buid presentation -june 2014 - wordpress.com · drainage and irrigation department of dubai...

Legal Aspects:

Overview of Green and Sustainable

attempts in Dubai

Presented to: The British University in Dubai- Construction Law and Dispute Resolutions Department June 2014

By : Monif Loutfy

Biography Monif Loutfy Master is Construction Law and Dispute Resolution-

UK Masters in Business Administration-Management-

MBA International Pg. Diploma in Project Management-UK Architect 17-year professional experience in the Construction

Industry within contractors and consulting firms in Lebanon and UAE

Legal Aspects: Overview of Green and Sustainable attempts in Dubai -BUiD-June 2014

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Brief Green Buildings -Built Environment

International Background of Green Built Environment

United Arab Emirates/Dubai attempts

Local Authorities requirements in promoting and implementing the green and sustainable environment;

Legal aspects-Case Law review

Contract provisions and the clauses of contracts to be included to define the scope of each party and role in Green Building -Built Environment

Legal Aspects: Overview of Green and Sustainable attempts in Dubai -BIUD -June 2014

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What is a Green Sustainable Built Environment


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“Green building (also known as green construction or sustainable building) refers to a structure and using process that is environmentally responsible and resource-efficient throughout a building's life-cycle: from siting to design, construction, operation, maintenance, renovation, and demolition…”


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U.S. Environmental Protection Agency

Background The green building field began to come together more

formally in the 1990s: American Institute of Architects (AIA) formed the Committee

on the Environment (1989) Environmental Resource Guide published by AIA, funded by

EPA (1992) EPA and the U.S. Department of Energy launched the ENERGY

STAR program (1992) First local green building program introduced in Austin, TX

(1992) U.S. Green Building Council (USGBC) founded (1993) "Greening of the White House" initiative launched (Clinton

Administration 1993) USGBC launched their Leadership in Energy and Environmental

Design (LEED) version 1.0 pilot program (1998)


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“… is transforming the way we design, build, maintain and operate our buildings, homes and communities.”

“USGBC is committed to a prosperous and sustainable future through cost-efficient and energy-saving green buildings, and works toward its mission of market transformation … in support of public policy that encourages and enables green buildings and communities.”

www.usgbc.org


7 The U.S. Green Building Council (USGBC)

United Arab Emirates(UAE) Attempts for Green Building and Built Environment


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“On land and in the sea, our forefathers lived and survived in this environment. They ... recognized the need to conserve it, to take from it only what they needed to live, and to preserve it for succeeding generations"

Late HH Shaikh Zayed Bin Sultan Al Nahyan

“On October 24th, 2007 His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai issued a resolution and directive that effective January 1st, 2008, all owners of commercial and residential buildings on the emirate of Dubai must comply and implement internationally recognized environment-friendly specifications of sustainable development to turn Dubai into Green Dubai.”

(New resolution on green building specifications by Dubai Ruler , 2008)(Arabian Business Staff Writer, 2007)


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The Emirates Green Building Council (EGBC)

Formed in 2006, with the goal of advancing green building principles.

“…Protecting the environment and ensuring

sustainability in the United Arab Emirates by the implementation of green building policies and regulations, by the adoption of consistent rating systems, and by the increase in the overall knowledge sharing and information available on built environments and communities...”


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“…The building industry must take into account the planet’s finite available resources, and in turn, design and build living environments to maximise resource use efficiency. To be socially and environmentally responsible is not an option; it is a responsibility to our future generations…”

Mr. Saeed Al Abba

Chairman-Emirates Green Building Council


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UAE Vision 2021- Green Economy -UAE cabinet / February 7, 2010

The UAE Vision 2021 specifically mentions the need to develop and promote renewable energy sources as one of the challenges facing the UAE …

“…we want the UAE to vigorously support international initiatives to protect the environment in full consciousness of its worldwide responsibility…”


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UAE Government Bodies Green Initiatives UAE becomes the first country in the Middle East and North Africa

(Mena) region to apply international environmental standards on government building projects.

