Security of Payment Legislation – A new chapter for the construction industry in Hong Kong

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The adoption of fair and good payment practice is conducive to the healthy and sustainable development of the construction industry. Based on overseas experiences, including those of the UK, Australia, Singapore, etc., the Security of Payment Legislation (SOPL) can help promote collaborative interaction among contract parties and strengthen protection of service providers down the contract chain. This is particularly meaningful to Hong Kong nowadays, which emphasises process streamlining (精簡流程) and collaboration (共同協作) in our work as well as showing care to our industry (同舟共濟).

 

A comprehensive survey undertaken by the Government and the Construction Industry Council (“CIC”) in 2011 revealed that payment delays, disputes and unfair contract terms adversely affected many stakeholders in our construction industry. After taking into account the views of a working group comprising representatives of key stakeholders established in 2012 and the comments received from the public consultation in 2015, the Government formulated a framework of SOPL and its scope of application for drafting the Bill. The framework includes the introduction of an adjudication mechanism, prohibition of conditional payment provisions, etc., aiming at improving payment practices and providing a rapid and interim binding solution for payment disputes.

 

To lead by example, the Government has begun to introduce a new requirement since December 2021 to implement the spirit of SOPL administratively in all new public works contracts. The Government has also completed the first draft Bill for stakeholder consultation in April 2022. We will continue to work with the construction industry to bring forward the legislative work for the SOPL and start a new chapter for our construction industry (同為建造業開新篇).

 

This article is contributed by the Development Bureau


Arup acts as technical advisor for Asia's strategic climate-resilient alliance

If you choose to listen to this article, you are welcome to download the PDF version of the Journal (June 2022 issue) and activate the “Read Out Loud” function in Adobe Reader. For more details, please read the user's note.

 

The Asian Corporate Coalition for Climate Change Resilience (A4CR) – a strategic collaboration between the World Green Organisation (WGO), Arup and PwC – has been established to support businesses in tackling climate change and build a climate-resilient business community in Asia.

 

The coalition brings together a line-up of global and regional experts, industry thought leaders and advisors, offering unparalleled scientific understanding and knowledge, ample connecting opportunities and a comprehensive benchmarking scheme.

 

Arup, serving as the coalition’s climate technical advisor, will draw on its in-depth understanding of the built environment to help businesses identify, assess, mitigate and adapt to current and future climate change risks. As the Environmental, Social, and Governance (ESG) reporting technical advisor of A4CR, PwC will assist corporates to integrate ESG into their business and capture sustainable finance opportunities that deliver long-term financial benefits and value for investors.

 

The alliance has already garnered widespread support from the Hong Kong business community, including some of the largest listed companies. It will continue to expand its presence in the Greater Bay Area and across Asia.

 

This article is contributed by Arup

Explore Hong Kong Engineer