Fira's production director Jari Koivu sheds light on what kind of fraudulent activity he has come across during his working career and how useful, among other things, ethical guidelines are in evading wrongdoers.
Fira Group's operations include versatile new, renovation and housing construction projects as well as line renovation projects. Since 2012, who has been the production director of Fira Jari Koivulla has a long experience in various management positions in the construction industry, managing both business units and procurement units, as well as project management of large construction projects.
In the following, Koivu tells, based on his experiences, how to identify and avoid shady actors and commissions:
How often do you encounter fraud in construction projects at the moment?
In several projects, a fraudulent entrepreneur can emerge at some point in the supply chain. This is still unfortunately common, even though fraudulent operators are actively hunted down and efforts are made to hunt them down. Fira wants nothing to do with lawbreakers.
The growth of the construction industry is now hot. The growth period attracts all kinds of fraudsters to the industry, some of whom can get through the long subcontracting chains. Although the entrepreneur's papers may be temporarily in order when the work starts, it is not always able to function with high quality.
Subcontractors with clean papers, previously found to be reliable, can take on too much work in their greed. When they are not able to handle them in a hurry as agreed, the work may end up in the hands of a fraudulent person.
Contracts try to prohibit chaining. Work is carried out and negotiated preferably with reliable and familiar contractors and subcontractors. In a tight market situation, there is a shortage of professionals. There is not always a choice, and companies' procurement people have to take conscious risks and choose factors from unknown actors.
Employers have a big mess to sort out. Dishonest operators are openly fraudulent. They knowingly act against the law and the articles. Big money also attracts bullies. Professional investigators are needed to investigate the backgrounds of suspicious companies.
What kind of things make the warning bells ring with different operators?
The subcontractors' offers tell a lot. The very cheap price indicates that the employees are not being paid their full wages. Everyone's bells should ring if the new company smells even a little gray.
There is no shortcut to avoiding fraud. The basic work is done in connection with the request for offers. Procurement employees play a key role in determining whether it is possible for the builder to act honestly. You should do your homework properly during the offer phase. Screening the information of employees, contractors and operators is important, as well as carefully checking the operators' references.
Through procurement specialists, we know how the actors have worked in previous projects. Intervention is important. The same operators proven to be reliable are used with pleasure. There is also always room for new reliable operators. Trust is of primary importance.
A price that is too cheap sets off Jari Koivu's alarm bells: "A very cheap price indicates that employees are not being paid their full wages."
What kind of experiences of fraudulent activity have you come across during your working career?
For example, in one shared contract, the subcontractor's work permits were not in order. Passing through the construction site becomes significantly more difficult when side or subcontractor employees have to be removed from the construction site at a critical stage.
Some years ago, there were problems with subcontractors' payments of foreign workers' wages according to the collective agreements at the construction sites. Now the situation has improved considerably.
Unfortunately, sometimes the employee has also gotten his own money and the company's money mixed up.
What helps in reducing fraudulent activity? What is the significance of ethical game rules and instructions?
Development has clearly taken place in the construction industry. With years of work, the situation moves forward and changes for the better. The situation is much the same as in occupational safety, where the joint efforts of the entire industry have taken development in a better direction.
You have to know the legislation and guidelines, you have to check things and act in accordance with the agreements and guidelines. Legislation, guidelines and game rules make things clearer and better understood.
How does it work in Fira?
Fira's ethical guidelines are an integral part of our operations. The goal of the instructions is to provide operating instructions for the personnel, so that operations in accordance with Fira's values can be realized in practice as best as possible. In order to keep this issue clear in the minds of all the people of Fira, we organize ethics training for the entire staff once a year.
We also have a vinegar kit that is reviewed with each person during a job interview or orientation. Orientation of new people is of the utmost importance. Ethical instructions are brought up regularly and immediately.
Fira's own ethical game rules have been made visible and site personnel have been trained to recognize dishonest situations. There is never too much education and enlightenment. The more we talk, the more grievances we become aware of.
As a rule, people perceive the communication of an operating method according to the principles as positive. People appreciate that the employer acts ethically.
In addition, we have opened a telephone line where you can call anonymously and report suspicious and illegal proposals and arrangements. It is important that reporting the matter does not cause consequences for the narrator.
We also ask hard-class experts, prosecutors and police officers to tell us about seemingly innocuous things that may be moving in a gray area and yet exceed the threshold for prosecution.
We try to keep people aware of the consequences of their actions, so that no one engages in fraudulent activities in their ignorance and "foolishness".
The work must be really transparent to everyone. Even the slightest doubt about a counter-gift should arouse critical reflection and an inspection of the matter by the superior.
Regarding subcontracts, we do careful background work to find out the companies' backgrounds. In addition to our own experts, our work sites are constantly reviewed by an external consultant familiar with the matter.
What do you think is the most important of all when it comes to cheating?
Everyone works according to the common rules of the game. The more difficult it is to cheat, the less likely it will be. Culture is always moving forward. We encourage absolutely honest behavior.
What hopes do you still have for the Construction Industry?
It is good to ensure that educational institutions also familiarize their students with the ethical rules of the game. Those studying for the profession and recent graduates should know the ethical and legal rules of the game and act in accordance with them from the start.
The role of the construction industry as a distributor of information and moderator of the discussion is important. You need a sleeper, someone always has to make noise.
See also
- Ethical principles in practice: 2. Avoid fraud from afar
- Other parts of the Ethical Principles in Practice writing series
More information
- Merja Vuoripuro, Construction Industry RT ry
tel. 040 587 2642, merja.vuoripuro@rakennusteollisuus.fi - Sari Puurtinen, Juuriharja Consulting Group Oy
tel. 040 676 3772, sari.puurtinen@juuriharja.fi
Root brush is a coaching company specializing in ethical management