OCCUPATION SAFETY AND HEALTH IN LOCAL AND INTERNATIONAL STANDARD FORMS OF CONSTRUCTION
CONTRACT
Goh Poi Hung
UNIVERSITI MALAYSIA SARAWAK
R13a BORANG PENGESAHAN STATUS TESIS
Judul: OCCUPATIONAL SAFETY AND HEALTH IN LOCAL AND INTERNATIONAL STANDARD FORMS OF CONSTRUCTION CONTRACT
SESI PENGAJIAN: 2008/2009
Saya GOH POI HUNG (HURUF BESAR)
mengaku membenarkan tesis * ini disimpan di Pusat Khidmat Maklumat Akademik, Universiti Malaysia Sarawak dengan syarat-syarat kegunaan seperti berikut:
1. Tesis adalah hakmilik Universiti Malaysia Sarawak.
2. Pusat Khidmat Maklumat Akademik, Universiti Malaysia Sarawak dibenarkan membuat salinan untuk tujuan pengajian sahaja.
3. Membuat pendigitan untuk membangunkan Pangkalan Data Kandungan Tempatan.
4. Pusat Khidmat Maklumat Akademik, Universiti Malaysia Sarawak dibenarkan membuat salinan tesis ini sebagai bahan pertukaran antara institusi pengajian tinggi.
5. ** Sila tandakan ( a ) di kotak yang berkenaan
SULIT (Mengandungi maklumat yang berdarjah keselamatan atau kepentingan Malaysia seperti yang termaktub di dalam AKTA RAHSIA RASMI 1972).
TERHAD (Mengandungi maklumat TERHAD yang telah ditentukan oleh organisasi/
badan di mana penyelidikan dijalankan).
a TIDAK TERHAD
Disahkan oleh
(TANDATANGAN PENULIS) (TANDATANGAN PENYELIA)
Alamat tetap: NO.154, Lorong 15 F
Jalan Arang, Ir. Ting Sim Nee
(Nama Penyelia) 93250 Kuching, Sarawak.
Tarikh: 06 APR 2009 Tarikh: 06 APR 2009
CATATAN * Tesis dimaksudkan sebagai tesis bagi Ijazah Doktor Falsafah, Sarjana dan Sarjana Muda.
** Jika tesis ini SULIT atau TERHAD, sila lampirkan surat daripada pihak berkuasa/organisasi berkenaan dengan menyatakan sekali sebab dan tempoh tesis ini perlu dikelaskan sebagai SULIT dan TERHAD.
The following Final Year Project:
Title: Occupation Safety and Health in Local and International Standard Forms of Construction Contract
Author: Goh Poi Hung Metric: 14069
has been read and certified by
____________________ 06 Apr 2008
Ir. Ting Sim Nee Date
Supervisor
OCCUPATION SAFETY AND HEALTH IN LOCAL AND INTERNATIONAL STANDARD FORMS OF CONSTRUCTION
CONTRACT
GOH POI HUNG
This project is submitted to Faculty of Engineering, University Malaysia Sarawak
in partial fulfillment of the requirements for the
Degree of Bachelor of Engineering with Honours.
(Civil Engineering) 2009
ACKNOWLEDGEMENT
First and foremost, I would like to express my gratitude to my final year project supervisor, Ir Ting Sim Nee, for her continuous guidance and constructive comments throughout the preparation of this project.
Apart from that, I would like to sincerely express my appreciation to those organisations and individuals who spared their valuable times to accept the interview.
I would like to thank my family members for their greatest supports and encouragements during this project.
Lastly, my appreciation also dedicated to my roommates and friends who offered a helping hand when time is need.
