“Self-Certification Versus Private Certification Doctrines on the Issuance of the Certificate of Completion and Compliance for Buildings In Malaysia”
Dato' Sr Profesor Kamarudin Mohd Nor
School of Environmental Engineering
Universiti Malaysia Perlis
P.O Box 77, d/a Pejabat Pos Besar
01007, Kangar, Perlis
The expansion of the scope of self-certification marks the intention of the Malaysian Government to replace the Certificate of Fitness for Occupancy or COF issued by the Local Authorities or LA with the Certificate of Completion and Compliance or CCC in the hope that the delivery system can be improved, the unnecessary layers of bureaucracy are to be lean and that the alleged rampant acts of gratifications in the LA be checked. This move can be viewed as a proactive step by the Government to reform the system of building control by providing an opportunity for self-regulation by the construction industry. However, there are unanswered questions to be looked into in sufficient depth as the new system is being adopted. One fuzzy area that is the question of independence of the “principal submitting person” or PSP empowered to self-certify completion and compliance of works. Lessons from the United Kingdom can be learned in addressing the issue of the independence of certification. The doctrine of private certification practised in the U.K. is examined and recommended to be adapted to complement the self-certification doctrine. It is posited that the LA should still retain the role as approving authorities.
Keywords: self-certification, Certificate of Fitness for Occupancy, Certificate of Completion and Compliance, private certification, self-regulation, Qualified Persons, principal submitting persons, building inspectors, Uniform Building By-Laws 1984, The Building Act [UK] 1984, Home Inspectors , Building Surveyors.
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The Malaysian Government’s intention to expand the scope of self-certification by the “Qualified Persons” or QP was announced by the Prime Minister of Malaysia on 26 June 2004. Under the self-certification doctrine, a “Principal Submitting Person” or PSP is empowered to issue the “Certificate of Completion and Compliance” or the CCC for all building types in lieu of the Certificate of Fitness for Occupation or CFO formerly issued by the local authorities or LA. However the practice of issuing the CCC by the PSP for individually built detached houses has been going on since 1999.
The Uniform Building By-Laws 1984 or 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 for the purposes of submitting plans. Hopefully, this definition could be widened to include other competent professionals like the interior designer or building surveyor.
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.”
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”. (UBBL Clause 25 (2))
The LA, subject to the expressed provisions in the UBBL “… 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 )
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 LA with the CCC in the hope that the delivery system could well be improved, the unnecessary bureaucratic procedures be reduced and that the alleged rampant acts of gratifications in the LA (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?
The full implementation of the CCC means a requiem is being composed hastily for the now defunct CFO. With it will mark the slow death of the building control function within the LA. As stated before, the move to substitute the CFO with the CCC via the self-certification doctrine is to address the issue of alleged inefficiency of the LA. It sets to speed up the process of the certification of completed buildings. However, the parties in the construction industry should also bear some of the responsibilities that contribute to the weaknesses of the process. To a certain extent, the QP 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 inferior quality workmanship.
Formerly, the CFO for buildings (excluding the individually built detached houses as mentioned earlier) are issued by the LA after the plans and works were duly vetted and approved by “one-stop centres” or OSC lead by the LA with members from various technical agencies. Through this rather ad hoc mechanism, the LA were given a specified time (of a maximum of 14 days from the date of the submission of Form E and other pertinent documents) to issue the CFO.
Despite the establishment of the OSC, the process of issuing the CFO was still slow because as alleged by many quarters, the technical agencies involved were fond of sending to the OSC meetings junior officers who were reluctant to make decisions. As such the Deputy Prime Minister had instructed that only competent and experienced technical officers (who can make decisions) should attend such meetings to expedite the process of issuing the CFO. (Utusan Malaysia 14 Oct. 2005, p.2).
The Minister of Housing and Local Government on 3rd October 2005 announced the creation of 334 posts at all LA (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 would “…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.)
What is the CCC? Simply put, it is a certificate under the self-certification doctrine issued by PSP when all building works are substantially completed according to the design, plans and documents deposited earlier with the LA (which according to LAM-PAM  , for record purposes only). Presumably the substantially completed works must have complied with various pertinent laws, regulations and requirements by the relevant agencies. Furthermore, the issuance of a CCC may well imply that the completed buildings are, to state a few:
· “fit for purpose”;
· sustainable and energy efficient;
· structurally sound;
· built with materials and fitted with parts, components& their disposition that conform to the relevant standards and performances;
· 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 ; and
· that the services are duly commissioned.
3 Questions arise:
· 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?
· 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?
· 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?
· How can one justify one’s belief and expectation that by empowering the PSP to self-certify (without the intervention of a third party as an auditor) the CCC, one can be assured of getting quality buildings?
· How independent are the PSP entrusted in the issuance the CCC? Will the CCC self-certified by the PSP who are not independent reflect the true state of completion, compliance, quality of building works and value for money of the finished products?
· 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?
· What remedies are available to aggrieved buyers and end-users after the statutory limitation period of professional liabilities of the PSP 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?
These questions have not been addressed properly until now.
4 Milestones in the process of issuing the CCC
Although the issuance of the CCC is towards the end of the building development process, the steps towards its issuance should be made transparent to all interested parties. It has been stipulated that the risks are to be distributed among the players in the development process instead of resting only on the shoulders of the PSP. This is made manifest by the issuance of various certificates of warranty by the players during the stages of development. For instance, the suppliers are expected to give warranties on the materials and components supplied. It is expected that between 20 and 30 certificates of warranty must be in place before the PSP is ready to issue the CCC.
