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In a construction service contract between the government and the service provider (contractor), there are often issues particularly related to building failure and its connection to the criminal law, both the criminal act of corruption and criminal acts in construction service.

The definition of building failure under Law Number 18 of 1999 on Construction Service (Construction Service Law) is a state where a building which has been transferred by the service provider to the service user fails to function entire entirely or partially and/or not in compliance with the requirements provided for in the construction work contract, or the use of which deviates from its intended purpose due to the fault of the service provider and/or the service user.

In order to determine the building failure, there are certain stages to go through. First, the construction work must be fully completed and transferred. Second, an audit needs to be performed by auditors, both internal and external, which in due course will determine whether there has been any deviation. If there is any deviation, the measure sought would be a settlement effort based on the applicable contractual clause or legal provisions on construction service. Furthermore, if the audit finds that the service user/ the government suffers loss due to the building failure, the government has the right to file a civil lawsuit against the service provider/contractor as regulated in Articles 25 and 26 of the Construction Service Law.

Article 43 of the Construction Service Law provides the criminal sanction of imprisonment for a maximum of 5 (five) years and 5%-10% penalty of the contractual value against any occurrence of construction failure or building failure due to any of the following:

1. construction work planning which fails to fulfil technical requirements;

2. conduct of work which is against or not in accordance with technical requirements;

3. supervisor of the construction work deliberately giving another party the opportunity to carry out the construction work and deviate from technical requirements.

All of the aforesaid elements must be a result of a “fault” due to any action which is not in accordance with technical requirements. In addition, building failure must fulfill the following criteria:

1. failing to function either partially or entirely; or

2. not meeting the requirements provided for in the contract;

3. there is deviation in its use. In the law regarding other special crimes, the element of building failure can also be categorized as an indication of criminal act of corruption, if the following criteria are met:

1. state loss,

2. building failure,

3. strong allegation of deliberate intent on the part of service provider/contractor or strong allegation of unlawful act on the part of contractor, namely gratuity, misuse of authority, or other unlawful acts.

Therefore, Article 2 paragraph (1) of Law on Criminal Acts of Corruption may be applied in the said building failure occurrence.

Based on the foregoing discussion, the element of building failure is a determinant factor in any inquiry into an alleged criminal act in construction service or corruption.