Ababa’s ten sub-
cities. It concludes that acquiring land in the city without bribing city officials had become
virtually impossible. It also finds that ambiguities in the legal code and relevant regulations
enabled corrupt officials to exploit these loopholes to their own personal benefit t.
According to the study, the land administration system’s major problems are an absence of
efficient systems;

a lack of trained and sufficient numbers of employees to provide efficient and effective
services; a lack of clarity in the proclamation,

Rules and regulations prepared for leasing land; and an absence of codes of conduct.20 the
report documents cases in which land was awarded to individuals on the basis of bribes or
forged bank statements.

3. Business Anti-Corruption Portal – Ethiopia country profile:

The Anti-Corruption Business Portal provides an overview of the various forms of
corruption that are prevalent in the country, with sources information substantiating the
information. The portal especially points to risks of corruption in the following areas:
• Practices of corruption are increasingly taking the form of private-to-private corruption
whereby private companies yield procurement contracts to other private companies in
return for bribes, etc.;

• Land distribution and administration is reportedly a sector highly vulnerable to

corruption, involving facilitation payments as well as bribes in order to keep land that is
leased from the state;

• The tax system is generally considered to be very corrupt and to lack transparency;

• The customs authority lacks qualified staff, and customs laws are not exercised uniformly
and without discrimination, which allows ample possibilities for corruption in interactions
with customs officials.

4. Index of Economic Freedom - Ethiopia 2010

In 2010, Ethiopia’s economic freedom scored 51.2 in the Heritage Foundation‘s index of
economic freedom, making its economy the 136th freest in the 2010 Index.

Its overall score fell 1.8 points as a result of deteriorating trade freedom, monetary freedom,
and investment freedom. Ethiopia is ranked 28th out of 46

Countries in the Sub-Saharan Africa region and its overall score are just below the regional
average.

5. Global Corruption Barometer (GCB) 2005

Transparency International’s GCB is a survey that assesses general public attitudes toward
and experience of corruption in many countries around the world. Ethiopia was last
included in the GCB in 2005.

3) “Whistle-blowing” can be defined as the act of a man or woman who, believing that
the public interest overrides the interest of the organization he/s serves, publicly
“blows the whistle” if the organization is involved in corrupt, illegal, fraudulent, or
harmful activity.
Questions:

1) Outline examples of problems that might warrant whistle-blowing.

Answer
serious and substantial wastage of resources;
misrepresentation;
corrupt conduct, including bribery, theft, fraud and other criminal conduct;
breach of Commonwealth or State legislation or local authority by-laws;
maladministration and gross mismanagement;
repeated instances of breach of administrative procedures;
dishonesty; and,
Any other serious improper conduct or any other conduct which may cause
detriment to the interests of the health or aged care organization and
community it serves.

2) As a morally obligated engineer, what are the conditions that you must fulfill prior
to engaging in external whistle-blowing?
Answer
 that the act of whistle blowing stem from appropriate moral motive of
preventing unnecessary harm to others;
 that the whistleblower use all available internal procedures for rectifying the
problematic behavior before public disclosure, although special
circumstances may preclude this
 that the whistleblower have ‘evidence that would persuade a reasonable
person’;
 that the whistleblower perceive serious danger that can result from the
violation;
 that the whistleblower act in accordance with his or her responsibilities for
‘avoiding and/or exposing moral violations’;
 That the whistleblower’s action has some reasonable chance for success.