regulatory frameworks of the construction sector in yemen: legal framework and suggested changes
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8/3/2019 Regulatory Frameworks of the Construction Sector in Yemen: Legal Framework and Suggested Changes
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RegulatoryframeworksoftheconstructionsectorinYemen:LegalFrameworkandSuggestedChanges
Dr.MohamedMoghram AssistantProfessorofPublicLaw
FacultyofLaw&Shariah
Sana'aUniversity YemenRepublic
Paperpresentedatconstructionworkshop
28-29September2010Sana’a
8/3/2019 Regulatory Frameworks of the Construction Sector in Yemen: Legal Framework and Suggested Changes
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Construction industry in Yemen in brief
introduction Construction sector in Yemen considered as an important
sector of the economy and has multiple linkages with other
sectors in the country
It contributes significantly to socio-economic developmentand creates employment opportunities in the country
construction industry in Yemen faces some problems like
many otter less development countries such as :
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Construction industry in Yemen in brief
introduction in term of institution capacity, many local construction
companies started their construction operations in many
projects, but lacked experienced staff.
most of local firms lack expertise, construction machineryand equipment and construction materials.
Yemeni engineers lack experience in modern construction
techniques
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Construction industry in Yemen in brief
introduction most of the construction materials are imported because
Yemen does not produce them or produces limited
amounts (e.g. cement).
Yemeni construction lacks domestic machinery orconstruction equipment.
All construction equipment needs to be imported and A
5% custom duty is imposed on these equipments,
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Construction industry in Yemen in brief
introduction foreign construction companies involved in construction
sector are obliged to pay, unless they are exempted by the
investment law for investment projects.
Yemen does not have a National Construction Database. It is evident from the field that there is no reliable
statistics can be presented with regard to building or
construction performance
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Construction industry in Yemen in brief
introduction construction sector in Yemen characterized with the
following legal weaknesses:
Construction industry in Yemen is not identified as a
separate Sector. ineffective and fail to effectively implement laws and
regulation.
Administrative regulations of construction sector are
cumbersome
Enforcement of the legislation is still weak and ineffective
lack of clear unified construction standards and regulations
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The assignment of this studythe assignment of the study comprised on the following :
conduct a systematic review and analyses of Yemeni
regulatory and legal framework of the construction sector
in Yemen ; Identify gaps and make recommendations for amendments
to the Yemeni law in light of the international best practices
Review the existing legislative and regulatory framework of
the industry
identify critical constraints/shortcomings affecting its
development
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Methodology of the study
this study used a descriptive and analytical method and
conduct a detailed internal review of the provisions within
the legislation concern with the construction sector in
Yemen. It includes: An extensive review of the existing legislations;
Data collection; examination of this data in light of the
existing Yemeni legislations;
Comparison of the Yemeni context with some best practice
of legal framework of construction industry in the region
and the world.
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Legal and Regulatory Framework of
construction sector in Yemen
legal and regulatory framework of the Yemeni constructionsindustry includes the following laws and regulations:
Procurement law no. 23 of 2007 and its bylaw.
Labor laws no 5 0f 1995 and its amendments
Construction industry codes and regulations including DecreesofthePrimeMinisters(manyregardingprocurementlawimplementation)
Investment law no 22 0f 2002
Republican Decree of Law no. 22 of 1997 concerning
Commercial Companies(the Companies Law) as amended byRepublican Decree no. 15 of 1999, Law no.12 of 2001, Law no. 28of 2004, and Law no. 37 of 2008
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Legal and Regulatory Framework of
construction sector in Yemen
Republican Decree of Law no. 35 of 1991 regarding
corporate entities as amendment by Republican
Decree Law no 7 of 1997
Regulation of classification, black listing ,qualification and licensing of construction
sector. (Decrees of the Prime Ministers )
Financial law
Banking law
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Categories of Construction industry in Yemen
No basis or annual reports on contracts or contractors, small andlarge constructions industries exist
it is difficult to categorize construction industry in a systematicmethod.
Decree of the Prime Ministers No. (419) of 2008 concerningClassification and Registration of the Contractors gives somedefinition and classification of some of construction industry in thearticle 2 of this decree we chose some of them as follows:
Contractor :AnynaturalorartificialpersonwhoshallbepermittedpursuanttoaLicenseissuedbytheMinistryorbytheconcernedofficetoexerciseacontractingprofessioninafieldr
moreofthefieldsthatspecifiedinthisRegulationandaccordingtoconditionsandaccordingtoconditionsandrequirementssetforthinsameregulation.
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Categories of Construction industry in Yemen
Work of the roads: Building, paving and asphalting of the roads,
construction of runways, paving of public squares and side-walks,
construction of bridges and tunnels, supporting walls and box and
pipe culverts including: Installation of steel rails and bars, protecting
barriers, traffic signs, painting works, fixing of guiding and warning
plates.