ABSTRAK
Kerajaan Malaysia, badan berkuasa, serta institusi yang berkaitan telah berusaha untuk melaksanakan keselamatan dan kesihatan pekerjaan dalam industri pembinaan untuk mengurangkan kadar kemalangan di samping meningkatkan keadaan kerja yang selamat dan sihat untuk pekerja dan orang awam. Walau bagaimanapun, keberkesanan usaha tersebut masih tidak menentu. Matlamat kajian ini adalah untuk mengkaji syarat-syarat dalam klausa kontrak pembinaan tempatan dan luar negara yang berkaitan dengan amalan keselamatan dan kesihatan perkerjaan. Borang yang akan dikaji adalah seperti Borang JKR 203A, Borang PAM 2006 (dengan kuantiti), Lembaga Pembangunan Industri Pembinaan 2000, dan AS(2124 – 1992). Klausa yang dikaji akan dibahagikan kepada empat (4) aspek, iaitu syarat jaminan, syarat insurans, syarat pekerja, dan akhir sekali ialah syarat keselamatan. Empat aspek ini akan dikaji dengan lebih terliti dari segi keseluruhan, kelengkapan, tatacara, dan kesamaan keadilan. Temuramah dijalankan sebagai sampingan bagi mendapat pendapat para perserta berdasarkan pengalaman mereka untuk mengkaji keberkesanan syarat-syarat yang tersedia ada demi mengurangkan kebahayaan di tempat kerja. Diharapkan gambaran yang lebih jelas tentang tempat kerja di tapak pembinaan yang sebenar boleh didapati, dan mengakui bagaimana borang kontrak dapat membekalkan apa yang diperlukan untuk OSH, serta mencari cara-cara menggunakan borang kontrak pembinaan sebagai langkah untuk memperbaik amaln keselamatan dan kesihatan perkerjaan di tapak bina tempatan.
ABSTRACT
The Malaysia government and other authoritative bodies or institutions have put in substantial amount of effort in the implementation of Occupational Safety and Health (hereafter, OSH) in the local construction industry so as to minimize the rate of accidents as well as enhancing a safe and healthy working environment to the workers and the public. However, the effectiveness of such efforts is yet to be confirmed. The aim of this research is to study the construction contract clauses in relation to the current OSH practice in the local and international Standard Forms of Construction Contracts, namely the PWD Form 203A (Rev.2007), PAM Contract 2006 (With Quantities), CIDB 2000 and AS (2124 – 1992). The clauses are classified into four (4) main aspects that are the indemnity provision, insurance provision, workmen provision and lastly safety provision. Comparisons are made for these four (4) aspects in detail as well as their comprehensiveness, completeness, procedures, and equal provision. Interviews are also conducted to obtain opinions from the local construction participants to learn their perceptions of the OSH practice and Standard Forms of Construction Contracts. Through this research, it is hoped that a clearer picture of what the real construction workplace needs or lack of can be obtained; and to acknowledge to what extent our contract forms had catered for OSH; and to further find ways to use construction contract forms as a mean to improve the insufficiency of OSH practice in our local construction industry.
