The Malaysian Bar urges the government to implement the Construction Industry Payment and Adjudication Act 2012 (CIPAA) as soon as possible.

No date has been stipulated for the CIPAA to come into force, although the legislation was gazetted on June 22, 2012.

The Bar has continuously maintained its support for the implementation of this legislation, subject always to the proviso that certain industries should be exempted, namely defence, oil and gas, energy and water.  

The rationale for such an exemption is that these are strategic, as well as sensitive, industries.  Nevertheless, in respect of the contracts affecting these industries, there should be proper guidelines that allow for the exemption.

The Bar Council has written to the relevant ministry to inquire about the implementation of CIPAA, and was informed that the regulation is awaiting comments from, and approval by, the Attorney-General’s Chambers.

However, Bar Council has now been informed that the government has requested an exemption under CIPAA for certain government construction contracts.

Particular industries can be exempted

While the Bar maintains its support for an exemption for the particular industries stated above, we strongly object to the proposal that certain classes of government construction contracts should be exempted.  

The Bar is of the view that this will undermine a substantial basis of the legislation.

The objective of CIPAA - to facilitate efficient, smooth and uninterrupted construction works by supporting contractors getting paid pending final determination of disputes - should not be forgotten.

The very purpose of the legislation would be defeated if the government does not participate in certain classes of construction contracts.

The Bar urges the government to reconsider its stand and to participate fully in the objectives and purpose of CIPAA. The legislation should be applied equally across the construction industry in order to actually benefit the entire industry.

The Bar is willing and ready to assist in any, and every, possible way for the proper and efficient implementation of the CIPAA.

 

CHRISTOPHER LEONG is president of the Malaysian Bar.