Ministry of Public Works new guidelines illustrate general rules on the application of green building standards at new government projects implemented which strive to increase environmental safety and establish clear standards for certified green developments in the UAE.

Ministry of Environment and Water will work closely with local government departments through the Department of Municipal Affairs to ensure that all new projects implemented adhere to the guidelines, so it will contribute to energy efficiency by promoting water conservation and encouraging smarter building design and reducing harmful emissions of dangerous gasses.

Department of Tourism and Commerce Marketing in Dubai aims of reducing carbon emission from hotels by 20 per cent.


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Dubai Chamber achieved the coveted LEED certification for Existing Buildings in 2009. May 2014 achieved Platinum Accreditation

Drainage and Irrigation Department of Dubai Municipality has a grey water treatment plant for use in irrigating local parks and trees.

Supreme Council of Energy in Dubai allocated AED12 billion for producing electricity from the solar energy in 2011. A

Masdar City in Abu Dhabi aims also to produce 7 per cent of its energy by 2020, which will be the first emission-free city in the world, hosing the headquarters of the International Renewable Energy Agency (IRENA).

Abu Dhabi has created Zayed Future Energy Prize in appreciation of the first environment supporter, the late Sheikh Zayed Bin Sultan Al Nahyan.


15 UAE Government Bodies Green Initiatives (Cont’d)

Dubai hosted the second session of the Dubai Global Energy Forum, it is clear that the transition to sustainability is already well underway and gathering real momentum.

The new criteria for the certification of sustainable buildings in the UAE were revealed during the Arab International Sustainable Real Estate Conference

It is the first city in the world to have established a governing body, the Dubai Supreme Council of Energy, with oversight of the entire energy sector, both the production and the demand side.

Dubai Integrated Energy Strategy 2030 , with a resource make-up consisting of five per cent from solar, 12 per cent from nuclear, 12 per cent from clean coal and the remaining 71 per cent from gas (AMEinfo, 2013)



Mohammed bin Rashid Al Maktoum Solar Park, with the first phase — a 13 MW photovoltaic array — scheduled for completion by the end of 2013, feeding 1,000MW of electricity into Dubai’s grid.

The Dubai Metro has simultaneously reduced both traffic congestion and air pollution.

The Dubai Electricity and Water Authority DEWA's Sustainable Building the largest government building in the world to have secured a Leadership in Energy and Environmental Design Platinum rating for green buildings from Leadership in Energy and Environmental Design (LEED),

The popular Jumeirah Emirates Towers has been re-certified by the Green Globe - an organisation that monitors sustainability in global travel and tourism businesses.



The first building to achieve rating in UAE is Pacific Controls Headquarters in Jebal Ali Free Zone and is the 16th worldwide to achieve a Platinum rating under the US Green Building Council's Leadership in Energy and Environmental Design (LEED)

(Leadership in Energy & Environmental Design, 2013)


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On January 15, 2012 in continuation to the above attempts, UAE Vice President, Prime Minister and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum has also announced the launch of a long term national initiative to build a green economy in the UAE under the slogan:

"Green Economy for Sustainable Development”

(UNDP , 2012)


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The Green Economy Initiative includes six major tracks covering a wide range of legislation, policies, programmes and projects: 1. The first track aims to promote renewable energy, clean fuels and energy

efficiency usage.

2. The second track intends to encourage investments in green economy and green technologies and to create job opportunities for UAE citizens.

3. The third track, concerning the green city, includes urban planning, sustainable transportation, and clean air initiatives;

4. The fourth, dealing with climate change, aims to reduce carbon emissions, encourage organic agriculture and preserve biodiversity.

5. The fifth track is set to rationalize the use of water and energy resources, encourage recycling and raise environmental awareness.

6. The sixth track, on green technology, will focus on carbon capturing and storage technologies plus generating energy from waste.