LIST OF TABLES
TABLES Page
1 Comparisons of Indemnity Provisions 50
2 Comparisons of Insurance Provisions 65
3 Comparisons of Insurance for Workmen Provisions 76
4 Comparisons of Safety Provisions 86
LIST OF FIGURES
FIGURES Page
1 Annual Accident Chart for the Construction Industry 11 2 SOCSO Annual Fatality Chart for Construction
Industry 11
3 Occupation’s fatalities in years 2008 13
4 Methodology Diagram 34
ABBREVIATION
ACE – Association of Consulting Engineers
AIA – American Institute of Architects
AIHA – American Industrial Hygiene Association
AS – Australian Standard Conditions of Contract
CFMEU – Construction Forestry Mining and Energy Union
CIDB – Construction Industry Development Board
CMGD – Certificate of Making Good Defects
DOSH – Department of Safety and Health
FIDIC – French for the International Federation of Consulting Engineers
FCEC – Federation of Civil Engineering Contractors
GDP – Gross Domestic Product
JCT – Joint Contract Tribunal
ICE – International Civil Engineering
NEC – New Engineering Contract
NIOSH – National Institution Occupational Safety and Health
NOHSC – National Occupational Health and Safety Commission
OSH – Occupational Safety and Health
OSHA – Occupational Safety and Health Act
PAM – Pertubuhan Arkitek Malaysia
PWD – Public Work Department
RIBA – Royal Institute of British Architects
SOCSO – Social Security Organization
TGC – Traditional General Contracting
UK – United Kingdom
TABLE OF CONTENTS
Page
Acknowledgement ii
Abstrak iii
Abstract iv
List of Table v
List of Figures vi
Abbreviation vii
CHAPTER 1 INTRODUCTION
1.1 Construction Contract 1
1.2 Types of Local and International Construction
Contract Forms 3
1.2.1 PWD Form of Contract 3
1.2.2 PAM Form of Contract 4
1.2.3 CIDB Form of Contract 5
1.2.4 British Standard Forms 5
1.2.5 American Form of Contract 6
1.2.6 Australian Standard General Condition of
Contract (AS4000-1997) 6
1.3 Occupational Safety and Health (OSH) 7
1.3.1 Occupational Safety 7
1.3.2 Occupational Health 9
1.4 Accidents 10
1.4.1 Injury 12
1.5 An Overview of OSH Issues in Malaysia and
Australia Construction Industry 12
1.6 Problem Statement 15
1.7 Hypothesis 18
1.8 Aim and Objectives 18
1.9 Scope and Limitation of Study 19
CHAPTER 2 LITERATURE REVIEWS
2.1 Overview of the Background of Occupation Safety
and Health Practices in Malaysia 21
2.2 Overview of the Background of Occupational Safety
and Health Practices in Australia 24
2.3 Methods to Improve Occupational Safety and Health
Practices in the Construction Industry 27 2.3.1 Define and Allocate Liability for
the Cost of Risks 27
2.3.2 Incorporation of OSH Requirements into
Contract Specification 28
CHAPTER 3 METHODOLOGY
3.1 Generally 34
3.2 Literature Review 35
3.3 Research Methodology 36
3.4 Standard Forms of Construction Contract Clause
by Clause study 36
3.5 Interviews 37
3.6 Analyze Data 39
3.7 Conclusion and Recommendation of Research 40
CHAPTER 4 ANALYSIS AND RESULTS
4.1 Generally 41
4.2 Indemnity Provisions 42
4.2.1 PWD Form 203A (Rev. 2007) 42
4.2.2 PAM Contract 2006 (With Quantities) 45
4.2.3 CIDB 2000 46
4.2.4 AS (2124-1992) 49
4.2.5 Summary of Indemnity Provision 50
4.3 Insurance Provisions 52
4.3.1 PWD Form 203A (Rev. 2007) 52
4.3.2 PAM Contract 2006 (With Quantities) 55
4.3.3 CIDB 2000 58
4.3.4 AS (2124-1992) 60
4.3.5 Summary of Insurance Provision 65
4.4 Insurance for Workmen Provisions 68
4.4.1 PWD Form 203A (Rev. 2007) 68
4.4.2 PAM Contract 2006 (With Quantities) 71
4.4.3 CIDB 2000 73
4.4.4 AS (2124-1992) 75
4.4.5 Summary of Workmen Provision 76
4.5 Safety Provisions 78
4.5.1 PWD Form 203A (Rev. 2007) 78
4.5.2 CIDB 2000 79
4.5.3 AS (2124-1992) 81
4.5.4 Summary of Insurance Provision 86 4.6 Summary of Indemnity, Insurance,
Insurance for workmen, and safety provisions. 87
4.7 Interviewee Response 88
4.7.1 Monetary Issue 90
4.7.2 Insufficient Clauses in Construction Contract
Forms 91
4.7.3 High Turnover Rate of Works 93
4.7.4 Lack of Education 93
4.7.5 Government’s Inefficiency 94
CHAPTER 5 DISCUSSION
5.1 Generally 95
5.2 Indemnity Provision Aspect 95
5.3 Insurance Provision Aspect 97
