The government has drawn up a draft of the Omnibus Law Bill which consists of Employment Creation Law, Tax Facilities Law and State Capital Law. On 12 February 2020 the chief of the House of Representatives has received an academic paper and a draft of the Employment Creation Law for further discussion. The Employment Creation Law consists of 174 articles and 79 affected laws and one of the laws amended in the draft of Employment Creation Law is Law Number 28 of 2002 concerning Buildings (“Law No. 28/2002”). Article 25 of the Employment Creation Law draft regulates changes to Law No. 28/2002, concerning Building Approval, building technical standards, building organizers, procedures, authority and sanctions.
This writing will only focus on the amendment of Law No. 28 of 2002 on Building in the draft of Employment Creation Law.
In the draft of Employment Creation Law, the terminology for Building Construction Permit is changed to Building Approval. According to the draft of Employment Creation Law, Building Approval for both its first issuance and its changes in building functions must obtain approval from the Central Government. Provisions regarding the procedure for obtaining a Building Approval will be regulated by a Government Regulation.
Building Technical Standards
Referring to Article 7 of Law No. 28/2002 each building must meet administrative requirements which include i) the requirements for the status of land rights, ii) the ownership status of the building, iii) building permit, as well as the technical requirements that cover i) the building layout requirements and ii) the building reliability requirements. The draft of Employment Creation Law removes the provisions regarding the administrative requirements of buildings, building layout requirements and building reliability requirements, and amends Article 7 of Law No. 28/2002 so that the building requirements are to meet the technical building standards. Technical building standard is a specification standard based on location, function and classification of buildings including the height of the building, the maximum number of floors of the building and the building distance. Further provisions regarding technical building standards will be regulated by Government Regulation.
The draft of Employment Creation changes Article 34 of Law No. 28/2002 related to the building organizer. Building organizers are parties who are required to meet the technical building standards. The parties referred to in the draft of Employment Creation Law are:
- Building owner;
- Construction service providers;
- Technical reviewers;
- Building users.
An expert is someone who has met the competency standards and is set by an accredited institution by the Central Government. Inspector is a building inspector who is a competent individual, given the task by the Central Government to inspect building operations. Construction service providers are providers of construction services as regulated in the construction services regulations. Technical reviewer is an individual or business entity that has obtained work competency certificate of expert qualifications or a business entity certificate to carry out a technical assessment of the appropriateness of building functions.
In the implementation of building construction, building owners are obliged to use construction service providers and building technical reviewers. The draft of Employment Creation Law regulates more details on building construction procedures, namely:
- The construction planner service provider conducts the planning of a building construction by following the technical building standards. If the building is planned but not in accordance with the technical building standards set by the Central Government, then the construction planner service provider must complete the construction plan with test results including but not limited to laboratory test results, simulations and/or analysis results. Next the said results are consulted with the Central Government to obtain a statement of compliance with technical standards and approval of technical plans from the Central Government. However, if the construction is planned to follow the technical building standards, the construction planner service provider will have to get a statement of compliance with the technical standards without the need to consult and inspection of compliance with the standards.
- Construction is carried out by construction service provider after obtaining the Building Approval. To obtain a Building Approval one must submit a statement of compliance with technical standards as a requirement document. The document is submitted to the Central Government through the Building Management Information System for non-business buildings and electronic integrated business licensing services for business buildings. Further provisions regarding the procedure of obtaining Building Approval will be stipulated by Government Regulation.
- In the construction phase, the Central Government supervises every stage of development by appointing Building Inspectors. This supervision is carried out to determine whether or not the construction work continues to the next stage.
After the construction is finished, the building can be used after obtaining a certificate of feasible function. The draft of Employment Creation Law regulates in detail the procedure for issuing the certificate of feasible function, as follows:
- Statement letter of the feasibility of the function will be issued by technical reviewer after the last inspection of the construction phase has been completed and it is stated that the building has met the building technical standards.
- The Supervision Service Provider or Construction Management submits the issuance of the certificate of feasible function based on the said statement letter of the feasibility of the function to the Central Government through an electronic system.
- Issuance of the certificate of feasible funciton is carried out in conjunction with the issuance of a building ownership certificate.
Some of the Regional Government’s authorities that are taken over by the Central Government in accordance with the draft of Employment Creation Law are:
- Stipulation of demolition of buildings that are not feasible and cannot be repaired;
- Ratification of the building technical plan; and
- Stipulation of buildings and/or environment which are protected and preserved.
However, the Regional Government still has the authority in preparing the Spatial Detail Plan of its area and each building must be in accordance with the allotment of locations stipulated in the Spatial Detail Plan.
If under the Law No. 28/2002 administrative sanctions are only imposed on building owners and users, in the draft of Employment Creation Law administrative sanctions can be imposed on all building organizers. Provisions regarding the types and procedures for imposing administrative sanctions will be regulated by Government Regulation.
Furthermore, under Law No. 28/2002 for violations which result in property losses are previously threatened with a maximum imprisonment of 3 years and/or a maximum fine of 10% of the building value. Under the draft of Employment Creation Law the same violation will be imposed with administrative sanctions and sanctions for compensation for damaged property. Criminal sanction will be imposed if administrative sanctions and sanctions for compensation are not carried out by the offender.
To improve the investment ecosystem and provide easier access for business actors, the draft of Employment Creation Bill simplifies the requirements for Business Licensing, in this case is the requirements for Building Approval. The draft of Employment Creation Law does not specifically regulate administrative requirements for buildings and only requires buildings to comply with building technical standards. This might be further regulated under the more technical implementing regulation especially involving the application through online system. These technical standards are not specified in the draft of Employment Creation Law but will be regulated in its implementing regulation. In addition, the draft of Employment Creation Law regulates more specific the parties involved in the management of buildings. These parties must comply with the provisions and standards set by the Central Government including the obligation to comply with the technical standards of buildings. The involvement of these parties must present from the planning stage to the construction and supervision stages of the building. This is done to ensure that every stage of building construction is carried out in an orderly and safe manner.
Building Approval will be issued by the Central Government through an electronic system. In addition, in order to simplify the process of buildings management, all Regional Government authority related to the administration of buildings will be transferred to the Central Government.