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We certainly ever heard of collapsed buildings incident from the media, either the entire building collapsed or only part of it. For example, the collapsed of the IDX hallway in 2018, which became the national spotlight because there were more than 70 injured victims. In the same year, there was also a similar incident, namely the collapsed of the Soekarno Hatta Airport perimeter which resulted in the death of one person.

Under the prevailing law, the collapse or malfunction of a building after the final delivery of a building is known as building failure. Building failure is very dangerous for people in or around the building because it can result in the loss of a person’s life. Then, who can be held responsible for building failure?

Based on Law Number 2 of 2017 concerning Construction Services (“Construction Services Law”), in every construction service operation, Service User and Service Provider are required to meet the security, safety, health and sustainability standards. If this is not met, the Service User and/or Service Provider may be the party responsible for building failure.

Responsibility for building failure includes:

1. Replacement or repair of building failure by the Service Provider

The Service Provider is obliged to replace or repair a building failure caused by the Service Provider’s error. Replacement or repair of building failure by Service Provider can be transferred to a third party, e.g. insurance.

2. Providing compensation by Service User and/or Service Provider

Apart from being obliged to replace or repair a building failure, the Service User and/or Service Provider are also obliged to provide compensation in the event of a building failure. Compensation is determined by the competent authority based on the expert appraiser’s report. Based on Article 90 of Government Regulation of the Republic of Indonesia Number 22 of 2020 concerning Implementation Regulations of Law Number 2 of 2017 concerning Construction Services, the compensation referred includes:

  1. compensation for the aggrieved party who dies;
  2. compensation for the aggrieved party who suffers a wound that results in permanent disability;
  3. compensation for medical expenses that were clearly incurred by the aggrieved party or part of other service costs; and
  4. compensation for destroyed, damaged or lost due to building failure.

The compensation process carried out by the Service Provider must be started within a period of no later than 30 (thirty) calendar days since stipulated by the competent authority. The obligation to pay for compensation can be transferred to a third party, e.g. insurance.

Building failure is determined by an expert appraiser whose determination is final and binding. The duties of an expert appraiser are to:

  1. determine the level of compliance with security, safety, health and sustainability standards in the operation of construction services;
  2. determine the causes of building failure;
  3. determine the level of collapse and/or malfunction of the building;
  4. determine the party responsible for building failure;
  5. report the results of the assessment to the minister and agencies that issue building permits, no later than 90 (ninety) working days from the date of implementation of the duty; and
  6. provide policy recommendations to the minister to prevent building failure.

The Service Provider’s responsibility for building failure is limited to the period specified in the construction life plan, which must be stated in the construction work agreement. In the event that the construction life plan is more than 10 (ten) years, the Service Provider is only obliged to be responsible for the failure of the building within a maximum period of 10 (ten) years from the date of final delivery of construction services. After 10 (ten) years, the responsibility shifts to the construction Service User.

Administrative Sanctions

If the Service Provider does not fulfill the obligation to replace or repair a building failure, the Service Provider may be subject to administrative sanctions in the form of:

a. written warning

The Minister, Governor, or Regent/Mayor impose a written warning sanction on Service Provider who does not fulfill their obligations to replace or repair building failure.

b. administrative fine

The Minister, Governor, or Regent/Mayor impose the administrative fine on Service Provider who does not fulfill the obligation to replace or repair a building failure, in the amount of 5% (five percent) of the implementation guarantee value.

c. temporary suspension of construction service activities

If within 30 (thirty) calendar days since the imposition of the written warning sanction and administrative fine, the Service Provider does not fulfill the obligation to replace or initiate action to repair the building failure and does not pay the administrative fine, then the sanctions for temporary suspension of construction service activities will be imposed.

d. blacklisting

If within 30 (thirty) calendar days since the imposition of sanctions for temporary suspension of construction service activities, the Service Provider does not fulfill the obligation to replace or initiate action to repair building failure, then it will be subject to blacklisting sanctions.

e. license suspension

If within 30 (thirty) calendar days since the imposition of sanctions for temporary suspension of construction service activities, the Service Provider does not fulfill the obligation to replace or initiate action to repair building failure, then the business license suspension will be imposed.

f. revocation of the license

If within 30 (thirty) calendar days since the imposition of sanctions for blacklisting and suspension of business licenses, the Service Provider does not fulfill the obligation to replace or initiate action to repair building failure, then the business license revocation will be imposed.

Hope it is useful.

FREDRIK J PINAKUNARY LAW OFFICES

LinkedIn: FJP Law Offices | Facebook: @FJPLaw | Instagram: @fredrik_jp

This Article also available in Bahasa Indonesia : Tanggung Jawab Kegagalan Bangunan

This article is written by our associate:

Yunilla Nurhalim
email : yunilla@fjp-law.com
phone: +622129332990
linkedIn: Yunilla Nurhalim

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