5.4 Insurance for Workmen Provision Aspect 98
5.5 Safety Provision 100
CHAPTER 6 CONCLUSION AND RECOMMENDATION
6.1 Generally 102
6.2 Research’s Findings 102
6.2.1 Finding 1: Occupational Safety and Health is
important and need to be practiced widely 103 6.2.2 Finding 2: Safety Provision is insufficient I
the local Standard Forms of Contract 103 6.2.3 Finding 3: Each Standard Forms of
Construction Contract has its strength
and weakness 104 6.2.4 Finding 4: CIDB 2000 Form is not commonly
used despite its well drafted clauses 104 6.2.5 Finding 5: Lack of OSH practice is not
constituted by the insufficiency of Safety and Health clauses in the Standard
Forms of Construction Contract 105
6.3 Recommendation 105
6.4 Conclusion 109
6.5 Further Research 110
BIBLIOGRAPHY / REFERENCES 111
CHAPTER 1
INTRODUCTION
1.1 Construction Contract
According to Ashworth (1998), contract is defined as a legally binding agreement made between two or more parties, by which rights are acquired by one or more acts or forbearances on the part of the other or others. Hinze (2001) declared that once construction contract had been signed, construction operations could start with guidance provided by the contract documents. In an engineering construction contract, the constituent clauses of Conditions of Contract are written with great care so as to be clear, precise, unambiguous, and also allocates risks and duty fairly between the parties (Williams, 1992).
According to Singh (2002), the purpose and function of the contract documents are to serve as the primary evidence of agreements and legal relationships between the parties involved; express the terms and conditions mutually agreed by the parties involved; provide descriptions and details of the scope of work undertaken by the contractor, state the amount to be paid by the employer to the contractor in accordance with the agreements; and also outline the administrative procedures to be fulfilled by the parties involved.
According to Bockrath (2000), standard forms with general conditions can actually save time and expenses when preparing the contract documents and it is usually to avoid omissions and mistakes. Moreover, standard forms with general conditions are also to allocate the risk fairly between the parties. The risk will be shared proportionally between the contracted parties which will eliminate contractor from increasing his premium (Singh, 2002).
Malaysian construction contract documents usually comprises of Form of Tender, Letter of Acceptance, Conditions of Contract, Preambles, Contract Drawings, Bills of Quantities or Schedule of Rates, Specification, Treasury Instruction and other related documents (Williams, 1992).
One of the important documents in forming an engineering construction contract is Conditions of Contract. In an engineering construction contract, the constituent clauses of Conditions of Contract are generally written with great care so as to be clear and precise. It is because the Conditions of Contact constitute much of the legal basis on which any court official decision would be made in the event of a dispute (Williams, 1992).
The Conditions of Contract set out the legal and contractual constraints applying to the contract and these represent the main operative provisions in the contract (Rajoo, 1999). According to Ashworth (1998), the Conditions of Contract seek to establish the legal framework under which the construction work is to be
Apart from that, Contract Drawings and Specifications also form as important part of the Contract Document. According to Mohamad and Madon (2006), a good construction contract shall have well drafted drawings and specifications, where it tells clearly and comprehensively what the scope of the contractor to be fulfilled.
1.2 Types of Local and International Construction Contract Forms
In Malaysia, there are several authorities and professional bodies which contribute to the production of various types of Standard Form of Construction Contracts are such as PWD Form of Contract, PAM Form of Contract and CIDB Form of Contract.