Buildings works: All works related to industrial, cement and metal
buildings installations and structures, pre-tab light (prefabricated)
buildings works and works related to establishing of garden, parks,
central markets, town and streets landscaping and enclosures, fencesand pavements works as well as other works thereof.
.
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Categories of Construction industry in Yemen
Marine Constructions Works: Works related to sea ports building,ships reparation basins, marine pavements as well as drilling, drivingstanchion in, anchorage cleaning and deepening works as well asmarine barricades and rails, bridges and corniches
Water and Sanitation Works: Works relating to water andsanitation including building of stations for water purification as wellas stations for water treatment and disposal of waste and exertions,installation of sewerage networks and erection of pumping anddrainage stations.
Dams, Water structures and Irrigation Canals Related Works:
Construction of dams, water structures and building of canals andvarious types of irrigation projects (of cement or heavy dust bulk of stone) works of protection from disasters.
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Categories of Construction industry in Yemen
Works of Drilling of Water Wells: Work related to drilling of
artesian wells, water wells as well as various installation and fittings.
Electromechanical Works: All works relating to implementation of
power generation and distribution, installation of networks, lighting
of streets and installing of electrothermal stations as well as
renewable energy and distribution thereof.
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Categories of Construction industry in Yemen
Refrigeration and air conditioning works:- Central system of refrigeration warmness, air conditioning and ventilation.
Mechanical works:- Installation of lifts, mobile ladders, grain silos.Installation of fire extinguishers and safety systems in theestablishments and fixing of conveyor belt, mechanical heatingsystem, installing of turbines, steam boilers, liquid gas filling stationsand others.
Decoration works: - Decoration works of various types of gypsum,wooden and metal buildings. Furnishing of halls, theatres and sizablerooms as well as construction of fountains and swimming pools.
Chapter Two of this decree detailed the scope and fields of the
previous definitions in article 4. Which stated that “Provisions of this regulation are applicable to prime and sub-fields of building andconstruction contracting works as follows:”
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CategoriesofConstruc/on
Legisla/onsinYemen The major construction related laws and regulations in Yemen are
categorized on their application into the following
General Application Laws:
mean most of laws and regulations applied directly to
construction industry which such as: Public Procurement Legislations
consist the procurement law and its bylaw regulation.
labor laws no 5 0f 1995 and its amendments
investment law no. 22 of 2002, and;
Republican Decree of Law no. 35 of 1991 regarding corporateentities as amendment by Republican Decree Law no. 7 of 1997.
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CategoriesofConstruc/on
Legisla/onsinYemen Applicabilityofthelawsandregulations:Meansconstructionlawsandregulationthatappliedtocertainentitiesandgovernmental
institutionssuchas: Ministries’headquarters.
Publicestablishmentandauthorities
othercentralbodiesandtheirbranchesthereofatlocalunits,
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CategoriesofConstruc/on
Legisla/onsinYemen specializedfundsandotherunitscoveredbythestate’sgeneralbudget.
Administrativeunitsofthelocalauthorities.
Publicsectorunits. Unitswithautonomousordependentbudgets.
CertifiedCreditandGrantAgreements
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Procurement law No. 23 of 2007 on Tender,
Bidding and Government Storehouses
The public procurement system in Yemen is regulated by the
provisions of the procurement law 23 of 2007
This law issued on August 14, 2007.
This new law replaced the former Law No. 3 of 1997 onPublic Procurement.
The new law was aimed among other aims at:
adjusting previous of the Yemeni law on Public Procurement
to the provisions of international standards
enhancing the correctness of the conducted contract award
procedures and modifying the provisions,
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Procurement law No. 23 of 2007 on Tender,
Bidding and Government Storehouses
Protectionofpublicfunds,maintainingthestate’spropertyandassetsandfightingcorruptioninbidsandauctions.
Fairnessandequalityintreatmentofbiddersinbidsandauctions.
Integrity,transparencyandaccountability,andstreamlininganddefiningproceduresinbids,procurementsandstorehouses.
Economiceffectivenessinbidandauctionactivities.
Effectivesupervisionandmonitoringofbid,procurementandstorehouseactivitiestosafeguardandprotectpublicfundsand
interest Encouragingcontractors,suppliersandconsultantstodeveloptheirperformanceprofessionallyandeconomically.
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Procurement law No. 23 of 2007 on Tender,
Bidding and Government Storehouses
HighTenderBoardisthehighauthoritythatresponsibleforcontrollingandapprovingallbidsthatexceedingtheceilinglimitsdeterminedbytheexecutivebylaw.
Thisboardisconsideredoneoftheagenciescombatingcorruptionthoughitsfocusonthefollowing;
Technicalaspectsofbiddingandtenderinginacompetitiveandfairmannerprotectingpublicfundsandinterest.
