Building what matters, sustainably – 2016 Sustainability Report

Ethics and Compliance

Ethics & Compliance

Ethics and compliance matters at SNC-Lavalin. We expect every employee to fully understand our policies and procedures, and to consistently put them into action, no matter how challenging the circumstances. 

We’re proud of our robust Ethics & Compliance Program. External recognition of our commitment to the program’s principles and to our corporate values reinforce our conviction that we’re on the right path. Recent examples include:

  • Winning major projects in Canada, including government contracts, worth over $8 billion, a testament to our clients’ confidence in our ability not only to do the best job, but to do it ethically
  • Recognition of our Ethics & Compliance Program by Brazilian authorities and registration of SNC-Lavalin as a Clean Company under the new Brazilian Clean Company Act

Governance

Oversight and reporting

Policies and procedures

Corporate policies provide guiding principles and rules for our entire organization, regardless of location. Corporate Standard Operating Procedures (SOPs), on the other hand, standardize tasks and processes by specifying rules on a given subject or sets of instructions on how to perform a function. Policies have a broad and global application, while SOPs can be applicable to a specific geographical region, business unit or corporate function. 

Our Policy Oversight Committee establishes good practices in policy governance and helps review all new and revised policy documents. The committee meets monthly to review any policies and procedures being put forward. Members include the Policy Coordinator and a representative of the following corporate functions: 

  • Corporate risk management
  • Ethics and compliance
  • Finance
  • Global human resources
  • Integrated management systems
  • Internal audit
  • Legal affairs
  • Marketing, Strategy and External relations

As part of our Operational Excellence initiative, we’ll create the Project Delivery Centre of Excellence (PDCE), a proactive and centralized online repository for employee knowledge sharing. To be rolled out in 2017, the PDCE will enable employees to seamlessly share and interact with one another. It will also support the transparent communication of our updated policies and procedures.

In 2017, we plan to introduce several policies and procedures, including our:

  • International Trade Compliance Policy
  • Export Control and Trade Compliance SOP

Reporting

Our Duty to Report SOP requires all employees to be vigilant about possible illegal or unethical behaviour and to take appropriate and timely action to prevent or detect improper conduct.

At SNC-Lavalin, people use the following channels to report any suspected misconduct:

  • Our third-party, confidential, 24/7 Ethics & Compliance Hotline where employees, suppliers, clients, etc. report potential violations of our Code, company policies or applicable laws, either online (www.snclavalin.ethicspoint.com) or on the phone, in over 170 languages without fear of retaliation 
  • Their manager, Compliance Officer, human resources or legal representative
  • Our Compliance Consultation Centre

A committee composed of the Chief Compliance Officer, the Head of Compliance Investigations, the Compliance Legal Counsel and the Head of Internal Audit meets on a weekly basis to review, assess and prioritize allegations of compliance violations. Once assigned to the Compliance Investigations team, the team: 

  • Implements appropriate investigation procedures including the use of specialized expertise as necessary
  • Completes investigations in a timely manner to determine whether allegations are substantiated
  • Respects and preserves the integrity of the Compliance Investigations’ processes at all times 

Our highly experienced Compliance Investigations team reports to the Chief Compliance Officer. Team members are from different professional backgrounds and located in two main hubs, Canada and the Middle East, to ensure worldwide coverage and a timely response in investigating allegations.

Allegations in 2016:

Allegations made via:

  • Email: 59%
  • Online: 24%
  • Ethics & Compliance Hotline: 6%
  • Mail: 5%
  • Compliance Consultation Center: 3%
  • Telephone: 3%
New compliance cases opened: 401
New compliance cases opened based on anonymous allegations: 92
Compliance cases closed: 333
Disciplinary sanctions: 56, of which 11 resulted in termination, 15 in written warnings, 14 in verbal warnings and 16 in other. 
 

Code of Ethics and Business Conduct

Our Code of Ethics and Business Conduct lies at the heart of our Ethics & Compliance Program and sets expectations for integrity and ethics in our business dealings. Every manager at every level is accountable for ensuring we deliver a world-class ethics and compliance performance.

