ECRI ENGINEE RING & CONSTRUCTION 27 September 2006 RISK - PowerPoint PPT Presentation

ECRI Sponsors Meeting Hilton Kensington Hotel – London Day 1 – Wednesday 7 th June 2017 WELCOME ECRI ENGINEE RING & CONSTRUCTION 27 September 2006 RISK INSTITUT E 1

Session – 1 Welcome, Safety Moment, New Introductions, Administration, Adoption of Previous Minutes and Review of Agenda Rod Kyle, ECRI ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 2

Programme – Wednesday 7 th June 2017 Session Time Description Discussion Leader 08.00 - 08.30 Registration / Refreshments 1. 08.30 - 08.50 “ Welcome, Safety Moment, New Introductions, Administration, Adoption Rod Kyle of Previous Minutes and Review of Agenda ” 2. 08.50 - 09.50 “ Lessons Learned from the Skanska Project / Risk Review Process ” -- Kevin Morecroft, Head of Risk-Civil Engineering, Skanska UK 09.50 -10.10 Tea / Coffee Break 3. 10.10 -11.10 “ To Disrupt or be Disrupted “ -- Andrew Council, Group Head of Construction Risk, LendLease . 4. 11.10 -12.05 “ Security Peer Group “ -- Tim Potier, Vice President, Chief Security Officer, Parsons Corporation and Darren Albers, Director-Information Security, Fluor Corporation 5. 12.05 -13.00 “ Air Liquide E&C Risk Management “ -- Jean-Claude Joyeux, Director, Business Development EMI Projects, Air Liquide Inc. 13.00 - 14.00 Lunch 6. 14.00 - 14.30 “ Breakout Group Topic Introductions ” Rod Kyle A. ” Strengthening Compliance ” B. “ Dealing with Joint Ventures – Issues, Risks and Possible Solutions “ C. “ Construction Safety / Innovation “ 7. 14.30 -15.30 “Breakout Work Sessions” Groups 1,2 and 3 15.30 -15.50 Tea / Coffee Break 8. 15.50 -16.50 “Breakout Groups Feedback and Discussion” All -- Workshop Topic A, Group 1 Mark Watson -- Workshop Topic B, Group 2 Michael Burch -- Workshop Topic C, Group 3 Greg Ramsay 9. 16.50 - 17.00 Wrap-Up and Close Rod Kyle ECRI 17.00 End of Day 1 Session / Departure ENGINEE RING & CONSTRUCTION RISK INSTITUT E 3

Session - 2 Lessons Learned from the Skanska Project / Risk Review Process Kevin Morecroft, Head of Risk – Civil Engineering Skanska UK ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 4

Session - 3 To Disrupt or be Disrupted Andrew Council Group Head of Construction Risk Lendlease ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 5

Session - 4 Security Peer Group Tim Potier, VP, Chief Security Officer, Parsons Corp. & Darren Albers, Director – Information Security, Fluor Corp. ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 6

Session – 5 Air Liquide E&C Risk Management Jean-Claude Joyeux Director, Business Development EMI Projects Air Liquide Inc. ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 7

Session - 6 Introduction to Breakout Group Workshops Rod Kyle, ECRI ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 8

Session 6 – Breakout Topics Topics taken from Sponsor Inputs, SIG Mtgs. and ECRI’s Annual Risk Survey – 2017 The above plus Group Breakout Feedback used as the basis for possible New Best Practices ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 9

Session 6 – Introduction to Breakout Group Workshops Topic A – “ Strengthening Compliance ” Group 1 Facilitator / Presenter : Mark Watson, Amec Foster Wheeler Group 1 Recorder : Peter Olofson, ECRI (Breakout Group Allocation in Handout Packs) ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 10

Session 6 – Introduction to Breakout Groups Topic A – Strengthening Compliance  With many recent cases in the Public domain, Feedback indicates that this is a Major concern across the Board  With certain Sponsors, this is identified as their Biggest Risk  There are both INTERNAL and EXTERNAL considerations : -- Code of Conduct, Confidentiality, Conflict of Interest, Anti- Bribery & Corruption Policies, Directors Liability etc. -- Compliance with multiple Laws & Regulations, Anti-Trust, FCPA / UK Bribery Act, Anti-Dumping, Conflict Minerals, Child Labour / Worker Welfare, (Anti)-Boycott, Environmental etc.  There are Major Consequences of Infringement / Breach : -- Long-Term Damage to Reputation, Stock Prices, Loss of Home / Overseas Market access, Severe Financial Penalties, Attracting Talent, Financing Access, Disbarment and other ECRI Sanctions ENGINEE RING & CONSTRUCTION RISK INSTITUT E 11