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Procurement law No. 23 of 2007 on Tender,
Bidding and Government Storehouses
Theboardalsohandlesthecomplaintsreceivedfromthebiddersabouttheproceduresoranyallegedviolations.
TheMinistryofFinance,however,isconsideredtobe
responsiblefortheworkofbiddingsregardingmonetaryissues,
whileMinistryofPublicConstructionsinareasrelatedtocontractsoversights,publicworkestablishmentsfromthetechnicalaspect
MinistryofInternationalCooperationregardingdevelopmentprojectswhicharefundedpartiallyorfullythroughforeignloans
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Gaps on the Procurement system and its Laws and
Regulations mostofitsprovisionsareaboutanadministrativeandcontrolfunction.
Thislawneedstoincorporatethemodernconceptof
theprocurementsystemthatreflectedinastrategicfunctionofthegovernmenttopromotebetterfiscalmanagementandtosupportgovernmentdevelopmentpolicies.
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Gaps on the Procurement system and its Laws and
Regulations Theprocurementsystemisbedeviledbytechnicalandmanagerialdifficultiesarisingfromskillshortages,andasaresult,applicationsoftechnologicaland
managementtechniquestoconstructionprocesses. ChallengesfacedbyContractorsinconstructionsectorinYemenarecenteredmainlyinsomeareasi.e
thebiddingprocess, evaluationandcontractaward, contractformatsandprojectexecution.
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Gaps on the Procurement system and its Laws and
Regulations Despiteampleregulationofprocurement,nospecificregulationgovernsinternationalcompetitivebidding.
Inpractice,foreignfirmsparticipateinnationalcompetitivebidding,theregulationforwhichdoesnotaffordthecustomaryriskmitigationprovisionsthatwouldattractthelowestpricedbidsandpromotecompetition(e.g.exchangeriskprotection,arbitrationfordisputeresolution,appropriatedeliveryterms,etc.).
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Gaps on the Procurement system and its Laws and
Regulations Procurementlaw23of2007allowedthecontractingauthoritiestoawardthecontractsinsituationwhereintheproceduretherewasonlyoneeligibletender
submitted therearesomeinconsistenciesinitsprovisionsarticles91withthestandardsandguidelinesforprocessofbiding,contractawardingandcontractimplementation.
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Gaps on the Procurement system and its Laws and
Regulations Theprequalificationanddesigningbidsprocessrequiresmoretechnicalexpertisewhichinashortatmostofgovernmentministriesandentitiesgoverned
bytheprocurementlawanditsbylaw. TrainingNeedsAssessmentinordertobuildandfostertheirtechnicalskillsthroughplanningongoingtrainingprocess.
Unificationandpopularizationofgoodpracticesconcerningtheawardofpubliccontract,
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Suggestion on the Procurement system and its
Laws and Regulations Fromtheaboveanalysis,somesuggestionsareneedtocorrectweaknessesinpublicprocurementsystemsthrough:
Comprehensivelegalframeworks,withcoordinationoftheregulatoryauthoritiesinaclearpolicyandstrategytopromoteconstructionsectorinYemen.
Effectivemonitoringandauditingproceduresandorganizationstoensurecompliancewithlawsandregulations.
Standardoftermsandconditionsofcontracts. Improvedtransparencyandpublicavailabilityofrulesgoverningtheprocess,and
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Suggestion on the Procurement system and its
Laws and Regulations animprovedcapacityfordevelopingandretainingpeoplewithprofessionalskillsinprocurement
Separatelegislationpertainingtotheselectionofconsultantsfromlegislationpertainingtotheprocurementofgoodsandpublicworks
improvementofcontrolmechanisms,aswellastrainingoftheawardingentitiesandbodiesdealing
withcontrolofcontractawardprocedures
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Suggestion on the Procurement system and its
Laws and Regulations thelegislativeframeworkonpublicprocurementalsoconsistsofthefollowingregulationsthatwereenactedbyregulativeAuthorities(executivebranchas
authorizedbytheconstitution). Thisregulationshadchangedormodifiedmanytimesbycabinetdecrees.
thesechangesdidnotpublishedsuchchangingtheceilinglimitationamountsofbidingatalllevels.
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Suggestion on the Procurement system and its
Laws and Regulations Andalsohasstipulateconditionsnotmentionedinthelawsuchasart9ofthisbylaw.
Oneparticularaspectofthepresentsystemisthatit
treatsequallytheselectionandcontractingofintellectualorprofessionalservices(consultants)andthecontractingofothergeneralservices
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Regula(onnotcompleted TheprocurementlawinYemenpermitsvariousagenciestoissueprocurementregulationsindependently.