Reviewing the Code annually keeps this important document current. Yearly training and certification to the Code is a condition of employment and an intrinsic part of our onboarding program.

Annual training and certification

All employees (regular, occasional, temporary, contractual and full- and part-time), consultants, loaned personnel, officers and Board members receive annual training on our Code. Training for craft employees takes place throughout the year while, for other employees, the annual certification occurs in the first quarter of the year over a two-month period. In 2016, we trained and certified more than 18,000 employees during this rigorous and ambitious undertaking. This included almost 3,000 individuals, or 15% of participants, who received in-person training. 

Non-craft employees

Training for non-craft employees is delivered online in nine languages. With the assistance of local managers and HR teams, employees at remote sites and/or with no internet access receive in-classroom training in three languages. Each year, it takes several months for our Ethics & Compliance and Global Training and Simulation Services teams to develop the modules and ensure their user friendliness and availability in multiple languages. 

The training includes real-life case studies inspired by compliance investigations and our Compliance Officers’ feedback. In parallel with the content development, it also took hours to our team to develop the processes and the communication, to implement it in our systems and to create the reporting tools. Over this period, our team worked closely with our Learning Management System team to ensure that all the tools are ready and easy to use and that our online process is running smoothly.

Craft employees

Craft employees (blue collar and construction workers) receive continuous training in eight languages on the 12 major aspects of our Code that impact them the most. This in-person training is delivered during monthly Health & Safety and other meetings. A facilitator gives a 10-minute presentation about one aspect of our Code including a real-life example. The presentation ends with a ‘duty to report’ message and pertinent contact information.

Communicating the 12 major aspects of our Code

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Learn more

Communications 

We take steps to ensure all our stakeholders receive clear and consistent messages, both internally and externally. 

Internal communication activities and channels include:

  • Ethics and compliance campaigns
  • CEO blog
  • Management and other meetings 
  • Annual performance reviews
  • Intranet

Managers begin meetings with scripted Ethics Moments to help reinforce our ethics and compliance culture. Like safety, integrity is now top of mind for everyone and an integral part of meetings, planning and actions at all levels.

Externally, we provide stakeholders with detailed information on our ethics and compliance initiatives, our vision and plans as well as contacts for promptly addressing questions and issues. We also regularly share our ethics and compliance messages and commitments at:

  • International and national conferences
  • Universities, associations and ethics-based organizations
  • Our Annual General Meeting of Shareholders 

Business Partner Compliance Due Diligence

We take significant steps to ensure Business Partners fully understand our ethics and compliance expectations. We expect our Partners to adhere to our business principles, culture and values and comply with all applicable laws and regulations. In fact, all Business Partners must sign our Anti-Corruption Compliance Attestation, which commits them to abiding by the same standards of business conduct and practices as we do.

We actively foster a risk-aware culture at all levels across our organization. Through our Business Partner selection process, we continue to strive for a well-balanced and optimal risk-reward trade-off. Our Business Partner Compliance Due Diligence effort is supported by a state-of-the-art IT process. The approval workflow and its continuous monitoring provide global transparency on third-party risk exposure. 

Business partners Compliance Due Diligence (CCD) risk levels

Comparison (2016 vs 2015)
Risk Dec. 31, 2016 Dec. 2015 Weighted risk redistribution
Low 785 (88%) 684 (80%) -8%
Medium 83 (9%) 153 (18%) -9%
High 26 (3%) 22 (2%) 1%
Total 894 859
Total variance: -4%

The number of approved Business Partner CDDs remained relatively stable in 2016. The decrease of Medium risk CDDs is due to a better evaluation of the scope of engagement of the services rendered by the Business Partner. We’ve built and sustained thousands of Business Partner relationships to drive mutually beneficial projects as well as responsible and sustainable growth. Although we actively seek to develop new Business Partners, we expect this stable trend to continue in 2017 as we leverage the full potential of our existing Business Partner relationships.

