MUNICH - Anti-corruption initiatives in the German real estate sector are a good start, but more needs to be done to implement codes of practice, leading German anti-corruption campaigner Peter von Blomberg said on Tuesday.
MUNICH - Anti-corruption initiatives in the German real estate sector are a good start, but more needs to be done to implement codes of practice, leading German anti-corruption campaigner Peter von Blomberg said on Tuesday.
The Corporate Governance Initiative in the German Real Estate Business was founded in 2002 to ensure greater transparency and improved corporate governance in the real estate sector. It is a 'very sensible' initiative, Von Blomberg, deputy chairman of the board at the German chapter of the Berlin-based anti-corruption NGO Transparency International, told PropertyEU. He said it was commendable that 'a whole sector has done something, rather than just an individual firm,' adding that it was a 'in principle a good approach.'
The initiative has developed three levels of integrity principles, of increasing complexity. Firms wishing to join the association have to commit to at least the first level, which consists of ten principles. Von Blomberg praised the third level, a complex values management system, which he described as 'very comprehensive.'
However implementing the codes of practice is the problem, Von Blomberg said, stressing that this applies in general to all forms of fighting corruption in all sectors of industry. 'It's not enough to make a wonderful code and distribute it around a company,' he said. 'This is the point where the serious work begins, trying to change the corporate culture and encouraging employees to adopt the principles. The implementation of these codes of practice is not taken seriously enough by many people in the industry.'
Von Blomberg said that the real estate industry was especially at risk of corruption because of several structural reasons. One reason is the amount of money changing hands. 'When you have large sums involved, there are always many people who want to get a slice of that,' he said. Another reason is that projects are very complex, with a whole network of firms involved, including agents, surveyors and public bodies. 'Such networks are typically prone to corruption,' he commented. The proximity to the construction industry, which is generally seen as one of the most corrupt sectors, is another factor, he added.
Von Blomberg stressed that Transparency International's focus is on analysing business processes to see where the risk of corruption is especially high, and then to change those processes to reduce the temptation to engage in corrupt practices. 'We don't believe we can make people better than they are,' he said.