Thisgreatlyincreasestheriskofinconsistencies,overlaps,orgaps,andnomechanismisavailabletocoordinatethedevelopmentofprocurementregulationsissuedbyregulatoryagencies
sothatallcanbereconciledandbetteraligned withgovernmentpolicy.
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Regula(onnotcompleted Theprocurementlawstatedinitsarticlesthat:
Mixedsectorunitswhere50%ormoreofthecapitalisownedbytheStateshalllayouttheir
ownrulesandregulationsthatmanagebidandauctionactivities.
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Regula(onnotcompleted Theserulesandregulationsshallnotbeeffectiveuntiltheyhavebeenapprovedbyeachauthorizedentity,andendorsedbytheCabinet
Mixedsectorunitswherelessthan50%ofthecapitalisownedbytheStateshalllayouttheirownrulesandregulationsthatmanagebidandauctionactivities,tobeapprovedandendorsedby
thebodiesconcernedateachunitaspertheirfoundinglaws.
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Regula(onnotcompleted TheMinistryofDefenseshalllayoutrulesandregulationsofitsowntomanagesuppliesandmilitary works.Theserulesandregulationsshallnotbe
effectiveuntiltheyhavebeenapprovedbytheCabinet. TheHighAuthoritymaysupervisebidandauctionactivitiesatthebodiesmentionedinsections(A,BandC)ofthisArticle.
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Regula(onnotcompleted IfthevalueofbidsconductedbythesectorunitsreferredtoinsectionAofthisArticleexceedsthethresholdidentifiedintheregulations,theapprovalofthesebidsshallbewithinthescopeoftheHighTenderCommitteejurisdiction.
TheentitiesreferredtointhisarticleshallimplementtheprovisionsofthisLawanditsExecutiveRegulationsuntiltheentity-specificrulesandconditionshavebeenapproved,providedthattheserulesandregulationsconformtothegoalsandprinciplesofthisLaw.
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Regula/oneffec/ngbids MinisterofFinanceResolutionno1of2010regardingthepreparationanddesignofbids.
Thisresolutionrestrictthebidingprocessbynotallowinganyentitytoenterinbidingbeforeitgetsapprovedfromtheministryoffinancewhichisnottabulatedbythelaw.
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Investment Law no 22 of 2002
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InvestmentLawno22of2002
TheInvestmentLawno22of2002,whichisaresultofmanychangesandamendmentsofthefirstlawsince1991consideredacomprehensiveandeffectivepieceof
legislationaimedat: providingadefinitestructure, distinctfrontierand; effectualmanagementtoinvestmentsactivitiesin
Yemen
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Investment Law no 22 of 2002
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InvestmentLawno22of2002
ThislawisdesignedtopromoteandregulatetheinvestmentofYemeni,Arabandforeigncapitals.
thelawstatedthatallactivitiesandprojectisgovernedbytheprovisionsoftheinvestmentLawwithinthecontextofthestategeneralpolicy,
goalsandprioritiesofthenationaleconomicandsocialdevelopmentplan,
andnotincontradictionwiththeIslamicjurisdiction ThelawtreatstheArabandforeigninvestoraswellastheYemeniinvestorwithoutanydiscrimination.
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Sectorsarenotaninves(ngsector sectorasnoninvestingsectorandnotbenefitfromguaranteesandbenefitsthatgiventoitsprojectsthesesectorsarethefollowing:
Explorationandextractionofoil,gasandmineralsthataregovernedbyspecialagreements.
Weaponsindustryandexplosivematerials.
Industriesthatharmtheenvironmentandhealth.
4.Banksandexchangebureaus 5.Financialtrade,importing,wholesaleandretailtrade.
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Gaps on the investment law Despitetheallprovisioninthelaw,therearestillsomeproblemsthateffectagoodimplementationofthelawandregulationasindicatedbelow:
Lackofprotectionforpropertyorenforcementofcontracts
lackofdependablejurisprudence,enforceablecontracts,securelandtitles,
Predictabletaxationortariffprotection, insomecasesphysicalinfrastructureandphysicalsecurity.
Lacksofawell-structuredlegalframeworktoensurepropertyrightstoinvestors
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Sugges/on Somesuggestionregardingtheseissuesisimportantsuchas:
Improvingtheconstructioninvestmentenvironment,byreducingthepublicandmixedcorporatecompetitionsasa
presenceofgovernmentinsomeareasofconstructionsector(e.g.,parliamentbuildingmonopolywithoutbiddingandweaknessinotherareas)(e.g.justice,landtenure,bankingregulation,informationandpromotionforpotentialinvestors)
Emphasizeswithintheinvestmentlawsandregulation
additionalnecessaryrulesandregulationsrequiredtocombatcorruptionandpenalizetheofficersofinvestmentauthorityandotherinstitutionsgovernedtheinvestmentissues.