Business Partners CCDs by region

Region 2016 2015 Change
Africa (Northern) 9 (1%) 12 (2%) -1%
Africa (Southern) 24 (3%) 35 (4%) -1%
Asia/Pacific 71 (8%) 57 (7%) 1%
Europe 128 (14%) 140 (16%) -2%
Latin America 126 (14%) 74 (9%) 5%
Middle East/India 147 (16%) 103 (12%) 4%
Northern America 386 (44%) 426 (49%) -5%
Worldwide 3 (0%) 12 (1%) -1%
894 (100%) 859 (100%)

The geographic location of our Business Partners remained relatively stable across the board. Notable increases in Latin America, the Middle East and India are primarily due to enhanced development and more projects in these areas requiring additional Business Partner expertise. The decrease in North America is due to the consolidation of our business with a smaller number of Business Partners who are involved in several longer term projects. 

Risk assessment

During our annual Ethics & Compliance Risk Assessment process, top executives and senior managers team up with our Compliance Officers, directors, senior managers and subject matter experts in over 50 countries of operation to assess the compliance risks in their sectors and business units. 

We continuously cross-check our risk exposure against our compliance program to identify gaps and required adjustments. Based on the findings, we enhance our policies, procedures, communication activities and training materials to close any gaps.

In 2017, we’ll enhance our risk assessment approach by incorporating:  

  • Risk control self-assessments
  • Optimized workshops
  • Compliance synchronization and integration initiatives

We strive to remain at the forefront of emerging risks and responses to modern-day challenges. This proactive approach is a must if we’re to mitigate the full spectrum of potential threats to our stakeholders and surrounding environment. Among several initiatives being implemented, we’re currently evaluating our exposure to modern-day human trafficking and slavery, a risk that threatens many international organizations. 

Guarding against complacency

Since 2012, we’ve built and implemented a robust ethics and compliance prevention, detection and response system across an organization dispersed around the globe. Our training and communication plans ensure employees are living our values, adhering to our ethics and compliance processes, and feeling comfortable about voicing concerns.

And yet our job is far from done. First and foremost, we must guard against complacency. Strong ethics and compliance cultures require constant attention. Maintaining a vibrant ethics and compliance culture also entails providing both existing and new employees with regular training. 

As part of SNC-Lavalin’s Operational Excellence program, we’re continuously improving our Ethics & Compliance Program. We’re not only monitoring and ensuring the effectiveness of our systems and processes, but also assessing their efficiency in helping us achieve our business goals. The end result will be seamless business processes that enable us to make timely and astute decisions, using integrated processes and, wherever possible, avoiding the duplication of tools.

Education and training

Ensuring that employees everywhere understand and comply with the standards of conduct we expect of them is a top priority across SNC-Lavalin. We regularly benchmark our best-practice ethics and compliance training modules to ensure we offer stakeholders a topnotch and diverse training program. These courses, which we either develop internally or make available, include target-group-specific mandatory training as well as general non-mandatory training for all. 

Mandatory courses and training initiatives

At the beginning of 2017, our 20,000+ Learning Management System (LMS) users have access to 28 ethics and compliance eLearning modules in two to eight languages for a total of 118 modules.

Out of these 28 eLearning modules, 10 are mandatory depending on the employee’s role. Our Ethics and Compliance team works closely with our Global Training and Simulation Services team to develop most of these modules to ensure they meet our needs and reflect our policies and SOPs. In addition to this online training, we also deliver ongoing anti-corruption training in classrooms (in locations with more than 10 employees to train) or through virtual sessions (on Lync/Skype). 

In 2016, we rolled out the following mandatory initiatives:

  • February to April 2016: The annual certification of all non-craft employees to our 2016 Code of Ethics and Business Conduct either online or in-person for isolated sites 
  • May to July 2016: Launch of our insider trading and our antitrust and competition training (12,000 and 4,500 employees targeted respectively)
  • November to December 2016: Launch of our working with the Canadian government training (more than 600 employees targeted)

In 2017, mandatory training for employees, depending on their role, will include:

Anti-corruption and competition awareness training: This three-session training is provided globally through in-person and virtual classrooms. It is mandatory for employees in sensitive roles such as all executive, senior and general management functions, as well as all staff in business development, procurement, project management and government relations. 

Anti-corruption refresher: Every two years, a refresher is mandatory for all targeted employees. Our anti-corruption refresher is an eLearning module developed by TRACE International that requires employees to handle several situations. A special version for US employees integrates export control, anti-boycott and other specific US requirements.

