Final-INTERNATIONAL-CONFERENCE-ON-PROFESSIONALISM-AND-ETHICS-IN-CONSTRUC...

Proceedings of the International Conference on Professionalism and Ethics in Construction Keyworth Centre, London South Bank University, UK 21-22 November 2018 Main Organisers London South Bank University CIB Task Group 95 on Professionalism and Ethics Co-organisers Applied Science University, Bahrain CoST, the Construction Sector Transparency Initiative Federal University of Technology Akure, Nigeria Sponsors Chartered Institute of Building Willmott Dixon Interiors Supporting Organisations of the Conference Association of Project Management Association of Project Safety Constructing Excellence Edited by Prof Charles Egbu and Prof George Ofori British Library cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN 978-0-9560514-2-4 Published by London South Bank University 103 Borough Road London SE1 0AA United Kingdom PROCEEDINGS OF THE INTERNATIONAL CONFERENCE ON PROFESSIONALISM AND ETHICS IN CONSTRUCTION The conference The construction process involves several activities undertaken by many persons with different academic and practice backgrounds, from different companies, working to accomplish inter-related and inter-dependent tasks in an atmosphere of uncertainty and risk Thus, it is necessary for participants at any stage of the process to be assured of the quality and efficacy of the work completed at earlier stages Construction activity and its products relate to health and safety, and sustainability, and can have an impact on the lives and wellbeing of the community There should be competence, professionalism and dedication to public interest on the part of all participants in order to attain the best offer to clients in terms of life-cycle value for money, sustainable development and improvement in quality of life The construction industry has a poor image in most countries from an ethical point of view The issues include: corruption, malpractice and mismanagement on projects; predatory business practices; and poor responsibility towards the well-being of its own workforce and other stakeholders It is estimated that up to one-third of the governments' investments in construction is lost through corruption and mismanagement Collapsed buildings and disastrous fires are other examples There have been many studies of professionalism in construction In practice, there have been arguments on which construction occupations are legitimate ‘professions’ There have also been discussions on the current state and the future of construction professions The issues of shortfalls in ethics and the loss of the public’s trust have also been topical Recent events, such as the Grenfell Tower fire in the UK, incidences of poor building work and collapse of built items in many countries, modern slavery and lack of safeguarding of workers have brought the issues to the public’s attention Governments seek to regulate the professions and the construction process to protect society Nations also have statutory and administrative provisions against corruption Professional institutes have standards of performance and ethics Society expects the construction professions to deliver the muchneeded buildings and infrastructure with a focus on the well-being of the community It was considered to be appropriate and timely to explore and deliberate upon the state of professionalism and ethics in the construction industry around the world and consider actions for improving the situation The conference was intended to bring together researchers and practitioners to jointly explore the issues Conference Aim and Objectives The aim of the conference was to provide an Opportunity to review knowledge on professionalism and ethics and how it relates to the construction process in different countries, in order to make proposals of actions for improving the situation The objectives of the conference were to: • review the state of the construction professions, and the implications of this state of affairs • consider the importance of ethics in construction, the current state of adherence to ethics in different countries and implications of the present situation • discuss what can be done to develop the construction professions and practitioners to enhance the levels of professionalism and ethics to improve performance and enhance industry’s social image Conference sub-themes The papers submitted for the conference were to explore topics including the following: • The state of the professions in the construction industry; the underlying factors and the implications • Regulation and control, and continuous development of the construction professions • Professionalism and current issues in construction such as leadership; sustainable development; stakeholder management; technology development; and innovation • Project management and professionalism • Ethics in construction and current issues relating to it such as modern slavery, responsible sourcing, considerate contracting • Transparency and forms of open contracting • Stakeholder management and citizen involvement in construction • Education, training, and the development of professionalism and ethical awareness among students • The future of the built environment professions CONFERENCE ORGANISATION Conference Co-Chairpersons Prof Charles Egbu, London South Bank University, UK Prof George Ofori, London South Bank University, UK Conference Organising Committee Dr Zulfikar Adamu, London South Bank University, UK Prof G Aouad, Applied Science