Law on Construction

7/28/2019 Law on Construction

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Lao Peoples Democratic Republic

Peace Independence Democracy Unity Prosperity

***************

National Assembly No. 05/NA

Vientiane Capital, dated 26th

November 2009

Law on Construction

Chapter I

General Provision

Article 01. ObjectivesThe objectives of the law on construction are determine the principles,

regulations and measures on the management, the approval, the controlling, the

following up, the inspection, the running business transaction on construction all type

of construction and characters for ensuring the construction to be well qualified,

safety, economized, convenient, transparency, in accordance with the urban planning,

socio-economic development plan, in accordance with law for aiming at the

promotional construction by using technique technology that is modern, equitable

with standard, cooperate among the idea, construction material within domestic and

foreign, to keep the national characteristic, to protect the scenery, the beauty of city,

to contribute in the national socio-economic development.

Article 02. ConstructionConstruction is the procedures for the implementation of the constructive

activities, constructing and repairing by starting the feasibility, survey, design

constructive project, fitting and installation to completing construction.

Article 3 Definitions

The definitions for the words and expressions used in this law are as

follows:

1. The construction activity process refers to the assessment of the investmentproject, the undertaking of the construction work and the determination on thegeneral plans such as: The survey, the designing, the construction, the reparation,the rehabilitation, the restoration, the enlargement, the modification, theexpansion, the dismantlement, the management, the inspection and supervision of

the construction work;2. The construction project refers to all activities to be undertaken on various

categories of the construction work by laying out the scope, the goal, and specificconditions, with proper designation of liabilities, labor and/or construction

company, the budget, the working plans, the setting of the commencement andcompletion dates;

3. The construction buildings refer to all products from laboring, matters,machineries and construction materials, to include other equipments and


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installing devices which are closely associated with the soil, the soil surface, theunderground, the underwater and water surface, built in accord with the designs

for individual benefits, as the socio-technical infrastructure system;4. The technical infrastructure system refers to the irrigation system, the

transportation system, the traffic system, the telecommunication network system,the energy supply system, the electricity system, the public lighting system, thewater supply system, the recycle system of dirty and contaminated water, theurban drainage system, the waste disposal and storage system and the likes;

5. The social infrastructure system refers to the infrastructures on public health,culture, education, sports, commerce, housing, public servicing and parks;

6. The special construction activity refers to the irregular implementativeactivities such as: The national stability activities, the construction under theurgent order of the GOL;

7. The construction standards refer to all technical principles and regulations inrelation to the framework and various components for the constructiondetermined by the concerned sector (s);

8. The project owner (proprietor) refers to the funds owner and/or his nomineewho is authorized to use such a fund into the construction process;9. The contracting company refers to any juristic entity who enters into theagreement for the repair or construction with the project owner;

10.The bidders refer to any domestic and foreign juristic entities possessing properqualifications conditional to the selection and the bidding in either form asdefined by the project owner;

11.The preliminary designing refers to the data collection, the drawings andexplanation illustrating the designing points with adequate fundamental proof forarranging the total funding level, and as the basic reference for further designingprocess;

12.The basic designing refers to the designing, which composes of the project siteand the general drawings, displaying the characteristics and descriptions of all

structures within the construction project vicinity;13.The specific designing refers to the full complete designing, which composes of

the architectural drawings, the engineering drawings and the enlargement printsin need for clarity, to include the plans for the application of constructionmaterials and the installation of various equipments;

14.The architectural drawings refer to the blueprints showing off the nature, form,dimension, shape, supplies, frame level, area and the use of various parts of theconstruction project;

15.The engineering drawings refer to the blueprints displaying the dimension,quantity, and volume of the technical structure form of the construction project

together with some necessary enlargement sheets;16.The construction supervision refers to the technical monitoring and checking

regularly made during the construction by any architect or engineer, aimed atensuring the buildings to be in high quality, in conformity with the design, the

technical standards; timing up the work and strictly placing funds onto each workas well as checking the safety, and making the environment protection;

17.The construction follow-up and inspection refer to the progress checking of theproject work at each period from the commencement to the completion date;

18.The correctness certification under the construction project refers to theissuance of certificates to the completed project work, proving to be correct andconformable to the designed drawings, the economic-technical designation on theconstruction materials, and the construction standards.

