Risk assessment of draft Resolutions of the Cabinet of Ministers of Ukraine regarding DABI reform

The Construction sector experts of the Better Regulation Delivery Office (BRDO) have analyzed draft resolutions of the Cabinet of Ministers of Ukraine “On Optimization of State Architectural and Construction Control and Supervision” and “On Liquidation of the State Architectural and Construction Inspectorate of Ukraine and Amendments to Certain Resolutions of the Cabinet of Ministers of Ukraine” and prepared risk assessment of adopting both draft resolutions on the sector regulation.

In particular, experts warn against:

• formal replacement of the previous State Architectural and Construction Inspection (DABI) with a new one (or with several new bodies) without actual reform of administrative services provision and supervision/control in construction.
• refusal of electronic services in providing administrative services in construction (blocking the introduction of a Unified state electronic system in construction).
• reforming DABI at the level of the resolution of the Cabinet of Ministers of Ukraine and not at the level of the law. DABI should be reformed exclusively at the level of the law. According to Article 19 of the Constitution of Ukraine, state authorities and local self-government bodies, and their officials are obliged to act only on the basis, within the powers and in the manner provided by the Constitution and laws of Ukraine.

The following changes are needed to really reform DABI:

1. Eliminating a combination of powers to provide administrative services in construction and control and supervision powers in this sector in one state authority.
2. Reforming the procedure for providing administrative services in construction:
   1. Ensuring the transparency in the provision of administrative services in construction, including: 1) introduction of an opportunity to submit documents for providing all administrative services in construction in electronic form; 2) preparation of documents based on the results of providing all administrative services in construction using the Unified state electronic system in construction; 3) providing open access to the results of administrative services in construction (permits, licenses, refusals).
   2. Approving unified forms of decision (by check-list principle) on: 1) granting/refusing permits to perform construction works; 2) granting/refusing certificates on putting completed facilities into operation; 3) licensing of economic activities related to the construction of objects with medium (CC2) and significant (CC3) consequence (importance) classes.
   3. Transferring functions on issuing permits for all CC2 and CC3 objects to local authorities.
   4. Introducing a mechanism for pre-litigation appeals against refusals in granting construction permits and certificates on putting completed facilities into operation.

3. Reform of the supervision and control procedure:
   1. Retaining the construction control powers with a state authority, or using the experience of some foreign countries and delegating construction control powers to the private sector. In New Zealand (ranked 7th in the World Bank’s Doing Business rating in the category “Obtaining a construction permit”), both government agencies and individuals who have received appropriate accreditation can perform the construction control functions.
   2. Upgrading qualifications of control and supervisory authorities. For example, voluntary accreditation of local construction departments and other regulatory and supervisory agencies and organizations has been introduced in the United States. Such voluntary accreditation helps to improve the quality of the work of construction control and supervisory authorities, as it helps to identify and eliminate performance shortcomings. To receive accreditation, the agency should confirm compliance with a number of aspects of activities (document flow, professional education of employees, annual evaluation of employees’ activities, application procedures, etc.).
   3. Recoding inspections using technical video tools.
   4. Introducing a mechanism for pre-trial appeals against decisions of supervisory and control authorities.

4. Transferring DABI’s functions of market surveillance of construction products to the State Service on Food Safety and Consumers Protection.

Authors of the analysis: Taisiia Baryngolts, Construction Sector Head, and Andriy Bilenko, Construction Sector Senior Expert.

BRDO is an independent regulatory policy advising institution in Ukraine, funded by the European Union under the FORBIZ project and within the framework of EU4Business Initiative.