Construction Permits Reform in Serbia 2015-2017 ONE STOP SHOP - Electronic Building Permits Djordje Vukotic, Legal Advisor to the Ministry of Construction, Transport and Infrastructure for Construction Permits Reform and Cadastre Reform Belgrade, February 2017 1
Situation before the Reform - 2014 no Situation before the Reform GOAL of the Reform PROBLEMS REASONS of the problems 1. WITHDRAWAL OF INVESTORS Establishment of the System in accordance with the best International Standards DB 2014: Ranking DB 2014 (182/189): Procedures - No 18 Time -269 days Cost 1.433,5% of income per capital 2015 (186/189) Ranking in the region 2014-2015: Macedoina (63-89) Slovenia (59-90) Montenegro (106-138) Croatia (152-178) B&H (175-182) 2. LEGAL UNCERTAINTY for investitors and real estate customers Singapur (3) modern system, model for Macedonian reform Procedures - No 11 Time -26 days Cost 27,5% of income per capital 2015 (2) DENMARK (8) classic system Procedures - No 8 Time -67 days Cost 87,2% of income per capital 2015 (5) Macedonija FYR (63) Procedures - No 12 Time -90 days Cost 512,1% of income per capital 2015 (89) 1. NOT CLEAR WHERE CAN BE BUILT and WHAT CAN BE BUILT 2. COMPLICATED PROCEDURE of Building Permits Issuing 3. THE PROCEDURE TAKES TOO LONG (269 days) Unclear rules; lack of transparency; Real Estate Transactions with buildings that don t have Use Permit 7. CORRUPTION 3. ILLEGAL CONSTRUCTION Citizens have built more than 1.5 million. illegal buildings in Serbia (New houses; upgrading of existing buildings ) 2 MISSING PLANS WHERE AND WHAT CAN BE BUILT LARGE NUMBER OF PARTICIPANTS (Municipalities; Public Utility Companies, State authorities) LARGE NUMBER OF PRIOR APPROVALS FAILURE TO DEADLINES 4. HIGH COSTS PARA-FISCAL CHARGES - within the competence of all participants in the Procedure 5. THE UNEQUAL PRACTICE Each municipality and Public Utility Companie has an independent practice at the local level 6. LACK OF CAPACITIES Municipalities do not have professional staff for these jobs (despite the surplus of employees) (Public Utility Companies, Cadastre, Municipalities) 8. LARGE NUMBER OF OBJECTS - can t obtain a USE PERMIT; out of Cadastre WIDE DISCRETION NONTRANSPARENCY The LACK OF CONTROL during construction
MEASURES TO BE TAKEN - RESULTS OF THE REFORM N PROBLEM SPEC. GOAL N MEASURES IMPLEMENTER RESULT 1. NOT CLEAR WHERE CAN BE BUILT and WHAT CAN BE BUILT 2. COMPLICATED PROCEDURE of Building Permits Issuing Ensuring MINIMUM PLANNING DOCUMENTS in accordance with the needs of investors SIMPLIFYING PROCEDURES for investors 1. DEFINE PRIORITY AREAS Adoption of Detailed Regulation Plans for these areas first Cadastre; Municipalities NOT ACHIEVED YET WB LOAN - still not implemented SPATIAL PLAN + DETAILED REGULATION PLANS - regulate corridors and capacities of traffic, energy and other infrastructure 2. Lack of Detailed Regulation Plans cover by adoption of the SEPARATS Public Utility Companies; Donors NOT ACHIEVED YET SEPARATS not been adopted yet- not provided expert support for PILOT SEPARATS SEPARATS Regulation which regulate the conditions for connecting the objects on the infrastructure, if those conditions are not established by Planning Documents Must be adopted by Public Utility Companies that provide infrastructure. DEADLINE for ADOPTION: 04/10/2016; 10/10/2016 3. ESTABLISH ONE-STOP SHOP SYSTEM Municipalities ACHIEVED - OSSS operates in the municipalities from 01.01.2015 4. The difficulties of Procedure switch to municipalities which caused the complexity of the procedure in history. Prescribe the obligation for municipalities to establish One Stop Shop System - to represent investors towards Public Utility Companies, Cadastre and other public authorities in the procedures connected with obtaining: Location Conditions (reservation of the infrastructure capacities); Building Permit; Use Permit; Registration in the Cadastre etc. The law adopted in dec 2014. FORMALIZE PROCEDURE Ministry BTI ACHIEVED - adoption of the PC Law 01.01.2015 Prescribe that municipalities examine only fulfillment of formal requirements (and ownership) during procedures, and that they are not competent 3 to check the quality of the technical documentation for the construction (that was the biggest problem in the past)