19.The construction project land area refers to the total land area of theconstruction project, to include the land area to be furnished under the adopted

investment project.


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20.The construction unit price refers to the expense on any work or the cost ofvarious category construction activities, calculated by using the measurement unit

such as: In square meter, in cubic meter, in distance meter, kilometer or the likes;21.The building, the creation and installation refers to the newly-built

construction, to include the provision of equipments such as: The transmissionline, machines associated with the construction work;

22.The repair refers to the improvement, modification, the solution of the brokenand deteriorated part(s) of the buildings.

23.The expansion refers to the enlargement of the area and the volume of thebuildings.

24.The rehabilitation/restoration refers to the reconstruction so as to make thematter or the cultural, historic, scenic, natural buildings are in their usual natureand character.

Article 4. The Policy on the Construction

The State encourages all domestic and foreign economic sectors to

place their investment into the construction, the repair, the protection-conservation, and the use of all buildings in pursuant to the laws.

The State urges all types of construction to be processed in conformity

with the laws, the technical designation, the technical standards, the

construction unit price; to be of high quality, efficiency, economization,

the safety, the beauty, the safeguarding of the special national

characteristic and the environment conservation, as well as the

promotion for the use of domestic-produced construction materials.

The State urges and encourages all domestic constructionentrepreneurs to have access to the fund sources for strengthening their

own capacity, developing their workmanship and being able to compete

with those of the foreign countries. This is to ensure the construction

activities be developed and broadened as the contribution into the socio-

economic development.

Article 5. The Principles on the Construction

The construction undertaking must be made in pursuant to the

following principles:

1. To ensure the conformity with the national socio-economic development plans,the development master plans of each sector, the urbanization plans, the projectconstruction drawings, the technical designation and standards, and theconstruction unit price.

2. To guaranty the quality, the safety, and not to emit negative impacts in excess ofthe standard limit designated for the protection of the citizens livelihood, the

infrastructure, the natural scenery, the environment; and not to cause theexcessive disturbance to the people who live near the construction site.

3. To promote the development in parallel to the conservation and protection of thecultural, historic and natural heritage as well as the national characteristic.

4. To ensure the sustainability and high yield to the society and economy, byproviding facilities to the disabled and elders, especially the construction of

buildings, roads, and other public sites;


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5. The domestic architects and engineers must have access to the participation in themajor foreign-invested construction activities;

6. To make the assessment on the impacts against the natural environment and thesociety, primarily the health of the citizens.

Article 6 The Obligations of the citizens on the Construction

Lao citizens, aliens, foreigners and apatrids residing in the Lao PDR

are all obliged to respect and act in accordance with the law pertaining to

the construction, to give their comments on the construction activities,

and to take part in the conservation and protection of various existed

buildings which are the socio-technical infrastructure system, to include

the cultural, historic and natural heritage.

Article 7 The Scope for the use of this Law

This law is applicable to all infrastructural construction activities,high-cost construction and repair activities of any individuals, any state

and private organizations in the urban, rural areas and special economic

zones throughout the nation, mainly related to the transportation system,

the irrigation system, the embankment system, the telecommunication

system, the housing system, the electricity system, the construction

system related to mining and the likes.

This law is not allowed to be used with the special construction

activities, which shall be governed by specific regulations.

Article 8 The International Co-operation

The State widely opens and promotes the sub-regional, regional,

foreign and international relations and co operations in the construction

fields by means of exchanging scientific, technical, technological

experience, data, and information; building, culturing, upgrading technical

subjects to its employees; striving for the assistance, the investment

collaboration and taking part in the implementation of agreements,

treaties, in which the Lao PDR has been the partnership.