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LaborlawNo.5of1995.andits
amendments labormattersinYemenaregovernedbyprovisionsoflaborlawno5of1995anditsamendments
Thislawappliestoalllaborrelationshipregardlessthesectortheyareworking
foreignersworkingintheRepublicunderaninternationalConventiontowhichtheRepublicisaparty,thisexemptionbeingsubjecttothelimitssetbytheConventioninquestion;
foreignersholdingdiplomaticorspecialpassportswho
haveobtainedavisaandwhoworkintheRepublicsubjecttotheconditionsofsuchpoliticalvisasasmaybeissuedtothem;
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LaborlawNo.5of1995.andits
amendments therearenospecificregulationsapplytoconstructionsectoreveninthelawofprocurement
itsbylawdidnotmentionanyspecificprovisionsfor
theemployeesandemployersrelationshipinconstructionsector
allrelatedissuesoflaboraregovernedbythislawasstatedinthisarticleas“Para.1.
Theprovisionsofthislawshallapplytoallemployersandworkersexceptthosecoveredbyaspecialprovisionofthislaw”
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Laborforceandtraining,investmentlawno22of2002stipulatesthat“projectshallrecruitandtrainthemaximumnumberofYemenispossible,andshall
presentreplacementplanofYemenicadressubstitutingtheforeigncadreswithinappropriateperiodoftimeandaccordingtothenatureofproject
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Occupationalhealthandsafetylaws.(Nospecificlawratherseveralprovisionsinlaborlaw
Therearenospecificlawsandregulationregardingoccupationalhealthandsafety,however,somerulesandprovisionsarefoundinseverallawssuchasarticle105ofprocurementlaw,and
articles113to118andarticles123to127oflaborlawno.5of1995anditsamendments.
Publicsafetyinprocurementlawonlyconcernonthestorageasstatedinarticle105ofprocurementlaw:“Radiant,inflammable,poisonousandexplosivematerialsoranyothermaterialsharmfultotheenvironmentmaynotbestorednearresidential
communities,publicfacilities,orwaterresources. Inallcasesstoragemethodsshouldbeincompliancewithrulesofpublicsafety”
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Sugges/ononinvestmentLaW
Itisimportantforoccupationalhealthandsafetytoberegulatedwithintheprocurementlawandalsoincorporatedintheregistrationandclassification
regulation. Thesuggestionofthisstudyistoconsiderthisasrequirementofregistrationandclassificationofanyconstructionfirmandcompany.
Itisalsosuggestthatgoodrecordsofhealthandsafetyshouldbeoneofbasesforbidingevaluation.
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Republican Decree of Law no. 35 of 1991 regarding corporate
entities and Public Sector Enterprises as amendment by
Republican Decree Law no. 7 of 1997.
BasedontheArticle34,123and124ofLawno.35of1991regardingcorporateentitiesandpublicsectorenterpriseswhichgivesprivilegesandprefeWaiverof
theRequirementtoDemandProvisionofaPerformanceBond
Thewithdrawalfromtheobligationtorequestadepositorasecurityonduecontractperformance.
rencesforthoseentitiesasfollows:
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RepublicanDecreeofLawno.35of1991 regarding corporate
entities and Public Sector Enterprises as amendment by
Republican Decree Law no. 7 of 1997.
Tookintoconsiderationtheexceptionalcircumstancesinaspecificcasewhererequirementconcerningsecurityondueperformanceofthecontractcouldprecludetheconclusionofacontractorcausethe
significantincreaseoftenderprices. exemptedfromregistrationfeesandsometaxesforitseconomicunits
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Prime Ministers decree No. (419) concerning Classification and
Registration of the Contractors.
And Prime Ministers Decree No. (420) of 2008 concerning Classificationand Registration of firms and engendering consulting companies
TheseregulationsasstatedbyregulationshallbeissuedbytheMinistry/theOfficeinaccordancewiththeprovisionsstipulatedinthisregulationwhichshall
specifyandallowthecontractortoexerciseacertaintypeandlevelofthecontractingworks.
Certificatethatshallbegrantedtonon-Yemenicontractorswhoaredulyclassifiedattheinhomeland
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PrimeMinisterofficedecreeNo:(263)fortheyear2008.Concerning
theBlackList Theprovisionofarticle10ofprocurementlawno.23of2007statedthat“Theentitiessubjecttothislaw,wheninneedofconsultingservices,shallpostanadvertisementinapropermediaoutlettoreceiveinformationfromconsultantswillingtooffertheadvertisedconsultingservices.
TheExecutiveRegulationsdetailtherequiredprocedures”. Despitethisprovision,nooneofthecontractorshasbeencaughtinviolationofthisarticle;eventheseviolationsexistinpractice.