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Regulatory Implementations of the above Strategies


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Trakhess-CED: Green Building Standards. Provide the building permits through ePemit,

publication of regulations and communication of procedures , Accreditation Program, ensure quality control and inspections on sites, as well issue of building completion certificates.

“…Through its circulars, mainly the one issued on ref. Circular 3306/2008/sk dated 6th May 2008, Trakhees –CED advised that all developments effective January 2008 shall comply with the Green Building Standards, to implement in their designs to achieve the required standard…”

(Trakhees-CED , 2008)


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Trakhess- Environment Health Safety Department (EHS) Defines a green building as: “…one where the

qualities of both the indoor and outdoor environments have been considered and protected ..., increased water savings, reduced pollution, enhanced indoor air quality, better productivity and reduced operation costs,…reducing the Green House gas (GHG) emissions and climate change adaptation.”

EHS established Green Building regulations to implement within Dubai World jurisdiction and a sustainability department/green building department was created exclusively to administer these regulations.

The Original Mandatory requirements were evolved from USGBC LEED


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Dubai Municipality With its slogan :

‘Be Educated on Green Buildings’

Aims to intensify efforts in the field of green build through education and training.

It is linked to the approaching mandatory green building rules and regulations on all buildings of the emirate starting in 2014


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Dubai Land Department Detailed criteria were published in a book

entitled :

‘Dubai Sustainable Communities Initiative’

“The Land Department strives to introduce and implement these initiatives following in the vision and strategy of His Highness Shaikh Mohammad Bin Rashid Al Maktoum to build a sustainable economy,”

Sultan Butti Bin Mejren,

Director General at the Land Department


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Dubai Water and Electricity Authority (DEWA) Implementation of a decision issued by His Highness

Sheikh Mohammed Bin Rashid Al Maktoum, and as part of Dubai Strategic Plan 2015 for applying the specifications of green buildings to all the buildings and premises.

DEWA, in co-operation with Dubai Municipality, has launched the Green Building Regulations & Specifications, a set of specifications and guidelines for regulating the criteria of the structure that allows adequacy in the consumption of electricity, water and renewed energy as part of the green buildings project in Dubai, which will make savings of around AED10 billion until 2030


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But Worth to Note…..


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Mandatory Compliance and Voluntary Incentives


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YET!!! The Legal Challenges


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Contract documents, quantity surveyors, claims specialists, arbitrators and even local courts are not exposed or equipped to include such provisions to ensure those mandatory Authority requirements are taken in consideration during drafting of contracts, battle of forms, contracts signature and even during the administration of the contract.

Developers, project managers, consultants and contractors as well have to comply with Authorities requirements yet liabilities, responsibilities and scopes between project parties and stakeholders are not well defined, leaving the room for a lot of conflicts and disputes during the life cycle of the project.


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How!! Building Permits

Design No Objection Certificates (NOCs)

Construction NOCs

Building Completion Certificates

Third Party Accreditations ( LEED-EHS…)


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This may Imply and Cause … Sources of Liability

By the Contract Obligations Shift of Liabilities

Tortious Rights

Duty of Care

Misrepresentation

Economic Loss

Negligence

Negligent Misrepresentation

Fraud


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Major Barriers to Green Buildings Lack of Regulatory Laws-Case Law –Precedence –Civil Codes

Lack of Financial incentives

High Cost perceptions

Health/Financial Benefits Public awareness

Technical knowledge-Inexperience

“Green” Materials availability

Cost

Present the outcome and bring stakeholders to develop and execute a common project vision.


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For an Owner, a failure to achieve certification could result in breach of contract claims for lost profits from potential tenants who are only interested in a certified building or lost tax credits and other incentives linked to attaining certification.

Other claims may be grounded in false advertising, fraud or deceit if the building had been marketed as 3rd party certified during its construction but does not achieve it.

For Contractors and Designers, a failure to achieve certification could lead to law suits from Owners seeking consequential or liquidated damages for breach of contract.

Owners may seek damages from Contractors or Designers in the amount of a building’s diminution in value

Holdbacks while the other parties sort out their rights and obligations, await final certification on a completed building, or attempt to blame Subcontractors or suppliers for faulty or negligent work.


