concrete foundation flaking

[carwashguy]

I removed an old shelving unit from a corner of my basement and found a section of the wall had some flaking and efflorescence.  What is the best way to treat this area?  I want to put some pink foam insulation panels over this area in the next month.  I was thinking about removing the flaking area with a scraper and applying waterproofer to the area and then covering with the foam. 
The affected area will be framed for a storage area.
The house was built in 1962 and I've never had water intrusion in the 16 years I've owned the house.

[Roly]

Looks like moisture coming through the wall. Look outside to see if it a low spot causing it. Try to correct that and or dig down and seal the outside of the wall. Roly

[carwashguy]

Looks like moisture coming through the wall.  Look outside to see if it a low spot causing it.    Try to correct that and or dig down and seal the outside of the wall.   Roly

I think this is an old condition that was fixed many years ago.  I also see some water stains (not rot) on the rim joist and floor joist ends from some previous water intrusion. There is a paved walkway that abuts the foundation in this area.  it was probably put there to resolve the water problem.

[Roly]

I think this is an old condition that was fixed many years ago.  I also see some water stains (not rot) on the rim joist and floor joist ends from some previous water intrusion. There is a paved walkway that abuts the foundation in this area.  it was probably put there to resolve the water problem.

I would clean all the loose off and waterproof it as you said then.   Roly

[Snipe Hunter]

The white is efflorescence. It's mineral deposits left from water coming through and drying in the interior. Can you take a picture outside the foundation where the water is coming in. If there's any sump pump discharge, rain downspouts or negative grade (towards the foundation), try to get that in the picture.

Using a sealer on the inside will cause more problems. The water will simply soak the wall, not allowing it to dry and will still find it's way around the sealer. So you'd have to paint the entire basement and that would only soak more concrete and create a bigger problem.

The fact it's at a corner usually points to a rain gutter or sump discharge terminating at the foundation without any sort of extension directing the water away.

[crokett™]

What Snipe Hunter said. I would tape sheet plastic to that section of the wall for several days, if it rains while the plastic is on the wall, so much the better. if the plastic comes out damp or wet then you still have water coming through the foundation.