Session 6 – Introduction to Breakout Groups Topic A – Strengthening Compliance  Also, as Clients continue to shift risk, they are now imposing rigorous Compliance Clauses holding Contractor entirely responsible for any breach including the onerous requirement of guaranteeing compliance by Subcontractors and Suppliers  AND to reimburse their costs in the event of an incident !  Apart from being totally unreasonable on Contractor, this is extremely time consuming and costly : -- With say 300 + Suppliers, Does it include $100 Chinese bicycles bought from WalMart for Construction site usage ? -- Or, How do you deal with Leased Construction Equipment form a Caribbean Island Co. or Modularisation / Fabrication where tracing becomes more diffused ? ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 12

Session 6 – Introduction to Breakout Groups Topic A – Strengthening Compliance  The Risks are also compounded by current levels of M&A activity, Organisational Change, Pressure to secure new work and the growth of work in high Corruption Index Countries and Countries with Boycott Legislation – all possibly leading to points of weakness in Governance  The above certainly underscores the importance of an Effective Compliance Programme for both Internal and External aspects  So, some thoughts for consideration : -- Should be driven from the Top as a Core Value -- Value Moment Concept -- Establish proper Systems, Procedures and Controls -- With Clear Lines of Responsibility and Accountability ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 13

Session 6 – Introduction to Breakout Groups Topic A – Strengthening Compliance -- Mandatory Continuous Training & Communication at all levels -- Hotlines and Reporting Channels -- Background Screening of Personnel -- Appropriate level of Incentives and Discipline -- Compliance Risk Assessments as part of overall Risk Mngt. -- Continuous Up-dating / Improvement and Lessons Learned -- Check level(s) of Government Officials interface -- Absolute importance of Counter-Party Due Diligence -- Compliance Agreements with (all ? ) Partners, Subcontractors and Suppliers -- Use of specialist ABAC oganisations - Transparency Intl. WEF’s PACI etc. ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 14

Session 6 – Introduction to Breakout Groups Topic A – Strengthening Compliance So, the Issues for Consideration by Group 1 are :  “ What does the Group consider to be the Minimum / Key Requirements for an Effective Compliance Programme ? “ AND “ How do we, as an Industry, ensure the Correct Behaviour and Improve Risk Avoidance / Mitigation Strategy in this area ? “ The Group should also consider whether there is benefit in  ECRI setting up a focussed SIG and / or a new Best Practice setting out the Key Features of a Compliance Programme, for the Sponsor Group as a whole ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 15

Session 6 – Introduction to Breakout Group Workshops Topic B – “ Dealing with Joint Ventures - Issues, Risks and Possible Solutions ” Group 2 Facilitator / Presenter : Michael Burch, KBR Group 2 Recorder : Tony Winstanley, ECRI (Breakout Group Allocation in Handout Packs) ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 16

Session 6 – Introduction to Breakout Groups Topic B – Dealing with JV’s  Again quite high on the concerns ranking, based upon 2017 Survey Feedback  With continuing reports of under-performance by JV Partners  A new set of factors has emerged stemming from the fairly recent increase in North American projects with Foreign Companies positioning for market access : -- Buy US Firm or Merger with another Foreign Firm for access -- Or, Form JV with a US Company  Worth recalling, From our Lessons learned Data Base that the fundamental problems encountered with JV’s are : -- Lack of Trust among JV Parties -- Meeting Ethical & Safety Standards you require / Reputation ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 17

Session 6 – Introduction to Breakout Groups Topic B – Dealing with JV’s -- Cultural / Language / Appetite difficulties -- Inability of one Party to Perform -- Different / Incompatibility of Quality, Processes, Procedures and Systems -- Contractor / OEM JV is a high-risk structure  And, issues do rise exponentially with the number of Parties  In Fact, our almost overriding observations are : -- Picking the right Partner is 80% + of the Battle -- The JV might be governed by signed formal documentation but in practice, it only works successfully through positive cooperation between the key people of the Parties ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 18

Session 6 – Introduction to Breakout Groups Topic B – Dealing with JV’s  The task for this Breakout Group is therefore : “ With the possible route into North American work by a Foreign Co. In JV with a US Company, in mind – What circumstances or structure have Worked or Failed ?” ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 19