CHAPTER II

THE CONSTRUCTION ACTIVITIESSECTOR 1

CATEGORY, NATURE, AND SIZE OF THE CONSTRUCTION

Article 9 The Construction Categories

The construction categories are sectorally classified as follows:1. The public Work and Transportation Sector:

- Transportation system: Road-bridge, railways, river ports, tunnels,navigation canals and airports;

- Housing system: Houses, buildings, hospitals, schools, temples, plants,factories, petroleum depots, petroleum and gas pipeline, fuel pumps,stadiums, parks, transport stations;


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- Water supply and sanitation systems: Pump stations, water plants,transmission and distribution lines, ditches, waste and contaminated water

drainage pipes and/or culverts;- Telecommunication system: Satellite stations, radio frequency trans-

receiving stations;- Embankment and anti-flood protection systems.

2. The Agriculture and Forestry Sector:- Irrigation system: Irrigation canals, channels, spillways, catchment basins;

3. Energy and Mine Sector:- Electricity system: Hydro-power dams, power plants, power receiving and

distributing stations, transmission line system;- The construction system related to mining.

Article 10 The Construction Characters:

The construction characters are as follows:1. The construction, the building-up and installation;2. The repair;3. The expansion;4. The rehabilitation and restoration and the likes.

Article 11 Construction Scale

Each category of the construction can be classified into scales as

follows:1. Large scale;2. Medium scale;3. Small scale.

The relevant sector is delegated to determine the scale of the construction for

each category, which is under its management by referring to the cost, the site, theproject technical significance. As to the construction work in the state-funded

project, the assessment must be made in line with the provisions of the law pertainingto the state investment.

Article 12 The Designation of the Techniques, the Standards and the Unit Price of the

Construction

The technical designation, the technical standards, and the construction unit priceare the ceiling base, the comparative and indicative construction standards to be used

as the reference for budgeting, monitoring, inspecting and assessing the output of theconstruction.

The Ministry of Public Work and Transport has to work in conjunction with otherrelevant sectors to make a research and study the technical designation, the overalltechnical standards, and the construction unit price and submit them for adoption bythe Government. Furthermore, the concerned sector has to make the research andissue out the technical designation, specific technical standards and the unit prices forits own construction.

Article 13 The Construction Activities

Here are the main activities of the construction:1. The feasibility study on the construction project;


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2. The survey, the design of the construction project and the determination on theconstruction material to be used;

3. The construction permit;4. The provision of land area for the construction project;5. The devisal and implementation of projects construction work;6. The construction supervision;7. The protection and use of the buildings.

SECTION 2

THE FEASIBILITY STUDY ON THE CONSTRUCTION PROJECT

Article 14 The feasibility study on the construction project

The feasibility study on the construction project is the socio-economic,technique-technology, financial, technical and/or construction laboring study; theassessment of the environmental, socio-cultural impacts, the actions of which shall

display the investment effectiveness by basing on the construction category, nature,

and scale.

For all large and medium construction projects with complicated techniques andthe use of extravagant funds, the prior feasibility study should be made in order togain more options for further precise study.

As to the small-scale construction activities with no complicated techniques andlow cost, the concerned sector has to formulate its own specific managementregulations.

Article 15 The Summary on the Feasibility Study of the Construction Project

The summary on the feasibility study of the construction project is the economicand technical commentary report on the project, i.e., the assessment to see if such a

project is effective and efficient, the technique-technology study in relation to theconstruction, to include the impacts over the natural environment and society.

Article 16 The Estimates from Making the Feasibility Study of the Construction

Project

The feasibility study of the construction project must display the followingestimates:

1. The extreme benefit and the beneficiaries from such a construction project;2. The value, the servicing term of such a construction project;3. The economic-technical effects, the natural environment and society;4. The measures for reducing the negative impacts over the natural environment and

society, the citizen health, occurred from such a construction project;5. The working plans and the methods to be used in the construction

implementation.

Article 17 The Content of the Summary on the Feasibility Study of the

Construction Project

The summary on the feasibility study of the Construction project must

compose of the following:


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1. Policy lines: To make a study on the policy lines and the national socio-economic development plans associated with the construction project;

2. Finance and the investment benefits: To estimate the total value of theconstruction project, the demand of fund at each period, the sources of funds and

the output to be acquired from such an investment, to include the direct andindirect beneficiaries from such a construction project;

3. Techniques: To make a study on the scale of the construction project, thetechniques and technologies to match with the exact geographical, socio-economic circumstance in each locality in the current and future period, togetherwith the management, the work process and the safeguarding for thesustainability of the construction project;

4. Resources: To make a study on the need of materials, equipments, labour, thepersonnel training and the likes;

5. The organization and management of the construction project: To make a studyon the currently existed organization, the necessity and the effectiveness for theestablishment of specific project management team to coordinate with the devisal

and implementation of such a construction project;

6.