Article100fprocurementlawno.23of2007
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Sugges/on
RevampandEnforceBlacklistingRegulation Theconstructionsectorarefacedmanyproblemthatneedtobesolvedthroughrevampingandenforcingblacklisting.
thereismuchprovisionstopunishcorruptofficials,butnotenoughtopunishcorruptingfirms.
Theprosecutionofthecriminaloffenceisdifficultandtimeconsuming,andhence,noteffective.
Thegovernmenthaseveryrighttodealonlywithethicalfirms.Businesscommunityshouldberequiredtoadheretoa“codeofconduct”iftheywishtodealwithpublicpurchasers.
Anyinfringementshallresultinsanctions. Theblacklistingrulesneedimprovementspermittingexclusionfrompubliccontractsforaperiod,orpermanently,dependingontheseriousnessoftheoffence.
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Companies’law TheCompaniesLawhasbeenissued.
Thislawrequirementsintermsofshareholders,directors,minimumcapitallevelsandincorporation
procedures. Thelawsetsforthprovisionsgoverningconversion,mergeranddissolutionofcompanies.
itsmostrelevantprovisionspertainstothecondition
statingthatatotallocalequityofnotlessthan(51%)mustbecompliedwithinanycommercialcompany, whileremaining49%maybelongtoforeigners.
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Sugges/on Registrationoffirmsandcompanydoesnothelpmuchontheissueofprocurementthereforeitisimportanttohavethefollowingsuggestion:
TheregistrationsystemshouldserveitspurposerelatedtopublicprocurementandcurrentlyfunctionstothedisadvantageofmanycapableYemenibidders.
Leavestheproblemofpre-andpostqualificationofunregisteredforeigncontractorsunresolved
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Construction building law no.22of 1995and it bylaw
no.448 of 2008
BuildingRegulationsareconcernedwiththeadequacyofbuildingconstruction.
theseonlyspecifyminimumconstruction
performancewithinalimitedframeworkofhealthandsafetyobjectives.
Theconstructionindustrysuffersfromaninadequateregulatoryframework,theabsenceofconstructionnorms,andthelackofaqualifiedworkforce.
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Sugges/on RationalizeandIncreasetheEffectivenessofYemeniBuildingRegulationsastheprimarylegalinstrumentinYemenforsettingbuildingperformancestandards.
EnsurethattheinterpretationandoperationoftheBuildingRegulationsisuniform,harmonizedandcompetentacrossthecountry
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The Financial Law no. (8) of 1990 which amended by
Law no.(50) of 1999” and bylaw of the financial law Asstatedbyarticle2ofthefinanciallaw,itapplytoallministries,government
authoritiesandbodiesanddifferentorgansandbranchescontainedbythepublicbudgetofthestateincludingalladministrativeunitsandlocalcouncilscoveredbythegovernoratesbudgets.
Thesameprovisionsapplytoalleconomicunitsofthepublicandmixedsectorsandunitsofindependentandannexedbudgetsunlessthe
incorporationlawsstipulatethecontrary. Theprovisionsofthislawapplyalsotowhereverthereisnospecialprovision
appliedtothosebodieswhichincorporationlawsincludespecialrules,provisionsandregulations.
ARTICLE(74)offinanciallawstatedthat“Theestablishment,amendmentandcancelingofpublictaxescouldnotbemadeonlybylawandnobodyisexemptedfromtheirtotalorpartialpaymentexceptincasesstatedbylaw.Itmaybeimpossibletochargeanybodytopayanytaxes,leviesandpublic
chargesexceptbylaw”isviolatedbyimposingfeesforcityimprovementwhichreachesoneYemeniReyaloneachcementbag50Kgenteredthecity.
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Sugges/on
Thislawneedtorevisedandamendedinthecontentofrevenueandprocurementissues
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taxa/onlaw
TheIncomeTaxLawandrelatedregulations(Article13)require“profitsorlosses,auditedbyacharteredaccountant…accompaniedbycopiesofthefinal
accounts,balancesheet, thedepreciationstatementpreparedbythetaxpayer,andastatementoftheaccountingprinciplesupon whichallthefiguresshowninthedeclarationarebased.”
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taxa/onlaw
MinisterofFinanceResolutionno.255of1999,Article4,addsarequirementfor“explanatorynotes”.
ProjectsregisteredbyInvestmentAuthorityare
subjecttocustomsexemptionsasstatedbyinvestmentlaw22of2002.
Thelawstipulatedthat“customsexemptionsprovidedforinArticles(16),(18)and(19)ofthisLaw,shallbedeemedtoberelatingtoprojectsregisteredbythe Authority.
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bankinglaw TheCentralBankofYemenhasprimaryregulatoryauthorityoverbanks,inadditiontoitsvariousotherrolesingovernmentandpublicfinance.
ItisthesinglemosteffectiveindependentregulatorybodyinYemen,withfairlystrongregulatoryandmonitoringpowers.