After the development order for the construction of a building has been obtained from the LA, a PSP 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). This may well 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 with the PSP. If this is the case, then it could be a dangerous step as errors and the possibilities of non-compliance with the relevant codes and standards may occur if unchecked by a third party.
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 PSP must not be treated as for the purposes of record only. They must be deposited with the relevant 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 milestones in the building delivery system will have to stay put.
During the construction phase, the PSP’s role should not be restricted to supervising the works only as required in Clause 25 (a). The PSP (especially the one playing the role of lead consultant) must be actively engaged in all aspects of building control. That means the PSP should be a qualified inspector too – continually inspecting the works and issue certificates at each stage of completion. Again, during the construction phase, the PSP 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 PSP is expected to coordinate the clearance from various agencies like BOMBA [the Fire Services Department], Tenaga Nasional or TEN [the National Energy Company], Telekom [the National Telecommunication Company] and waterworks authority. He/She is also responsible to arrange for the amenities to be tested and commissioned, and ensure that health, safety & environmental requirements are complied with. Only then can the PSP issue the CCC.
Questions arise: at what specific stage 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 PSP issue an interim CCC first and the final one issued at the end of the defects liability period (assuming that all defects are made good satisfactorily)?
5 Private-certification as an alternative doctrine to self-certification.
It can be inferred that the self-certification doctrine bestows upon the PSP the 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 himself/herself. In theory, he/she is likened to a law maker, a judge and an executioner all in one. Whilst the doctrine may well satisfy the objective of ensuring a speedier issuance of the CCC, what avenues are open to buyers or end-users to air their grievances if they are not satisfied with the products that they commissioned or purchased?
Despite the assurance by the PSP 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 a delinquent PSP. However, these measures could be too late to be taken as the delinquent acts have already been committed. At the end of the day, the buyers and end users will suffer and will have to pick up the pieces themselves.
It is proposed that, the CCC 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 stakeholders. For this purpose, the elements of the doctrine of private certification practised in the United Kingdom or the UK may well be adopted in the process of issuing the CCC.
In the UK, a statutory framework is contained in Part 11 of the Building Act 1984. It passes on the responsibility for ensuring compliance with building regulations to an independent “approved inspector” or AI. An AI is a person approved by the Secretary of State or a body designated by him for that particular 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.
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 deemed to be a “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 too, 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. (Powell-Smith and Billington, op. cit.)
The expansion of the scope of self-certification marks the intention of the Government to replace the CFO issued by the LA 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 LA be checked. This move can be viewed generally, as a proactive step by the Government to reform the system of building control by providing opportunity for self-regulation by the construction industry.
However, there are unanswered questions to be looked into in sufficient depth before the new system can be pratised effectively. One fuzzy area that could manifest itself as a potential problem later is the question of the independence of the PSP empowered to self-certify completion and compliance of works.
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 studied thoroughly and if need be replicated and customized to suit the needs of the country [Malaysia]. As such, the CCC can be both done via self-certification by the PSP (to a limited extent – as practised currently) and private-certification by independent approved AI. 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.
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 enforced in the U.K. could be studied and adapted in Malaysia in the future.
Finally to safeguard the interests of the buyers and end-users, we may well want to examine the recently passed “Home Inspection Act” in the UK. The Act ensures that houses delivered to buyers and end-users are inspected by independent home inspectors or HI 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 persons before making any decision. One such party could well be the Building Surveyor or BS.
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.
The Starspecial “Bold Local Initiatives – One-Stop Centre Mechanism” pages ss4-ss5, ublic Service, Tuesday 22nd May 2007
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.
A BRIEF DESCRIPTION OF THE AUTHOR
• Associate Professor Dato’ Dr. Kamarudin B. Mohd. Nor BSc Hons HBP (Architecture) Universiti Sains Malaysia, MSc (Construction Management) Heriot-Watt University, Edinburgh, PhD Welsh School of Architecture, University of Wales Cardiff
• Professional Affliations:
• MCIArb (Member of the Chartered Institute of Arbitration UK),
• FISM (Fellow of the Institution of Surveyors Malaysia in the Building Surveying Division)
• FRICS (Fellow of the Royal Institute of Chartered Surveyors UK)
• MBEng (Member of the Association of Building Engineers UK),
• Associate Professor, School of Environmental Engineering University of Malaysia Perlis [since October 2006] – Also the Coordinator of Quality Unit and Project Advisor for the new 1,000 acre UniMAP campus at Pauh.
• Vice President of the Institution of Surveyors Malaysia and Chairman of Building Surveying Division
• Minister Counselor (Education) with the Malaysian High Commission in the UK and Director of the Malaysian Students Department (MSD) for the UK and EIRE in London
• General Manager (Construction Business Development Division), Construction Industry Development Board Malaysia or CIDB
• Managing Director Bina Darulaman Berhad – a Public listed property development company (a subsidiary of Kedah State Dev. Corp.)
• Associate Professor and Dean of School of Housing, Building and Planning; Univ. Sains Malaysia
• Construction Manager, Dixon Homes Malaysia Sdn. Bhd
• Project Manager and Designer, Arkitek Maju Chartered Architects
• General Manager, Syarikat Peruda Kedah Sdn. Bhd
• State Civil Service Officer, Kedah State Government (KCS) [Last post: Assistant State Secretary – Local Government]