Speech by 2M Indranee Rajah at the Society of Construction Law (Singapore)'s Annual Construction Law Conference 2021
Sep 23, 2021
First, I wish everyone here and in Singapore, a very good morning, and there may be some who are tuning in from elsewhere around the world, good evening or good afternoon to you. Let me start by saying that I am delighted to be here at the Society of Construction Law’s Annual Construction Law Conference.
Introduction
Today’s event brings together lawyers and professionals in the construction industry to discuss a wide range of topics. These include the adoption of technology to transform the industry, adaption to post-COVID norms and the future of dispute resolution. But even as we look ahead, we know that the industry continues to face challenges due to the pandemic.
Impact of COVID-19 on the Construction Sector
Whilst most construction work has resumed here in Singapore since August last year, public health considerations have necessitated strict border controls, and the knock-on effect of which is that the inflow of migrant workers for the construction sector continues to be constrained, leading in turn to increases in manpower costs and delays in construction projects.
The industry has also had to deal with disruptions in the supply of construction materials from overseas, and this has exacerbated project delays and added to the strain on firms.
It has also curtailed the interactions which are the lifeblood of the business – networking, the sharing of common issues and the ability to look at the person that you intend to do business with and make an assessment of whether you should do the deal. The Society for Construction Law, for example, has found it hard to organise international conferences due to the travel restrictions.
I just want to acknowledge these challenges and to say that; the Government is very aware of the challenges that are faced by the sector, and we are doing what we can to help. We have implemented several measures to alleviate the situation.
As a key step to getting the pipeline of migrant workers going again, our agencies have facilitated an industry-led initiative to bring in migrant workers safely. This comprises a tightened end-to-end process to minimise the risk of importing COVID-19 cases. The initial pilot was successful, and the industry is now scaling up the process to bring in more workers.
Last month, the Government also announced a package of manpower support measures to help companies in the construction sector retain their existing workers and facilitate the inflow of new workers. So for example, Work Permit Holders may be allowed to renew their permits that are expiring between July and December 2021 for up to two years, even if they do not ordinarily meet the renewal criteria.
We have also provided financial assistance to help companies tide through this difficult period. This includes the $1.36 billion Construction Support Package, the Foreign Worker Levy waivers and rebates, and wage subsidies for local employees under the Jobs Support Scheme.
In addition, we have introduced unprecedented legal measures under the COVID-19 (Temporary Measures) Act (COTMA) to help affected firms. And here, I would like to emphasise that we do not take decisions to intervene in private contracts lightly. That is an assurance that I want to give, but the measures in this case, are necessary to ensure that no single stakeholder in the construction industry bears an undue share of the burden imposed by COVID-19.
Construction projects involve many parties, often in long interlocking contractual value chains, and if one party goes down, not only are the entire projects at risk but the other parties in the value chain as well. Hence, it was critical for the Government to intervene and put in place these extraordinary measures to safeguard the interests of all parties.
Effecting More Equitable Risk-Sharing
COTMA is a temporary legislative measure to staunch an immediate problem. But for the longer term we do need to future proof our contracts to address uncertainties in risk allocation arising from pandemic events.
For example, we have received feedback that contractors have been buffering for risks in their current tender bids for uncertainty, which has resulted in an increase in tender prices for new contracts. Hence, we had set up a workgroup, led by BCA and comprising government agencies, lawyers, consultants, as well as trade and professional associations. The workgroup has been reviewing our standard construction and consultancy procurement contract provisions to facilitate the adoption of pandemic resilient contracting practices.
We are in the final stages of the review and will announce the workgroup’s recommendations and new contracting practices for public sector construction tenders in due course.
The Future Built Environment Sector
Even as we work together to overcome the challenges brought about by COVID-19, we must continue to accelerate the longer-term transformation of our Built Environment.
BCA has been working with the sector on three key areas of transformation – and these are
automation, digitalisation and
sustainability.
First, COVID-19 reinforces the need to adopt Design for Manufacturing and Assembly, or DfMA, on a wider scale to reduce our reliance on manpower.