Antitrust training: This training is based on our corporate policies and explains the basic concepts with a couple of case studies to help employees understand their antitrust responsibilities and identify potential risks in their activities. It is mandatory for employees in senior management, legal affairs, business development, finance and procurement. 

Avoiding trafficked labour training: This course was developed by TRACE International to help employees understand and recognize human trafficking. In 2017, this course will be mandatory for all senior managers and employees in procurement and HR as well as our Board members (about 1,600 employees).

Business partner due diligence training: This eLearning module was developed to help employee understand the purpose and scope of our Business Partner Policy. It helps them identify Business Partners, their role and responsibilities when dealing with them, and familiarize themselves with our business partner due diligence process. This training is mandatory for all high-level professionals and managers as well as employees in sensitive roles such as our business development and project management employees.

Training of business partners: When they first begin working with us, certain business partners are required to undergo mandatory online anti-corruption training. Out of our 26 high-risk CDDs approved in 2016, 24 underwent this training.

Gifts and hospitality training: Based on our SOP, this training familiarizes employees with situations in which accepting or offering something might be considered as improper. It also identifies situations requiring a scorecard. This training is mandatory for employees in general management, procurement, government relations, business development, ethics and compliance, human resources, legal affairs and project management.

Insider trading training: This eLearning was developed by the United Nations and is available at thefightagainstcorruption.org. In this module, employees learn how to handle ethical dilemmas while in possession of confidential information. This training is mandatory for our employees in general management, procurement, government relations, business development, ethics and compliance, finance, legal affairs and project management. 

Working with the Canadian government training: Developed in partnership with the global law firm Norton Rose Fulbright, this three-session module covers federal laws and regulations, procurement integrity and conflicts of interest when doing business with the Canadian government. It is mandatory for all employees in charge of procurement and management on federally funded projects in Canada as well as for our Board and Executive Committee members.

Visible leadership in the community

Outreach in 2016

Our outreach efforts focus on engaging with external stakeholders, including industry peers, clients and ethics and compliance experts, to exchange best practices and ensure effective compliance programs. This outreach is part of our overall commitment to ethics excellence and integrity. As part of this commitment, we maintain and value our membership in:

Global Ethics & Compliance team 

In 2016, our Global Ethics & Compliance team participated in over 60 outreach events, an 88% year-over-year increase. Key team members appeared as guest speakers at national and international conferences in many major cities, including Dubai, Vienna, Hong Kong, Sao Paulo, Houston and Montreal. The team also consistently engages with numerous universities, global ethics and compliance associations as well as with clients’ ethics and compliance professionals.

In 2016, we collaborated with:
  • Transparency International
  • TRACE International
  • International Bar Association
  • C5 Group
  • International Anti-Corruption Committee of the American Bar Association
  • Kinstellar
  • Engineering and Construction Risk Institute
  • Marcus Evans
  • IBC Legal
  • Ethisphere
  • Ethicscentre
  • EthicScan
  • Organisation for Economic Co-operation and Development (OECD)
  • Canadian Business Ethics Research Network (CBERN).
  • MITACS (https://www.mitacs.ca/en) 

Partnering Against Corruption Initiative (Global)

The World Economic Forum’s Partnering Against Corruption Initiative (PACI) is becoming the leading business voice on anti-corruption and transparency. As part of PACI’s Vanguard CEO community, our CEO collaborates with peers from various industries around the world in the fight against corruption. This rapidly expanding community is focused on implementing a global anti-corruption agenda.

Our Chief Compliance Officer also serves on a PACI working group with a mandate to focus on the infrastructure and urban industries sector, with the aim of identifying challenges and opportunities to collectively level the playing field. Working with international organizations and governments, members explored innovative solutions and worked to promote a culture of integrity within this sector. 

Infrastructure and urban development

In collaboration with the Forum’s IU (Infrastructure and Urban Development) Industries community, PACI explored various dimensions of anti-corruption across different regions. The three-year project found that different types of corruption are experienced across the life cycle of a project. Also, project risks are experienced adversely by different stakeholders and are compounded by cultural contexts.

