Are there any specific requirements that parties should be aware of in relation to: (a) Health and safety; (b) Environmental; (c) Planning; (d) Employment; and (e) Anti-corruption and bribery.
(a) Health and safety;
The Construction Client Regulations require that a custom health, safety and environment plan is created before the project is started. The plan must take into account all potential risks to health and safety.
In Norway there are strict regulations which aim to protect the environment.
For example, the Planning and Building Act of 2008 and the Pollution Act of 1981 set out requirements relating to energy consumption and the environmental impact of building materials used, the completed building's indoor environment, energy used during the building's lifetime, and what impact it has on the external environment.
A breach of environmental regulations may constitute a criminal offence.
Most construction work requires necessary permits from the planning and building authorities before work can commence. For larger projects, obtaining building permission happens in two stages. Initially an application for a general permission must be made. Only after the first application has been approved, the application for a project start-up permission can be made. The latter provides the right to commence the work.
In relation to employment, parties should be aware of that minimum wage rates are mandatory in all construction projects and apply to both skilled and unskilled workers on construction sites.
(e) Anti-corruption and bribery.
The Norwegian Penal Code criminalises active and passive bribery, trading in influence, fraud, extortion, breach of trust and money laundering. A company can be held criminally liable for corruption offences committed by individuals acting on its behalf.
(a) Health and safety;
Swedish law includes comprehensive legislation on work environment. The Work Environment Act and associated statutes contain specific provisions for construction projects. Under these provisions, “a person who orders the execution of building or construction works”, i.e. usually the owner/employer under the construction contract, is responsible not only for his own employees, but carries an overall responsibility for the coordination of work environment matters in the project. The obligations include, among other things, to prepare a work environment plan and to appoint a work environment coordinator for both the planning and design phase and the on-site construction phase. These obligations can be delegated to a contractor, provided that the contractor has a sufficiently independent role in the project.
Swedish law includes comprehensive environmental legislation, including the Environmental Code and various special statutes. Environmental permits will usually be required for large construction projects, e.g. for water or groundwater activities.
Swedish law includes comprehensive planning and building legislation, including the Planning and Building Act and associated statutes. There is a system with municipal zoning plans that have to be complied with, and building, ground or demolition permits are required for all construction projects.
Swedish law includes comprehensive legislation in the field of employment. The labour unions in Sweden, including the Construction Workers Union, have a strong position and regularly go on strike. Blockades and other labour actions are often taken against foreign companies which do not have collective bargaining agreements or do not respect labour laws that are equivalent to the laws in Sweden.
(e) Anti-corruption and bribery.
Sweden has anti-corruption and bribery laws that are similar to the laws in most other Western jurisdictions. Bribery is regulated under the Penal Code and is a criminal offence. There is no distinction between bribery of public officials and private persons. However, there is usually a higher risk that a benefit given to a public official will be deemed to be a bribe.
(a) Health and safety
The Occupational Safety and Health Ordinance (Cap. 509) provides for the safety and health protection to employees in workplaces, both industrial and non-industrial. This ordinance stipulates the role that employers, occupiers of premises and employees have to play in creating a safe and healthy workplace. The Occupational Safety and Health Regulation (Cap. 509A) sets down some basic requirements for accident prevention, fire precaution, workplace environment control, hygiene at workplaces, first aid, as well as what employers and employees are expected to do in manual handling operations.
The Factories and Industrial Undertakings Ordinance (Cap. 59) provides for the safety and health protection to workers in the industrial sector. This ordinance imposes general duties on proprietors and persons employed at industrial undertakings to ensure safety and health at work. Under this ordinance, there are 30 sets of subsidiary regulations (including the Construction Sites (Safety) Regulations (Chapter 59I)) covering various aspects of hazardous work activities in factories, building and engineering construction sites, etc. The subsidiary regulations prescribe detailed safety and health standards on work situations, plant and machinery, processes and substances.
The Environmental Protection Department of the Hong Kong Government is the main body that enforces the anti-pollution laws, which include Air Pollution Control Ordinance (Cap. 311), Noise Control Ordinance (Cap. 400), Waste Disposal Ordinance (Cap. 354), Water Pollution Control Ordinance (Cap. 358), and Dumping at Sea Ordinance (Cap. 466).