MEASURES TO BE TAKEN - RESULTS OF THE REFORM N PROBLEM SPEC. GOAL No MEASURES IMPLEMENTER RESULT 3. THE PROCEDURE TAKES TOO LONG Shorten the Duration of the Procedure 4. HIGH COSTS Reduce the Cost of the Procedure 5. Shorten the DEADLINES and prescribe PENALTIES if deadlines are not respected 6. Establish an ELECTRONIC PROCEDURE - avoid paper doc. Ministry BTI Ministry BTI; Donor; SBRA ACHIEVED - adoption of the PC Law 01.01.2015 ACHIEVED - adoption of the PC Law 01.01.2016 7. REDUCE FEES for land repeal Ministry BTI ACHIEVED - adoption of the PC Law 01.01.2015 8. ABOLISH para-fiscals and put the fees under the control (fees charged by municipalities and Public Utility Comp) Ministry of Finance NOT ACHIEVED YET Work on the Law is in progress 5. THE UNEQUAL PRACTICE 6. LACK OF CAPACITIES Adopt the Law which will prescribe that Public Utility Companies and Municipalities can t charge fees that are not in line with the costs of the services they provided ESTABLISHMENT of the Fees Register and COMPETENCE of the Ministry of Finance to control the fees amount, during their registration (Public Register) Unify Practice 9. ESTABLISH PUBLIC ELECTRONIC PORTAL at the state level - Ensure the transparency of the system Improve the Capacities of Municipalities 10 MODEL OF THE ACTS - DEVELOPMENT Donor; SBRA Ministry BTI; Donors 11 INTER-MUNICIPALITY COOPERATION Ministry for Public Administration ACHIEVED - adoption of the PC Law 01.01.2016 NOT ACHIEVED YET Donor funds not provided NOT ACHIEVED YET Municipalities, especially smaller ones do not have IT experts; computers; Qualified inspectors itc. It is necessary to prescribe that the municipalities that have these 4 deficiencies, must solve this problem in mutual cooperation among them (to exchangefill capacity gaps). Amendments to the Law on Local Self-Government is the best measure.
N o MEASURES TO BE TAKEN - RESULTS OF THE REFORM PROBLEM SPEC. GOAL No MEASURES IMPLEMENTER RESULT 7. CORRUPTION (Public Utility Companies; Cadastre; Municipalities) 8. LARGE NUMBER OF OBJECTS - can t obtain a USE PERMIT; is out of Cadastre Eliminate Corruption Perform control during construction 12 Establish an electronic One-Stop Shop System to avoid direct contact: Investor - employee in the Municipality; Investor - employees in the Public Utility Company. - Transparency of the System SBRA; Municipalities PARTIALLY ACHIEVED - adoption of the PC Law 01.01.2016 PROBLEMS: During issuing Location Conditions Municipalities repeatedly rejected Requests, because of non-fulfillment formal conditions; During Connecting Facilities to the Infrastructure - Public Utiliti Companies may refuse to make connection, due to installation defects. 13 CONTROL OF CONSTRUCTION in KEY STAGES Ministry BTI ACHIEVED - adoption of the PC Law 01.01.2015 Prescribe the obligation of the inspectors to carry out CONTROL OF CONSTRUCTION in the key stages ( 1. check the foundation of the facilities at the beginning 2. check of the construction at the end) 14 IMPROVE CAPACITIES of BUILDING INSPECTIONS Municipalities; Ministry for Public Administration NOT ACHIEVED YET In order to Reduce Public Administration 5 restriction of employment is prescribed by the Law. EXCLUSION OF INSPECTORS is agreed with Ministry for Public Administration, but not implemented yet
PRINCIPLES OF UNIFIED PROCEDURE 1. PUBLIC ADMINISTRATION AS SERVICE FOR CITIZENS OLD SYSTEM DECENTRALIZED SYSTEM - dissection of procedures: Municipalities; Public Utility Companies; Cadastre itc. 2. TRANSPARENCY LACK OF TRANSPARENCY: The investor does not know what happens during the procedure (depends on the clerks) Data on construction unavailable to to the public 3. PREDICTABILITY UNPREDICTABILITY of the: COSTS (Investor don t know what he will have to pay and how much) DURATION OF PROCEDURE (in Public Utility Companies, Cadastre itc.) 4. STANDARDIZATION OF PRACTICE DIFFERENT PRACTICE in: numerous Municipalities; numerous Public Utility Companies; territorial units of the Cadastre. 6 NEW SYSTEM ONE-STOP SHOP SYSTEM Municipalities: Issue Building Permits; represents the investor toward: Public Utility Companies; Cadastre itc. TRANSPARENCY od the SBRA Portal of the: PROCEDURE (investitor can follow the procedure) SYSTEM (data on construction are publicly available) COSTS (informations on fees) PREDICTABILITY: COSTS (available on Portal; REFORM ESTABLISHMENT of the FEES REGISTRY, on going) DURATION OF PROCEDURE (short deadlines, tracked through the CIS; misdemeanor punishment for delays) STANDARDIZATION OF PRACTICE: Municipalities have an overview of all proceedings in Public Utility Companies; Municipalities and Public Utility Companies can use offered FORMATs - Central Information System (CIS) leaded by SBRA
