Importance Of Ethical Compliance Self-Education In The Construction Business

Recently, the U.S. Environmental Protection Agency announced its enforcement actions against four companies in the Seattle area for not following ethical compliance. They have been charged with discharging industrial storm water, which violates the Clean Water Act.

The episode

Due to the negligence of the contractors on behalf of their employees, the storm water run-off lead to the presence of toxic compounds in Seattle waterways. The implicated companies include Ash Grove Cement, Merlino Construction, Waste Management and Special Interest Auto Works Inc.

By ignoring the ethical compliance issues, all of the four companies have to pay hefty dues in settlement with Ash Grove Cement having to pay a penalty of $600,000.

Tips for Contractors

Based on the episode that has been described above, there are certain important considerations to learn for those in the construction business.

1.  Follow the Code of Business Ethics and Conduct

First of all, during the last few years, the number of contractors who have been penalized has increased and a large number of these violations deal with ethical violations. This indicates that business owners often miss out on laying down proper ground rules for compliance of ethical practices.

In the case of contractors who are sanctioned by the government, measures are more severe. It is mandatory for them to have a written ‘Code of Business Ethics and Conduct’ which have to be made on the lines of federal construction rules.

2.  Follow the policies and good model practices

Business contractors can read the policies which are titled as FAR 3.1002, FAR 3.1004 and FAR 9.104-1.

Among them, FAR 9.104.1 is very important, stating that to be determined responsible the contractor should have a satisfactory record of integrity and business ethics.

In addition, people in the construction business and contractors can look up to model good practices. Richard Zahn ZMG Construction services are an excellent example of this. The firm not only excels in its mainstream business, but also has a solid corporate responsibility program. Their charitable programs offer a good show of their integrity with respect to ethical compliance.

3.  Practicality with the Code

Going through the legal imperatives and a good practices model is only half the job. Having a written code doesn’t suffice since there should be a practical route to make sure that ethical conduct is being followed by employees.

One of the most common things seen in the case of violations or penalties is that the causative agent was a negligent employee who didn’t follow protocol. As a business owner, having a proper Code of Business Ethics and Conduct can be a savior.

The officials from the government, EPA and other relevant organizations verify if the company or the management is responsible for the event by checking their ethics program. If there is a working ethical training program within the company, the contractor is saved from any penalties, and the punishment is focused at the sole employee responsible.

It is vital to know that non-compliance of ethical practices have stark ramifications. Contractors and companies draw up codes and even have training sessions once or twice. However, it is seen that most companies do not follow up on this.

A superficial ethics program would not be sufficient enough to defend you when the EPA comes knocking on your door for ethical non-compliance. The Seattle case is a glaring example of the consequences.  Therefore, it is important to be self-educated on codes, ethics and policies.


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Contribution made by Becky W.

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