Online Feature Articles for Construction Professionals - Architects

Conflict of Interest

Conflict of interest may undermine the integrity and objectivity of construction professionals. If not handled properly, it may even constitute a breach of professional code of ethics or evolve into a criminal offence.

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A conflict of interest situation arises where a person's private interests compete or conflict with the interests of his official duties. Private interests include both the financial and personal interests of the employee himself, his family or other relations, friends, any association he has joined or any person with whom he has frequent contact or to whom he owes a favour or is obligated in any way.

An actual conflict of interest situation arises when an employee's private interests interfere with the proper discharge of his or her official duties. There can also be cases of perceived or potential conflict of interest. In perceived conflict of interest, the actions and decisions of the persons involved are perceived by a third party to be under the influence of their private interests. Perception of conflict of interest is critical because this may cast doubt on the integrity of the person involved and cause damage to the reputation of the organisation. In a potential conflict of interest situation, the persons involved may, in the future, be influenced by their private interests when performing their official duties.

Construction professionals failing to handle conflict of interest properly may lead to biased decisions. People may also doubt the reliability, independence and impartiality of those involved in conflict of interest. Such mishandling may also contravene the respective professional code of ethics and lead to disciplinary sanction.

For example, architects shall comply with Principle 2 of the HKIA's Code of Professional Conduct (HKIA Code) which requires its member to avoid any action or situation inconsistent with his professional obligations or likely to raise doubts about his integrity. Rule 2.1 of HKIA Code states that a Member who finds that his interests, whether professional or personal, conflict so as to risk a breach of this Principle shall, as the circumstances may require, either withdraw from the situation, or remove the source of conflict, or declare it and obtain the agreement of the parties concerned to the continuance of his engagement. Furthermore, Rule 2.2 of HKIA Code states that a Member shall not have any financial or personal interest in or connection with any businesses which would or might breach this Principle, unless such interest or connection is fully declared and accepted by his client, contractor and any other parties likely to be affected thereby. Other construction professionals, including engineers and surveyors, are also governed by their respective rules. They shall comply with the Rules of Conduct of the Hong Kong Institution of Engineers and the Rules of Conduct of the Hong Kong Institute of Surveyors respectively to avoid or manage conflict of interest situations.

Conflict of interest may also carry the risk of legal consequences. If a person uses falsified declaration documents to cover up a conflict of interest situation, he may contravene a criminal offence such as Section 9(3) of the POBO or fraud. If a person involved in a conflict of interest situation accepts an advantage as an inducement to or reward for his action related to his principal's business, he may also commit a bribery offence under the POBO. Furthermore, for construction professionals serving in the government or public bodies, failure to avoid or declare a conflict of interest may render them liable to disciplinary actions and, in certain circumstances, prosecution under the common law of misconduct in public office.

"Avoid" and "declare" are the fundamentals of handling conflict of interest situations. Construction professionals should avoid situations that may lead to an actual or perceived conflict of interest situation which may provoke criticism of their integrity or damage to the organisation's interests and reputation. If a conflict of interest situation is unavoidable, the staff concerned should declare the situation to the organisation to demonstrate his impartiality.

When a report on conflict of interest situation is received, the management of an organisation should handle the declared conflict of interest prudently, and act according to its policy and guidelines. They may also follow these principles in managing the declared conflict of interest:

examine the facts and assess the nature and seriousness of the conflict;

adopt appropriate mitigating measures, such as redeployment of staff, and make timely follow up actions;

document the decision made and the rationale behind the decision; and

report any suspected corruption to the ICAC, and other crimes to the respective law enforcement authorities.