Construction Industry Development Board Act, 2000 (Act No. 38 of 2000)Board NoticesCode of Conduct for the parties engaged in Construction ProcurementPreamble |
Good corporate governance is being introduced throughout the world as a business imperative offering competitive advantage. Investors and employers prefer to do business with those business enterprises that uphold the key elements of corporate governance, namely discipline, transparency, independence, accountability, responsibility, fairness and social responsibility.
To participants in the construction industry, good corporate governance is of particular importance and many of the employers (clients), as well as contractors, material manufacturers and suppliers are under obligation to adhere to the provisions of the King Report on Corporate Governance for South Africa, 2002. Professional service providers are also obliged, in their role as trusted adviser, to assist clients to comply with these provisions.
In this context the development of the construction industry will be promoted by participant and stakeholder organisations that:
| • | Have clearly stated and enacted corporate values; |
| • | Ensure that they perform efficiently, responsibly, accountably, transparently, and with probity; |
| • | Recognise the legitimacy of interest of defined stakeholders; |
| • | Engage in long-term relationships; |
| • | Adopt agreed codes to tackle corruption and persist in the enforcement thereof; |
| • | Give due recognition to the respect for human rights; |
| • | Respect the well-being of employees treating them fairly and with cultural sensitivity; |
| • | Practice and encourage greater environmental and social responsibility; |
| • | Avoid the use of harmful products and processes; |
| • | Promote collaborative partnerships with communities; |
| • | Work to build capacity; |
| • | Recognize need for profitability in the private sector to ensure a vibrant and sustainable industry; |
| • | Guard against abuse of power by the stronger party in contractual relationships; |
| • | Recognize the inherently dangerous nature of the industry and give priority to occupational health and the safety of all employees and the public; and |
| • | Engage with and share best practice. |
A code of conduct for all participants in the construction procurement process is a necessary condition for the achievement of these principles.
The construction industry operates in a uniquely project-specific environment, continuously combining different clients, consulting professions, as well as different contractors and subcontractors in a variable supply chain. Procurement arrangements, which also vary considerably, bind this supply chain and define the obligations, liabilities and risks that link the parties together in the delivery process.
The conduct of parties throughout the supply chain impacts on the ability of the construction industry to deliver value and to perform efficiently and competitively. A high standard of conduct is essential to the growth, development and sustainability of enterprises and to the objectives of empowerment and transformation.It impacts directly on project costs, timely completion and delivered quality. Poor conduct opens a window on corruption and inflates the cost of development to South African society.
A common code of conduct to guide and regulate the behaviour of parties engaged in construction-related procurement is necessary to establish the standards of behaviour that participants may expect from each other and against which their behaviour can be measured.
This code of conduct represents an important step in the management of integrity and the creation of an environment within which business can be conducted in a fair and transparent manner. It is also forms an essential first line of defense in combating the scourge of corruption.
This six-point Code of Conduct deliberately avoids the pitfall of detail. Instead the Code of Conduct is published with a set of examples that illustrate good conduct and, by implication, conduct that would breach this code.