Culture-Society: To make the study on the citizens residential evacuation, thebeneficial targeted groups from the construction project, specially the generationof income, the setting of employment to the citizens, to include making the studyon the affects against the residential evacuation program, the resettlement, thesafeguarding of their customary tradition, culture, which are the most valuableheritage of the ethnical people;

7. The Environment: To make the study on the impacts over the naturalenvironment and the society, the health of the citizens such as: The biodiversity,natural water sources, climate and the likes, and simultaneously place appropriatemeasures for the prevention of such an environmental impacts.

Article 18 The Adoption of the Summary on the Feasibility Study of the Construction

Project

After checking and assessing the correctness in pursuant to the provisionsstipulated in Article 16 of this law, the relevant state sector will make the adoption ofthe summary on the feasibility study of the construction project.

As to the impacts on the natural environment and society, they must be assessedand adopted by the Water Resources and Environment Division.

SECTION 3

THE SURVEY, THE DESIGN OF THE CONSTRUCTION PROJECT

AND THE DESIGNATION OF APPLICABLE CONSTRUCTION MATERIALS

Article 19 The Survey and Design of the Construction Project

The survey of the construction project is the collection of precise data necessaryfor making the economic-technical feasibility study by assessing the economic-technical effects and the impacts over the natural environment and the society, beavailable and ready for the designing.

The design of the construction project is the precise formulation of drawings inaccordance with the technical standards, on the basis of analyzing all data acquired

from the survey; the action of which is composed of the complete technical,engineering, and architectural drawings, the designation of techniques, the value

assessment, and the lay-out of the construction schedule.


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There must be the survey, the designing, the assessment of the construction costfor each construction project, except for the small-scale construction project with

non-complicated techniques and low value, for which the relevant sector has to workout its own specific regulations.

Article 20 Steps for Making the Survey and Designing the Construction Project

The survey and designing of the construction project have to be made incompliance with the following steps:

1. Making the survey, the collection and analysis of all data;2. Working out the preliminary designing, and making the average value

assessment;3. Making the basic designing;4. Formulating the precise design, evaluating the construction project cost;5. Preparing the bidding documents for the construction project.

Article 21 Estimates to be Acquired from the Survey, the Designing of theConstruction Project

The survey and designing of the construction project must display the followingestimates:

1. They must be in pursuant to the objective of the construction project. Providingthe project is for the housing construction, it must possess the national

architectural character mixed up with the extreme modern style, the environmentand the natural scenery;

2. They must meet with the technical designation and the technical standards foreach construction category; and simultaneously the use of domestic construction

materials should be promoted;3. They must ensure the existence of socio-cultural and economic effects; and the

benefits of the citizens;4. They must ensure the preservation, the protection of the social and natural

environment, the public properties, and the safety to the lives and properties ofthe people.

Article 22 The Adoption of Documents Related to the Survey and Designing of

the Construction Project

The documents related to the survey and designing of the

construction project compose of the complete sets of the technical,engineering, architectural drawings, the designation of techniques and

construction materials, the value assessment together with the

construction working plans.

Any of the surveyed and designed construction projects which is

deemed to have the socio-economic effects and have no impacts over the

natural environment and the society shall be adopted by the relevant

state sector by referring to the category, scale, and level of such a

construction project.

Article 23 The Designation of the Applicable Construction Materials


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The Ministry of Public Work and Transport is responsible for

surveying and managing the construction material sources, primarily the

borrow pits of laterite, black soil, red soil, sand, gravel, macadam, basalt,

lime stone, earth, and other typical rock for the construction from the

surveyed site approved by the GOL. Also, it has to make the designationfor the use of such construction materials, to include bricks, roofing tiles,

timber, steel bars, sectional steel and other construction materials.

