Sunday, May 11, 2008

Self-Certification versus Private Certification on the Issuance of the CCC

1.0 Introduction

1.1 The Government’s intention to expand the scope of self-certification by the “Qualified Persons” (QP) was announced by the YAB Prime Minister on 26 June 2004. Since 1999, the QP have been empowered to issue the Certificate of Completion and Compliance (CCC) in lieu of the Certificate of Fitness for Occupation (CFO) issued by the local authority (LA) for individually built detached houses.
1.2 The Uniform Building By-Laws 1984 (UBBL) under the Street, Drainage and Building Act 1974 (Act 133) or SDBA restrictively defines a QP as any architect, registered building draughtsman or engineer. Hopefully, this definition could be widened to include other competent professionals like the interior designer or building surveyor in the near future.
1.3 On the question of the issuance of the CFO by a QP, the UBBL clearly expresses this in Clause 25 (1) as follows:
“Certificate of fitness for occupation of a building shall be given when –
(a) the qualified persons during the course of the work have certified in form E as set out in the Second Schedule to these By-laws that they have supervised the erection of the building, that to the best of their knowledge and belief the building has been constructed in accordance with these By-laws and any conditions imposed by the local authority and that they accept full responsibility for those portions which they are respectively concerned with and the local authority or an officer authorized by it in writing for the purpose has inspected the building.
(b) all essential services, including access roads, landscape, car parks, drains, sanitary, water and electricity installation …have been provided.”

1.4 In Clause 25(2), the UBBL states that “ nothing contained in this by-law shall prevent the local authority or any officer authorised by it in writing for the purpose from inspecting any building works at any stage thereof and calling attention to any deviation from the approved plan or non-compliance with any of these By-laws which he may observe and from giving notice in writing ordering such deviation to be rectified”.
1.5 The LA, subject to the expressed provisions therein, “… may in its discretion grant a partial certificate of fitness for the occupation of any part of a building partially completed…. A partial certificate of fitness for occupation once issued shall remain effective until the whole of the building is completed and a certificate of fitness for occupation is issued” (Clause 27 (1) and (2) of the UBBL 1984)

1.6 The expansion of the scope of self-certification may well be interpreted as the resolve of the Government to replace the CFO issued by the LAs with the CCC in the hope that the delivery system can be improved, the unnecessary bureaucratic red-tapism be cut and that the alleged rampant acts of gratifications in the LAs (as claimed by some quarter) be stopped. This move, too, can be viewed as a proactive step by the Government to reform the system of building control by providing opportunity for self-regulation by the construction industry. Are the reasons for such a move justifiable?
1.7 The full implementation of the CCC (expected in March 2006) means a requiem is being composed hastily for the CFO. With it will mark the slow death of the building control function within the LAs. As stated before, the move to substitute the CFO with the CCC via a self-certification doctrine is to cut down the unnecessary bureaucratic mechanism and address the issue of inefficiency of the LAs to speed up the process of the CFO issuance. However, the parties in the construction industry should also bear some responsibilities that contribute to the weaknesses of the process. To a certain extent, the QPs too may be blamed for the incomplete submission of development plans and documents, non-compliance with the UBBL and other relevant requirements and failure to supervise properly resulting in shoddy workmanship.

2.0 Background

2.1 At the moment, the CFO for buildings (excluding the individually built detached houses) are issued by the LAs after the plans and works are duly vetted and approved by “one-stop centres” (OSC) lead by the LAs with members from various technical agencies. Through this rather ad hoc mechanism, the LAs are given specified time (of 14 days from the date of submission of Form E and other pertinent documents) to issue the CFO.
2.2 Despite the establishment of the OSCs, the process of issuing the CFO is still slow because, according to YAB DPM, the technical agencies involved are fond of sending to the OSC meetings junior officers who are reluctant to make decisions. As such YAB DPM has instructed that only competent and experienced technical officers (who can make decisions) are to attend such meetings to expedite the process of issuing the CFO. (Utusan Malaysia 14 Oct. 2005, p.2).
2.3 The Minister of Housing and Local Government on 3rd October 2005 announced the creation of 334 posts at all LAs (presumably to be filled up by competent technical persons for building control purposes) to “…help cut red tape and bureaucracy in the processing and approval of development plans and Certificates of Fitness for Occupation (CF)” (The Star, 4th October 2005,p.6). The increase in the number of the posts, according to the Minister will hopefully “…resolve all problems pertaining to the CFs (sic) before the implementation of the Certificate of Completion and Compliance which will replace the CF”. (The Star, op. cit.)
2.4 What then does the CCC mean? Simply put, a certificate under the self-certification doctrine, is issued by QPs when all building works are substantially completed as per design, plans and documents deposited earlier with the LA (which according to LAM-PAM (2004) , for record purposes only). Presumably the works must have complied with various pertinent laws, regulations and requirements by relevant agencies. Furthermore the CCC may well imply that the completed buildings are, to name a few:
· “fit for purpose”;
· sustainable and energy efficient;
· structurally sound;
· built with materials and fitted with parts, components& their disposition that conform to pertinent standards and performance;
· of acceptable quality both overall and in details, benchmarked against best practices known;
· in strict compliance with the stipulated health, safety and security needs;
· easily maintained, refurbished and altered (if need be);
· and that the services are duly commissioned and functioning as per performances expected.