University, Bahrain Prof O Arayela, Federal University of Technology, Akure, Nigeria Dr Dorcas Ayeni, Federal University of Technology, Akure, Nigeria Dr Yamuna Kaluarchchi, London South Bank University, UK Prof John Obas Ebohon, London South Bank University, UK Mr P Matthews, Engineers Against Poverty, UK Prof F.K Omole, Federal University of Technology, Akure, Nigeria Prof Herbert Robinson, London South Bank University, UK 10 Dr Faiza Zitouni, Applied Science University, Bahrain Scientific and Technical Committee Dr Islam Abohela, Applied Science University, Bahrain Dr Zulfikar Adamu, London South Bank University, UK Dr Assem Al-Hajj, Applied Science University, Bahrain Prof G Aouad, Applied Science University, Bahrain Prof O Arayela, Federal University of Technology, Akure, Nigeria Dr Dorcas Ayeni, Federal University of Technology, Akure, Nigeria Prof A Rashid Aziz, University of Science, Malaysia Prof V.A Bello, Federal University of Technology, Akure, Nigeria Dr Paul Chan, University of Manchester, UK 10 Prof Charles Egbu, London South Bank University, UK 11 Prof John Obas Ebohon, London South Bank University, UK 12 Prof Fang Dongping, Tsinghua University, China 13 Prof Richard Fellows, Loughborough University, UK 14 Prof Will Hughes, University of Reading, UK 15 Dr Yamuna Kaluarchchi, London South Bank University, UK 16 Prof I.B Kashim, Federal University of Technology, Akure, Nigeria 17 Prof M Kumaraswamy, University of Hong Kong 18 Prof Florence Ling, National University of Singapore 19 Prof Low Sui Pheng, National University of Singapore 20 Prof Edward Minchin, University of Florida, USA 21 Prof George Ofori, London South Bank University, UK 22 Prof S Ogunlana, Heriot-Watt University, UK 23 Prof F.K Omole, Federal University of Technology, Akure, Nigeria 24 Prof M Ranasinghe, University of Moratuwa, Sri Lanka 25 Prof Herbert Robinson, London South Bank University, UK 26 Prof Steve Rowlinson, University of Hong Kong 27 Prof Les Ruddock, University of Salford, UK 28 Prof P.D Rwelamila, University of South Africa, South Africa 29 Prof W Shakantu, Nelson Mandela University, South Africa 30 Prof M Sohail, Loughborough University, UK 31 Dr M Tuuli, GIMPA Business School, Ghana 10 Case studies demonstrating innovation, regulation control and sustainable development DOI 10.18744/CONF.2018040 Table 1: Popularity of Main Waste Minimisation Techniques Waste Minimisation Technique Number of Case Studies Implemented In Percentage Use (%) Segregating waste on site 75 Using returnable pallets where possible 37.5 Storing reusable items from demolition phase 37.5 Chipping of tree waste on site 25 Retaining materials in packaging until required 25 Ensuring sub-contractor participation 12.5 Using ground remediation 12.5 Controlled ordering and storage of materials 12.5 Utilising cut and fill opportunities 12.5 Alteration of pathways to minimise cutting of trees 12.5 Table shows a cost saving comparison among the case studies As each case study site is different in size, the savings per m2 has been calculated to allow comparisons to be drawn It can be seen that some of the larger sites, such as the Warehousing project, have high economic savings due to the larger scale of their sites meaning that it would be possible to make more savings When calculated at savings per m2, the savings from the Warehousing project (£3.75/m2) are lower than the average across all the case studies (£4.94/m2) The highest savings per m2 was found at the New School Development project, which managed to make a saving of £16.13 per m2 of their site This site utilised four different waste minimisation techniques Most of the techniques used were popular on the other case studies, as shown in Table These included segregating waste on site (used on 75% of the case studies), and the storage of reusable items during demolition (used on 37.5% of the case study projects) This was the only site which claimed that they ensured that all subcontractors were ordering correctly and consciously to avoid wasted materials 441 Ayris, Downes and Onashoga Table 2: Cost Analysis of the Case Studies Case Study Economic Saving (£) Floor Area (m2) Savings (£ per m2) Medium Size PC –7 Star Hote 25,000 3,106 8.05 Medium Size Dev - Flats 700 600 1.17 Medium Size PC –New School 10,000 620 16.13 Medium Size PC – Factory 15,000 1,726 8.69 Medium Size PC – Civil Eng 5,200 7,400 0.70 Medium Size PC – Civil Eng 2,005 8,000 0.25 Medium Size PCWarehousing 16,400 4,371 3.75 Medium Size PC - Offices 3,000 4,000 0.75 The results demonstrate that sustainable practices and innovation assist in professionalism within the industry as well as leading to significant cost savings and minimising environmental impact It is pertinent to note that all the companies received training on regulations and were given the tools to control regulation inhouse This was supported by further awareness training on expectations and knowledge across the levels of management and site labour These results would not have been measurable without adopting a lateral process for monitoring regulation control, best practice and professionalism in the methodology including regulations, standards, best practice and professionalism The SitePlan.online software was instrumental in helping the clients of WPS to achieve sustainability and provided transparency in the project development and regulation control The adoption of waste minimisation techniques is also tentatively linked to the question of ethics and although this was not measured during this