The Science and Technology Agency shall make the consideration for

adopting the construction material standard proposed by the Ministry of

Public Work and Transport or by the concerned sector.

The Ministry of Industry and Commerce shall be liable to control the

construction material production and distribution to be in pursuant to the

standards laid out by the Science and Technology Agency.

SECTION 4

THE CONSTRUCTION APPROVAL

Article 24 The Request for the Construction Approval

Any individual and/or organization wishing to make various

constructions such as: The structural building, the construction, the

installation, the repair, the expansion, the rehabilitation-restoration, the

modification and/or the dismantlement, has to submit the request for

approval to relevant state sector.

Article 25 The Construction Approval

Upon receiving the request for the construction approval from any

individual and/or organization, the relevant state sector shall place it into

consideration as stated in the procedures. In case such a request for the

construction approval meets with the provisions, the concerned sector

will issue out the construction approval permit in pursuant to the

proposed nature of the construction within the due time as prescribed

forth in the laws and regulations.

Article 26 Terms set forth for the individual requesting for the Construction

Approval

Any individual and/or organization requesting for the construction

approval must possess the following complete terms:

1. To properly submit the documents requesting for the construction approval;2. To obtain the ownership certificate or the permit for land use on the land area

where the construction is being taken place, in conformity with the provisions of

the land law and other concerned regulations;3. To possess the documents on the survey and designing, properly adopted by

relevant state sector as having stipulated in Article 19, Clause 3 of this law.


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4. To have the proper permit for earth excavation or refill at such an approvedconstruction site.

Article 27 The Responsibilities of the project Owner

The project owner has the following responsibilities:1. To submit a notice on the commencement date of the exact construction to the

sector which has issued out the approval.2. To install a billboard indicating the project basic data at the site.3. To proceed the construction in pursuant to the approval.4. To supply data, information or submit concerned documents to the construction

control agency to effectively make the monitoring and inspection.5. To submit the construction control agency a notice after the completion of the

construction so that the inspection can be made in accordance with theagreement, to include the complete sets of technical drawings and otherconcerned documents.

SECTION 5

THE ALLOCATI9ON OF LAND AREA TO THE CONSTRUCTION PROJECT

Article 28 Conditions set for allocating the land area to the construction project

The following conditions must be ensured in the allocation of

land area to the construction project:

1. To strictly and completely lay out the program for the compensation of thedamage which possesses proper reference proofs. There must be the decision-making process with the participation of the affected people or organizations togive comments on the land allocation to the construction project before thecommencement of the construction;

2. The damage compensation, the residential evacuation and the removal of allobstacles should be completely made prior to the hand-over of the allocated landarea to the construction project;

3. The demarcation of the allocated land area must be made in accordance with thenational, regional, provincial, district land allocation plans; the adopted overalldrawings of the construction project and/or the investment project.

4. The time limit for allocating the land area to the construction project must be inconsistent with the schedule set up for the implementation of the adoptedinvestment project and/or in pursuant to the decision of relevant state sector.

Article 29 The Damage Compensation

The compensation of the damage arises from the allocation of

land area to the construction project must be made as follows:1. To ensure the overall benefits of the nation, the individual and/or the

organization;2. To ensure that those who are subject to the residential evacuation to have

dwellings and their living not less than the level existed before the evacuation;3. To ensure the legitimacy, equality, transparency, and compliance with the laws and

regulations.4. To legally make the payment of the damage compensation.


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Article 30 The Application of the construction project land area

The application of land area under the construction project must

ensure the main overall benefits, the legitimate rights and benefits of the

individual and/or organization as well as the safety, the conservation and

protection of the environment; the natural, historic, and cultural heritagesby acting in conformity with the national socio-economic development

plans, the district plans, and the master plan of relevant sector.

