The humanitarian sector is a multi-billion dollar business, and just because it aims to help people doesn't mean it's safe from corruption, as aid agencies have found after the 2004 tsunami and Hurricane Katrina, and in West African refugee camps where staff have been caught using their power to trade sex with children.

Many organisations are already doing their best to tackle corruption - with phone hotlines or anonymous boxes for whistleblowers to report bribes and kickbacks and colleagues who siphon off food deliveries.

But now they've tried to document the problem for the first time from the point of view of aid agencies on the ground.

An anonymous study involving seven leading international aid agencies found many staff outside their headquarters didn't know that demanding sexual favours or getting a friend a job might count as corruption.

"(Many) humanitarian workers have a narrow view of what constitutes corruption, seeing it primarily as a financial issue, rather than abuse of power," says the report by Transparency International, Feinstein International Center of Tufts University in Boston, and the Humanitarian Policy Group of British-based Overseas Development Institute think tank.

Transparency International's definition of corruption is simple - it's "the abuse of entrusted power for private gain".

But a lot of the aid workers interviewed anonymously for the survey saw nepotism as a good thing, a way of guaranteeing that the friends and family they brought on to the staff would be honest.

One of the highest-risk areas for corruption is food aid, despite being bulky and hard to conceal, the researchers found. Construction, which brings plenty of potential for kickbacks and bribes and poor workmanship, is another vulnerable point.

They discovered that programmes giving out cash were actually safer, since it was distributed less publicly.

Both aid staff and people on the receiving end have all kinds of ways of cheating the system - from using aid agency cars to over-reporting the size of families or villages to get more aid and sell it on.

The researchers point out that fundraising and media pressure often demand fast action from aid agencies in times of crisis, and they frequently let controls go out the window. For example, one agency said in a sudden emergency it lost track of all but 11 of 50 satellite phones it started out with.

Many aid workers argue that the imperative to save lives is more important than keeping an eye on every penny, but others, including the report's authors, argue that avoiding corruption should be embedded in relief projects from the start.

It's in the nature of the places where aid agencies operate that basic services and the legal system are often damaged or destroyed, and in war zones civilians are often under the thumb of politicians or armed rebels. Needs are great and the potential for corruption huge.

"Humanitarian aid is a valuable resource injected into an environment ripe with potential power imbalances, personal need and critical survival challenges," the report says.

The disparity between wages and responsibility doled out to international and national staff was sometimes a motivation - or used as an excuse - for corruption.

And agencies are in a tricky situation when they partner with local non-governmental organisations. There's highest risk of corruption when most power is devolved to the partner, but there's most chance of creating a sustainable project when international agencies hand over maximum responsibility.

The aid workers interviewed said that even when corruption came to light with a local partner - even if it happened more than once - sometimes the international agency failed to end the relationship because it couldn't find anyone else to take over the work.

Huge amounts of money are channelled through aid agencies these days.

"Humanitarian budgets have nearly doubled since the beginning of the decade and now account for up to 14 percent of official development assistance, reaching more than $10 billion in 2006," the report says.

And given the scale of donations following the Indian Ocean tsunami, the speed agencies were expected to work and the heat of media attention, it's no wonder the humanitarian world was shaken by allegations of things gone wrong.

"Agencies had to confront corruption within their operations and in the operating environment around them in a larger and more public way than they had ever faced," the report says.

Both developing and developed countries are vulnerable to the problem, from post-Katrina United States to Iraq and Afghanistan.

Many aid workers fear that reports of corruption could undermine public trust, which in turn could hurt donations, and that would hit their ability to work with people who need it.

But corruption experts at Transparency International say you need to get rid of the taboo around discussing corruption to avoid it or stop it.

Many aid agencies already have policies to help whistleblowers, some even going as far as having free, independent 24-hour phone hotlines. But researchers found that staff in field rarely knew about this kind of thing.

Some had set up their own, low-tech solutions - like anonymous complaints boxes - often even before headquarters launched their anti-corruption initiatives.

Others have codes of conduct for staff, or keep strict financial controls.

But some pressures are hard to deal with. Big donors are increasingly putting limits on the percentage agencies can use for their administrative costs. This is admirable, but it also means agencies are likely to cut down on regular field visits that help keep them clued up on what's really going on, the report says.

And agencies know they can't protect whistleblowers indefinitely. For example, one aid worker reported he'd narrowly escaped being arrested for refusing to allow a politician to use an agency car for personal use. International organisations often only work in a community for a relatively short time, while the local elite aren't going anywhere.

Why does it matter?

The chair of Transparency International, Huguette Lapelle, said in a statement: "Considering the impact of corruption on even the most vulnerable aid recipients, as well as the magnitude of disaster and post-conflict relief efforts costing millions, detecting and preventing corruption in relief processes is an urgent priority."

The report's findings and recommendations will be the basis for a handbook to help agencies cut corruption, to be published in early 2009.

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