Timber iQ February - March 2020 // Issue: 48 | Page 15

ASSOCIATIONS
Recommitment to codes of
good practice
By Master Builders South Africa (MBSA)
A group of construction industry
stakeholders has urged the industry
to return to basics in order to
overcome its current challenges
successfully.
T
he call was made at a stakeholder meeting initiated
by Master Builders Association North, as mandated
by a sub-contractors’ committee meeting.
The stakeholder meeting consisted
of Master Builders South Africa,
represented by Roy Mnisi; MBA
North represented by Mohau
Mphomela; the South African
Property Owners Association
(SAPOA), represented by Neil
Gopal; and the Association of South
African Quantity Surveyors (ASAQS),
represented by Yunus Bayat.
“JBCC and Master Builders contracts are designed to
create a fair and standardised business environment, and to
ensure that all parties are protected. Amending them is not
only bad business practice in the long run, it is illegal,” he
notes. “We are seeing the results around us. Unauthorised
amendments to these documents, especially payment
clauses, should be immediately flagged and reported to the
Master Builder Regional
Associations, ASAQS and SAPOA.”
Adopting the ‘pay-when-paid’
principle often means, for example,
that smaller contractors get paid late
or not at all. Most cannot deal with
unpredictable cash flows and are
forced to shed staff or even go out
of business.
Mohau Mphomela is the MBA North executive
director.
One of the key issues identified at the meeting is the established
practice of making unauthorised amendments to Joint Building
Contracts Committee (JBCC) and Master Builders South Africa
contract documents. These standard documents are designed
to simplify the administration of construction contracts,
implement best practices and industry standards, and spread
risk equitably across the construction value chain. They
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Mphomela says that the practice of amending JBCC and
other Built environment contracts to, for example, insert
conditions such as ‘pay-when-paid’ puts all players in the
value chain at risk. Such practices contribute greatly to the
industry’s malaise.
“It’s no secret that the construction
industry is in crisis, with several of the
leading companies either liquidated
or in business rescue – clearly there is
a need for a period of self-
examination,” says Mphomela, MBA
North executive director. “It’s
essential we overcome our challenges
not only for our own sakes, but also
for the sake of the country:
construction remains one of the
biggest potential creators of jobs.
According to Statistics SA’s recent
Quarterly Labour Force Survey, the
sector still accounted for 24 000 jobs
and contributed to the modest growth
in the number of employed people.”
represent the consensus view of all industry stakeholders and
build on the accumulated experience and wisdom of these
bodies, which are co-signatories of the contracts.
Tender procedures were also
identified as cause for concern.
Although public tenders are by law
required to be transparent, this is not
enforced. The meeting called for all
public tenders to be open to ensure
transparency. Conversely, there is no
regulation regarding the
transparency of private tenders, and
therefore no requirement for
reporting on why contracts are
awarded to particular contractors. In
an open market system, contractors
are advised to be careful of entering
into contracts that expose their
companies to low or no margins.
“The various professional and industry organisations all have
codes of good practice that spell out the standards expected
of their members. If the industry recommits to following these
codes and acting ethically, many of these challenges will be
reduced,” Mphomela concludes.
// FEBRUARY / MARCH 2020
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