research, the impact these decisions had on individuals who were part of the projects would have been positive; further research on this area is required CONCLUSION The eight case studies detailed above highlight that communication underpins the successful management and delivery of construction and infrastructure projects irrespective of the size or nature of the project Robust communication enables sustainability of any best practice adopted and embraced over the entire duration of a project In addition, it is demonstrated that there is a strong link between sustainable development and professionalism within the industry and regulation control is part of this and software can be a useful ‘assistant’ in helping to monitor, record and measure objectives on a project and within a company REFERENCES: Association of Project Management, Body of Knowledge 6th Edition) [Accessed 20/05/2017, 22/05/2017] Dainty, A., Moore, D., & Murray, M 2006 Communication in Construction – Theory and practice London; Taylor & Francis 442 Case studies demonstrating innovation, regulation control and sustainable development DOI 10.18744/CONF.2018040 Giddings, B., Hopwood, B., O'Brien, G (2002) Environment, economy, and society: Fitting them together into sustainable development, Sustainable Development, Vol 10(4), pp 187 – 196 Kivilä, J., Martinsuo, M., Vuorinen, L (2017) Sustainable project management through project control in infrastructure projects, International Journal of Project Management, Vol 35(6), pp 1167 – 1183 Katz, D and Kahn, R.L., 1978 The social psychology of organizations (Vol 2) p 14 New York: Wiley Labuschagne, C., Brent, A.C (2005) Sustainable project lifecycle management: the need to integrate life cycles in the manufacturing sector, International Journal of Project Management, Vol 23, pp 159 – 168 Mavi, R.K., Standing, C (2018) Critical success factors of sustainable project management in construction: A fuzzy DEMATEL-ANP approach, Journal of Cleaner Production, Vol 194, pp 751 – 765 Silvius, A.J.G., Schipper, R.P.J., (2014) Sustainable in project management: a literature review and impact analysis, Social Business, Vol Sinakou, E., Pauw, J.B., Goossens, M., Petegem, P (2018) Academics in the field of Education for Sustainable Development: Their conceptions of sustainable development, Journal of Cleaner Production, Vol 184, pp 321 – 332 Simionescu, V., Silvius, G (2016) Assessing Sustainability of Railway Modernization Projects; A Case Study from Romania, Procedia Computer Science, Vol 100, pp 457 – 465 Sommerville, J Craig, N and McCarney, M (2004) Document Transfer and Communication between distinct Construction Professionals, COBRA 2004, The international construction research conference of the Royal Institution of Chartered Surveyors 7-8 September 2004 Leeds Urbaniec, K., Mikulčić, H., Wang, Y., Duić, N (2018) System integration is a necessity for sustainable development, Journal of Cleaner Production, Vol 195, pp 122 – 132 Weaver, W (1949) The Mathematics of Communication [Scientific American, vol.181, no.1, July 1949, pp.11-15 [Accessed 20/05/2017] World Commission on Environment and Development (WCED) (1987) Our Common Future, Oxford University Press, Oxford, England Ziek, P and Anderson, D Communication, dialogue and project management International Journal of Managing Projects in Business Vol No 4, 2015, p 788 – 803 443 ETHICS IN CONSTRUCTION: KEY ISSUES Steven Thompson 1 Royal Institution of Chartered Surveyors, Parliament Square, London SW1P 3AD, UK This is a paper for the Royal Institution of Chartered Surveyors (RICS) It discusses the following topics which relate to professionalism and ethics: international standards and ethics, conflicts of interest, anti-money laundering, bribery and corruption, modern slavery It outlines what the institution is doing in each of these areas It concludes by stating the RICS to provide thought leadership to guide its members to act with integrity and professionalism while competing for work in a challenging market in a complex and fast changing environment Key words: Professionalism, Conflict of interest, Money laundering, Modern Slavery, Thought leadership, Commercial pressure INTERNATIONAL STANDARDS AND ETHICS Ethics is a current ‘hot topic’ within the property and construction sectors – the proper behaviour of Chartered Surveyors as they undertake their services and the need for them to ‘do the right thing’ every time Client expect a quality service from the professionals that they employ – and acting ethically at the same time - this was typically not questioned in the past as it was just to be expected – and on many occasions business was conducted and successfully concluded with merely the good and true word of both parties Regrettably, the modern world with extremely complex business structures does not necessarily approach business of an entirely ethical basis This is why the Royal Institution of Chartered Surveyors (RICS) was one of the key coalition members who have written and published the International Ethics Standard (IES), a set of high level principles which seek to ensure that professionalism is delivered consistently and transparently throughout the world The group, of now around 130 independent, not-for-profit global organisations came together to write and publish (for the first time) a set of high-level ethical principles intended for use across the whole of the property and related professions, be they connected with land, property, construction, infrastructure or