IMPACT OF LEGAL REGULATIONS ON THE CONSTRUCTION INDUSTRY IN VIETNAM

I. MAIN LEGAL REGULATIONS AFFECTING THE CONSTRUCTION INDUSTRY IN VIETNAM

1. Regulations on construction permits

Construction licensing regulations require companies and contractors to complete a series of administrative procedures before starting a project. This process includes submitting construction permit applications, design approval, and checking construction quality. The waiting time to receive a permit can last from several months to a whole year, affecting the project's schedule and cost.

For example: 

Metro line No. 1 project (Ben Thanh - Suoi Tien) in Ho Chi Minh City has encountered many problems leading to delays, including design adjustments and legal requirements. The complexity of licensing procedures, as well as planning changes, have also somewhat prolonged the project completion time.

2. Regulations on labor safety

Labor safety regulations require contractors to comply with strict standards of safety and health protection for workers. This includes providing protective equipment, regular safety training, and taking measures to prevent workplace accidents. Complying with these regulations can increase costs but also minimize risks and improve working conditions.

For example:

The Nguyen Tri Phuong Bridge construction project in Da Nang had to invest significantly in protective equipment and safety training programs for workers. Despite increased costs, this investment has helped reduce workplace accidents and improve safety on construction sites.

3. Regulations on environmental protection

Environmental protection regulations require construction companies to implement measures to minimize impacts on the ecosystem, manage waste and use energy efficiently. This may include carrying out environmental impact studies and adopting green technology. However, compliance with these regulations can drive up project costs and require companies to invest in new technology and processes.

For example:

The EcoPark Urban Area project in Hanoi had to carry out environmental impact studies and apply sustainable construction technologies to minimize impact on the environment. This project has succeeded in reducing pollution and building a green urban area, while contributing to environmental protection.

4. Regulations on planning and design
Planning and design regulations require projects to comply with urban planning and construction design standards. This may include compliance with regulations on building density, building height, and ensuring harmony with the urban landscape. Misalignment between local and national regulations can create difficulties in project implementation.

For example:

- Landmark 81 high-rise building construction project in City. Ho Chi Minh faces challenges in complying with urban planning regulations. Adjusting the design to fit planning requirements has led to changes in construction plans and increased costs.

- The Sky City project in Hanoi, a luxury apartment project, encountered many problems related to the licensing and design approval process. Processing time is long due to multiple procedural steps and quality checks required. This delay leads to increased construction costs and affects the project completion schedule.

II. WHAT IS THE IMPACT OF THE ABOVE REGULATIONS ON THE CONSTRUCTION INDUSTRY?

1. Enhance safety and construction quality

• Regulations on labor safety

Legal regulations on labor safety require construction companies to take measures to ensure the safety of workers, such as providing personal protective equipment (PPE) and organizing regular safety training. period, and take accident prevention measures. For example, according to the National Technical Regulations on labor safety in construction (QCVN 18:2021/BXD), contractors must ensure workers are fully equipped with helmets, gloves, and protective shoes. core. Compliance with these regulations can lead to increased investment costs in equipment and training, but at the same time reduce the risk of workplace accidents. This not only protects workers' health but also reduces legal risks and ensures the project is completed on schedule.

• Construction standards and quality

Construction standards regulations require projects to meet certain technical criteria to ensure quality and durability. For example, construction design and construction standards according to TCVN 9330:2012 require buildings to be designed to withstand specific loads and environmental conditions. Contractors must check the quality of materials and construction techniques to ensure the project meets requirements. Although compliance with the standard may result in increased costs and implementation time, it helps ensure the quality and sustainability of the project.

2. Impact on project progress

• Construction permit procedures

The construction licensing process in Vietnam often faces many problems related to complexity and long processing time. For example, to build a luxury apartment project in Hanoi, the investor needs to take many steps such as applying for a construction permit, approving the planning design, and checking the quality. Processing time can range from several months to a year, depending on the size and complexity of the project. Lengthy permitting processes can delay project schedules and increase overall costs.

• Regulations on quality management

Quality management regulations require construction companies to carry out periodic inspections and reports. For example, according to the Regulations on quality inspection of construction works (Circular 26/2016/TT-BXD), contractors must carry out periodic inspections and maintain detailed records of the construction process. . Complying with these requirements can increase project time and costs because of the periodic testing and reporting that needs to be performed. Sometimes, waiting for inspection results or approvals can lead to delays in proceeding with the next phases of a project.

3. Construction and investment costs

• Regulatory compliance costs

Compliance with legal regulations can lead to increased construction costs. Companies need to invest in technology, equipment, and training to meet regulatory standards. For example, to meet fire prevention and fighting requirements, construction companies must install fire alarm and extinguishing systems, conduct periodic inspections, and train workers. These costs include not only equipment procurement but also maintenance and operating costs. In particular, fire protection testing and certification requirements can increase costs and implementation time.

• Licensing fees and taxes

Permitting fees, taxes and other construction-related fees are also a significant part of project costs. For example, construction permit fees, inspection fees and land use taxes can create a significant financial burden for the investor. In some cases, calculating and paying these fees can result in project budget overruns.