SECTION 6

THE IMPLEMENTATION OF THE CONSTRUCTION PROJECT

Article 31 Conditions set forth prior to the Implementation of the Construction

Project

Prior to the implementation of the construction project, the project

owner and the contractor must possess the following conditions:1. To obtain the construction approval as stipulated in Article 24 of this law;2. To have the contract agreement of all scales and the supervision contract for large

and medium scale construction and/or for the construction with technicalcomplication through the appropriate bidding process; such agreement/ contract

must be properly registered;3. To have the precise project construction processing plans for each work;4. To have laid out the measures for maintaining the safety and the protection of the

environment during the construction.5. To place a billboard with the projects data such as: Name of the project, the

owner of the project, the donor, the designer, number of the construction permit,

the constructer, the supervisor of the construction, its value, dates ofcommencement and completion.

In case ancient objects which represent the historic and cultural trace

are found during the construction of the project, a notification to the

relevant authority should be immediately made.

Article 32 The Change of Construction Land Area under the Project

The change of land area under the construction project from one sit to

another must be appropriately made by ensuring that such a construction

is in lines with the adopted drawings, consistent with the environmentsurrounding; and ensuring that the existed structures remain under their

former shape, nature, and quality, the citizens receive their legitimate

benefits, the safety, and causing no negative impacts to the environment.

Here are the primary causes for the change of construction land area

under the project:

1. To provide the overall benefits of the state;2. The land condition is inappropriate for the construction project;3. Once there is a discovery of ancient objects or high-valued mineral ore at the

allocated sites during the construction processing.


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The land area change under the construction project must get the

approval from relevant sector who has formerly made the adoption for

such a construction project.

Article 33 The Structural Dismantlement

The structures to be dismantled must be under the below-listed

conditions:1. Any broken and deteriorated structures which may cause negative

detrimental effect to the society and the environment;2. Any structures which are non-standardized, non-conformed to the approved

drawings and/or non-consistent with the construction permit;

3. Any structures with no legal permit and non-consistent with the adoptedurbanization plan;

4. Any temporary structures built up during the construction processing and notnecessary for use after the completion of the construction work.

The project owner or the owner of the structure shall be liable to all

expenses for such a dismantlement. Provided that the project owner or

the owner of the structure does not act upon his/her liability, the relevant

sector shall perform such a pull-down or dismantlement, and make the

removal or disposal, the action of which shall be charged as the expense

of the project owner or the structure owner.

Article 34 The Safety Maintenance

Generally, the maintenance of the safety should use the measures in

pursuant to the regulations issued out by relevant sector; primarily thedanger warning signs, the fencing of the construction site, the protective

equipments such as: Safety helmets, boots, gloves, anti-ray glasses.

In case any of the force majeure occurs during the construction such

as: Flood, tornado, fire, earthquake, land slide or other form of disasters,

which cause the affects the construction processing, the contractor must

place the protective measures for immediate and timely solution as

follows:1. To give the safety signal within the construction site;2. To place the construction under the provisional cessation and timely use

appropriate solving measures so as to guaranty the safety of all workers and toprotect the properties of the construction project;

3. To urgently report such an incident to the project owner, the relevant authority,the local administration so that they can put in place the solving measures.

SECTION 7

THE CONSTRUCTION SUPERVISION

Article 35 The Construction Supervision

The supervision of the construction must be implemented as follows:1. To supervise and make the construction in consistent with adopted drawings,

technical standards, designation of techniques and construction materials.


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2. To maintain continual and regular supervision. In case the supervisor of theconstruction finds any default(s) during the construction processing, he must

notify the project owner on such a matter and place the solving measures byusing appropriate methods as fast as possible.

3. To properly make the records or reports on the precise result of theconstruction supervision and safely keep such document and/or data.

The project owner has to nominate or employ any competent

individual and/or consultant company full of experience propitious to the

work, category, scale, and level of the project for making the follow-up,

inspection, and control the construction, except for the small-scale

construction project with low-value and non-complicated techniques.

Article 36 The Conformity Certification on the Structure

Every construction project is subject to the inspection from the

Construction Management Agency upon the completion of theconstruction work. When such a construction is deemed to have properly

and fully implemented in accordance with the drawings, the technical

standards, the designation of techniques and construction materials, and

other concerned documents as stipulated in the contract agreement for

the construction, the Construction Management Agency will issue out the

conformity certificate on such a structure to the project owner.

