SCORE cert

A short introduction to what is CIDB

The Construction Industry Development Board (shortened as CIDB) is a regulatory agency under the Malaysian Ministry of Work (Jabatan Kerja Raya) formed by the Government of Malaysia based on the Construction Industry Development Board Act 1994 (Act 520). 

The main goal for the enactment of this Act is to guide, improve and propel the overall industry’s expansion whilst undertaking research on any matters relating to the industry which includes the following topics:

  • Standards of workmanship for construction-based work;
  • Standards and quality of Materials used in construction (Refer to the 4th Schedule of Act 540);
  • Aspects stemming from Occupational Safety and Health (OSH) in work-sites;
  • Provision, promotion and coordinating training for the construction industry
  • Registration and accreditation (i.e. revocation, suspension, reinstatement) of:
    • Contractors
    • Building Personnel (i.e. workers, site managers, Quality Surveyors etc..)
  • Management of complaints or reports in respect to construction work-based failures or completed projects which affects public safety
  • Provision of consultancy and advisory services with respect to the construction industry.
  • Ensure that best practices is followed by contractors and Managing Companies

With that said, any forms of activity from civil engineering to construction will be regulated by the CIDB. Moreover, with the authority to scrutinize all projects, the board has implemented various standards of operation which must be adhered to in which failure would result in fines or suspension of contractors or site licenses.

Since the formation, various programs and regulations have been enforced to minimize on-site accidents. Most of them have thus far been effective in drastically lowering the industry’s accident rate. The most promising of all programs would be the CIDB Green-Card program. 

The CIDB Green-Card program is introduced by CIDB Malaysia to provide basic knowledge (via. training) to ensure that construction workers are aware of the importance of a safe and healthy workplace and also what are the legal requirements in relation to the Green-Card. As an introductory program for all Construction workers working in construction sites, CIDB has noted that statistically, workers who have attended the course and are registered as Green-Card holders have a drastically lower rate of accidents and higher rate in complying with Safety & Health regulations set by CIDB, NIOSH and DOSH.

The “Contractor Capability and Capability Assessment Program (SCORE) developed by CIDB in collaboration with SME Corp. is another program which aims to provide a rating system on a Companies’ Business performance, Financial Capacity, Technical Acumen, Project and Procurement Management, Best Practices and Management Capability. This helps Companies who tender projects to identify the performance disparities between contractors and also to help contractors elevate their capabilities and capacities by acting as a advisor on how to increase the Companies’ SCORE rating.

Based on evidence submitted by Contracting and Project Management Companies, the ones who go to great lengths to ensure maximum compliance will be awarded by CIDB with the “Malaysian Construction Industry Excellence Award”, this also promotes long-term compliance by various Companies as it instills trust by the market during the tendering phase of projects.

    SCORE cert

    Why Compliance Matters and how non-compliance affects your Company

    Since the inception of the Malaysian Construction Industry Development Board (CIDB) as the enforcer of Act 520 of 1994 and its amendments, there has been constant discoveries which highlighted several key industry players conducting various forms of malpractice and negligence from improper facilitation of projects (i.e. insufficient site investigation), improper use of construction materials, little to no Workplace Safety Standard Operating Procedures (SOP) introduced to delayed payments on the project to contractors, suppliers and various parties related to the project.

    The first foundation that we need to consider in any form of project is the safety and health of all workers involved in the project. In 2018 alone, the construction industry has recorded a total of 169 deaths and 3,911 accidents (The highest recorded among Malaysia’s economic sectors). Based on a period of 5 years from 2013 to 2018, there has been a total of 145 cases researched by the Journal of Sustainability Science and Management.

    Since the inception of the Malaysian Construction Industry Development Board (CIDB) as the enforcer of Act 520 of 1994 and its amendments, there has been constant discoveries which highlighted several key industry players conducting various forms of malpractice and negligence from improper facilitation of projects (i.e. insufficient site investigation), improper use of construction materials, little to no Workplace Safety Standard Operating Procedures (SOP) introduced to delayed payments on the project to contractors, suppliers and various parties related to the project.

    The first foundation that we need to consider in any form of project is the safety and health of all workers involved in the project. In 2018 alone, the construction industry has recorded a total of 169 deaths and 3,911 accidents (The highest recorded among Malaysia’s economic sectors). Based on a period of 5 years from 2013 to 2018, there has been a total of 145 cases researched by the Journal of Sustainability Science and Management.

      SCORE cert

      Contractor disputes and how CIDB license protects the interest of the Management

      Those who are working in the construction industry may have seen their shares of conflicts due to various contractual relationships, project complexity, financial stake and also its schedule-based pressures. 

