Risk Pathways

4. Corruption in sustainment and contracting


Operational contracting and sustainment has traditionally been seen as a support function separate from the main business of conducting military operations. Recent experiences, however – especially that of ISAF in Afghanistan – have prompted a wholesale re-evaluation of these assumptions, as financial flows and political relations generated through sustainment activities strengthened adversaries and made it far more difficult for ISAF to achieve key goals related to security and stability.

Sustainment contracts with international forces tend to generate significant income for the contractors. When handled well, increased availability of work and injection of additional resources can provide an economic stimulus in the area of operations, help diversify the economic base, spur on competition, and widen access to opportunity for a wide range of stakeholders. But mission sustainment, from food delivery to large-scale outsourcing of transport services needed to supply international troops, also carries significant risks in fragile and conflict environments.

Consequences for the mission

Waste of resources

Strengthening of corrupt and criminal networks

Weakening of legitimate governance structures

Difficulty in achieving development- and security-related goals due to spoiler activity and lack of opportunities for the majority of the population

Increasing disenchantment among the host nation population

Increasing violence and insecurity levels

Adversaries using corruption as a way to discredit friendly government and/or in recruitment

Diminished force protection levels

Exit strategy more difficult to achieve

Risk Areas within Risk Pathway 4. Corruption in sustainment and contracting

These risk areas provide further information on specific corruption risks associated with sustainment and contracting, including specific guidance how to identify these risks and what measures can be implemented to mitigate them.

4.1 Divergence of mission resources to criminal networks and to adversaries

Contracting relationships not only create tangible financial flows, but also result in intangible, social and political links between mission forces and local service and goods providers. They can be an important resource for local stakeholders, who can use them to build up their own political and economic position.

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4.2 Collusion in the bidding process

Collusion – illegal cooperation or conspiracy aimed at distorting the tendering and procurement process – can create the appearance of competition while in fact directing resources to particular powerbrokers through a network of seemingly independent companies.

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4.3 Subcontractors, agents and intermediaries

The fragmentation of the supply chain to include significant numbers of subcontractors, agents and intermediaries has been identified as key a contributor to corruption risk. In 2013, more than 90 per cent of reported US Foreign Corrupt Practices Act (FCPA) cases were found to have involved third party intermediaries.

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4.4 Asset disposal

Disposal of mission assets, usually coming at a point when international forces are winding down, transitioning or withdrawing, poses significant corruption risks. While they might no longer be significant for the mission itself, these assets, if they make their way into the hands of malign networks, can prolong conflict and strengthen spoiler groups.

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Mitigations within Risk Pathway 4. Corruption in sustainment and contracting

Promoting strong integrity standards among mission personnel can help set expectations for relations with the host nation, and prevent creation of new opportunities for corrupt networks.

Ensuring that financial flows do not exceed the host nation’s absorptive capacity will diminish the risk of diversion by corrupt networks; tying funding and assistance to improvements in governance can help create momentum for reform.

Civil society organisations can be valuable allies in the fight against corruption: they can help set strategies, understand what could be improved and how, and oversee specific projects using mission funds.

Stronger oversight of mission resources will help limit opportunities for corrupt networks, and helping develop host nation or civil society oversight mechanisms will help create longer-term accountability of host nation forces.

Ensuring that the international mission is able to receive and process signals of wrongdoing from those familiar with the projects it finances increases the likelihood of detection and diminishes the appeal of corruption.