ETHICS AND THE LAW
Ethics is often erroneously confused with compliance with the law. In reality, ethics is much broader than the law. In this chapter, however, the focus is on compliance with the law. Ethics and law seem tightly intertwined for obvious reasons. Violation of laws related to ethics can lead to ones and penalties for organizations and individuals, can end in debarment, or can cause a public relations disaster. Ethical situations and transgressions that do not involve the law, more Offer than not, are dealt with in a much quieter way. legal penalties for violations are often substantial and, consequently, demand, immediate attention.
THE RELATIONSHIP BETWEEN LAW AND ETHICS
It behooves organizations, and in some instances individuals, to keep the following guidelines in mind when considering ethics and the law. First, recognize that compliance includes more than the law—for example, adhering to policies, procedures, and methodologies of an organization. Most organizations circle around compliance with the law, but not always. For example, compliance with a methodology may not involve compliance with the law but may require compliance with management direction or a specific contract with a customer.
Second, recognize that compliance is not passive; it is very active. Organizations, at all levels, must make a concerted effort to demonstrate compliance with the law. We absence of an ethical situation or transgression does not mean compliance with the law. More oven than not, compliance with the law must be demonstrated, meaning exercising such concepts as due diligence and due care. For example, tests should be
ETHICS AND PROJECT MANAGEMENT
administered to ensure compliance with quality standards dictated by the law; it cannot be assumed that compliance will just happen. Third, understand that noncompliance requires taking corrective action. Failure to comply, especially if awareness of its existence occurs and nothing is done, can result in sit penalties both for the organization and the individuals involved. For example, it is dangerous to assume that a serious violation of a law on the project will go away simply by ignoring it or hoping that no one says anything to be absolved of responsibility.
Fourth, have a good understanding of any applicable laws, but do not act as an attorney. Project managers manage projects; that is their expertise. Unless they have a strong legal background or are an attorney, they should rely on experts to help with questions regarding the law. Overtimes, the law can be vague and convoluted, and interpreting without the expertise can have dire consequences for the organization and involved individuals. For example, export laws can be very complex, and the company’s attorney can help interpret them.
Fifth realize that compliance does not stop unethical behavior; it simply minimizes the probability of occurrence. Just because a law exists, and an organization embraces the law does not mean people on the team or the parent organization are obeying it. Compliance requires ongoing awareness and, in some cases, continuous monitoring. For example, it makes good sense to have an idea of what laws apply to the project and to revisit them during the course of the project to determine the degree of compliance.
Sixth, recognize that noncompliance can result from internal and external circumstances. For example, partnerships and other strategic alliances in which the project may be involved do not necessarily exempt individuals or the project from responsibility for compliance; a close working relationship could lead to legal complications without anyone realizing it.
Seventh, be aware of the ethical laws applicable to the project and have a good understanding of the content and scope of those laws. When it comes to compliance, knowledge is the best protection. Again, when in doubt, contact the experts. For example, large companies especially have procurement specialists, lawyers, and contract specialists available for consultation.
Eighth, do not let current conduct and custom be a substitute for compliance with the law. Conduct and custom are good guides, but both may be tolerating noncompliance. For example, what may be customary in China or Italy may not be legal according to the home country’s laws.
ETHICS AND THE LAW
Ninth, don’t gamble with obeying the law by calculating the acceptable loss or threshold in terms of nes, because nes are only one part of the equation. Here is also the potential for debarment, imprisonment, and a tarnished reputation, which are incalculable and can go way beyond the purview and time frame of the project.
Tenth, corporate social responsibility dictates that individuals and the project comply with the law. Some companies have considerable economic, social, and political power that can impact society in many ways. Failure to comply with relevant laws can result in negative consequences that go beyond the law. e same applies to a large project or program. Knowingly, and sometimes unknowingly, violating the law can harm people, their trust, and the organization’s credibility as an institution. For example, a blatant violation of hazmat laws not only has legal ramifications but also can cause physical and emotional problems.
It is a fact of life in business that the laws originate from many different jurisdictions. In the United States, businesses must follow federal law originating not just from congress but also from many branches and agencies in the United States. Some of these agencies are semiprivate, while others are public. Here is a sample list of agencies and other entities at the federal
level that you or your organization may have to deal with and comply with
their regulations:
Bureau of Alcohol, Tobacco, Firearms, and Explosives
Bureau of Industry and Security
Commodity Credit Corporation
Council on Environmental Quality
Customs and Border Protection
Department of Commerce
Department of Treasury
Directorate of Defense Trade Controls
Equal Employment Opportunity Commission
Federal Financial Institutions Examination Council
Food and Drug Administration
International Trade Administration
National Labor Relations Board
Occupational Health and Safety Administration
Office of Federal Procurement Policy
Office of Government Standards
Overseas Private Investment Corporation
Ethics and Project Management
Securities and Exchange Commission
U.S. Customs Service
U.S. Export-Import Bank
U.S. Federal Trade Commission
U.S. Trade Representative
In addition to the federal institutions, a wide of array of laws exist at the state and local levels as well as in other countries and within specific jurisdictions for each one. As if that is not enough, businesses may have to follow international guidelines and rules, some of which may be public or private:
Asia-Pacific Economic Cooperation (APEC)
Caux Round Table Business Principles of Ethics
Council of Europe Cybercrime Convention
European Union (EU)
General Agreement on Taris and Trade (GATT)
International Monetary Fund (IMF)
North American Free Trade Agreement (NAFTA)
Organization of Petroleum Exporting Countries (OPEC)
United Nations Conference on Trade and Development (UNCTAD)
United Nations Convention on Contracts for International Sale of Goods (CISG)
World Trade Organization (WTO)
The bottom line is that it is necessary to know, based on the scope of the project, at least what laws apply to the project and then to become familiar with them. If there are questions or doubts, check with the appropriate legal experts.