Article 37 The Hand-over of the Construction Project

After the completion of work under the construction project and

having made the inspection for conformity certification of such a

structure, the project owner and the contractor are to prepare a legal

hand-over document in compliance with the law and regulations and to

organize the hand-over of each work under the construction project

within the maximum period of not more than three months

As to the security term and value on each category of work under the

construction project, they are prescribed forth in the specific regulations

of each sector.

Article 38 Rights and Obligations of the project Owner

In undertaking the construction project, the project owner has

the following primary rights and obligations:1. To select, organize the bidding the enter into agreement with the company of the

contractor for the construction processing and with the consultant company forthe construction supervision;

2. To modify the drawings, in case of technical-economic necessity and reasonablyadjust the construction value in an economical manner upon the proposal of the

contractor company or the consultant company;3. To make the payment of the construction cost to the contractor company as well

as the construction supervision cost to the consultant company for each work inaccordance with the agreed provisions under the agreement;


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4. To make the monitoring and inspection on the work performance of thecontractor and consultant companies in the matter of safety and the

environmental protection and conservation;5. To notify, suggest, temporary suspend or order the project work to a permanent

cessation in case the contractor and/or the consultant companies do not act inconformity with the agreement provisions or do not act as directed.

6. To keep and file all documents related to the technical-economic feasibilitystudy, the soil and construction material test results, the important piece of thestructure, the drawings adopted prior to the commencement of the construction,the exact construction drawings and other related documents.

Article 39 Rights and Obligations of the Company Making the Survey, the

Designing, and the Construction material Analysis

Here are the primary rights and obligations of the company

making the survey, the designing, and the construction material

analysis:1. To collect, to fully analyze data and necessary construction materials for each

category of construction work so as to be used as the basic reference for the

designing;2. To design the drawings, to design-calculate the engineering framework, to draw

the precise cross-section of the framework;3. To designate the construction materials to be used, to estimate the construction

cost, and formulate the working plans in detail;

4. To consider the modification of the drawings, any part of which is deemedinappropriate as proposed by the project owner;

5. To take the liability under the laws on the results in relation to its own survey,designing, and analysis of the construction materials.

Article 40. Rights and Obligations of the Contractor Company

The contractor company has the following principal rights and obligations:

1. To lay out the working plans from the commencement to the completion date andthen submit them to the project owner and the consultant company for adoption;

2. To undertake the construction in pursuant to the drawings, the technicalstandards, the designation of techniques and construction materials as stated inthe contract agreement;

3. For the purpose of exact monitoring and inspection, to notify the consultantcompany in advance prior to performing any important construction work;4. To manage the construction site, to enforce the regulations on the safety so as tocreate the appropriateness to the category, scale, and nature of the constructionproject, to ensure the order maintenance by means of not causing any impactsagainst the surrounding residents and any structures existed within theconstruction vicinity;

5. To provide necessary data and documents to the project owner and/or theconstruction inspection agency as shown in the agreed schedule;

6. To make the proposal for reasonably modifying the drawings and the projectcost;

7. To be liable to the compensation of the damage occurred from the infringementof the agreement, the work performance not in consistent with the drawings, the

technical standards for the construction, the application of construction materialsas having mutually agreed, or from the negligence in the work performance;


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8. To keep and hand-over the technical-economic feasibility study, the test results,the exact construction drawings, the documents related to the construction

modification, memos, reports, and other related documents to the project owner;9. To receive the construction cost at the value as stipulated on the contract

agreement.

Article 41 Rights and Obligation of the Consultant

The primary rights and obligations of the consultant company are as follows:1. To , make the arrangement on the bidding documents, to draft the contract

agreement and the likes to be used in the construction;

2. To edit the plans, to supervise the construction and to give directions for properimplementation by the contractor so as to make the construction be proceeded in

conformity with the drawings, the designations and the technical standards for theconstruction;