These laws encourage operators not to pollute, and to provide a framework for offenders to be punished. Penalties generally include fines of up to HK$5 million (approx. US$640,000) and provisions for jail terms.
The principal body responsible for statutory planning in Hong Kong is the Town Planning Board (“TPB”). It is formed under the Town Planning Ordinance (Cap. 131).
Statutory plans known as Outline Zoning Plans (“OZPs”) are prepared by the TPB to show the land use zones, development parameters and major road systems of an individual planning area.
Prior to commencement of development, in order to know whether an application to the TPB is required, a developer must check the land use zone of the site/premises on the relevant OZPs to which the proposed use or development relates and the terms of the OZPs.
(d) The Construction Workers Registration Ordinance (Cap. 583) prohibits unregistered persons from carrying out construction work on a construction site.
A contractor may also be liable to pay wages and compensation to its sub-contractor’s employees.
The Employment Ordinance (Cap. 57) provides the general statutory framework for employment issues. One specific part of the Ordinance relevant to construction protects subcontractors’ employees by providing a mechanism for an employee to claim wages, which its own employer fails to pay within a specified time, from the principal contractor or any superior subcontractor (which that party may then recover from the employee’s employer).
The Employees’ Compensation Ordinance (Cap. 282) provides that when an employee of a sub-contractor is injured at work, the principal contractor is liable for any claim of compensation made by the injured employee. The principal contractor may, however, take action to recover from the sub-contractor any payment which he is required to make.
(e) Anti-corruption and bribery.
The Prevention of Bribery Ordinance (Cap. 201) is the main anti-corruption legislation in Hong Kong; it is enforced by the Independent Commission Against Corruption. This Ordinance outlaws corruption in both the public and private sector. Under this Ordinance:
• It generally is illegal for public servants to solicit or accept any advantage. The offeror of the advantage also is guilty of an offence.
• In relation to public contracts, it is an offence for public servants to solicit or accept any advantage as an inducement to or reward for giving assistance or using influence in matters relating to public contracts. The offeror of the advantage also is guilty of an offence. It also is unlawful to offer any advantage to other persons for the withdrawal of a tender for public contracts or for that other person’s refraining from bidding at any auction conducted by any public body.
• In the private sector, no agent (usually an employee) is allowed to solicit or accept any advantage without the permission of his principal when conducting his principal's affairs or business. The offeror of the advantage also is guilty of an offence.
- Health and safety
The Health and Safety at Work Act 1974 sets out the basic health and safety duties of a company, its directors, managers and employees. Extensive obligations are imposed on employers, and individual director and company officers can be held criminally responsible for health and safety offences. Under the Corporate Manslaughter and Corporate Homicide Act 2007 companies can be convicted of corporate manslaughter.
The Construction (Design and Management) Regulations 2015 affect most construction projects in the UK. Their main purpose is to ensure that the employer appoints competent consultants and contractors, and a Principal Designer, although duties are imposed on all the main participants.
There is a trend towards increasingly stringent environmental controls, largely through the adoption of EU legislation. The main environmental law regimes address contaminated land, water pollution, nuisance, permitted emissions, waste, asbestos, the EU Emissions Trading Scheme, various energy efficiency measures and protection of biodiversity, habitats and wildlife.
BREEAM is the Building Research Establishment’s Environmental Assessment Method, which sets best practice standards for the environmental performance of buildings through design, specification, construction and operation. Although not compulsory, many developers, local planning authorities and government projects may require BREEAM certification (or equivalent) for new or refurbished buildings.
Any “development” of land under the Town and Country Planning Act 1990 (including a change in use) requires planning permission.
Applications must be submitted to the local planning authority or the Secretary of State. An application must be decided within 8, 13 or 16 weeks depending on the nature of the development and whether an environmental impact assessment is required. If granted, planning permission may be subject to certain conditions, obligations or a “community infrastructure levy”.
If planning permission is refused, the applicant has the right of appeal to the Secretary of State. A grant of planning permission cannot be appealed, but a defective decision can be challenged by way of judicial review within six weeks of the decision.
Planning applications for “nationally significant infrastructure projects” are examined by the Planning Inspectorate, which provides a recommendation to the Secretary of State as to whether a development consent order (DCO) should be granted. Certain developments have their own hybrid Act of Parliament, such as the Crossrail Act 2008.
