The general explanation of Law Number 2 of 2017 concerning Construction Services as amended by Article 52 of Law Number 11 of 2020 concerning Job Creation (Construction Law) states that the construction services sector is a community activity in realizing buildings that function as supporters or infrastructure for social and economic activities of the community and support the realization of national development goals. In addition, construction services also play a role in supporting the growth and development of various goods and services industries and broadly supporting the national economy (Wibowo, 2019, p.2). However, the rapid development of construction work has the potential to trigger an increase in disputes. Conventionally, dispute resolution is usually carried out by litigation or dispute resolution before a court where the position of the disputing parties is very antagonistic (opposite each other) (Sariono & Wibawanto, 2006, p.246). The method that is considered “conventional” has been criticized a lot because it is considered overloaded, a waste of time, very expensive, unresponsive to the public interest, over-formalistic and over-technically which is contrary to the principle of fast dispute resolution, simple, and affordable (Nasution & Simorangkir, 2010, p.4). Therefore, in order to fulfill the need of fast, simple, and affordable dispute resolutions, the latest Construction Law created a body called Dispute Board (DB). The existence of DB is a concrete manifestation of the principle of lex semper debit remedium (the law always provides the best medicine) (Putra & Aryani, 2019, p.15)
Discussion
If observed, Construction Law stipulates in a limited way the dispute resolution efforts listed in the Construction Work Contract. These efforts only include mediation, conciliation, and arbitration (vide. Article 88 paragraph [3] Construction Law). The word “and” should be interpreted as a tiered dispute resolution mechanism, not an alternative option. This means that the parties cannot directly choose the arbitration institution if the mediation is not successful. Arbitration can only be carried out if the construction dispute is not successfully resolved by mediation, and conciliation. Another change that can be observed in the Construction Law is the additional ‘third party’ services. Previously, Construction Law 1999 stipulates that out of court dispute resolution (non-litigation) can use the services of a third party, which includes: arbitrator services at national and international arbitration or ad-hoc arbitration institutions, mediator services at mediation institutions, conciliator services at conciliation institutions, and expert appraiser services (see Article 37 of the Construction Law 1999). To complete the variation of the ‘third party’, DB was also presented at Construction Law. Based on the explanation above, a table of discrepancies regarding dispute resolution between the old and new construction law was obtained.
The existence of the provisions of Article 95 GR 22/2020 can be considered as the main evidence that the settlement of construction service disputes through DB reflects the principles of fast, simple, and affordable dispute resolution. On the one hand, based on Article 95 paragraph (2) of GR 22/2020 there is a time limit for objections in the form of 28 days after the decision of the DB which incidentally is quite fast and provides certainty of the settlement period for the parties (Nugraha, Izzaty, Anira, 2020, p.9.) One of the characteristics of the DB that distinguishes it from other alternative dispute resolution is to prevent disputes from occurring. This is explicitly regulated in Article 94(3) letter a of GR 22/2020 and in Article 6(1) letter a of the MRDB, which stipulates that the DB has the task of preventing disputes between the parties.The MRDB provides a fairly comprehensive arrangement regarding the working mechanism of the DB. Article 8 of the MRDB stipulates that the DB works in accordance with the work procedures in the DB work agreement which consists of: 1) dispute prevention and resolution mechanisms; and 2) Dispute resolution mechanism. Then Article 9 of the MRDB further stipulates the dispute prevention mechanism includes document review, field trip, announcement, hearings and advice. From the explanation above, the DB mechanism to prevent disputes has been clearly regulated in the MRDB. Regarding the DB regulation in Construction Law, two things that can be criticized. The first one is regarding the provisions of Article 95 paragraph (3) of GR 22/2020 which stipulates that when the parties/one of the parties object to the decision of the DB, then the parties is allowed to take the next stage of dispute resolution efforts which are mediation, conciliation, and arbitration (Kurniawan et.al., 2020, p. 50). This provision is the same as back to square one. There should be an attempt to object only when all parties object to the DB檚 decision. The second one is that there should be a period of settlement through the DB, for example a maximum of 28 days after the dispute, the DB must make a decision so that it will better reflect the principles of fast, simple, and affordable dispute resolution. The concept of resolving construction disputes using a DB institution, although it is relatively new to the Indonesian construction world, is a dispute resolution concept that has existed for quite a long time.
Conclusions & Recommendations
In Indonesia, apart from mediation, consolidation, and arbitration, there are alternative dispute resolution mechanisms with different characteristic which can be established starting from the beginning of the contract, long before the construction dispute occurs, namely the Dispute Board. DB can be used as a dispute resolution in private, as well as government construction work. The superiority of DB is to prevent a dispute from occurring through document review, field trips, announcements, hearings, and giving advice. But if Construction Law and International Law are being compared, it can be seen that the regulation of the DB in the Construction Law is far from adequate. Few norms have manifested the principle of quick, simple, and affordable dispute resolution by giving no opportunities to resolve disputes through litigation and having a period to file an objection towards DB檚 decisions. However, there are three points of criticism: (1) the concept of DA itself shows a lack of clarity in the concept, so it needs to be clarified, (2) no time limit for the DB to make decisions, (3) the option to solve disputes through mediation, conciliation, or arbitration is still available for the unsatisfied party, which is just the same as going back to square one. As a closing statement, writers would like to recommend the providing of time limit for DB in giving decision, also additional conditions to file an objection towards DB only when all parties object to the decision (not just one of the parties). In addition, for further research, it is important to adjust the concept of DB in Indonesia with the concept of DB in FIDIC.
Author : Faizal Kurniawan Samsiati, Kurniawan, F. ., Nugraha, X. ., & Hartono, J. . (2022). Dispute Board in Construction Services: A manifestation of the principles of quick, simple, and affordable dispute resolution. Environment-Behaviour Proceedings Journal, 7(SI11), 9-13.