4. Impact on competition and innovation

• Impact on competition

Legal regulations can create barriers for new or small construction companies. For example, certification and licensing requirements can increase the cost of market entry and make it difficult for small companies to compete with large companies. The complexity of regulatory compliance can reduce the number of contractors and limit competition in the industry. This can lead to increased prices and reduced service quality.

Encourage innovation

While regulations can create challenges, they can also drive innovation in the construction industry. Companies are forced to seek and apply new technologies and construction methods to meet the requirements. For example, the application of BIM (Building Information Modeling) technology helps improve design, cost estimating, and project management. This technology not only helps reduce construction costs but also increases the efficiency and accuracy of projects.

III. PROPOSED SOLUTIONS

To minimize the impact of legal regulations on the construction industry, solutions need to be implemented synchronously and comprehensively. These solutions aim to simplify processes, improve compliance, and apply technology to improve construction efficiency.

1. Simplify the legal process

1.1. Streamline the licensing process

Simplify the construction permit process by improving processes and reducing unnecessary administrative requirements. Create an integrated licensing system where relevant agencies can coordinate and process applications synchronously.

• Application of information technology: Develop an online construction permit management system to minimize application processing time and increase transparency.
• Interdisciplinary cooperation: Develop a coordination mechanism between construction, environment, planning and fire prevention management agencies to quickly process permit applications.

1.2. Build a simple evaluation system

Establish a simpler review and approval system for small and medium-sized construction projects. These projects can be processed through a more agile process if basic safety and quality standards are met.

• Flexible approval process: Create flexible approval processes for projects that do not have a major impact on the environment and community.
• Reduce paperwork: Reduce paperwork and documentation requirements to simplify the application and approval process.
• Optimize the inspection and approval process: Create a tracking and management system to track inspection and approval requests, helping to reduce wait times and increase transparency in the process. Regulators should work closely with contractors and investors to ensure the inspection and approval process is quick and efficient.

2. Enhance training and legal advice

2.1. Organize periodic training courses

Organize periodic training courses on legal regulations for contractors, project managers, and industry experts. These training courses should be updated regularly to reflect the latest changes in legal regulations.

• Workshops and conferences: Organize workshops and conferences to share knowledge and experience on legal regulations and best practices in the construction industry.
• Guidance documents: Issue detailed guidance documents on legal regulations and required standards, helping businesses and contractors easily access information.

2.2. Provide legal advice

Cooperate with legal and consulting organizations to provide consulting services to construction businesses. Legal experts can help companies understand and apply regulations effectively, and assist in handling legal issues that arise.

• In-depth consulting services: Providing in-depth legal consulting services on issues such as planning, construction licensing, and quality management.
• Dispute resolution support: Provide support in resolving disputes and handling regulatory compliance issues.

3. Apply modern construction technology

3.1. Applying BIM technology (Building Information Modeling)

Use BIM technology to improve design and construction management. BIM helps integrate design, construction, and project management information into a 3D model, thereby minimizing design errors and enhancing coordination between stakeholders.

• Effective project management: Apply BIM to track construction progress, control quality and manage design changes.
• Process Optimization: Use BIM to optimize the construction process and minimize costs due to design errors or unwanted changes.

3.2. Invest in green and sustainable technology

Apply green and sustainable technology to meet environmental protection and energy saving requirements. This technology not only helps minimize environmental impact but also improves the efficiency and quality of projects.

• Green construction: Using sustainable construction materials and energy-saving technology to create environmentally friendly buildings.

  Waste management: Apply effective waste management and recycling technology to reduce pollution and protect natural resources.

4. Improve management and monitoring systems

4.1. Strengthen monitoring and evaluation

Build a periodic monitoring and evaluation system to ensure projects comply with legal regulations and quality standards. This system helps detect problems early and provide timely corrective measures.

• Periodic assessment: Carry out periodic assessments of regulatory compliance and construction quality.
• Feedback and improvement: Collect feedback from stakeholders and apply improvement measures to improve project quality and efficiency.

4.2. Create conditions for businesses to self-evaluate

Encourage construction businesses to self-assess their ability to comply with regulations and take necessary measures to improve. Provides tools and guidance to help companies conduct effective self-assessments.

• Self-Assessment Guide: Provides detailed instructions on how to conduct a self-assessment and the standards to be followed.
• Self-audit tool: Develop an online self-audit tool to help businesses assess their compliance.

III. CONCLUDE

Legal regulations play an important role in regulating and managing the construction industry in Vietnam. These regulations, while necessary to ensure construction quality and safety, also create significant cost, time and compliance challenges. To minimize negative impacts, strategic solutions are needed such as simplifying legal processes, enhancing legal training and consulting, and applying modern construction technology.

Improving processes and applying technology not only helps the construction industry operate more efficiently but also contributes to the sustainable development of the industry. Close coordination between regulatory agencies, businesses and communities is a key factor in achieving this goal and ensuring sustainable development for the construction industry in the future.