3.0 Questions
3.1 Has a thorough study been carried out to identify the constraints that impede the smooth approval of development plans and issuance of the CFO by the LA?
3.2 If yes, has the relevant ministry identified possible solutions to improve the existing process holistically?
3.3 If the CCC via the self-certification doctrine is a recommended solution (despite it not being studied thoroughly with regard to its legal implications for instance), will it provide the much awaited panacea that warrant it to terminate the CFO issuance process?
3.4 Will the CCC via the self-certification doctrine be but an ad hoc and simplistic solution to speed up the delivery system until a more efficacious mechanism is found?
3.5 How can one justify one’s belief and expectation that by empowering the QPs to self-certify (without the intervention of a third party as an auditor) the CCC, one can be assured of getting quality buildings?
3.6 How independent are the QPs entrusted in the issuance the CCC? Will the CCC self-certified by the QPs who are not independent reflect the true state of completion, compliance, quality of building works and value for money of the finished products?
3.7 Does the move to replace the CFO with the CCC tantamount to a complete substitute for LA control? Who then will be responsible for taking any enforcement actions?
3.8 What remedies are available to aggrieved buyers and end-users after the statutory limitation period of professional liabilities of the QPs has ended despite having issued the CCC initially themselves? Can the aggrieved party sue the relevant LA instead? If not, what is the use of the CCC at all?

4.0 Milestones in the process of issuing the CCC
4.1 Although the issuance of the CCC marks the last stage in the building development process, the steps towards its issuance should be made transparent to all interested parties.
4.2 Assuming that the development order has been obtained, a QP will only have to deposit all the necessary plans and documents in compliance with the UBBL codes and standards with the LA for record purposes only (LAM-PAM 2004, Appendix C). This would mean that the building control unit within the LA will be reduced to a sheer archival unit as the role of building control is now being entrusted to the QP. If that is the case, then it could be a dangerous step as errors and the possibilities of non-compliance to the relevant codes and standards may occur if unchecked. At the outset, it must be posited that the role of building control should continue to rest on the shoulders of the LA. Therefore, all plans and documents submitted by the QP must not be treated as for the purposes of record only. They must be deposited with the pertinent building control department for the purposes of vetting and obtaining approval before development order can be issued and the ensuing construction can proceed. This means the existing milestone in the building delivery system will have to stay put.
4.3 During the construction phase, the QP’s role should not be restricted to supervise the works only as required in Clause 25 (a). He/she (especially the one playing the role of lead consultant) must be actively engaged in all aspects of building control. That means he/she should be a qualified inspector too – continually inspecting the works and issue certificates at each stage of completion. Again during the construction phase, the QP should collate certification and warranties by all parties (main contractor, sub-contractors, specialist contractors, manufacturers, suppliers and supporting consultants as well) involved in the production process. Towards the completion stage, the QP is expected to coordinate the clearance from various agencies like BOMBA, TEN, Telekom and waterworks authority, get the amenities tested and commissioned, and certify that health, safety & environmental requirements are complied with. Only then can the QP issue the CCC. Questions arise: at what specific stage in the development process should the CCC be issued to reflect the substantial completion of the works and compliance with the UBBL codes and standards? Will the Final Certificate issued to the contractor be construed as an equivalent evidence as to the practical completion of the works? Or should the QP issue an interim CCC first and the final one certified at the end of the defects liability period (assuming all defects are made good satisfactorily)?

