How to establish a trustworthy incentive and disciplinary mechanism for dishonesty

Zhejiang: The mechanism of "credit guarantee" reduces costs and burdens for trustworthy enterprises-Industrial Injury Insurance Network

For a long time, the dishonesty of construction enterprises in China mainly focused on four aspects: qualification, business contract, payment and project quality. As a result, the four deposit systems of bidding, performance, wage payment for migrant workers and quality have been born, and the project guarantee system has also been promoted to become the main support of the credit system in the construction market.

Since the introduction of insurance mechanism in the field of construction project deposit on 20 16, Zhejiang Province has taken measures such as "substitution", "reduction", "exemption", "guarantee" and "management" to take the lead in implementing the reform of construction project deposit system in China. In order to further play the role of project guarantee in the construction of credit system in the construction market, the Housing and Construction Department of Zhejiang Province and other departments also issued the Notice on Reforming the Deposit System in the Construction Field of the Province last year (hereinafter referred to as the Notice), proposing to "establish and improve the linkage mechanism between credit and project guarantee".

Around the "credit guarantee" mechanism, Zhejiang Province has carried out a series of work in credit reward and punishment, credit restraint and other aspects through measures such as paying margin by difference and implementing electronic guarantee.

1. Strengthen credit rewards and punishments and implement differentiated deposit payment.

In order to further strengthen the credit incentive mechanism, the Notice clarifies that from June 30, 2020, construction enterprises with the highest credit evaluation results can be exempted from paying the bid bond for government investment projects; Construction enterprises that have implemented real-name management and wage sub-account management, and have not been put on file for two consecutive years and have not been included in the list of serious dishonesty in the construction market, can be exempted from paying the wage deposit for migrant workers. In order to further strengthen the credit punishment mechanism, the Notice also requires that for construction enterprises that have not implemented the system of eradicating wage arrears or have been put on file for wage arrears, the amount of wage guarantee for migrant workers should be increased (the maximum amount should not exceed three times the amount they should pay).

Through the implementation of differential deposit payment, in 2020, Zhejiang Province has exempted migrant workers' wage deposit of 2.29 billion yuan, and imposed economic penalties on enterprises with serious dishonesty. This is not only the implementation of the Guiding Opinions on Accelerating the Implementation of the Project Guarantee System for Housing Construction and Municipal Infrastructure Projects (hereinafter referred to as the Opinions) issued by the Ministry of Housing and Urban-Rural Development and other six departments, but also encourages more construction enterprises to standardize and keep promises, earnestly perform their duties, and strive to avoid issuing letters of guarantee when undertaking businesses with good credit evaluation results, or obtaining project guarantees at lower premiums.

2. Deepen credit constraints and introduce market-oriented supervision into the letter of guarantee.

In Zhejiang Province, while replacing the deposit with the letter of guarantee and reducing the market access conditions, the role of the letter of guarantee in the supervision of the construction market has been further highlighted through the combination of credit and market access.

On the one hand, engineering guarantee replaces cash deposit, which increases the cost of dishonesty of construction enterprises: for enterprises with good credit, banks, insurance companies and guarantee companies are more willing to issue letters of guarantee and charge lower premiums; Enterprises with bad credit need to pay more premiums, and enterprises listed in the list of serious dishonesty may not be able to obtain guarantees and it is difficult to undertake engineering projects.

On the other hand, the cash deposit is replaced by the project guarantee, which introduces a market-oriented supervision mechanism for the supervision of the construction market, so that the competent authorities can implement more comprehensive supervision over the performance of enterprises with the help of banks, insurance companies and guarantee companies. As emphasized in the opinions of the Ministry of Housing and Urban-Rural Development and other six departments, except for breach of contract, the tenderer fails to return the bid bond, bank deposit interest or bid guarantee in the same period as stipulated, and the construction unit fails to return the deposit at maturity, which should also be recorded in the credit record as bad behavior; Serious untrustworthy enterprises such as malicious claims should also be included in the "blacklist" management of the main body of the construction market-the application of letter of guarantee will undoubtedly expand the source of credit information of construction enterprises and enrich the depth and breadth of credit evaluation.

On this basis, the competent authorities can also use the market-oriented supervision power to carry out credit restraint work more accurately. The notice clearly stated that "if a construction enterprise is included in the list of serious dishonesty due to wage arrears, it will be restricted in terms of market access, qualification management, bidding and other aspects according to law during the release period of the list of serious dishonesty; Tenderers of government investment projects can ask bidders not to publish bad information, which will also play a greater role.

In a word, project guarantee is highly sensitive and dependent on enterprise credit, and replacing cash deposit with it is more helpful to strengthen the deterrence of credit constraint and accelerate the construction of a "one place is broken and everywhere is limited" construction market environment.

3. Implement electronic guarantee to enrich credit collection and application.

Implement the requirements of "actively developing electronic letter of guarantee, encouraging the credit management of guarantee institutions with project re-guarantee system, and promoting the supervision of the guarantee market of' internet plus' project" in the opinions of the Ministry of Housing and Urban-Rural Development and other six departments, and respond to "vigorously promoting the use of letter of guarantee, especially" replacing cash deposit with electronic letter of guarantee "in the Notice of the National Development and Reform Commission on actively responding to the epidemic situation and innovating the bidding work to ensure the stable operation of the economy. The circular also proposed to "speed up the implementation of electronic letter of guarantee and enhance the ability of enterprises to handle banks"

As a result, Zhejiang Province began to implement electronic bid guarantee in the field of engineering construction. At present, the electronic guarantee system for key projects in Zhejiang Province has been put into operation, and 56 cities and counties (cities, districts) have also begun to implement electronic guarantee for bid bonds. On the one hand, increasing digital empowerment provides convenience for trustworthy enterprises to issue letters of guarantee, on the other hand, it also embeds credit information, which is helpful to establish a letter of guarantee credit database.

Along with the electronic letter of guarantee, there are not only the verification of the authenticity of the letter of guarantee, but also the disclosure of the guarantee institution, guarantee period, guarantee amount, policy number and other information by the electronic letter of guarantee system. The former is helpful to broaden the dimension of credit evaluation; The latter helps to convey the trustworthy incentive message that "the better the credit, the easier the guarantee" by publicly demonstrating the strength of the construction enterprise to issue a letter of guarantee.

Project guarantee is an important measure to transfer, share, prevent and resolve the performance risk, and also an important institutional arrangement to promote the construction of credit system. Its application is helpful to guide the main body of the construction market to establish credit consciousness, strengthen internal credit management, continuously improve the performance ability and accumulate enterprise credit; It also needs to be fully empowered by the "credit guarantee" mechanism to play a greater role in the market environment of "one place is broken and everywhere is constrained".