Industry future leaders highlight the ‘darker side’ of project delivery

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Industry’s future leaders warn that collective and individual responsibility is needed to tackle corruption, modern slavery and other ‘difficult’ challenges across global infrastructure delivery.

Future infrastructure leaders have come together to raise concerns about less talked about challenges in project delivery around the world and how more could be done to tackle them.

In a discussion on corruption, money laundering, modern slavery and other issues that hold back the ethical delivery of projects, Rodrigo Juarez, chair of the FIDIC Future Leaders Advisory Council, stressed that there could be challenges in even discussing these issues in greater detail because of the discomfort involved.  

Rasha Hammad, founder and CEO of Youth Underground, stressed that this discomfort must be overcome.

“We need to help make the uncomfortable comfortable,” she said. “The first thing to address is public awareness and outreach to support detection and to build public support for communities, governments and companies to act. Because with something like modern slavery, it isn’t only a grave humanitarian crime, but it undermines the security of nations and sectors.

“We need to view why something happens and how it happens in order to address it. And we must discuss ethics in business. Because ethics does affect the bottom line.

“A study in the USA found that within companies, ethics and the focus on ethical issues can avoid negative cultures that diminish a company’s success. And a company with an issue can benefit from addressing it. One clothing brand, for example, was revealed to have a supply chain factory in a developing world country with terrible conditions. The company then took action and appointed companies to monitor and audit their supply chain and their reputation was less affected than companies in the past that have denied or excused bad practices that emerge.”

While such examples can be instructive, detailed study can be complicated. Dr Tristano of the School of Civil Engineering at the University of Leeds highlighted challenges with studying such problems, though he stressed that should not deter academics from trying.

“We have the freedom as academics, to investigate these phenomena and try to understand how they impact our industry. In a way, as academics, we are much more free than those involved in law enforcement or investigative journalism to simply seek to understand, but that means we must apply metrics – to assess impact on society. And we need to embed scientific rigour, which can be difficult.

“The challenge in doing that, is that it is hard to collect data. We cannot interrogate people and we must abide by ethical rules in our fieldwork. That can limit our exposure to information.”

Mads Brandt Rasmussen, of engineering and architectural consultant COWI, highlighted that a great deal of emphasis had to be placed on setting and standing by strong ethical standards, while recognising that these can raise challenges across borders.

Rasmussen said “We have ten rules on how to work with our client. This includes a responsibility to address money laundering and human trafficking and to be clear that such things are not acceptable to us. But having worked as a project manager across the world, that code of conduct is not universal.

In one country, after signing a contract and starting work, the contractor demanded that another consulting company be added to the project. This represented a degree. We were not aware of the company, how they were appointed or what their practices were. So to progress, we reached an agreement with the new company to understand them and to emphasise that it was crucial to ensure our standards were maintained.”

“That can be a very complicated process. Even working across close borders like Denmark and Sweden, the culture and contracts can be different and again, this raises questions about how you ensure you meet their standards and requirements while taking responsibility for some of the darker side issues. So it needs to be clear that, when something bad happens, everyone knows what the process is for a shut down or for removing someone from a project.”

The scale of corruption can make or break infrastructure investment. Losses resulting from corruption, mismanagement and inefficiency are reportedly on average around 30%, strongly diminishing capacity to deliver.

Artur Henrique de Morais Brito, of Brazilian infrastructure firm TPF Engenharia, warned that culture, not just systems, are integral to the problems being discussed.

“The culture and practices in Brazil were changed dramatically under military dictatorship, during which the government engaged in systematic corruption. The legacy of that continues to today. Indeed, Brazil scores 38 out of 100 in transparency, and that is the reality of the political and economic culture in Brazil.

“For example, we saw a major scandal in 2014 with corruption through the oil and gas industry in which bribes were paid in cash of gifts, and kickbacks to politicians, with laundering of money through offshore countries. Things were so extensive that one of those involved even had a bribery department.

“Prosecution was made possible thanks to some individuals turning state evidence, and the impact in Brazil was huge. Politicians and government lost the faith of the country. Construction companies faced bankruptcy. It led to impeachment of politicians not only in Brazil but other countries too.

“Against that historic background, Brazil has in its constitution and laws, systems for arresting politicians. We have the information access law and new anti-corruption laws against national and international companies. Yet all of this has not eliminated corruption.

“One really practical advance has been the new bidding law that standardised the process and qualification based on price. Electronic procurement and independent audits are now mandatory and harder sanctions are in place. But cultural change is hard. We need a clear code of conduct, which in turn needs to be communicated right down to the ground. We need to ensure training and support is in place so that employees can identify such risks and avoid them.”