Subcontracting is rife throughout the construction industry. Subcontractors are generally accepted to be independent contractors rather than employees, so contractors will not have vicarious liability for the negligence of a subcontractor where it carries out the work for which it was engaged, unless, exceptionally, it can be shown that there was a relationship analogous to employment.
Where there is a service provision change or a transfer of all or part of an undertaking, for example where a developer changes contractor, brings the work in-house or outsources various works and services, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) may apply. Employees automatically transfer across into the employment of the transferee, there are obligations to inform and consult with representatives, and employees have enhanced protection against dismissal.
The Modern Slavery Act 2015 requires large commercial organisations that operate in the UK and have a turnover of £36 million to prepare an annual statement setting out what steps have been taken to ensure that their business and supply chain are free from slavery and human trafficking
- Anti-corruption and bribery
The Bribery Act 2010 captures offences committed by anyone inside the UK. For people or companies with “a close connection with the UK”, the Act extends to the same offences committed outside of the UK.
The four main offences are bribing another person, being bribed, bribery of a foreign public official, and failure of a commercial organisation to prevent bribery. Where the Act is breached, the consequences can include potentially unlimited fines, up to ten years’ imprisonment, and debarment from competing for public contracts.
(a) Health and safety;
The federal Occupational Safety and Health Act, 29 U.S.C. Sec. 15 (1970) extends to all employers and their employees in all 50 states, the District of Columbia, Puerto Rico and other territories under federal jurisdiction. The law was enacted to ensure worker and workplace safety, with the intent to require employers to provide workplaces free from recognized hazards to safety and health, such as exposure to toxic chemicals, excessive noise levels, mechanical dangers, heat or cold, or unsanitary conditions. The law is enforced by the Occupational Safety and Health Administration (OSHA), which is a division of the U.S. Department of Labor.
OSHA has enacted numerous regulations governing health and safety for construction activities. Any entity performing construction work within the United States or its territories must comply with OSHA regulations governing construction safety. See 29 CFR 1926. The OSHA standards for construction govern a diverse range of safety and health issues from safety training and education, to the types of personal protective and life safety equipment required. Careful review and compliance with these regulations is important, as substantial fines can be assessed for non-compliance.
In addition to OSHA, many states have enacted their own occupational safety and health laws. For example, Maryland has adopted the Maryland Occupational Safety and Health Act (MOSH Act) for all non-federal projects within the State of Maryland. Under the MOSH Act, all employers are required to comply with health and safety regulations adopted by the Maryland Department of Labor, Licensing, and Regulation -- Division of Labor and Industry. These regulations closely mirror the Federal Occupational Safety, but include a number of distinct substantive regulations. Failure to comply with MOSH regulations can result in significant daily penalties as well as criminal liability for willful violations.
Maryland is not unique. Many other states, such as Alaska, California, Hawaii, Indiana and the District of Columbia also have state health and safety plans governing construction projects. Knowing and understanding the obligations imposed upon employers through these regulations is critical to avoiding costly penalties that can undermine the success of a construction project.
Construction projects involving clearing, grading, excavation or demolition may require compliance with federal environmental regulations. In addition, if the Project will involve dredging or the discharge of fill material into a waterway or wetland specific sections of the Clean Water Act apply and strict compliance with those sections is required. Additional requirements under the Clean Air Act may apply to heavy-duty trucks used for construction and may require regulation of dust emissions at your construction site. Other requirements apply to the use of hazardous materials as well as to requirements mandating reporting of any spill of a hazardous chemical.
Most of the environmental requirements applicable to U.S. construction projects are regulated by the United States Department of Environmental Protection (US EPA). The US EPA has, however, delegated authority to states to regulate certain aspects of the Clean Air Act as well as other regulatory programs. Non-compliance with environmental regulations can result in civil penalties and even criminal liability.
As noted below, most jurisdictions have land use and zoning laws that must be adhered to. Knowing the applicable zoning laws and allowable uses for your property prior to commencing design and construction is imperative. Failure to comply with applicable zoning or land use laws can result in fines and, potentially, demolition of non-conforming work. Typically, these issues are addressed during the permitting phase of the project. At that stage the local permitting authority reviews completed construction drawings for compliance with building codes and land use and zoning laws prior to issuing a construction permit.
