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Change for Builders – No More ‘Licensing Regulations’

Every change of every regulation is possible and permitted, but it is questionable why this is done somewhat covertly, through an expedited process, against the logic of the profession, as was the case this summer with the abolition of the Regulation on Consent for Commencing Construction Activities. Domestic builders suspect that they will now only receive cheaper competition.

The fact is that every new regulation potentially causes resistance, sometimes due to someone’s ignorance, and sometimes due to the threat to certain acquired rights and interests. This is especially the case when the implementation or compliance with a regulation means additional employment with all that such employment entails (from seeking labor, which is very often, especially in certain sectors such as construction, very difficult, through obtaining various permits to the most banal, but often the most challenging, additional costs). Especially when the regulation is ‘improved on the go’, either through formal change or change in interpretation or practice.

Out of Force

A good example of going through the phase of ‘childhood diseases’ is the Regulation on Consent for Commencing Construction Activities (Official Gazette No. 43/09), better known to the public as the ‘licensing regulation’, which had the additional problem of being adopted at the beginning of a crisis that has not yet passed, and which has probably caused the most damage to construction and related activities of all economic sectors. Previously, there was a regulation with a similar name from 2006, which, according to the general assessment of interested parties, was significantly milder and whose requirements were easier to meet (possibly partly because there was no crisis in 2006).

Just before summer, at the session on July 3, 2015, according to the usual expedited procedure, the Law on Spatial Planning and Construction Activities (Official Gazette 78/15) was adopted, which abolished the licensing regulation. The reasons are not clearly visible from the legal text, nor from the explanation of the Proposal for Law No. 845. There are statements that construction is threatened by the crisis, but also that in most EU countries there are no prescribed conditions for commencing construction activities, so the abolition of the licensing regulation will help our builders enter that market, which seems completely unbelievable even as a claim. It is known that our builders have always worked in foreign markets, but they have always been the best and largest, those who never had problems with the mentioned regulation because they had the necessary staff employed, as well as appropriate logistics.

Lowered Criteria

If the European Union had obliged the Republic of Croatia to abolish the mentioned regulation (which it did not), it would still be understandable, but this way it is not at all. Only in that sector has everyone (even by force) gotten used to having to meet certain conditions, only for that reason have experts gained importance, only it has been accepted that no one can decide on a daily basis instead of (to caricature) selling sandwiches near a school to build buildings and sell apartments, and we have already returned to (at least by that criterion) a bad past.

Thus, every change of every regulation is possible and permitted. But why is this done somewhat covertly, through an expedited process, without clear and transparent justification, why is even what is justified done only for the sake of form (who will believe that the Regulation was abolished for greater competitiveness of our builders in the EU market), ultimately why is it done against the logic of the profession. Conversations with some builders suggest that they will now receive competition from those who would never have met the conditions of the Regulation, and now, in accordance with public procurement rules, will always be cheaper than ‘real’ builders. Whatever solution is ultimately accepted, it would still be significantly different if everything had been done ‘lege artis’ in the true sense of the term, so that, among other things, it is permanently preserved who advocated for what and with what arguments. It seems that, unfortunately, we will have to wait a long time for such a ‘modus operandi’.