Based on the project’s findings, technology will be a key enabler in:

  • Increasing transparency and combatting corruption
  • Empowering citizens
  • Conducting social audits
  • Reducing human interaction in transactions to limit opportunities for bribery 

Corruption risk in IU industries is intimately linked to structural relationships with governments that have weak institutional capacity, outdated policies and dysfunctional legal and regulatory systems. IU industries must prioritize public-private cooperation to actively build trust and integrity back into business and institutions.

The CEO initiative (South Africa)

In South Africa, our Oil & Gas sector spearheaded the creation of a forum of companies supporting anti-corruption activities, called the Coalition for Ethical Operations. This initiative is part of our efforts to improve the business environment in Africa’s Sub-Saharan region. Companies seeking to join the coalition must sign a pledge committing to:
 
  • Share best practices in promoting ethical business and reducing corruption
  • Promote training on ethical business and anti-corruption for small to medium-sized enterprises (SMEs) in the coalition’s supply chain
  • Engage in occasional and voluntary collective action 

At the end of 2016, 12 prominent local and foreign-owned companies in South Africa had signed the pledge. Together in 2016, we:

  • Held a think tank in March with companies and ethics-related organizations at which we agreed to create the initiative
  • Held a “Sharing Best Practices” session hosted at Sasol with presentations by GE, Sasol and Massmart
  • Hosted an event with GIBS Business School at which the Head of Integrity of the African Development Bank gave a presentation on “Managing Business Challenges and Promoting Integrity: An African Perspective”
  • Formalized our partnership with The Ethics Institute
  • Supported Trace International’s awareness campaign in South Africa
  • Set up our web portal 
  • Created awareness of Corruption Watch, an advocacy organization in South Africa 
Current coalition members
  • AECI
  • ENSafrica
  • General Electric
  • Group Five ltd.
  • MTN Group
  • Nampak ltd.
  • SABMiller
  • Santam
  • Sasol
  • Siemens
  • SNC-Lavalin
  • Tiger Brands

Activities in 2017

In 2017, the coalition will focus on developing a training program for SMEs aimed at building capacity in anti-corruption and ethical business practices. Coalition members will mentor and help SMEs set up programs tailored to their size and type of operations. 

SME training program

  • Working group set up with SNC-Lavalin, Siemens, Massmart, Mercantile Bank, Sasol and Nedbank
  • Partnership established with The Ethics Institute to develop and deliver the program
  • Program development to be funded by coalition members
  • Pilot program to be aimed at suppliers in coalition members’ value chain  
  • Blended learning (online and in-classroom) delivery model
  • Content to be generic across industries
  • Program to be certified by The Ethics Institute

Sharing best practices

  • Quarterly in-person sessions to be hosted by different coalition members
  • Monthly virtual sessions (webinar, live chats, blogs) to be developed with technology partner MarketSqr on existing portal

Topics to be covered:

  • Whistle blowing
  • Third-party intermediaries
  • Corporate social responsibility
  • Gifts and hospitality
  • Conflict of interest
  • Focus on developing an active online community to promote interaction between compliance officers

Addressing cross-border challenges

  • Leverage existing initiative funded by Siemens which provides training for customs officials
  • Launch awareness campaign in collaboration with Corruption Watch
  • Contact relevant government ministries to secure their collaboration
  • Develop resource tools on web portal (e.g. contact numbers, case studies with lessons learned, live chats, etc.)
  • Create smart phone app for truck drivers (to send out alerts for assistance when a driver is confronted with a situation where he may be bribed or asked for a facilitation payment)
  • Host workshop in Johannesburg on cross-border challenges with SNC-Lavalin expert 

Human rights and worker welfare

As signatories to the UN Global Compact, we’re committed to ensuring that our business policies incorporate and support its Ten Principles. Starting in late 2015 and continuing into 2016, we assessed our business practices in the Gulf Region for any issues related to modern slavery and worker welfare. In 2017, we’ll standardise the best practices we developed in the region to ensure our Code of Ethics principles are universally upheld, wherever we work. We’ll also deploy a training program for senior leaders in the company to raise their awareness and knowledge of this issue.