In the United States, there are numerous requirements that govern employment relationships for construction. For example, when performing construction work in the United States, it is common to encounter union labor. Special legal requirements apply when union labor is used. Even if union labor is not used, however, there are several other employment requirements applicable to construction projects.
In 1935, the National Labor Relations Act (NLRA) was passed in the United States. The NLRA provides the framework and foundation for collective bargaining between unions and employers. Collective bargaining is the process by which an employer and a union negotiate wages, benefits and other terms of employment. The NLRA is administered by the National Labor Relations Board (NLRB). The NLRB has exclusive jurisdiction over certain labor disputes between an employer and a union including the right to investigate unfair labor practices, levy charges, bring cases and issue enforcement orders. The nuances relating to the use of union labor in the United States could fill an entire chapter of its own. Understanding the requirements imposed by the NLRA and the implementing regulations promulgated by the NLRB, however, is important if union labor will be used during any aspect of the construction process.
Other major employment laws applicable to construction in the United States include the Fair Labor Standards Act and corresponding state laws (e.g., Maryland Wage and Hour law), state wage payment and collection laws and the Davis-Bacon Act.
The Fair Labor Standards Act (FLSA) is a federal law that mandates minimum wage, overtime pay and youth employment protections. While the FLSA does exempt some employees (e.g., certain executive, administrative and professional employees) construction workers are typically non-exempt and covered by FLSA. As a result, construction employees are entitled to be paid at least a federal minimum wage as well as time and a half for all hours worked over 40 in a work week. Many states have also enacted their own wage and hour laws that are applicable to most construction employees. Maryland, for example, requires employers to comply with state minimum wage laws and provides an employee with a private cause of action against an employer for violating the law. Numerous other states have enacted similar laws. Failure to comply with FLSA or applicable state laws can result in significant penalties and damages. In some instances employers may also have to pay the legal fees incurred by an employee to recover his or her unpaid wages.
Finally, the Davis-Bacon Act, and its corresponding regulations, mandates the wages paid for work performed on any federal construction project. The Davis-Bacon Act applies to all federal government or District of Columbia contracts in excess of $2,000 for the construction, alteration, or repair of public works. See 49 U.S.C. Sec. 3141-3148. Under the Davis-Bacon Act, all contractors and subcontractors are required to pay workers in accordance with the wage rates set by the Secretary of Labor. If a contractor fails to comply with the Davis-Bacon Act, the government can withhold payments due to the contractor under the contract. As with wage and hour laws, many states have enacted laws similar to the Davis-Bacon Act requiring contractors and subcontractors to pay prevailing wage rates on state construction projects.
(e) Anti-corruption and bribery.
The United States Department of Justice (DOJ) aggressively prosecutes bribery and corruption both within the United States and globally. The principal U.S. law governing bribery and anti-corruption is the Foreign Corrupt Practices Act (FCPA), 15 U.S.C. Sec. 78dd-1, et seq. In addition, 18 U.S.C. Sec. 201 makes bribery of public officials and witnesses in the United States a crime.
Pursuant to 18 U.S.C. Sec. 201, it is a crime to directly or indirectly offer or promise anything of value to any public official or person who has been selected to be a public official with the intent to influence an official act or induce such person to do any act in violation of the lawful duty of such person. 18 U.S.C. Sec. 201(b). It is also illegal to directly or indirectly give or promise anything of value to a public official, former public official or person selected to be a public official because of an act performed by such person. See 18 U.S.C. Sec. 201(c). In short, contractors operating in the United States cannot bribe a public official or offer a gratuity after benefiting from an official act. While bribery is somewhat self-explanatory, what constitutes a gratuity is not always intuitive. Under United States law, an illegal gratuity is any gift to a public official after an official act occurred and does not require any quid pro quo. See United States v. Sun-Diamond Growers of Cal., 526 U.S. 398, 404-05 (1999). To avoid criminal liability construction professionals should avoid making any gifts to public officials in the United States. Otherwise, such professional expose themselves to potential criminal liability.
