‍Anti-Corruption Clean Construction System

Background Information

As a way to create an environment where irrational subcontract practices are eliminated, the city of Seoul made the Mayoral Proclamation No. 520-1 on July 25, 2013. In order to accomplish the objectives made in the declaration, the city began the “Anti-Corruption Clean Construction Project.”

This project will pave the way for establishing a transparent construction environment in which the underprivileged are protected, the work efficiency is enhanced and any inconveniences to citizens can be easily addressed.

Goals of the Initiative

The city of Seoul has established two separate systems to improve the transparency of the construction and to gain additional benefits.

•Protect the underprivileged, enhance work efficiency and cope with citizens’ Inconveniences:                

The city of Seoul decided to make separate payments for prime contractors and subcontractors, and also made an online system in order to preempt inappropriate delayed payments. This new measure was aimed at protecting the weakest links in the chain, improving construction work efficiency and increasing convenience for citizens through easy access to critical information.

Subcontractors, after registering on the online system, can use it immediately. The measure will protect numerous subcontract workers, who suffer from greater unstable financial conditions than prime contractors. In addition, subcontractors no longer need to submit copies of their bankbooks to get access to payment information as they had to in the past. Now they can monitor remittance to their accounts in real time, as banks now allow fund transfer information to be available to the subcontractors immediately. The new system saves people a lot time and effort.

If citizens have any question or proposals in regards to the system, they can easily let their voices be heard through emails, telephone calls or posting on the city’s website. Inconveniences caused by the system will be addressed immediately. System improvements are adopted through planned internal reviews.

•Satisfy citizens’ right-to-know by managing construction processes systematically :

With the Construction Allimi and One-PMIS, a high tech process management tool, data can be used to prepare for a scientific and systematic construction management. These systems also enabled the city of Seoul to satisfy citizens’ right-to-know and to champion a transparent construction practice. All construction related personnel register relevant information on the ONE-PMIS website. Information of project outlines and reports are then posted according to each construction phase online. Information that is closely related to citizens will be disclosed to the public.

Innovation for the Initiative

The Anti-Corruption Clean Construction System, subcontract payment system and One-PMIS were surely not created to improve the existing system, but to be revolutionary.

What’s innovative about the subcontract payment system is that it not only broke away from the existing practice of transaction, but also contributed to settling proper transaction practices by checking payment processes in real time and separately managing the payments of prime-contractors and sub-contractors. This requires much technical and systematical effort such as connecting banking systems and hosting public hearings to coordinate different opinions. This is an unprecedented effort made by the Seoul Metropolitan City Government.

Outcomes and Assessments

•Subcontract payment system

With the subcontract payment system all stakeholders can check the payment details in real time, and separately manage the shares allocated to prime contractors and sub-contractors respectively. Above all, it can contribute to providing preferential treatment to the weak parties, including sub-contractors and construction workers, by securing the shares of sub-contractors. Since the system shows clearly the flow of payment between contracting parties, the transparency of construction transactions has greatly improved.

•One-PMIS

With One-PMIS citizens, contractors, supervisors/inspectors and owners can share information across all projects. Therefore, the risk of work being delayed can be prevented in advance. One-PMIS also contributed to building a collaborative system in which openness and the sharing of information are key elements. In the future, the city of Seoul is planning to introduce the “Construction Participation History Scheme” in order to release information to the public, including information related workers and their working period. By improving the quality and accessibility of information, Seoul will be able to achieve a higher level of construction transparency.

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