PRINCIPLES OF UNIFIED PROCEDURE 5. EFFICACY OF THE PROJECT CONTROL EFFICACY OF THE CONSTRUCTION CONTROL EFFICACY OF THE RESERVATIONS OF INFRASTRUCTURE CAPACITIES EFFICACY OF THE CONNECTING TO INFRASTRUCTURE FACILITIES EFFICACY OF THE PROPERTY REGISTRATION IN THE CADASTRE OLD SYSTEM PROJECT APPROVAL SYSTEM PROJECT CONTROL BEFORE CONSTRUCTION EMPLOYEE in municipality, when issuing building permit CONTROL in OFFICE" BEFORE issuance USE PERMIT (Technical control) If increase size of the bulding - can t obtain USE PERMIT; can t register in the Cadastre APPROVAL SYSTEM Approval of the project by Public Utility Companies - "NEGOTIATION" on conditions; MANY separate, unrelated, unpredictable PROCEDURES APPROVAL SYSTEM SYSTEM ON INVESTOR S REQUEST If the investor does not submit application for registration of the building to the Cadastre, the 7 building shall not be registered (might never) NEW SYSTEM SITE INSPECTION SYSTEM CONTROL OF THE PROJECT DURING CONSTRUCTION INSPECTOR during site inspection PROJECT may changes during construction, without authority approval "CONTROL of the CONSTRUCTION SITE" DURING CONSTRUCTION Inspector obligatory checks dimensions of the building twice: 1. foundation of the building at the beginning; 2. the construction of the building at the end CAPAVITIES RESERVATION SYSTEM System centralized (CIS) Predictable, transparent system. Reservation of capacity is: publicly available information lasts for 2 years, with exceptions OBLIGATION to CONECT building on Infrastructure Public Utility Companies may refuse to connect building, only if installation in this building are out of standards SYSTEM - EX OFFICIO Municipality is legally obligated to submitte application for registration of the building to the Cadastre, immediately after issuing permit for use
IMPORTANT REGULATIONS APPLICABLE TO THE PROCEDURE Basic legislation - Law on Planning and Construction: 1. provides the legal basis for adoption of the bylaws governing unified procedure; 2. lex specialis in relation to the Law on Administrative Procedure, the Law on State Administration, and bylaws derived from these laws; 3. excludes the application of other laws that are in conflict with this Law, with the exception of regulations regulating environmental protection. The relation between the by-laws: 1) Decree on Location Conditions regulates the relations between municipalities and Public Utility Companies; 2) Rulebook on the process of electronic implementation of the integrated procedure regulates the relations between investors and municipalities; 3) Decree on the Electronic Office Management of State Administration Authorities provides the possibility of implementing electronic procedures - regulates exchange and archiving electronic documents 8
1 DISSECTION OF THE SYSTEM - a large number of competent authorities is not always a problem for the successful implementation of reforms 2 COMPLICATED REFORMS should be carried out in phases, in order to avoid that blocade of the system, which may compromise the reform 3 Large Municipalities and Public Utility Companies are MAIN OPPONENETS of the Reform 4 Fast and non-systematic implementation of the Reform prevents timely obtaining and spending of DONOR FUNDS 5 It is necessary TO PROVIDE RESOURCES FOR MONITORING the implementation of the Reform in the first years of implementation LESSONS LEARNED THE ARGUMENT - if only one municipality or other authority can implement new procedure successfully, so can other Phase 1 - establishing this ONE-STOP SHOP system Phase 2 - INTRODUCTION OF the ELECTRONIC EPROCEDURE (electronic procedure prevents improvisation, which is necessary in the initial phase of the reform) Small municipalities, although they have the least capacities, are trying to solve problems in their community. Large municipalities shifts the blame on the System and other participants in the System. Great Donors Funds were used for preparation of the documentation useless for the Reform (Donors Projects may become purpose per se) Monitoring in order to: prevent changes in regulations that woud retrograde the Reform; establish the System in accordance with best practices 6 Regulate in MOST FLEXIBLE FORMAT On the beginning of the reform - procedure should be regulated by by-laws of the competent line Minister (not the Government, nor Parliament - Easiest way to change). Frequent changes of regulation are necessary during complex reforms. By the law must be presciribed just provisions that substantially change the old system. On the end of the successful reform - results can be fixed by transferring provisions (endorsed by the time) from by-laws into the law. 7 The most DRASTIC REFORMS are generally MORE SUCCESSFUL than small changes of the old System Drastic changes enable changing of bad habits and behavior of administration which compromised the OLD SYSTEM (good implementation of outdated System - no needs for the 9 Reform)