The FCPA prohibits offering to pay, paying, promising to pay, or authorizing the payment of money or anything of value to a foreign official in order to influence any act or decision of the foreign official in his or her official capacity or to secure any other improper advantage in order to obtain or retain business. The FCPA’s provisions can apply to conduct both inside and outside the United States. Construction entities operating within the United States, even if not domestically incorporated, must be aware of, and comply with, the FCPA. This is because the FCPA applies to foreign nationals or entities that, either directly or through an agent, engage in any act in furtherance of a corrupt payment while in the territory of the United States or that involves interstate commerce (this can be triggered by simply placing a telephone call or sending an email, text message or fax from to or through the United States or by sending a wire transfer from or to a U.S. bank). The law can also reach to officers, directors, employees, agents or stockholders acting on behalf of such persons or entities that are subject to the FCPA.
For example, in one recent case a vendor of air-conditioning, ventilation and refrigeration equipment and services supplier, through its subsidiaries, paid approximately $522,500 to an intermediary who used the funds to pay certain government officials in the UAE. Payments were made to secure contracts related to the construction of a government-owned luxury hotel. Although vendor did not make any of the payments to the UAE officials itself, vendor knew that its intermediary was making the payments on its behalf to secure certain contracts. Vendor made similar payments to obtain contracts in Iraq, Bahrain, Egypt, India, Turkey, China, Nigeria and various other European and Middle Eastern Countries. The payments made by Vendor to its intermediary were recorded as “consultancy payments.”
As a result of these payment, the U.S. Department of Justice and the U.S. Securities and Exchange Commission filed criminal and civil charges against Vendor. Those charges included violations of the FCPA’s anti-bribery provisions, failure to devise and maintain internal controls to prevent and detect violations and failure to accurately record the bribes. Vendor paid $10 million to settle the criminal charges and was required to engage an independent FCPA compliance monitor for a period of three-years. Vendor’s settlement with the Securities and Exchange Commission included disgorgement of $8,949,132 in profits, payment of $1,083,748 in prejudgment interest and a civil penalty of $2 million.
The United States prosecutes bribery and corruption cases aggressively. Construction professional operating in the United States must be sure to comply with such laws. This includes insuring compliance on projects outside the United States. Failure to comply with these laws can result in massive penalties, disgorgement of profits and criminal liability.
(a) Health and safety;
Employer is obliged to provide healthy and safe work environment to the employees, i.e. to the engaged personnel. Rights, obligations and liabilities in regard to health and safety at workplace have to be regulated either by general or individual act of the employer.
The main law that regulates the respective area is Law on safety and health at workplace. Aside from the said law, in terms of health and safety at construction sites, Republic of Serbia ratified the ILO Convention No. 167 on Safety and Health in Construction which provides general rules that have to be followed by the employers who engages personnel for the work on construction sites.
Also, two additional acts regulate matter of safety and health at construction sites - Regulation on safety and health at workplace on temporary and movable construction sites and Rulebook on safety at work during conducting construction works.
One of the main duties stipulated by the aforementioned bylaws is that the principle constructor is obliged to appoint coordinators for health and safety for the phase of project development and for the phase of conducting the construction works. Obligation of the coordinator for health and safety for the phase of project development is to prepare the Prevention Measures Plan. Once the construction works begin, the coordinator for health and safety for the phase of conducting the construction work shall oversee whether the Plan is being followed by all the contractors and whether it any amendments should be made or not. Therefore, aside the persons in charge for health and safety at workplace/construction site, which shall be appointed by each employer, principle constructor is responsible to appoint the aforementioned coordinators. Number of coordinators depends on the number of subcontractors, i.e. it should be proportional. If the aforementioned coordinators are not appointed, principle constructor could be liable for misdemeanour, i.e. penalized with a pecuniary fine of up to RSD 1.000.000.
The Law on Environmental Protection prescribes the general obligations on environmental protection, as well as the special obligations which must be fulfilled regarding the environmental issues before/during and after finishing of the construction.
