Chinese and Israeli companies are among international contractors who regularly bribe Kenyan officials to win lucrative multi-billion shilling public infrastructure contracts, a new report by global corruption watchdog Transparency International (TI) says.
TI says bribery of Kenyan officials has over the years continued unabated, partly because foreign governments are not enforcing the existing anti-bribery laws.
“While China has criminalised the bribery of foreign public officials, in line with obligations under the UN Convention against Corruption, there has been no known enforcement against foreign corrupt practices by its companies, citizens and or residents,” the TI says in the report, which seeks to assess progress of the Organisation for Economic Co-operation and Development's (OECD) anti-bribery convention.
TI says Chinese bribery of foreign officials has continued despite the fact that its companies and individuals have been the subject of publicly reported investigations and charges in numerous countries, including Bangladesh, Ethiopia, Kenya, Sri Lanka, the United States and Zambia.
Samuel Kimeu, the TI Kenya executive director, said failure to act on reported corruption cases has become a matter of great concern given the high cost of irregularly awarded contracts. "Runaway graft in public contracting is robbing taxpayers of value for money in publicly funded projects because they mostly result in poor workmanship.
"This inaction has anchored corruption as the main driver of contracting systems in Kenya,” Mr Kimeu said, adding that many of the local contracts are being awarded to proxies who then transfer them to foreign companies at a fee resulting in exaggerated costing.
Kenya last year enacted a law criminalising bribery and with severe penalties, including a Sh5 million fine for convicted executives and a 10-year embargo on their firms.
The law, which is modelled on the UK’s Bribery Act, seeks to punish private sector bribery, especially in their dealings with government.
The OECD Anti-Bribery Convention establishes legally binding standards to criminalise bribery of foreign public officials in international business transactions and provides for a host of punitive measures for effectiveness.
Its anti-graft pact boasts of being the “the first and only international anti-corruption instrument focused on the ‘supply side’ of the bribery transactions.”
While singling out China as the “world’s leading exporter of corruption,” the TI insists stringent punishment of Chinese officials implicated in graft will change the trend.
“(China) should acknowledge the influence of its companies in terms of how they conduct business in foreign markets,” the TI report says.
Chinese firms have in recent years firmed their grip on cash-rich infrastructure contracts in Kenya, including various roads and the multi-billion shilling Standard Gauge Railway (SGR).
The report is expected to rekindle public debate on the procurement of Kenya’s mega infrastructure projects and whether such procurement produces value for money.
Legal documents in past and ongoing cases have often shown how some rogue Kenyan State employees manipulate the procurement law to inflate tender prices and line their pockets with huge sums of money in exchange for shady deals.
Kenya's list of unresolved corruption cases involving foreign officials and companies includes the Independent Electoral and Boundaries Commission ‘chickengate’, Goodyear’s tyre deal, British American Tobacco’s “cigarette” scandal, among others.
Multiple Chinese companies are embroiled in contracting litigation in Kenyan courts.
Top Kenyan Transport ministry officials were recently in the spotlight for alleged involvement in shady procurement deals with an Israeli construction firm.
Investigators from the Israel Police on February 20, this year began probing former senior managers at Shikun & Binui, on suspicion that they were involved in bribery of public officials in Kenya to win lucrative tenders.
The probe saw Israeli investigators raid the company’s offices in Kenya and freeze some of its bank accounts.
In 2014, a four-year investigation by the United Kingdom’s Serious Fraud Office (SFO) into allegations of British firms dishing out bribes codenamed ‘chicken’ to Kenyan officials to secure deals, unearthed a multi-million-shilling corruption scam where local election officials pocketed millions of shillings in bribes to award lucrative printing contracts over a two-year period.
Under the Kenyan anti-bribery law, wheeler-dealers and “tenderpreneurs” convicted of giving, soliciting, receiving, or agreeing to receive a bribe face a Sh5 million fine and a 10-year jail term, coupled with a 10-year ban from holding any public office, company directorship or partner in any firm.