TheBank’smainweaknessissimilartootherinstitutionsinthatitlacksstrongtoolsforenforcing
regulationsandforcingviolatorsintoline. Inadditiontotheaboverules,banksaresubjecttoadditionalCentralBankrules:
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bankinglaw Facilitiesgrantedtorelatepartiesmustbegrantedonsubstantiallythesametermsasthosegrantedtosimilarthirdpartycustomers;
Totalcreditfacilitiesgrantedtoanyemployeemaynotexceedoneyear’sgrosscompensation;
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bankinglaw Totalcreditfacilitiesgrantedtoanynon-employeeBoardmembermaynotexceed0.5%(one-halfpercent)ofthebank’stotalcapitalplusreserves;
Totalcreditfacilitiesgrantedtoanyshareholderowning5%ormoreofthecapitalislimitedto15%ofthebank’stotalcapitalplusreserves;
Totalfacilitiesgrantedtoallrelatedpartiesinaggregatemustnotexceedthebank’stotalcapitalplusreserves;
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bankinglaw Relatedpartyloansmaynotbewrittenoffwithoutacourtdecreeofbankruptcy,unanimousapprovaloftheGeneral Assembly,CentralBankapproval,andthewrite-offwillnotbetaxdeductibleasaloss;
.However,intermofbankinglawsandregulationconcerningtheconstructionsector:
Thereisnobankorfinancialinstitutionthatspecializesinconstructionfinance.
Thereisalsoalackoftechnicalexpertiseinfinancialservicesthatcatertoconstructiondevelopment.
Infrastructuralweaknessespertainingtotheconstructionsectorcontributetotheproblem.
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bankinglaw Localconstructionsareburdenedbythelackofavailabilityofloansandotherfinancialservicestomostconstructionsector.
Constructiondisputelinkedtotheseproblemsledtothegapsinconstructionsector.
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Sugges/on
Reformingthefinancialsectorisessentialifthebankingsystemistoplayitsroleinmobilizingandefficientlyallocatingresources
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Construc/onRegulatory
Authori/es legislationsoftheconstructionindustryareissuedbythelegislatureauthority.
thepolicies,procedures,guidelinesanddelegationofauthorityrelatingtoconstructionindustryinYemenareissuedbytheexecutivebranchofthegovernmentthrough:
cabinetministers,
MinistryofPublicWorksandhighways,
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Construc/onRegulatory
Authori/es TheHighAuthorityfortheControlofTendersand Auctions,
TheHighTenderCommittee,
MinistryofFinance,and alsothroughotherministries.
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Weaknessesintheconstruc/on
system ThechallengesbeingfacedbytheconstructionsectorinYemenincludeinsufficienteducationandtraining(lackofHR).
Absenceofcommitmentfromthegovernmentauthorityespeciallyincontractenforcement.
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Weaknessesintheconstruc/on
system Lackoflong-termvisionandplanningforthesector
ineffectivebudgetaryproceduresresultingincostover-runs,
Fluctuationsinworkload,defectivecontractdocuments,corruptcontractingprocedures.
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Weaknessesintheconstruc/on
system Lackofprotectionagainstadversephysicalconditions. Paymentrelateddelays,problemsofbondingandinsurance.
Lackofadequatefinancialresources,uninstabilityofforeignexchange.
Unfaircompetitionfromstate-ownedcontractorsandconsultants
Non-availabilityofequipmentandmiscommunicationofinformation.
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Absentofcoordinatedagency Thereisaneedtoestablishasinglecoordinatedagencyandsimultaneouslysupportotherpublicpolicies
suchasdevelopmentofconstructionandsocialgoals, withoutcompromisingthemainobjectivesofeconomy,
efficiency,transparencyandaccountabilitydepartmentoragencytoevolve,
coordinateandoverseepoliciesandproceduresinconstructionindustry.
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Competence,SkillsandTrainingofOfficersand
Staff
MostofthelawsandregulationreviewedinthisstudyapprovedthatthereisnoCompetence,skillsandtrainingofofficersandstaff,
becausetheconstructionindustryinYemenisyettodeveloptomaturity.
Exceptforafewlargefirms,themajoritiesarelaborcontractors,withoutadequatefinance,equipmentorprofessionalstaffandaremainlydependentongovernment
contracts. Thegovernment’spolicies,thetenderingandcontractingprocedures,anddocumentsaremostlyresponsibleforthis.
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Competence,SkillsandTrainingofOfficersand
Staff
Contractorshavebeentreatedasmerelaborproviders, withthegovernmentassumingresponsibilityfordesign,provisionofmaterialsandtechnical
supervision, andevenpreparationofclaimbillsonbehalfofthecontractor.