5.0 Private-certification as an alternative to self-certification.
5.1 It can be inferred that the self-certification doctrine bestows upon the QP total freedom to design, produce plans and documents for the purposes of production (without having to obtain prior approval from the LA); control building development process at various stages; and certify that the building is complete and in compliance with the relevant laws and regulations all by him/herself in theory. He/she is a law maker, judge and executioner at the same time. Whilst the doctrine may well satisfy the objective of ensuring the speedier issuance of the CCC, what avenues are open to buyers and end-users to air their grievances if they are not satisfied with the products that they bought?
5.2 Despite the assurance by the QPs that they can act independently (vide LAM-PAM, op. cit.), there is no certainty that they cannot be pressured or coerced by their employers to act delinquently. Of course there are measures available to act against delinquent QPs. However, they could be too late to be taken as crimes have been committed, leaving the buyers and end users to pick up the pieces unnecesarily.
5.3 It is proposed that, whilst the current practice by the QP to issue the CCC via the self-certification mechanism for individually built detached houses could be allowed to continue, the CCC for other buildings should be processed under the doctrine of check and balance to ensure the principles of disclosure, transparency, accountability, liability, neutrality and fairness in decision-making are adhered to by all interested parties. For this purpose, the doctrine of private certification practised in the United Kingdom (UK) be adopted in the process of issuing the CCC.
5.4 In the UK, a statutory framework is contained in Part 11 of the Building Act 1984 passing on the responsibility for ensuring compliance with building regulations to an independent “approved inspector”. An approved inspector (AI) is a person approved by the Secretary of State or a body designated by him for that purpose (Section 49 of the Building Act 1984). This is a private certification mechanism enshrined in the Building (Approved Inspectors, etc,) Regulations 1985. The full operation of private certification depends on: (a) the availability of adequate insurance cover and (b) the qualifications of AI.
5.5 An AI must have: (a) professional qualification approved under the Act such as the CIOB, RIBA, RICS, ABE (IAAS), ICSE. (b) ample practical experience (c) indemnity insurance and (d) knowledge of the building regulations. An AI cannot supervise work in which he/she has a professional or financial interest unless it is “minor work” (Powell-Smith and Billington 1986, p.46). There is a general definition of what is meant by having a professional or financial interest in the work. The following persons are considered to be having such interest:
“ (a) Anyone who is or has been responsible for the design or construction of the work in any capacity.
(b) Anyone who or whose nominee is a member, officer or employee of a company or other body which has a professional or financial interest in the work, e.g. a shareholder in a building company.
(c) Anyone who is a partner or employee of someone who has a professional or financial interest in the work.
However, involvement in the work as an approved inspector on a fee basis is not a debarring interest..” (Powell-Smith and Billington, op. cit.)
An AI may arrange for the work to be inspected on his behalf by someone else but he remains responsible for such inspection.
An AI can issue a plans certificate to both the LA and building owner certifying that the design has been checked and that the plans comply with the Building Regulation 1985. He/she should issue the final certificate when the work is completed. If the LA does not reject the certificate within ten working days it is deemed to have accepted it. However, self-certification by an approved person with an interest in the work is allowable in certain specialized works like ensuring structural stability of and determining energy requirements in buildings.

6.0 Conclusion
6.1 The expansion of the scope of self-certification marks the intention of the Government to replace the CFO issued by the LAs with the CCC in the hope that the delivery system can be improved, the unnecessary bureaucratic red-tapism be cut and that the alleged rampant acts of gratifications in the LAs be checked. This move can be viewed globally as a proactive step by the Government to reform the system of building control by providing opportunity for self-regulation by the construction industry.
6.2 However, there are unanswered questions to be looked into in sufficient depth before the new system is put in place. One hazy area that could manifest itself as a potential problem later is the question of independence of the QP empowered to self-certify completion and compliance of works.
6.3 Lessons from other developed countries, especially the U.K. can be learned in addressing the issue of the independence of certification. The doctrine of private certification practiced in the U.K. could be examined and if need be replicated and customized to suit our needs. Therefore the CCC can be both done via self-certification by the QP (to a limited extent – as practised currently) and private-certification (for other buildings) by independent approved building inspectors. However, the LA should still retain the role as an approving authority in ensuring that building plans comply with the stipulated codes and standards. Only building inspection function be empowered to the professionals.
6.4 Another area that can be learned is the implementation of health, safety and welfare measures during the construction process. The measures should form part of the final certification of works. The Construction (Design and Management ) Regulations 1994 practised in the U.K. could be studied and implemented in this country in the future.
6.5 Finally to safeguard the interests of the buyers and end-users, we may well want to examine the recently passed “Home Inspection Act”, again in the U.K. The Act ensures that houses to be delivered to buyers and end-users are inspected by independent home inspectors even if the certificate of completion and compliance of such houses have been obtained. As such the buyers and end-users are given the opportunity to solicit professional opinions of third parties before making any decision.
CIDB (2004) “ Current Challenges Facing the Malaysian Construction Industry”. An unpublished report by the Construction Industry Development Board Malaysia.
CONIAC-Bone, S. (2003) “Designing for Health and Safety in Construction: A Guide for Designers on the Construction (Design and Management) Regulations 1994. HSE: Suffolk
Lembaga Akitek Malaysia-PAM (2004) “ Government’s Proposal to Substitute the CFO with a CCC issued by Professional Architects and Engineers”. An unpublished paper, July 2004.
Murdoch, J. and Hughes, W. (2002) “Construction Contracts-Law and Management”. Third edition. SPON Press: London.
Powell-Smith, V. and Billington, M. (1986) “The Building Regulations – Explained and Illustrated.” Collins: London.
Reddin, P. (2005) “Certificates for Occupation-A Multi-Track Approach”. A paper presented at the 7th Surveyors’ Congress, P.J., 21st June 2005.
The Star (2005) “Getting a CF minus the usual red tape”, p.6, Nation, Tuesday, 4th October 2005.
Uniform Building By-laws 1984 (All amendments up to September 2000). MDC Pub: K.L.
Utusan Malaysia (2005) “CFO: Pegawai lebih layak diarah hadiri mesyuarat OSC”. P.2, 14th October 2005.

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