Acres Business Integrity Management System

1
Acres Business Integrity Management System

• Acres Background
• Context Industry Views and Actions
• Acres BIMS
• Expected Outcomes

2
Acres Background - A Major Firm with a Long
History

• Acres International - Founded in 1924 as a
  Consulting Engineering company specializing in
  hydropower projects
• Services now diversified - Acres is an energy
  and infrastructure company with annual Revenue
  over C100 million, 700 employees. We retain a
  strong practice in hydropower and water
  resources.
• Services offered from permanent and project
  offices across Canada, in the US and Overseas
• Projects have been completed in over 100
  Countries

3
Acres Background - Integrity is a Major Issue

• Role of the traditional consulting engineer as
  trusted advisor - examples
• unbiased judgements re project feasibility,
  including environmental effects
• unbiased judgements on contractor, equipment
  supplier selection, regardless of past
  relationships
• unbiased opinions on complex technical problems,
  solutions
• Strong supporter of FIDIC initiatives on Capacity
  Building and Integrity Management

4
Acres Business Integrity Management System

• Builds on Past Practices
• Code of Conduct, Annual Signoff (since 1978)
• Standard Representative Agreement (since 1980s)
• Principal Elements
• Code of Conduct (revised 2002)
• BIMS based on FIDIC Model (2003)
• Representatives and Sub-consultants (updated
  2003)
• Emphasis on due diligence and internal controls

5
Acres BIMS (continued)

• Mechanisms
• Define expectations re behavior (widely
  disseminated Code of Conduct)
• Require compliance with CFPOA (Canada) and FCPA
  (US) - available on Acres internal web site
• Expand existing QA audit system to include
  Integrity Management. Non Conformances not
  cleared consequences
• Use existing Risk Management Committee to review
  High Risk Agreements
• Establish special audit measures and 100
  frequency for Critical Projects
• Define due diligence, agreement terms, red flags,
  monitoring for Representatives, Sub-consultants

6
Context The Consulting Engineering Industrys
Views on Corruption and Integrity Management

• Corruption - Statements by FIDIC
• Undermines Values of Society
• Breeds Cynicism
• Demeans Individuals Involved
• Inhibits Sustainable Development
• Imposes Financial Risks on Society
• Integrity Management - Statements by FIDIC
• Promotes ethical behavior, which is fundamental
  to the Client / Consultant Relationship
• Represents Best Practice
• Is complementary to Quality Management
• Reduces Commercial Risk
• Promotes stakeholder satisfaction
• Contributes to a sustainable practice and
  sustainable profits

7
Context The Consulting Engineering Industrys
Actions on Integrity

• 1995
• Integrity / Corruption formally raised at FIDIC
  annual conference
• 1996
• World Bank re-defined policy on corruption -
  proactive stance
• FIDIC Policy Statement
• 1997
• OECD Convention
• 1998
• FIDIC Task Force on Integrity Management

8
Context The Consulting Engineering Industrys
Actions on Integrity (Contd)

• 1999
• Presentation of FIDIC BIMS initiative to BIMILACI
  in Washington. Formed JWGI FIDIC, World Bank,
  IDB, FEPAC, to work on BIMS Guidelines
• 2001
• Presentation of Guidelines for Business Integrity
  Management in the Consulting Industry to FIDIC
  Annual Conference
• 2002
• Presentation of Business Integrity Management
  System Training Manual to FIDIC Annual
  Conference. Recommendations to Member
  Associations to Promote BIMS
• 2002 / 2003
• Initial Adoption of BIMS by Some Firms,
  Discussions with ISO

9
Integrity Management
IM
10
Structure of Acres BIMS
Representatives
Code of Conduct
IM-01
Acceptance of and Compliance with Code of Conduct
Acceptance of and Compliance with Code of Conduct
BIMS
IM-02
Engagement of Representatives And Sub-consultants
Sub- Consultants
IM-03
Critical Projects
Non-Critical Projects
Low Risk Agreements
High Risk Agreements
100 Audits Project IntegrityRecord
File Integrity Checklist Conflict of
InterestChecklist Learn and Modify

• Random Audits
• Integrity Checklists
• Conflict of InterestChecklist
• Learn and Modify

Normal Commercial Procedures Normal Risk
Management Procedures Due Diligence Watch
for Red Flags
Due Diligence Red Flags Checklist Minimum
Agreement, Monitoring Provisions Referred to
Risk Management Committee
11
High Risk and Critical Designations

• High Risk Representation Agreements
• All involving interaction with governments
  outside Canada, USA
• High Risk Sub-consultant Agreements
• Countries with TI CPI lt 7.0
• Depends on red flags in due diligence
• Likely direct interaction with government client
• Critical Projects
• Countries other than Canada, USA TI CPI gt7.0
• New government client, over 2000 person-hours
• New private client or aid agency, over 2000
  person-hours, Sub-consultants involved
• Countries other than Canada, USA TI CPI lt7.0
• Government or aid agency client, over 2000
  person-hours
• New private client

12
Representatives and Subconsultants - Procedure

• Due Diligence Form
• Due Diligence Questionnaire
• Red Flag Form
• All High Risk Agreements to RMC
• Due Diligence acceptable
• Special provisions for Agreement
• Agreement mandatory principles
• Sample Agreement
• Monitoring Format
• Initial report
• Regular reports

13
Acres BIMS - Lines of Authority
Acres Incorporated President Board of Directors
Annual Report
Annual Report
Code of Conduct Advisory Committee
BIMS Compliance Officer, Corporate QA Sponsor

• Interprets Code of Conduct
• Education/familiarization
• Confidential Reporting

President Acres International

• Supervises Acres QM, BIMS Programs through
  Chief Auditor
• Training and education

Recommendations re Contract Signature, Risk
Management
Risk Management Committee - President AIL
(Chair) - BIMS Compliance Officer - VP
Finance - President AMC - President Acres
CPI - VP Central Hydro BU
Risk Management Committee
High Risk Agreements, Critical Projects
Business Unit 1
Business Unit 2
Committee Referrals
Audit Process
14
Expected Outcomes

• Enhanced company-wide emphasis on integrity
• Improved understanding of integrity issues
• Increased customer respect and satisfaction
• Reduced commercial risk
• Sustainable practice and profits