valuation A coalition formed towards the end of 2014 and they started by signing a charter which committed them all to promote and subsequently make use of the Standards An independent Standards Setting Committee was formed with a group of nineteen experts from around the world who drafted and then consulted upon the text, resulting in publication at the end of 2016 Copies of the IES are freely available to download at www.ies-coalition.org sthompson@rics.org Ethics in Construction: Key Issues DOI 10.18744/CONF.2018041 The Standards note that their vision is to, ‘promote and strengthen the ethical conduct of professional practice for the benefit of clients, third parties, current and future stakeholders, and the public’ (IES, December 2016) The high-level principles (listed in alphabetical order) are: • Accountability • Confidentiality • Conflict of interest • Financial responsibility • Integrity • Lawfulness • Reflection • Standard of Service • Transparency • Trust The RICS, along with many other global organisations in the fields of property, land and construction seeks to bring clarity and leadership in this important area The IES has now offered a ‘supporter’ category of membership for firms, government and academia and interest continues to grow around the world INTERNATIONAL STANDARDS AND ETHICS Ethics is a current ‘hot topic’ within the property and construction sectors – the proper behaviour of Chartered Surveyors as they undertake their services and the need for them to ‘do the right thing’ every time Client expect a quality service from the professionals that they employ – and acting ethically at the same time - this was typically not questioned in the past as it was just to be expected – and on many occasions business was conducted and successfully concluded with merely the good and true word of both parties Regrettably, the modern world with extremely complex business structures does not necessarily approach business of an entirely ethical basis This is why the Royal Institution of Chartered Surveyors (RICS) was one of the key coalition members who have written and published the International Ethics Standard (IES), a set of high level principles which seek to ensure that professionalism is delivered consistently and transparently throughout the world The group, of now around 130 independent, not-for-profit global organisations came together to write and publish (for the first time) a set of high-level ethical principles intended for use across the whole of the property and related professions, be they connected with land, property, construction, infrastructure or valuation A coalition formed towards the end of 2014 and they started by signing a charter which committed them all to promote and subsequently make use of the Standards An independent Standards Setting Committee was formed with a group of nineteen experts from around the world who drafted and then consulted upon the text, resulting in publication at the end of 2016 Copies of the IES are freely available to download at www.ies-coalition.org The Standards note that their vision is to, ‘promote and strengthen the ethical conduct of professional practice for the benefit of clients, third parties, current and future stakeholders, and the public’ (IES, December 2016) The high-level principles (listed in alphabetical order) are: 445 Thompson • • • • • • • • • • Accountability Confidentiality Conflict of interest Financial responsibility Integrity Lawfulness Reflection Standard of Service Transparency Trust The RICS, along with many other global organisations in the fields of property, land and construction seeks to bring clarity and leadership in this important area The IES has now offered a ‘supporter’ category of membership for firms, government and academia and interest continues to grow around the world CONFLICTS OF INTEREST This is one of the ethical principles noted above and it requires that professionals make any and all appropriate disclosures in a timely manner Having made the disclosure, if it transpires that the conflict cannot be mitigated or removed all together, then the professional shall withdraw from the situation It could be, of course, that all parties concerned may agree that matters can continue after the disclosure, but surveyors (and others) are always advised to err on the side of caution Given that this is such an important matter of practice for professionals, the RICS has recently published a Professional Statement, entitled, ‘Conflicts of interest’ (RICS, March 2017) which seeks to build upon the high-level principle as set out in the IES and set out detailed and specific requirements and directions to professionals Up to now, the RICS Rules of Conduct merely state that, ‘members and firms at all times must act with integrity and avoid conflicts of interest and avoid any actions or situations that are inconsistent with their professional obligations’ All very well, but there was then no specific material as to how that was to be worked out in practice, and this Professional Statement seeks to correct that imbalance The Professional Statement places into categories three types of conflict, namely: • Party conflict (conflicting duties owed to two different parties within the same assignment) • Own interest conflict (conflict within the firm over seeking to act in conflict with the interests of the same firm) • Confidential information conflict (disclosure of information known to the surveyor from one client being shared with another client) In all