Tuesday, 23 September 2014


In an effort to resolve construction disputes between sevice user and contractor, some legal and construction experts established Indonesian Arbitration Board and Alternative Resolution of Construction Disputes (BAPSKI).

Minister of Public Workers, Djoko Kirmanto, explained that construction contract is different from all other forms of contracts, due to the dynamic nature of construction contracts, given the duration of the projrct, which is dynamic and relative long, the complexity, size and facts, that the agreed price and the amount of work performed can be changed any time during the contract period.

Until now there is no special agency that handles construction dispute resolution. In fact, construction dispute is one of the major problems in the implementation of construction in Indonesia, because it can inhibit the completion of a planed project. Therefore, the establishment of the agency is very important, considering the length of the court process, which is almost always followed by the process of filing an appeal to the high court and then an appeal to the Supreme Court which takes a long time, even there is an opportunity to file a judicial review (PK), as stated in the Constitutional Court’s decision, that PK may be filed if there is new evidence, so the certainty of a court ruling also becomes a problem.

“The establishment of this agency should become a better option, because the success of the agency is inseparable from public trust and public recognition to the” appointed,” Djoko said after the signing of the establishment of BAPSKI in Jakarta, on Tuesday (August 19).

Difference in he interpretation of the clauses in the contract are the most frequent cause of claims which later developed into a serious dispute. The parties involved certainly do not want their future relationship to be hampered because of the dispute. If the parties fail to resolve the dispute peacefully (amicable settlement) through arbitration and/or alternative dispute resolution, then it will certainly take a long time and huge expenses. Another consequence of the final decision is that eventually one party will lose its reputation, which can damage the relationship between the parties. Therefore, the best way to avoid the above situation is to prevent differences of interpretation which later developed into a formal dispute.

On the same occasion, Head of Construction Development Board, Hediyanto Husaini, explained that the establishment of BAPSKI is to make construction dispute settlement clear, not expensive, and not too protracted, but not harmful to each other.

In addition, the establishment of BAPSKI is also based on how arbitration tends to be commercialized. According to Hedianto, in the dispute settlement cases so far, they had been a little bit commercialized. If, for example, a case is worth above IDR 5 billion, the contractor and owner of the project must pay a certain percentage.

Construction projects, which are the most potential to create problem, is the dam project, because it involves nature, including climate change and weather. While, the forms of dispute, most of them are cost overruns due to change in material prices as a result of rising fuel prices and exchange rate changes, and so on.

In order to smooth the achievement of the goals of the construction contract, namely the completion of the project, which is fast, cheap and qualified, the clauses in the contract should include three basic rules, namely: 1. Risk Sharing with the use of General Requirements of Contract, which is fair and impartial according to the mandate of Law No. 18 of 1999 on Construction Services between the FIDIC Conditions of Contract which is currently widely used in government projects with foreign aid, even in privately owned projects; 2. Variations, by preparing articles related to variation or change, explanation of treatment in the event of changes, including procedures and measurement; 3. Dispute resolution, by preparing articles related to Dispute Resolution efforts, either related to arbitration or other alternative dispute resolution, where the Dispute Board, including dispute resolution in accordance with Law No. 30 of 1999 Arbitration and Alternative Dispute Resolution contains the methods of handling disputes through litigation in the general courts and through non-litigation processes, such as arbitration and alternative dispute resolution. (E)

Business News - August 22, 2014

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