As for international Standard Form of Construction Contracts, there are British Standard Forms such as JCT Forms, ICE Forms and NEC Forms, American Form of Contract such as AIA Document A201 (US), Australian Standard General Condition of Contract, FIDIC (French for the International Federation of Consulting Engineers) Form which has the same format and condition as ICE condition of contract form, and etc
1.2.1 PWD Form of Contract
In Malaysia, Public Work Department (PWD) forms of contract are the standard forms of construction contract most commonly used by public sector. PWD
forms of contract are produced to govern the relationship between the Government as employer and the contractor; the relationship between the contractor and the nominated sub-contractor and the relationship between the contractors and nominated supplier (Rajoo, 1999). The types of form of contract for government projects are listed as below:
o PWD 203 A with Bills of Quantities
o PWD 203 with Drawings and Specifications o PWD 203 N for Nominated Subcontractor o PWD 203 P for Nominated Supplier
o PWD Form DB/T (2000Edn) for Design and Built or Turnkey project o PWD 75 (Rev. 2006)
1.2.2 PAM Form of Contract
Standard Form of Building Contract (PAM 1998 Form) is produced by the Architect Association of Malaysia (Pertubuhan Arkitek Malaysia – PAM) and is used essentially for private sector projects, building works and contract undertaken through Traditional General Contracting (TGC) procurement route (Singh, 2002). It is a standard form for lump sum project. The PAM/ISM 1969 Form was original based and closely modeled on the Joint Contract Tribunal (JCT) 1963 Form, United Kingdom (Rajoo,1999). The types of form of contract which commonly use by the
• PAM 98 with Bills of Quantities
• PAM 98 without Bills of Quantities
• PAM 98 Nominated Subcontractor Form
• PAM 2006 with Bills of Quantities
• PAM2006 without Bills of Quantities
1.2.3 CIDB Form of Contract
According to CIDB Standard Form of Contract For Building Works (2000), Construction Industry Development Board Malaysia has introduced its own standard form of contract for building industry. This form is known as CIDB Standard Form of Contract for Building Works 2000 Edition. However, it is not as commonly used while compared to others more frequently used local construction contract forms such as PAM or PWD forms.
1.2.4 British Standard Forms
According to Jones (N/A), the first used of standard form of contract in the construction industry was the Royal Institute of British Architects (RIBA) Form which was published in year 1870 and this leaded to the formation of the Joint Contracts Tribunal (hereafter, JCT). The JCT Forms were said to be direct modeled originally from RIBA Form and was established in the year of 1931. It has produced standard forms of contracts to be used in the construction industry for 77 years.
ICE Conditions of Contract 1993 (hereafter, ICE) is the most commonly used standard form for civil engineering works in United Kingdom. According to Williams (1992), ICE was established by the Association of Consulting Engineers (ACE) and the Federation of Civil Engineering Contractors (FCEC). The latest edition of ICE Contract Form was the Seventh Edition and published in the year of 2003.
NEC Engineering and Construction Contract (hereafter, NEC) was created by the Institute of Civil Engineers and as a guidance for drafting the civil engineering documents and construction project. The main objectives are for the purpose of obtaining the tenders and awarding of contracts, Wikipedia (2009).
1.2.5 American Form of Contract
AIA Document A201 (US) is for the use of construction projects in United States of America published by the American Institute of Architects (hereafter, AIA).
The latest edition is the Fifteenth Edition that was published in 1997 and known as AIA Document A201 – 1997, AIA (1997).
1.2.6 Australian Standard General Condition of Contract (AS4000-1997)
organization and is an internationally recognized leader in the facilitation of standardization solutions. In 1997, the Australian Standard Conditions of Contract was revised the title from AS 2124 – 1992 to AS4000-1997, (Standards Australia Committee, N/A).
1.3 Occupational Safety and Health (OSH)
After the brief description of the types of standard forms of construction contract, it is important to define the general terms used in OSH. According to Oxford Advanced Learner's Dictionary (2000), occupation can be defined as a job or profession. Safety can be define as the state of being safe and protected from danger or harm while health defined as the state of being physically and mentally healthy.
1.3.1 Occupational Safety
According to Steen (1996), safety can be defined as lack of danger from which harm or loss could occur. The achieved performance can be directly measure in term of the harm or loss that occurred, and reducing losses towards evidence of performance improvement. Success can be measured through lack of failures, injuries, illnesses and losses.