cases, there is the Opportunity to obtain ‘Informed Consent’ from the Client, but the Professional Statement makes it clear that this should never be sought merely to serve the interests of the firm or individual RICS are bringing this important subject to the forefront of the practice of professionals and the publication has been welcomed by all ANTI-MONEY LAUNDERING 446 Ethics in Construction: Key Issues DOI 10.18744/CONF.2018041 The global property world now sees a huge volume of cross-border transactions with the constant flow of funds between countries being commonplace We will all be too aware with our own personal banking transactions of the measures that the banks have put in place to guard against this practice and the Government equally takes international money laundering very seriously having set up a new watchdog (in January 2018) to seek to strength the UK’s defences against it In the property sector, London remains a very attractive location for international investment in high end residential property and professionals in this and related fields of practice need to be aware of the risk of ‘dirty money’ being the vehicle for the purchase Accordingly, the RICS continues to develop specific guidance for professionals working with other stakeholders to spot the signs BRIBERY AND CORRUPTION A recent Court case on the Crossrail infrastructure project showed the extent of corruption that can take place even on a high-profile scheme like that – the claiming of a greater quantum of time and men than was actually used, and with the help and assistance of someone on the ‘inside’ merely ‘signing off’ the claims in return for a cut of the winnings However, much of the activity in this field is ‘low level’ and includes the offering of hospitality and gifts as inducements for the placing of business and giving favour The Bribery Act was introduced by Government to bring clear direction in this area and it is considered that this legislation is amongst the toughest in the world in this area of law Many ethical issues arise within construction over the status of interim payments – the Contractor over-claiming for the extent of work undertaken in the previous period, in the hope that it is just ‘waved through’ by the professional QS In many cases, the response is to merely ‘strike it out’ noting the sharp commercial practice by the Contractor But is it attempted fraud, or is that too strong a label to apply to that action? These, and other construction related ethical issues are considered in the latest edition of the RICS Construction Journal (RICS, November/December 2018) where several professionals were asked to consider how they would react to the issue put to them – the answers given are very interesting and it is hoped that a healthy debate will result Given that this is also a very important area for consideration by professionals, the RICS is developing specific guidance MODERN SLAVERY The Modern Slavery Act 2015 sought to bring the growing issue of modern slavery (MS) to the public mind and to seek to address the problem which has been present for several years within such areas of the UK economy as agriculture, retail, car washes and nail bars More recently, construction has increasingly been an industry where it is present and the Home Office report that it is now the fourth most common expression of MS Many RICS professionals working within construction will have historically not 447 Thompson considered it not to be in their industry and if it is in construction, it is not within the UK market The reality of MS within the construction industry has been a painful voyage of discovery for many surveyors within the UK market and the RICS is seeking to educate its members, by being trained to watch out for the key signs of MS on a construction site PROFESSIONALISM AND COMMERCIAL PRESSURE - RICS THOUGHT LEADERSHIP All the foregoing issues within the professional world are being ‘played out’ in a world where Clients expectations of the service to be provided by surveyors must be of the highest quality, but at a price which is considered fair and reasonable – and RICS research has found that ‘the biggest challenge to professionalism is commercial pressure’ Surveyors, and indeed all professionals, should continue to resist Client pressure to reduce fees and to report against even increasing deadlines This is particularly relevant where the advent of technology provides the Opportunity to undertake (for example) survey work by machine – which on the surface is a threat to the future work of surveyors – what should the response be to this threat? All professionals seek to work by reference to a set of Rules of Conduct and Professional Statements particular to that profession but to act at all times with integrity when there is the need for an element of interpretation over the Rules and Statements The area of conflict of interest is very relevant in this debate and so how can professionals manage this ever-present tension and not always ‘lose out’ on appointments from Clients where other firms might take a different and more relaxed interpretation of the Rules? Chartered Quantity Surveyors working within the construction industry are responsible for the management of considerable values of Client funds and there is always the Opportunity for other players in the industry to offer low-level inducements to the professional to be invited to tender for a construction project, to be the successful bidder or to look favourably upon the claimed