Quebec, $186 billion in contracts and the question of self-regulation

Justice France Charbonneau presided over public hearings in Quebec that exposed one of the biggest construction scandals in the history of North America. Many of the companies that admitted to wrong doing, like SNC Lavalin, have working presences in the Tristate area.

Do engineers use the public’s lack of expertise in the technicalities of their profession to operate outside the law?

by Nicholas Zeman

More challenges to engineers’ “privilege” to police themselves surfaced across North America in 2016, with the most dramatic example coming when Quebec’s Department of Justice took administrative control of the Canadian province’s Order of Engineers'(OIQ) in July, the first time in the nation’s history a major professional association (61,000 members) has been placed under government “trusteeship.”

The move follows years of inaction at the order, and a landmark official inquiry into collusion and corruption in the construction and engineering industries, now widely known as the Charbonneau Commission for Justice France Charbonneau. She presided over the hearings from 2012 to 2015, as witnesses described ubiquitous bid-rigging schemes among a “cartel” of engineering and construction firms who wanted to obtain public contracts from the city of Montreal in exchange for political donations.

These “political donations” were really bribes carried out in a way that allowed the parties to avoid detection from the law and saw public officials awarding contracts to companies who had bought them off. Genivar Inc., Dessau, Groupe SM, CIMA Plus, and SNC Lavalin, among others, all admitted to wrongdoing.

Many other episodes when engineers’ technical skills and ethical integrity were questioned developed in recent years, and the situation could mean more bureaucrats—who know nothing about the profession—coming between engineers and their work. In its report following an investigation into the Mount Polley dam collapse, British Columbia’s Office of the Auditor General said regulation of mining is overly reliant on engineers and geoscientists and criticized “professional bodies’ ability to regulate their professions.”

The collapse of a load bearing wall at Algo Centre Mall in Elliot Lake, Ontario, which killed two people, amplified the public’s growing lack of faith in the engineering workforce because it involved questions about both unskilled and unethical practice.

Further, the largest financial penalty in history against a United States utility was leveled against Pacific Gas and Electric for engineering decisions that led to a pipeline explosion that killed eight people in California in 2010, and the engineering department at Southern California Gas Co., failed to replace a safety shut-off valve on a gas well that led to one of the worst methane leaks in California history. In New York, state comptroller Thomas DiNapoli is asking for more power to review the award of public works contracts after a widespread bid rigging scheme there.

In a recent organization newsletter, Alberta Professional Engineers and Geoscientists Association President Steve Hrudey said the very nature of these technological failures that cause major environmental damage –from hydrocarbon spills to groundwater contamination—and cases of corruption, can be expected to attract criticism and a public search for blame. “Such circumstances will inevitably include questions about the performance of professional geoscientists and professional engineers, a reality that we must be able to responsibly address,” Hrudey says.

The revocation of a major association’s autonomy, which generated headlines like “Quebec doesn’t trust engineers to regulate themselves” and “Quebec takes over Order of Engineers,” has caused engineering boards and professional associations across the United States and Canada to take notice—if the industry cannot police engineers effectively, governments will step in, and the results could hinder business decisions and the freedom of the engineering workforce.

The disciplinary council of the OIQ has stepped up its enforcement efforts since being placed under the stewardship of government trustees, or “bureaucrats” with no engineering expertise as Hrudey calls them. It’s revoked the licenses of more than ten high profile engineers, which is the most severe punishment available, the order said in a statement.

This enforcement posture is a sharp turn. “Before the Charbonneau Commission they investigated no complaints, they analyzed no files, they disciplined no one,” says Stephan Boivin, spokesman for the Quebec Office of Professions, the agency responsible for monitoring professional associations in the province. “When they were asked to submit a proposal on how to address many of the problems, in-fighting within the organization got worse.”

One point of contention was the membership dues paid by engineers to the order were equal to only one-fifth those paid by doctors and lawyers, Boivin says. “This lack of resources explains in part why there were no investigations prior to the start of the Charbonneau Commission.”

In December, the order proposed raising dues by 50 Canadian dollars per year. Unfortunately, Hrudey stated, there was substantial controversy and resistance among OIQ Members to fee increases. “This was one reason, the Quebec government concluded that OIQ was not responding adequately to the problems identified by Justice Charbonneau’s Commission.”

Underlying Philosophy

Self-regulated industries are allowed to monitor and police themselves in lieu of having an independent agency or third party enforce technical or ethical standards on its practitioners. Many times these standards are more rigorous than government rules, but Boivin says at its worst, self-regulation sets the stage for corruption and incompetence.

The underlying philosophy for self-regulation is the belief that only engineers have the necessary expertise to make judgments about another engineer’s qualifications, conduct or performance, said Tom Smith, executive director of the the American Society of Civil Engineers in an e-mail. “For that reason, ASCE is concerned by any decision that potentially involves putting non-experts in the role of a gatekeeper for the profession.”

Other workforce agencies have voiced concerns as well. “As a professional regulator, for us, what has occurred in Quebec serves as a reminder that self-regulation is a privilege, not a right,” said Association of Professional Engineers and Geoscientists of British Columbia. CEO Ann English. “Fulfilling our role means never losing sight of our duty to protect the public safety of British Colombians, and I do believe that BC engineers and geoscientists are committed to this core value.”

Professional associations have a difficult balance to hold between protecting the public and protecting the image of the profession. A state run board would be less interested in protecting the image of the profession, says Dean Chan, principal of Boreal Services and APEGA member, who like English, tells ENR that the industry should be reminded that an act of government could compromise the autonomy of engineers in a given state or province.

In the United States, individual states have their own engineering boards—there is no federal agency that specifically polices engineers. While technically state agencies, however, engineering boards in the United States are usually “composed primarily of market participants, elected by fellow licensees and operate without active oversight by the state,” ASCE says. Essentially, the U.S. engineering profession is “self-regulated” as well. But again, more third parties, including attorney generals and state controllers, have been elevating their level of attention to the machinations of the engineering profession as more instances of misconduct mount.

More scrutiny on the engineering and construction industries in Canada comes at a time of dramatically increased nationwide spending on infrastructure across the country-Canada Finance Minister Bill Morneau announced a spending plan of $186 billion for public works projects in November, and U.S. President-Elect Donald Trump has proposed a $1 trillion infrastructure plan.

These are incredible targets for corrupt actors, who are surely to spring to action if government agencies and the the general public don’t remain vigilant of the inner workings of the engineering and construction industries, says Pierre-Olivier Brodeur, spokesman for the non-partisan Quebec construction industry watchdog group, the Public Monitoring Committee on the Recommendations of the Charbonneau Commission.

But many governments, and the public at large simply do not have the expertise to deal with the materials necessary to regulate engineers. Laying off the responsibility to engineers themselves means the costs of the regulatory process are borne by the regulated professions, not by the taxpayer, Hrudey says.

It’s a stance many engineers profess, but one that does not hold true when corruption enters the process, Brodeur says. During the three years of Charbonneau hearings, construction costs in some Quebec jurisdictions dropped 30 percent. “We were losing $130 million to $150 million in construction costs every year to corruption and collusion—just in Quebec,” he said. “Victims of the illegal and corrupt practices of awarding of public [construction] contracts are the taxpayers themselves.”

 

 

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