Thailand Country Profile
Public Procurement and Contracting
Business Corruption
Corrupt relationships are common between government officials in charge of public tendering and the private sector. According to the US Department of State 2010, irregularities in public contracting are found to be frequent, especially in relation to publicly owned lands. Furthermore, procurement requirements are sometimes altered in order to favour well-connected companies over others. As a result, the formation of cartels as well as collusion between potential bidders is not uncommon. Global Integrity 2007 describes procurement processes in Thailand as 'very weak'. Companies are generally recommended to use a specialised public procurement due diligence tool in order to mitigate corruption risks in relation to public procurement in Thailand.
According to a section in a report by Oxford Business group 2011, written by Chairman and Chief Values Officer David Lyman, the state-funded infrastructure and procurement projects are plagued by massive kickbacks from suppliers and contractors. The report states that the average bribe has risen form 3% to 10-30% of a project's cost.
Read more on public procurement under 'Public Anti-Corruption Initiatives' in the Initiatives section.
Political Corruption
According to the Transparency International National Integrity Systems 2006, the government is able to grant monopoly concessions in certain areas of public contracting. This represents a considerable incentive for companies to engage in corrupt practices, such as offering high-level officials and politicians illicit sums of money - typically fixed as a given percentage of the total value of the contract. The same report also states that public contracts are considered the primary channel for government officials, bureaucrats, politicians and companies to engage in medium to large-scale corruption.
The collusive practices between government officials and companies sustain the lack of transparency in bidding and contract procedures. One example noted by several sources such as Global Integrity 2007, is the irregularities found in connection with the procurement of 90 million rubber saplings that led to a former Minister of Finance and a former Deputy Minister of Agriculture being charged with corruption in 2008. Another example, according to a November 2008 article from International Herald Tribune, is that of irregularities in the procurement of fire trucks, which led to the resignation of the Governor of Bangkok and of the ex-Governor Samak, who also served as Prime Minister for a short period in late 2008.
In December 2009, the Public Health Minister resigned over a corruption scandal related to a USD 2.57 billion health procurement project. He was accused of supporting the Ministry’s purchase of overpriced medical equipment and construction of facilities that were deemed unnecessary. According to a December 2009 article by Reuters, the National Anti-Corruption Commission will follow up with further action.
Read more on public procurement under 'Public Anti-Corruption Initiatives' in the Initiatives section.
Frequency
World Economic Forum: The Global Competitiveness Report 2011-2012:
- Business executives give the diversion of public funds to companies, individuals, or groups due to corruption a score of 3.3 on a 7-point scale (1 being 'very common' and 7 'never occurs' and the mean of the results of the 133 surveyed countries being 3.8).
- Business executives give the favouritism of government officials when deciding upon policies and contracts a score of 3 on a 7-point scale (1 being 'always show favouritism' and 7 'never show favouritism' and the mean of the results of the 133 surveyed countries being 3.3).
The Nation: Thaksin-Era Corruption 'Cost State Bt 400 Bn', 1 October 2006:
- According to Supannee Chai-Amporn and Sirinthip Arun-Rue, National Institute of Development Administration, corruption in connection with large government projects are estimated to be between 5% and 30% of the costs of the projects.
