Overview on Construction Safety Management System and Building Failure Liability

Further to our earlier article regarding Indonesia’s new investment regime after the enactment of Law No. 11 of 2020 on Job Creation (“Job Creation Law”) in the construction sector, we will now focus our discussion on construction safety management systems and building failure liability as regulated under Government Regulation No. 14 of 2021 on Amendment to GR No. 22 of 2020 on Implementing Regulation of Law No. 2 of 2017 on Construction Services (“Amended GR 22/2020”).

The Amended GR 22/2020 provides detailed provisions on sustainable construction as one of Indonesia’s efforts to protect the surrounding environment.

Note: On 25 November 2021, Indonesia’s Constitutional Court issued Constitutional Court Decision No. 91/PUU-XVIII/2020 (“Constitutional Court Decision 91”), which states Job Creation Law as “unconstitutional”, and therefore, does not have any legal standing. Furthermore, Constitutional Court Decision 91 instructs the Government of Indonesia to revise the law within a period of two years. In the meantime, the Job Creation Law and its implementing regulations shall remain effective until the issuance of the revisions. Considering such position, our analysis in this article shall be applicable up to any revision made to the law and its implementing regulation is promulgated.

Scope of Construction Safety Management System/ Sistem Manajemen Keselamatan Konstruksi (“SMKK”): The government requires all construction service users and providers, particularly contractors who provide: (i) construction management consultancy; (ii) construction consultancy supervision; (iii) construction work; and (iv) integrated construction work services to implement SMKK (Art. 84I (2) of Amended GR 22/2020).

In this regard, the aforementioned parties must undertake: (i) hazard identification, (ii) risk assessment, control, and changes based on the work breakdown structure; and (iii) construction safety targets and programs. (Art. 84I (3) of Amended GR 22/2020).

Further to the above, the construction shall include all activities related to construction, operation, maintenance, demolition, and rebuilding works.

Safety Aspect of SMKK: For the fulfillment of security, safety, health, and sustainability standards, Art. 84I (5) – (8) of Amended GR 22/2020 stipulates that the construction must ensure:

Safety Aspect Target
Construction Engineering Safety 1. Buildings and/or Construction assets; and/or
2. Equipment and materials.
Occupational Health and Safety 1. Service users;
2. Construction workforce; and
3. Suppliers,
Public safety 1. Communities around the project; and
2. The public exposed
Environmental safety 1. Work environment;
2. Project affected environment;
3. Natural environment; and
4. Built environment.

Conceptual Design of SMKK: Construction service users and contractors shall prepare a review document on construction safety in the assessment, planning, and/or design stages. Art. 84L (2) of Amended GR 22/2020 stipulates that a conceptual design of SMKK shall include:

  1. scope of responsibility of assessment and/or planning;
  2. initial information on, among other things, the location, environment, and socio-economic, feasibilities, and/or environmental impacts; and
  3. technical recommendations.

For the assessment and planning stages, the design work shall, at least, include:

  1. the scope of the designer's responsibilities, including a statement that in the event of a design revision, the designer shall take the responsibility for the revision and impacts due to changes in the design;
  2. methods for carrying out the construction work;
  3. hazard identification and mitigation, and risk level determination;
  4. a list of standards and/or construction safety laws and regulations stipulated for the design;
  5. SMKK fees; and
  6. design of building construction operation and maintenance safety guidelines (Art. 84L (3) of Amended GR 22/2020).

Element of SMKK: Art. 84L (8) of Amended GR 22/2020 stipulates that the elements of SMKK are:

  1. Construction Safety leadership and workforce participation;
  2. Construction Safety planning;
  3. Construction Safety support;
  4. Construction Safety operations; and
  5. evaluation of the performance in the implementation of SMKK.

The Scope of Building Failure: Art. 85A (1) of Amended GR 22/2020 sets out that a building failure can be caused by the following reasons:

  1. the building collapse where the most parts of, or entire building components are damaged;
  2. the building malfunction where a building is not functioning as initially planned due to incompliance with one or more of the security, safety, health, and/or sustainability aspects.

(a and b above together referred to as “Building Failure”).

Building Failure Incident Report: Anyone including the users, owner or person-in-charge harmed in a building failure can report the incident within three calendar days upon the occurrence (Art. 85D (1) and (2) of Amended GR 22/2020).

The report on a building failure shall contain: (i) the name of the building; (ii) the owner and/or person-in-charge; (iii) the location; (iv) the types of Building Failure; (v) the time of event; (vi) the photo or evidence; and (vii) the identity of the reporting party to be further sent to and assessed by an appointed expert appraiser (Art. 85D (3) of GR 14/2021).

The above article was prepared by Marshall S. Situmorang (Partner) and Audria Putri (Senior Associate)

Disclaimer: The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.