Also,foralongtime,thegovernmenthastendedtoprotectlocalcontractorsfromforeigncompetitionbypackaginglargecontractsinsmallpackages,whichhasconstrainedtheirgrowth.
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Sugges/on
Theindustryneedsachangeofenvironmentinordertogrowtomaturity.
Forthebulkofsmallercontractors,thegovernmentshouldpromotetraininginallaspectsoftheconstructionandexposethemtomodernandinternationalpracticesanddocuments.
Suchtrainingprogramsshouldcovercosting,riskassessment,differenttypesofcontracts,preparationofbids,logistics,constructioninsurance,contractandclaimsmanagement,qualityenhancement,disputeresolution,etc.
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Sugges/on
Thegovernmentshouldalsopromotecreationofequipmentleasingcompaniesandexpansionofproject/constructioninsurance.
Inalltheseinitiatives,thegovernmentshouldworktogetherwithexistinginstitutionsinthepublicandprivatesectors.
Asforthelargercontractors,thegovernmentshouldpromotejointventureswithmoreexperiencedforeignfirmsbysuitablepackagingoflargecontracts,
sothatlocalfirmsacquirelogistics,contractmanagementandotherskillsfromsuchassociation.
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Sugges/onsforchanges ThestudyprovidedsomesuggestionsrelatedtolegalandregulatorysysteminYementhathelpstoimprovesuchsystem.
Tocorrectweaknessesinpublicprocurementsystemsthrough:
♦Comprehensivelegalframeworks,
♦Effectivemonitoringandauditingproceduresand
organizationstoensurecompliancewiththeregulations,
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Sugges/onsforchanges ♦Standardtermsandconditionsofcontracts,
♦improvedtransparencyandpublicavailabilityofrulesgoverningtheprocess,and
♦improvedcapacityfordevelopingandretainingpeoplewithprofessionalskillsinprocurement
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Recommenda/ons
1. Conclusions Legislationcanhaveagreateffectonthepolicy,planning,andthequalityofservicesandmanagement
ofconstructionsectorinYemen.Itisessentialthatlawsandregulationcan:
Expressthepolicyofthegovernment
Definethescopeandfunctionsofdifferentcategoriesofconstructionsector
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Conclusionsand
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Recommenda/ons
Regulatetherequirementsforpracticeofconstructionprojectsandtheworkingcondition,andprovideguidanceandstandersthatneedtobefollowed.
Regulatethedistributionofresponsibilityofvariousgoverningauthoritiesofconstructionsector.
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Conclusionsand
Recommenda/ons2. Recommendation Developmentoftheconstructionsectorrequiresalong-termcommitmentfromthegovernmentinterm
andpolicesandLawsRelatedtotheConstructionSector
LawgoverningUrbanPlanningandBuildingin Yemen.ThislawwillconstitutethebuildingcodesaimedatorganizingandregulatingthefieldsofurbanplanningandbuildinginYemen.
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Conclusionsand
Recommenda/ons TheBuildingControlRegulations StandardsandSpecificationsfortheConstructionIndustry.
AHealthyConstructionIndustryrequiresadequatenumbersofprofessionals,semiprofessionalsandartisanstoeffectivelyexecuteconstructionandmaintenancework
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Conclusionsand
Recommenda/ons Thefollowinglawsshouldbesubjectedtoscrutinizingstudyinordertoamendthemandharmonizethemilluminatinganycontradictions:
RepublicanDecreeofLawno.35of1991regardingcorporateentitiesasamendmentbyRepublicanDecreeLawno7of1997
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Conclusionsand
Recommenda/ons Regulationofclassification,qualificationandlicensingofconstructionsector.
Financiallaw,intermofprocurementsystemand
revenuescollection. Bankinglawtotakeinconsiderationtheconstructionandsmallenterprisessector.
Laborlawsno50f1995anditsamendments.
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Conclusionsand
Recommenda/ons Thefollowinglawsshouldbeissuedandpromulgated:
EstablishingtheConstructionOccupationslicensingframeworkisaneffectivemeansofregulatingtheconstructionindustryandensuringanefficientframeworkforskillsrecognitionwhichiscompatible withthenationalframework.
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Conclusionsand
Recommenda/ons Promotingthedevelopmentofthebuildingconstructionsectorthrough:
Promotingthedevelopmentofthebuilding
constructionsectorbyofferingincentivestosmallcontractors,andprovidingfacilitationintechnologybasedtrainingprogrammes;
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Conclusionsand
Recommenda/ons PromotingthedevelopmentofTechnicalandVocationskillstoenhancethehumanresourcecapacitiesinskilledandsemi-skilledcategoriesoftheconstructionsector
Ensuringtheadherencetodevelopedstandardsforbuildingmaterials,andconstructionmethodsandtechniques.
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Thank You!!! And
Now open my selfe for your questions and comments it is
your chance..............