      Construction Disputes arises from both legal and technical aspects of the project, it should be noted that technical disputes takes most of the limelight involving the duration, finance and quality of work done by contractors. Therefore, having litigation may even escalate the situation negatively towards the project managers as it will inevitably prolong cases and incur the cost of legal fees for both parties. The process itself will no doubt negatively impact the working relationship between the Companies and potential values that may be given by both parties during the process.

      Due to this, an Alternative Dispute Resolution (ADR) can be used to resolve disputes at a faster and more cost effective manner by the use of arbitration and mediation. CIDB itself is a “advocating statutory adjudication” as a suitable dispute resolution in the construction industry.

      During the start of conflict resolution between parties, CIDB can be appointed as a mediator for both parties to resolve any dispute or differences in which the resolution shall be recorded in a settlement agreement which both parties shall give effect to the agreement accordingly. The mediation between two Companies shall be conducted in accordance with the CIDB Mediation Rules.

      To highlight the benefits of having CIDB act as a neutral third party appointed in the mediation, the officers in charge are specialized and equipped with a vast knowledge of the construction industry, they are allowed to facilitate the amicable exchange of documents between parties and may even render advisory opinion on matters relating to the matter in a case-by-case basis. Mediation also provides a space between parties to negotiate any forms of resolution which may provide both parties a win-win situation. As this inevitably saves time and expenses for the parties, mediation has started gaining traction in Malaysia as the first-tier dispute resolution for a number of Malaysian construction contracts.

      In the event that the Contractors or Contracting Company are unable to reach a settlement at this stage, either party is allowed to escalate this issue directly and allow the CIDB to act as an arbitrator.

      Referring to the CIDB Standard Form of Contract 2000’s Article 47, The standard contractual forms has adopted arbitration as a final form of dispute resolution whereby CIDB (as a neutral third party appointed) holds the power to conduct the following actions:

      1. Open up, review and revise any certificate, opinion, decision, requisition or notice; and
      2. Determine all matters in dispute which shall be submitted to him; and
      3. Award damages including interest or financing charges for the period before and after the date of award at such rate as he may in his discretion consider to be appropriate.

      In order to further understand the concepts between arbitration and mediation or if you would like to consult us on issues arising from any disputes, please do not hesitate to contact us on the contact form below

        SCORE cert

        A Short glance on what is CIDB Green Card and its benefits

        On a short historical perspective, Malaysians (since the 1990s’) has ventured less in the construction sectors due to the nature of the job being consistent with the 3D (Dirty, Dangerous and Demeaning) stigma that it comes with and also due to the low wages paid by Companies. Since then, there has been higher and higher. In a statistical report by the Malaysian Social Security Organization (SOCSO), the fatality rate cases in the Malaysian construction industry was more than 3 times of other workplaces such as manufacturing, mining and quarrying with more than a bulk of unreported cases due to 80 percent of Malaysian workers are foreigners working without or expired work permits.

        Since then, the government has legislated the Construction Industry Development Board Act 1994; or Act 520. and in turn started the CIDB body under the Malaysian Ministry of Works (Jabatan Kerja Raya Malaysia)

        One of the main reasons the law was enacted was due to the lack of available domestic pool of construction workers in Malaysia which forced various firms and developers to outsource the employment to foreign workers. However, outsourcing foreign workers brings about another form of headache towards the employers whereby these workers are unskilled and require supervision to ensure that the work can be completed whilst complying to the minimal safety and construction industry requirements.

        With the onset of CIDB enforcing various policies including the introduction of the “CIDB Construction Personnel Registration Card”, which is known famously as the CIDB Green Card. After the introduction of this policy, all construction workers / site supervisors or any individual entering the work site MUST be registered with the CIDB Malaysia and carry the Green Card.

        With that said, the benefits of having employees who are registered with the CIDB Malaysia is somewhat like a safety net for Companies due to a few factors. The most important would be that personnels with the Green Card are recognized as a valid Construction Personnel by the CIDB Malaysia. Other than that,

        Lastly, any Construction personnel with the Green Card are automatically covered by a special Insurance Scheme that insures the personnel against accidents or death for 24 hours (inclusive of non-working hours) and is valid across the world. This insurance is provided to the Green Card holder is holding a valid Green-Card during the time of the accident.

        Knowing the importance of the having a Green Card is important for industries relating to Civil Engineering and Construction. To find out more, please do not hesitate to reach out to us by writing to our Company.