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Heading for the moral high ground

Manfred Stocker asks what ethics have to do with the construction industry.

In recent years, the construction industry in many European countries has often been exposed to severe criticism as a result of poor business behaviour or malpractice. Some within the construction sector appear only to pay lip service to the request for more transparency and co-operation, while others are dishonest and employ unfair practices.

While some have reacted by establishing ethical standard surveillance between two parties that agree to ethical management, real ethics management systems demand that all members of the construction chain adopt a common frame of ethics on which a project can be managed and controlled.

The chain extends from the client to the last tier of subcontractors, as well as the architect, engineer and each adviser to the client. Only in such an environment can the confidence necessary to follow ethical management be built.

Price-fixing and bribery are against the law in most countries today, so why should the building industry take the law any less seriously than other industries? Or is the civil engineer inclined to regard ethics and morals as less important issues?

Illegal actions cannot be excused under any circumstances. However, the one-off nature of individual construction activities and competitive urges create conditions where the misbehaviour of individuals can thrive and, because this often leads to short-term success, it is easy for senior managers to ignore such misbehaviour.

Mass produced products, like a pair of shoes or an electrical razor, are sold at a given price. The customer compares prices in different shops and buys according to value and personal taste.

By contrast, the client of a structure is often not buying a product, but a service - for instance, an excavation or a piled foundation for a building. Neither has to look pretty nor incorporate any special architectural style - they must fulfil their purpose. In fact, the client often resents expenditure on such elements of the project as they are seen as a cost that produces little direct value or appeal.

Since the vast majority of projects are tendered for by several contractors in competition, and whole life judgements are difficult to make and to justify, it has become customary to award the contract to the company tendering the lowest price.

In an ill-founded effort to get 'value for money' it is often found that, despite binding tender prices, the client tries to bargain with individual contractors after the tender submission. Normally, no one buying shoes or electric razors in Europe would try this.

But when the construction market is depressed, contractors are almost forced to take part in this game, if they wish to have a chance of securing a contract. But, as always, action leads to reaction. This must not be an excuse for unethical behaviour on both sides, but it may be an explanation why things seem to be more straightforward in the product sector than in construction.

The fact should be stressed that driving down a contract price does not always lead to a comparably lower out-turn cost, nor to better value for money in whole life terms. If the compensation of the contractor is below direct and indirect costs, then this will unquestionably have an influence on the quality of the products and, most probably, on future repair costs. At the same time, the contractor will explore more aggressively all possibilities for additional payments and claims.

The current situation satisfies none of the 'partners' or 'stakeholders' involved in a construction project. One of the most important conditions for success in construction, for the desired quality, for fewer claims and overrun costs and for achieving the required project completion date, is a high level of co-operation among all partners in the project. This can only be achieved when the legal and ethical rules and standards are strictly adhered to by everyone.

Consequently, the EFFC has drawn up standards of behaviour which contain both legal requirements and voluntary obligations, and these are recommended to all EFFC members. Each national federation or group within the EFFC has been asked to consider and adopt this code of ethics, and to provide the leadership necessary so that its individual corporate members introduce the code into their daily business management.

Ethics cannot be enforced on the unwilling. However, a high standard, once clearly established and promoted, is a target to be aspired to. The EFFC code of ethics is set out in the box to the left.

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