34 Potential Risks

Due to the novel risks and specialized requirements of green projects, parties may unintentionally accept more risk than on a standard project.

Green projects require heightened co-ordination among participants in order to meet the requirements of 3rd party rating systems.

Participants should carefully review any use of consequential or liquidated damage provisions in their contracts as potential claims may exceed the original value of the contract


35 Potential Risks (Cont’d)

Challenges and Opportunities for Green Building Lawyers

“…There are now approximately 1,100 LEED accredited professionals (LEED AP or LEED Green Associate) who now identify themselves as being related to the legal services industry…”

“…Granted, they are not all lawyers in private practice, and there are many more lawyers practicing green building law who are not LEED accredited…”

Second Annual Greenbuild Legal Forum -http://legallygreenblog.com


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Predicting the course of construction law and practice in a more sustainable world is a risky intellectual endeavour, much as construction itself is a risky economic and legal endeavour

Construction law evolves in response to broader changes in the law and advances within the design and construction industries. Some developments in incremental steps; others transform construction law to a specialized practice of the construction bar

Here to ask whether the sustainable construction movement will eventually transform construction law and practice or, instead, will simply be absorbed into the existing fabric of construction contracting


37 Challenges and Opportunities for Green Building Lawyers (Cont’d)

Lawyers for owners, for example, frequently recommend provisions intended to assure that the project will meet well-defined green building standards, such as a specific certification level.

Those drafting a contract on behalf of an architect or other design professional are more interested in maintaining the integrity of the design process and limiting the designer’s legal liability to the customary standard of care for professional malpractice.

Advocates for contractors and subcontractors promote provisions that clarify the scope of work and limit warranty obligations. Commentators viewing the circumstances from a claims perspective frequently note the potential liability risks inherent in the green building process.



This primary focus was on allocation of contractual responsibility and potential liabilities of owners, design professionals and constructors for achieving identified “green” targets, be they LEED certification, energy efficiency, or some other green building performance metric.

The design to meet the criteria and standards set for green ratings whether locally or internationally.

The construction industry is commonly characterized as technically and organizationally fragmented as a key factor preventing a tangible transition to sustainable construction.

More inclusive stakeholder participation in the building process is a vital step to ensure that sustainability fostered in construction occurs in a wider social context and not only in terms of technical interventions.

Moving construction law and practice toward more collaborative and integrative contractual



Scenarios for Green Building Disputes-as per the current legal precedence :

1. A project may not comply with regulatory requirements: the primary claims have involved bid protests and challenges to code requirements

2. Green building certification related to issues either in design scope or the construction techniques and used

3. Private parties have addressed failure to obtain LEED certification, non-satisfaction of LEED standards, additional costs of LEED compliance, and whether and to what extent “green” damages are cognizable and calculable.


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Henry Gifford, et al. v. U.S. Green Building Council

Briefly stated, the “green” aspect of this case was triggered by the developer’s counterclaim alleging the contractor failed to “construct an environmentally sound ‘Green Building,’ in conformance with a Silver Certification Level according to the [USGBC’s Leadership in Energy and Environmental Design (“LEED”) rating system,” which resulted in the loss of tax credits under Maryland’s green-building incentive program. This matter was settled on undisclosed terms, but received wide-spread discussions meaning in dozens of articles and presentations.


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Southern Builders, Inc. v. Shaw Development LLC Construction was completed in 2006 and the

developer (Shaw) intended to achieve LEED Silver certification. There were delays in construction and when Southern Builders filed a claim for $54 000, Shaw counter-claimed for $1.3 million with $635 000 in lost tax credits. The case ultimately settled out of court, but this too can inform our understanding of what went wrong.


