There are reasons why proponents of Site C, including utility executives and members of the former BC Liberal Government, continue to promote the project despite much evidence that it was the wrong choice three years ago and remains that today.
Read through the linked report or just consider the following extracts and measure the possibility that corruption motivated the political decision to proceed with the most expensive public project in BC history.
To ensure the project began, Liberals made sure they populated the board room and the executive suites at BC Hydro with loyal supporters. Then they sidelined BCUC, the independent body that was established to review this and other utility projects. Further, Liberals and their loyal friends ensured that Site C financial reports were either delayed or hidden and they employed spin doctors to manage their version of truth.
In other words, everything was done by Liberals to ensure that Site C was not subject to due diligence.
Even after the new government’s review process began, the utility was hiding and manipulating information. Despite the Horgan government’s expressed desire for an honest, open and transparent examination of Site C, Minister Michelle Mungall appears not to have imposed that will on the present management of BC Hydro.
This is a test of strength for the Horgan Government. They ought not to surrender.
Corruption is one of the key issues for public policies. It is one of the major impediments to the development of emerging countries and to further improve the quality of life in developed countries… The eradication of corruption is one of the key challenges that the world faces. Scholars agree that corruption might be eradicated by enhancing education and with cultural changes leading to a better government capable of producing policies tackling this issue.
Government policies can reduce corruption “increasing the benefits of being honest, increasing the probability of detection and punishment, and increasing the penalties levied on those caught […] Such measures usually require substantive law reform and the introduction of more transparency. [Research] indicates transparency in public procurement as a key practice for fighting corruption.
…corruption is particularly relevant for megaprojects because of their intrinsic characteristics. Megaprojects are projects characterized by: large investment commitment, vast complexity (especially in organizational terms), and long-lasting impact on the economy, the environment, and society…
Transparency International defines corruption as “the abuse of entrusted power for private gain”. There are three conditions favouring corruption:
- Discretionary power: public officials must have the power of design or administer regulations and policies in a discretionary manner.
- Economic rents: the manipulation of decisions must derive some return for the decision-makers.
- Weak institutions: the structure of government institutions and the political processes are very important determinants of the level of corruption…
- Reduces public revenue and increases spending, contributing to the fiscal deficit.
- Increases income inequality because it allows well-positioned individuals to take advantage of government activities at the cost of the rest of population.
- Imposes regulatory controls and inspections for market failures.
- Distorts incentives.
- Acts as an arbitrary tax.
- Reduces the role of government in the enforcement of contracts and on the protection of property rights.
- Reduces the legitimacy of the market economy and a democracy.
- Acts as a barrier to entry in the market for small size and emerging firms.
Specific features characterize projects and make it more or less susceptible to corruption. These characteristics are:
- Size: this is the most important feature because it is easier to hide bribes and inflated claims in large projects than in small projects.
- Uniqueness: this makes budget costs difficult to compare and therefore it is easier to inflate.
- Government involvement: public administrators can use their arbitrary power especially where there are insufficient controls on how government officials behave.
- Number of contractual links: each contractual link provides an opportunity for someone to pay a bribe in exchange for the contract award.
- Project complexity: when projects are very complex, factors like mismanagement or poor design can hide bribes and inflate claims.
- Lack of frequency of projects: winning these projects may be critical to the survival or profitability of contractors, which provides an incentive for contractors to use bribes.
- Work is concealed: subsequent processes cover the basic components of the work. The quality of the components can be very costly or difficult to check.
- Culture of secrecy: even if public funds subsidize the projects, costs could be kept secret.
- Entrenched national interests: the government selects local and national companies justifying the choice to favour national interests. These positions have often been cemented by bribery.
- Lack of ‘due diligence’: frequent lack of due diligence on participants in construction projects allows corruption to continue.
- The cost of integrity: in several cultures bribery and deceptive practises are often accepted as the norm: not paying these bribes means not doing the project.
In particular the procurement is critical, since corruption can be associated with:
- Invitation: the public officials may have the power to decide which enterprises to invite to the tender.
- Short listing/pre-qualification: limiting the number of competitors according to previous experience.
- Technology choice: aiming to require particular characteristics for the tender.
- Confidentiality of information: there are numerous ways for public officials holding confidential information to misuse their position…