amounts put forward – how does the surveyor distinguish between sharp commercial practice by others (‘trying it on’) and outright bribery and how they avoid over-reacting? The RICS continues to guide and direct members of the profession to act with integrity and in a professional manner at all times, for the public benefit We celebrate our 150th anniversary this year and even after this considerable period of time we continue to seek to lead the profession to ensure quality outcomes for their Clients in a complex and fast-moving world, hardly recognisable from the world when the RICS was founded 448 ETHICS AND CONSTRUCTION: THE FINAL FRONTIER K Hibbitt 1 Balfour Beatty plc, London, UK This paper presents what Balfour Beatty plc is doing to contribute to the efforts being made to bring about change in the construction industry It outlines the company’s ethics and compliance programme, how it ensures that its business partners in its supply chain also show integrity, how it influences clients, and how it is working with other construction firms to change the industry Keywords: Balfour Beatty, collaboration, contractors, construction, ethics BIDDING IN THE CONSTRUCTION INDUSTRY In 2009, the then Office of Fair Trading (OFT) investigated, and subsequently fined, 103 firms in the construction industry The OFT investigated collusion between competitors in the UK between 2000 and 2006 and concluded that the firms engaged in anti-competitive bid rigging activities on 199 tenders, mostly in the form of cover pricing Cover pricing is where one or more bidders in a tender process agree in advance the prices at which bids will be submitted and therefore who will win the tender One or more bids submitted contain prices which are artificially high resulting in the ‘cheapest’ bid winning The client is unaware of the cover pricing and believes that a competitive process has taken place and the best value bid has won As the winner faced no real competition, the client may have unknowingly paid a higher price than it would have done if there had been genuine competition The OFT named the companies involved and fined them a combined £129m In addition to fining and naming and shaming these companies, the OFT also issued guidance in conjunction with the Office of Government Commerce cautioning procurers against excluding the infringing firms from future tenders This guidance was issued on the basis that the practice of cover pricing was widespread in the industry; it was the way that the whole industry operated and had done so for many years The Government therefore recognised that the competition law issues arose from the operation of the entire industry, not just the behaviour of a small number of organisations within it Changing the industry begins with an individual organisation but collaboration is needed to effect long lasting change The Final Frontier DOI 10.18744/CONF.2018042 AN INDIVIDUAL APPROACH - BALFOUR BEATTY’S ETHICS AND COMPLIANCE PROGRAMME (BUSINESS INTEGRITY) Balfour Beatty’s programme was launched in 2009 and is underpinned by a Code of Conduct (www.balfourbeattycodeofconduct.com) The Code covers what is expected of everyone who works for or with Balfour Beatty It was originally launched as a hard copy book and subsequently redesigned and relaunched as a website in 2016 There is also a Supplier Code of Conduct which distils those parts of the Code which are relevant to suppliers (www.balfourbeatty.com/how-we-work/supplychain/supplier-code-of-conduct/) The Code covers anti-trust and bribery & corruption, and also health and safety, human resources and legal areas The requirement to comply with the Code is included in each employment agreement and supplier contract There is a dedicated team (Business Integrity) responsible for embedding the Code of Conduct into the business and a wider network of ‘champions’ who, in addition to their day job, provide support to the Business Integrity team and act as a conduit for information and best practice All elements of the Business Integrity programme link back into the Code of Conduct Following a redesign and relaunch of the programme in 2016, the focus has been on shifting responsibility for business integrity from the dedicated central team and onto each business, and moving away from a tick box approach, into a genuine compliance culture A number of different approaches have been used to further this goal In order to ensure that compliance is an individual responsibility which is encouraged and monitored by each business a “comply and explain” approach has been taken This involves the senior leadership of each business not only providing an annual declaration of compliance but evidence of how they have shown leadership in this area They are also required to highlight areas where they require additional support from the Business Integrity team (thereby reinforcing that the team is supporting the business to fulfil its responsibility) In addition, the businesses are required to agree the high level agenda of the Business Integrity team every six months, again requiring them to understand what is happening within their own businesses and highlight areas where additional support is required Data which is collected centrally on different aspects of the programme, including the number of whistleblower reports, registrations and training statistics, are shared with each senior management team and benchmarked against UK averages This enables each senior team to understand how well embedded the programme