DfMA allows building components to be fabricated off-site in automated facilities, and subsequently assembled on-site. This reduces our on-site workforce, raises productivity, improves workmanship, and reduces dis-amenities to residents near construction sites. DfMA adoption has doubled over the last three years, from 19% in 2017 to 39% in 2020. We aim to make DfMA the default building method, especially for large projects. Starting from April next year, we will raise the minimum buildability score for large commercial, institutional and industrial developments with GFA of at least 25,000 sqm, in order to drive DfMA adoption.
Next, we will move the industry towards leveraging digital technologies more intensively. Integrated Digital Delivery, or IDD, can better facilitate collaboration amongst project parties throughout the entire built environment value chain. IDD connects the various stages of the building lifecycle via a digital spine. This facilitates coordination among project stakeholders, improves the accuracy of design and planning, and reduces abortive work downstream.
We are also raising the sustainability standards for our buildings to tackle the long-term challenge of climate change. We launched the latest edition of the Singapore Green Building Masterplan in March this year, which is part of the Singapore Green Plan 2030. The Masterplan captures our collective commitment to pursue more ambitious sustainability standards and will accelerate Singapore’s transition to a sustainable, low-carbon Built Environment.
Earlier this month, during the International Built Environment Week, we also launched the refreshed Green Mark scheme. This will raise our standards in energy performance, and place greater emphasis on other important sustainability outcomes, such as enhancing a building’s resilience to climate change and creating healthier environments for building users.
Future of Construction Disputes
Finally, let me share some views on the future of dispute management, in a world where COVID is endemic.
We have worked hard over the years to develop Singapore as a top dispute resolution hub in Asia and the world, valued for our neutrality, stability and strong rule of law. And we will continue to work with dispute resolution institutions to strengthen the quality of Singapore’s dispute resolution services, build a strong pool of qualified practitioners and leverage technology for a resilient dispute resolution system.
COVID-19 brought global travel to an abrupt halt. As a consequence, parties have had to adapt to virtual hearings instead of meeting in-person. Having demonstrated that virtual hearings are possible, there is no going back. While we have no doubt that physical hearings will resume in due course, we also believe that going forward virtual hearings will continue to have value and will be used to complement physical hearings, such as for example, situations where witnesses are unable to travel for one reason or another.
We have recently enacted permanent legislation that empowers the courts to conduct hearings remotely. This will apply to criminal and civil proceedings, including construction disputes. Construction disputes tend to involve many parties, including witnesses, experts, counsel and tribunals. Some are also located in multiple jurisdictions. Virtual hearings make it more convenient for litigants to participate, paving the way for more cost effective and faster resolution of disputes. Given our strong branding as a top legal hub, we are in a good position to capitalise on this shift.
That said, in many instances, it may not be entirely possible to move away from in-person hearings.
For example, it may sometimes be necessary for the court and witnesses to examine technical or complex documents, such as spreadsheets, maps and technical drawings in person. Maxwell Chambers, Singapore’s Alternative Dispute Resolution hearing centre, has invested in large LED screens and technology equipment, which you may find useful for this purpose. And if you do think that there are other things that we can do in this direction, please give your suggestions either to MND or the Ministry of Law, to see how we can continually enhance Singapore as a dispute resolution centre for construction disputes.
In addition, we expect a shift towards
dispute prevention, in addition to dispute resolution. So moving upstream, is a strategy as well. The Singapore Infrastructure Dispute-Management Protocol, for example, is designed to help parties involved in mega infrastructure projects manage disputes and minimise the risks of time and cost overruns. It was developed by a Working Group comprising eminent private sector infrastructure and dispute resolution specialists, the Singapore International Mediation Centre and the Singapore Mediation Centre.
We hope that parties will use this protocol to resolve issues in a more collaborative manner. This will prevent the issues from escalating into disputes, which would then be more difficult and expensive to resolve.
Conclusion
In conclusion, let me say that we do fully understand that the last year and a half has been extremely difficult for the construction industry and related professionals. As Singapore moves forward to a state where COVID-19 is endemic, we hope to reopen our borders and facilitate the organisation of events, such as these.
We also need to set our sights on the future and fundamentally change the way we do things in the construction industry. We will continue to work with all of you on this transformation journey, so that together, we can emerge stronger.
So with this, let me wish everyone a very fruitful conference ahead. Thank you very much.