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Burchick Construction Company v. Pennsylvania State System of Higher Education

Court upheld a bid protest by a contractor who challenged unconventional procurement procedures used on a public project. The project's owner attempted to justify the departure from standard bidding procedures based upon its desire to obtain LEED certification, which the owner contended required coordination and cooperation of the prime contractors and a different procurement procedure. The Court disagreed concluding that traditional public bidding procedures were not inconsistent with a desire for LEED certification.


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Hampton Technologies, Inc. v. Department of General Services

By contrast, the Court rejected a disappointed bidder's protest alleging that developer had inappropriately considered the awardee's experience on LEED projects, reasoning that LEED criteria has been included in the project documentation supplied to bidders.


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Bain v. Vertex Architects

The stated objective of the Architectural Contract was to ‘create a sustainable green modern single family home.’” The form agreement the parties used was the AIA’s standard form of agreement for a residential or small commercial project.

The LEED-related allegations are contained in the first cause of action for breach of the architect’s agreement. Bain claims that, among other breaches, the architect “failed to pursue and obtain for the Project certification from the USGBC LEED for Homes Program.”


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In Keefe v. Base Village Owner & Pitkin Co. Dist. Ct.

Case brought against the developer, alleging in part that in marketing the condominium, the developer represented that the condominium would be a LEED-certified building within a LEED-certified neighborhood. The purchasers further alleged that neither the building nor the neighborhood are LEED-certified and sought to rescind the purchase contracts. Ultimately, the case was resolved on other legal grounds, but the case demonstrates the risks that developers face when marketing properties based upon the anticipation that the project will be able to achieve LEED certification, but then are unable to do so.


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Chesapake Bay v Weyerhaeuser Company

Case filed as Weyerhaeuser provided "defective, inferior and or unsuitable building products" for the Bay , alleging causes of action: Breach of contract, Common law indemnity, Contribution, Negligent Misrepresentation and Negligence . "As a result of Plaintiffs' reliance on Weyerhaeuser's assurances that submitted material was appropriate material for use in construction of the Project and for the environment . Thus, the defective condition of the material has created a clear risk of death or serious injury at the project." This case is an example of green building litigation that can develop as a result of the materials and products that go into the project.


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These cases illustrate the tension in using new green building considerations, which often involve subjective evaluations, to the objective financial framework normally utilized in public bidding and lowest responsible bidder evaluation laws.


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Recommendations Designers need to continually ask product suppliers and manufacturers

about their raw materials

Educate the client, barriers preventing clients from committing to a sustainable design Obtain proper local building approvals

Maintain green improvements between tenant and landlord

Secure financing

Negotiate with insurance and financial institutions

Resolve disputes over building projects that fail to achieve their energy conservation goals.

Organizational learning methods in the construction industry such as post-project review and post-occupancy evaluation focus on technical issues.


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Contracts between developer, contractor and architect/engineer should assign responsibility for obtaining required certification, while leases between tenants and landlords should contain clauses that include the parties’ individual responsibilities for maintaining green improvements

Planning next green building project from the learning lessons.


50 Recommendations (Cont’d)

Contract Language Terms by using performance based standards may also be a viable alternatives to LEED defined goals

Define Timelines by clearly laying out the timeline of green projects, including extra time for documentation and material sourcing, unexpected delays and litigation similar to the Shaw case can be avoided

Regulatory Environment against an internal review of company documentation policy to ensure that it complies with the relevant 3rd party system being used.

Assign Liability According to responsibility for achieving project: Design versus Construction



Consequential Damages

Liquidated Damages

Length and Scope of Obligations in time and scope of services a party is expected to provide on a project

Industry Standard Forms may need to be modified in order to fully address the responsibilities of sub-trades, sub-consultants (ie. LEED Facilitators or other 3rd party advisors), and material suppliers on green projects

Tort Liability should be defined

Promise Only What Can Be Delivered

Product Liability -Litigation Among Material Suppliers , Potential complications for Designers and Contractors seeking material appropriate for the use on green projects.

Insurance -Potential Exclusions -Professional Liability Insurance



Thank You…


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buid presentation -june 2014 - wordpress.com · drainage and irrigation department of dubai...

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