19. October 2015

Quebec Construction Association's Integrity Program: a tool for re-establishing trust through Collective Action

In Québec, construction is a major industry, with investments in 2014 of nearly $48 billion (CAN$), or 13% of the province’s GDP.  Québec construction association (Association de la construction du Québec or ACQ) represents more than 60% of the province’s builders. But Canada’s second largest province has been through a major crisis of confidence after investigative journalists uncovered  corruption and collusion in public construction contracts.  This led authorities to launch a public Inquiry in 2011.

The Commission of Inquiry on the Awarding and Management of Public Contracts in the Construction Industry, also known as the Charbonneau Commission, uncovered various collusion and corruption schemes, whose main consequences were distorting the free market and open competition, increasing costs, and impacting public finances – to say nothing of the reputations of those who were directly or even indirectly involved.

These manoeuvres also cost the industry very dearly in terms of the reputation and respect of tens of thousands of contractors and workers who saw their reputations tarnished and their pride undermined by unscrupulous individuals. These people have also been the target of anger, indignation, exasperation, cynicism and contempt from a growing number of citizens.

For the ACQ, clearly, there needs to be recognition that due to the nature of the crisis, no legislative, regulatory or structural change can forever eradicate the potential for collusion and corruption, nor can such measures rebuild integrity, a sine qua non condition of citizens’ trust in institutions.

Inspired by this pragmatic message, the ACQ created an integrity program, which is the outcome of a rigorous, in-depth process and that led its president, Ms Manon Bertrand, to conclude: “While we are all responsible for our actions, the industry must be proactive in order to project an image that truly reflects its values and its essential contribution to Québec society. In practice, all stakeholders need to equip themselves with appropriate tools for best using their judgment and assuming the obligations incumbent upon them with full transparency.”

ACQ made a commitment to change

Since 2010, the ACQ has committed to finding solutions to help the industry. As such, it tasked the Centre interuniversitaire de recherche en analyse des organisations (Centre for Interuniversity Research and Analysis of Organizations — CIRANO with a research assignment that identified various methods for detecting and preventing collusion in public markets.

Right away, the tool proved to be of interest, but for the ACQ, we needed to take it further. As such, in January 2013, the ACQ tasked CIRANO with a second mandate: to suggest solutions that will help honest entrepreneurs to demonstrate their integrity.

One year later, CIRANO submitted its report (executive summary), in which it recommended the creation of a collective action model to fight industry corruption. The approach it proposed is inspired by a guide developed by the World Bank Institute, which in turn showcases a model put into place by the Bavarian Building Industry Federation in Germany (Bauindustrie Bayern, EMB Werte management).

This proposal led to an effective partnership, which enabled the ACQ to implement: an integrity program tailored to the realities of Québec’s construction industry; a professional assistance service for companies; easy-to-use tools tailored to the industry; an independent certification process.

The steps of the ACQ integrity program

The ACQ integrity program is a unique model in Québec that combines tangible business management tools with training on ethics-related decision-making. To ensure that the integrity program is tailored to Québec realities, pilot projects were carried out with six companies of different sizes and types of expertise. The analysis carried out by the CIRANO team, completed in February 2015, indicates that this experimental phase helped “strengthen the integrity program’s credibility.” The program’s main steps are:

  1. Commitment from management
  2. Appoint program managers (integrity agent)
  3. Carry out the initial diagnosis
  4. Determine values
  5. Develop a charter of values and a code of conduct
  6. Define the risk
  7. Create simple yet rigorous process
  8. Train high risk people
  9. Inform and raise awareness among all employees
  10. Certification on audit and renewal

Since more than 80% of construction companies comprise five or fewer employees, many of them do not have the time, materials or resources to put such a system into place. For this reason, the ACQ’s assistance service is a crucial element in implementing the program. ACQ professionals have created an “Integrity Kit,” a turnkey product, Templates to personalise for each of the suggested documents,

In the spring of 2014, six ACQ member companies – varying in size from 5 to 500 employees – agreed to take part in pilot projects. Participants of the pilot projects had the opportunity to share a brief summary of their experience in these videos. Here is one of these testimonials (French audio with English subtitles).

The certification process

The certification program is currently being developed. The ACQ favours the creation of an independent, not-for-profit organisation tasked with auditing, checking and certifying the businesses that take part in the program.

These experiences seem to prove that a crisis such as the one our industry is currently undergoing is, to be sure, a significant problem with clearly felt consequences; but, at the same time, it has served to challenge the lax approach and social disengagement that had too long guided certain business practices.

While contractors must win back lost trust by implementing healthy governance practices, this culture change must be driven by effective methods that rely on principles of sustainable development in order to foster companies’ economic longevity.

To accomplish this, all stakeholders must contribute, so that the new rules of the game truly fit with the construction industry’s values and needs. Still in its infancy, this collective action will grow quickly, guided by those who choose to get involved in the project rather than stand on the sidelines.

The ACQ now wants to ensure engagement by clients in both the public and private sectors. There remains much to accomplish, and new partnerships are key. Clients need to have a voice in this process, among others by getting involved in managing the independent organization that will lead, audit, certify and re-evaluate the set of processes that entrepreneurs must follow. Let’s learn from our experiences, and let’s all put our shoulders to the wheel to help the Québec construction industry – a key pillar of our economy – in its recovery.

ACQ’s team has been at been at work mobilising stakeholders and the certification project is getting more support each day.  Since the official a launch of the program in June 2015 and the publication of a white paper, many more construction companies have since started to implement the integrity program.

The Charbonneau Commission will publish its recommendations after 3 years of inquiry on November 30th at the latest.  We yet have to find out if the Commission will recognise the effort made by the ACQ. Whatever the outcome, ACQ plans to follow through with the projects.

Find out more about the Québec construction association integrity initiative.