The investors must comply with the general rules regarding the environmental protection, but in some cases, depending on the type of the future facility and/or the location, the investors might be obliged to prepare the Environmental Impact Assessment (EIA). The contents of the Environmental Impact Assessment always depend on the type of the facility and location and, prior to preparing the EIA the competent state body renders special decision on the contents of the future EIA for the specific project. During preparation of the EIA the investors shall have to apply the sectorial laws (Law on Water, Law on Forests, Law on Protection of Nature, Law on Agriculture Land) and communicate with different authorities in order to finalize the EIA in accordance with legal requirements. Therefore the preparation of EIA may be time consuming.
For some projects and in the process of preparation and enactment of specific spatial planning documents the preparation of the Strategic Environmental Study is required.
Technical documentation for the construction of facilities is to be prepared by companies, respectively other legal person / entrepreneurs that are registered in the register of business entities. Technical documentation for the construction of facilities, for which the building permit is issued by the ministry in charge of construction matters, i.e. a competent authority of the autonomous province, may be produced by a company, i.e. other legal person registered in the appropriate register for production of technical documentation for that type of facilities which employs persons holding a license of a responsible designer who have appropriate professional results in the production of technical documentation for that type and purpose of the facility.
Such responsible designers are natural persons with a college degree of the appropriate profession, i.e. course, in the academic studies of the second degree (master academic studies, master of professional studies, specialist academic studies), i.e. in the basic academic studies lasting at least five years and holding a license to design, issued in accordance with the Law on Planning and Construction. The licenses of responsible designers may be obtained by a natural person holding a college degree of the appropriate profession, i.e. course, with a passed professional exam and at least three years of work experience with professional results in preparing technical documentation and with references from at least two responsible designers, or the Engineering Chamber of the Republic of Serbia.
The investor appoints a head designer who is responsible for compliance of the extract from design with the information from the design intended for the building permit, and who also confirms, with his signature and seal of personal license, that all individual parts of the design are harmonized. The head designer has to fulfil the requirements for the responsible designers, as pointed out herein above.
Labour law represents the basic law that regulates employment and labour relations in Republic of Serbia. Employers are obliged to provide the employees with the minimal rights granted by the respective law. Otherwise, they could be responsible for misdemeanour.
Labour law regulates rights and obligations of both employers and employees and should be applied regardless of the business activity of the employer. Therefore, in terms of employment and labour relations, there are no specific rules that should be applied to the personnel engaged on the construction sites.
Having in mind the aforementioned, depending on the basis of engagement, engaged personnel has to be provided with adequate receivables, rests during work, as well as daily, weekly rest and annual leave, etc.
Employers can engage foreigners for conducting construction work in Republic of Serbia, but only upon conducting the procedure of obtaining mandatory residence and work permits (except in cases when respective permits are not necessary).
(e) Anti-corruption and bribery;
The anti-corruption and bribery legal framework regarding construction does not exist in Serbia.
However, since every real estate has to be inscribed in the Real Estate Cadasters, certain practices may occur regarding the anti-corruption and bribery regulation. The Real Estate Cadastres are state bodies whose employees represent state servants and therefore official persons which are obliged to comply with the anti-corruption and bribery rules.
The main laws that regulate the respective area are Criminal Law and Law on the Anti-corruption Agency. Aside from the said laws, in terms of anti-corruption and bribery, Republic of Serbia ratified the Civil Correction Convention on Corruption adopted of 4 November 1999 in Strasbourg, The Criminal Law Convention on Corruption adopted on 27 January 1999 in Strasbourg and The United Nations Convention against Corruption, adopted in New York on 31 October 2003.
Criminal law regulates the receiving of bribery by official person, as well as giving of bribery to the official person as a criminal offence, which can lead to a prison sentence from 2 to 12 years of prison sentence for the official person receiving a bribe and a prison sentence from 6 months to 5 years in case of giving the bribe.
The Law on the Anti-corruption Agency prescribes that the official person must not receive a gift in connection with performing a public function, except for a protocol gift, which cannot be money and securities. An official person who has been offered a gift which he/she is not allowed to accept shall reject such offer and inform the one offering the gift that the gift, if accepted, will become public property. If the official person could not reject the gift, he/she shall hand over the gift to the body competent to manage property in public ownership and submit a written report. Otherwise, the official person could be responsible for misdemeanour with a fine ranging from RSD 50,000 to RSD 150,000. Additionally, the security measure of prohibiting the responsible person from performing specific activities may be ordered against an official person for a period of one year.