is within their business and ensure resource is deployed in those areas where it is required Key announcements and training requirements are cascaded through the businesses by the senior leaders within the business The importance of the Business Integrity programme is reinforced by the senior leaders communicating directly with their employees, rather than the central team If the boss believes something is important, it is likely that others in the business will too In order to ensure that compliance is the easy option, the 2016 programme review also removed or streamlined processes which had not reflected the changes in governance in the organisation more generally As controls around a number of businesses procedures had improved, many of the areas which were included under the programme were being covered elsewhere If complying with a process is anything 450 Hibbitt other than easy, people will devote a surprising amount of time and effort to circumventing it This is particularly true if they cannot see any value in the process itself because it is not necessary or repetitive The most effective change has been to tweak processes which were already operational and working well This meant that separate processes were not required and complying with the programme has become part of how the business operates; not an additional requirement of the Business Integrity team Another key focus was to understand why people behaved in the way they did To understand what were the biggest influencers on them whilst at work This involved understanding the culture within the different businesses and designing the programme to have the maximum impact The programme’s vision is to ensure that Balfour Beatty’s culture enables people to make the right choices and empowers them to Speak Up where others have not This means using different means of communications and training to change the way people behave To put people in the situations where we normally experience a risk of non-compliance and train them on how we expect them to behave This new approach is more thought provoking and engaging, and therefore persuasive The redesigned and relaunched programme is having an impact – the latest employee engagement survey (which had a response rate in excess of 70%) showed 95% of respondents know what is expected of them under the code of conduct, 82% feel encouraged to the right thing in everything they at work and 84% feel they can raise issues and challenge unethical, dishonest or unacceptable behaviour In addition, the number of cases reported through the whistleblowing hotline has increased from 7.2 cases per 1,000 employees to 11.6 cases per 1,000 employees between 2015 and 2017 COLLABORATION – WORKING TOGETHER TO CHANGE THE INDUSTRY The programme at Balfour Beatty has changed considerably and is working well but there are still issues For example, the culture on a project or an individual site is influenced by many different people Given the structure of the construction industry and its reliance on subcontracting, a project or site will include employees from a number of different organisations Whilst some will have their own ethics and compliance programmes, many not In order to effect a true change in the behaviours which are promoted or tolerated, a more coordinated approach is required The industry needs to work closer together and we need clients to support this approach As the OFT concluded, practices by construction companies are not usually isolated If behaviours are taking place in one company, they will almost certainly be more widespread than that, “just the way the industry operates” or the way “things have always been done” Particularly as people don’t tend to leave the industry, they simply move from one organisation to another In some cases this means taking inappropriate behaviour with them This behaviour must be addressed by the whole industry in order to stamp out these behaviours 451 The Final Frontier DOI 10.18744/CONF.2018042 TONE FROM THE TOP (CLIENTS) The construction industry is one of the few where a highly technical, complex and bespoke product is delivered for very slim margins Construction News’ CN100 puts the average industry margin at -0.9% for the top 10 UK contractors (by revenue) over the previous 12 months A large infrastructure project brings considerable risk into an organisation, but the reward doesn’t reflect this Nor does it reflect the complexity involved in delivering a project on time and on budget The slim pickings for those working in the industry drive behaviours which make it challenging to have a positive impact from an ethics and compliance perspective Firstly, a number of organisations simply not have the resources to devote sufficient time, energy and money to understand the legislative requirements and implement programmes to ensure compliance With margins so tight, the focus for most businesses is understandably on getting the job done, particularly if delay brings further cost This doesn’t just have an impact on behaviours which are troublesome from an ethics and compliance perspective but also potentially from a safety and quality perspective too With pressure to get jobs finished and little or no positive programmes to reinforce the right behaviours, there is a greater risk that corrupt activity will take place Paying to get the job signed off or to release payments or retentions may seem like a good solution In addition, where there is little to be made legitimately, the temptation of making some