Saturday, December 17, 2016

House Passes the Bill on Construction-Service Law

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Marcell Sihombing, Rofiq Hidayat


Photo by: RES


During a plenary session which was held last Thursday, the House of Representatives (House) finally passed the Bill on Construction Services (“Bill”). The Bill will replace the now obsolete Law No. 18 of 1999 on Construction Services (“1999 Construction Law”) when it effectively comes into force.
According to Fary Djemi Francis, the Chair of House Commission V, the Bill contains some 14 chapters which encompass a total of 106 articles. The Bill thus covers a greater number of provisions when compared with the 1999 Construction Law, which only comprised of 12 chapters and 46 articles in total.
Mr. Francis has also asserted that national development must be supported with sufficient protection being afforded to the organization of construction services. With this goal in mind, it is highly important that Indonesia is able to set out a reliable regulatory framework that covers the interests of both consumers and construction companies. In line with this goal, Mr. Francis has stated that the Bill now delineates a clear division of duties and responsibilities as regards said protection between central government and regional governments.
Moreover, the Bill is also set to tighten up the various requirements which must be satisfied by foreign construction companies that are intending to set up business operations within Indonesia. Such companies are now required to establish representative offices within Indonesia and acquire the status of Indonesian incorporated entities. In order to become an Indonesian incorporated entity, a foreign construction company is required to cooperate with domestic construction services under a capital-investment scheme.
Mr. Francis also asserted that the Bill was also being aimed at preventing any possibility of development failure. By way of example, Mr. Francis referred to the various provisions which are set out in Chapter VI of the Bill, which covers matters relating to security, safety, health and the continuity of construction projects. Moreover, Mr. Francis also explained that the possibility of failure as regards certain projects will be evaluated by experts who are appointed by the Ministry of Public Housing and Public Works.
Another important aspect of the Bill relates to the development of human resources through various competency-building training measures. Mr. Francis has stated that all construction workers will be required to be in possession of the necessary work-competency certificates.
Mr. Francis went on to highlight the fact that the Bill will facilitate public participation while also revoking criminal-sanction provisions. Mr. Francis believes that the Bill places a greater emphasis upon administrative and civil sanctions (sanksi keperdataan dan administratif) in the hope that any legal proceedings which are initiated for violations which occur during a construction project will not ultimately hamper the progress any such project.
On behalf of the government, Yasonna H. Laoly, the Minister of Law and Human Rights, affirmed Mr. Francis’s views and stated that the implementation of construction projects will require thorough protection. He also lauded the clear division of duties and responsibilities between central and regional government, which are clearly stipulated under the 2016 Construction Law.
Offering further insight, Minister Laoly also asserted that the central government should also involve the general public during the implementation of any construction services. Such involvement can be channeled through an institution which will be established by the relevant ministry. And last but not least, the implementation of construction services has now been extended to also encompass the provision of buildings (penyediaan bangunan).
“According to these various considerations, the President has given his consent for the passage of the Draft Bill on Construction Services into law,” Minister Laoly concluded.
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