Corruption Risks in Ecuador

Ecuador is plagued by corruption, which poses significant risks for businesses operating within its borders. This article outlines key areas where corruption and business risks are particularly prevalent.

High-Risk Areas: Public Procurement and Government Contracts

• The public procurement sector is highly vulnerable to corruption due to the prevalence of favoritism among procurement officials and frequent irregular payments.
• Companies dealing with government contracts face substantial bribery risks, which can compromise their integrity and reputation.

Moderate to High Corruption Risks in Ecuador’s Natural Resources Sector

• Lack of transparency in key budget figures and environmental impact assessments contributes to corruption in the extractive industries.
• Companies operating in these sectors often encounter difficulties when attempting to obtain information about contracts and bidding processes.

Weak Anti-Corruption Laws and Enforcement

• Ecuador’s anti-corruption framework is poorly enforced, with a small percentage of respondents believing that anti-corruption laws are effective.
• Corruption offenses are covered under the Criminal Code, but provisions for bribery of foreign officials are lacking, creating a significant loophole in the country’s legal system.

Restrictions on Civil Society and Media

• Freedoms of press and speech are severely restricted due to government attacks on private media and individual journalists.
• The Communication Law imposes aggressive regulations on the media, fostering a hostile environment for journalists and increasing self-censorship.
• Businesspeople generally avoid association with media outlets critical of the government due to fear of losing public contracts or being subjected to government audits.