money “on the side” becomes more attractive and perhaps more morally acceptable If someone is making extra money on a project because they are not following the right process it is tempting to join them Particularly if the culture makes it feel like this is acceptable and the risk of getting caught is low Just paying more for construction and infrastructure projects isn’t the answer Paying more and expecting more in the area of ethics and compliance is Clients, like others in the construction industry, have obligations to comply with the law Unfortunately sometimes this just involves passing the responsibility down the supply chain Questions are asked about what policies, procedures and training is provided but not checked in detail or questions asked about whether these are operating in practice Contractual obligations contain onerous requirements about ensuring no bribery or corruption exists within the business, supply chain or on the project, but how this actually works in practice isn’t explored Rights of audit are included within contracts but how often are they actually used? The responsible client doesn’t just “pass the buck” but makes ethics and compliance important by asking the right questions and checking what actually happens It also awards work to those who are genuinely trying to ensure that their employees behave in the right way Lastly, the responsible client must accept that every organisation is made up of a cross section of the population However good the ethics and compliance programme is, there will always be someone who will not comply It is simply not possible for a company to guarantee that no bribery or corruption will occur It is possible however to provide evidence of how they are ensuring that everyone knows what is expected, how people can raise concerns and the approach taken when someone falls below what is expected The price of a project and the way it is tendered, managed and delivered should fairly share the responsibility of ensuring people behave in the right way Arguably, this 452 Hibbitt should save money in the long term when less is lost to theft, fraud and bribery (the cost of which ultimately needs to be met by someone) TONE FROM THE TEAM (CONTRACTORS) The industry also needs to work together to make a lasting change Competing in the area of ethics and compliance means we are all simply spending money trying to achieve the same thing Worse still, we are making the industry more complex for the supply chain where the larger contractors have different requirements which must be met in order to work One organisation working in isolation will not succeed in changing the way the industry operates Cultural change can be difficult, time consuming, expensive and fail It also differs from organisation to organisation So what can we as an industry to start to make a change? There are some relatively small and inexpensive practical steps that members of the industry can take to start to make a change One which is easy and free; join an organisation which promotes the ethics and compliance agenda in the construction and infrastructure sector Balfour Beatty is a member of the Anti-Corruption Forum (http://anticorruptionforum.org/) The Forum is an alliance of UK business associations, professional institutions, civil society organisations and companies with interests in the domestic and international infrastructure, construction and engineering sectors The Forum needs additional representatives from industry to join the conversation After the bid rigging scandal, the construction industry is rightly sensitive to sharing information with competitors However, it is possible to share information on those who have committed criminal offences The financial services industry had issues with people committing fraud or other financial crime and then applying to work in the industry The financial services industry worked together to create Cifas (https://www.cifas.org.uk/) Cifas is a not-for-profit fraud prevention membership organisation and the UK’s leading fraud prevention service, managing the largest confirmed fraud database in the country The 400 members of Cifas are made up of organisations from the public and private sector and include the Home Office If a number of organisations in the construction and infrastructure sector joined Cifas, it would be possible to create a database of crimes which have been committed in or against construction companies Lastly, the industry and government could work together to educate and train small and medium sized enterprises (SMEs) on bribery and corruption There already exists a vehicle which is capable of facilitating this process – the Supply Chain Sustainability School (https://www.supplychainschool.co.uk/uk/default-homemain.aspx) The school is paid for by a collaboration of contractors, clients and 1st tier suppliers and is free at the point of use for SMEs The School provides eLearning, face to face workshops, supplier days and policies, procedures and check lists to nearly 30,000 registered users The School has expressed an interest in working with the industry and government to create content covering anti-bribery and corruption Balfour Beatty and members of the Anti-Corruption Forum are willing to assist in this process 453 The Final Frontier DOI 10.18744/CONF.2018042 All of the above are small but meaningful steps to start to work together to change the industry Let’s start now KEELY HIBBITT Group Head of Business Integrity Balfour Beatty plc October 2018 454