3. To follow up, inspect, and summarize in detail the volume and quantity of workdone at each period as the proper substantiation for the payment of the

construction cost;4. To periodically make the reports on the work progress, conveniences, difficulties,

and other problems of the construction project to the project owner;5. To make the technical decision whether to or not to adopt any work which is non-

standardized in pursuant to the techniques, and then report to the project owner;6. To make the collection of the technical-economic feasibility study, the soil test

results, the construction material analysis results, any important part of theframework, the initially adopted drawings, the exact construction drawings, the

contract agreements on the construction, the bills of quotation, memos, thereports on the work progress at each period from the starting to the completiondate of the construction and submit them to the project owner;

7. To receive the payment on the construction supervision as per the sum valueagreed within the agreement.

SECTION 8

THE PROTECTION AND USE OF STRUCTURES

Article 42 The Protection of Structures

Any individual and/or organization who is the owner or the possessor

of the structure has to manage, protect, rehabilitate, repair his/its own

structure to be in a solid, safe, clean and nice condition, and be capable of

using for a long time.

Article 43 The Use of Structures

Any individual and/or organization who is the owner or the possessor

of the structure must properly use such a structure in accordance with

the approved goal and must place the protective safety measures over the

health, lives, properties of the citizens, and must not cause any impacts

against the environment.

Once there is the need for changing the usage goal, he must submit a

request for prior approval on such a change from the relevantconstruction management agency.


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CHAPTER III

BUSINESS RELATED TO THE CONSTRUCTION

Article 44 Forms of Investment on the Construction Business

The forms of investment on the construction business compose of

private enterprises, joint venture enterprises, and companies as

prescribed forth in Article 10 of the law pertaining to the enterprises.

Article 45 The Approval Request for the Investment on the Construction

Business

Any individual and/or organization wishing to place the investment in

undertaking the construction business must submit a request to relevant

sector for making the consideration upon the steps as having defined in

the laws pertaining to the enterprises and the investment promotion.

Article 46. The Scales of the Construction Business

The construction business is classified into three scales as follows:1. Large scale;2. Medium scale;3. Small scale.

The construction business of each scale shall be determined by relevant sector.

Article 47. The Categories of the Construction Business

There are four categories of the construction business as follows:1. The survey and design;2. The analysis of construction materials;3. The consultation;4. The construction contract.

Each of the above construction categories maybe classified into various

levels, dependent on the size, the value, the requirement in techniques,

technology, construction materials, and the length of use, which the

relevant sector shall make the research and work out specific regulations.

CHAPTER IV

THE CONSTRUCTION AGREEMENT

Article 48 The Agreement on the Survey/Designing, the Construction

Supervision

The project owner must enter into agreement on the

survey/designing, the construction supervision with the consultant

company, the architect, the engineer, depending on each project work, in

accordance with the provisions stipulated in the law pertaining to theprovisioned and non-provisioned obligations so that the technical follow-


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up and inspection can be regularly made during the construction

processing. This is aimed at making the construction project be of high

quality and consistent with the designing.

Article 49 The Contents of the Agreement on the Survey/Designing, the

Construction Supervision

The following primary contents must be included in the

agreement on the Survey/Designing, the construction supervision:1. List of work items to be done in the survey/designing, the monitoring, the

inspection and supervision of the construction;2. Expenses and mode of payment to the surveyor/designer, and the construction

supervisor;3. Term and plans for surveying, designing, supervising each work of the

construction project;4. Reports on the outputs of the monitoring, inspection and supervision of the

construction;5. Fine charge in case there is the agreement infringement and/or the non-performance of its obligations in pursuant to the schedule;

6. The modification, the revocation or termination of agreement;7. The settlement of disputes;8. The language used in the agreement.

Article 50 The Bidding and the Conditions Set forth for the Survey/Design

Companies, the Consultant Companies on Construction Work to enter into the

Bidding

In general, the selection of the companies for making thesurvey/designing work, or of the consultant company for the construction

must be make through the bidding, and made in accordance with the law

pertaining to the state investment, particularly the projects funded by the

state.

The survey/designing companies, the construction consultant

companies applying for the bidding must possess the complete conditions

as follows:1. To be legally established;2. To have architects and engineers with good knowledge, competence, high

qualifications and experience in surveying/designing work, supervising theconstruction, propitious to the scale and nature of each construction projectcategory;

3. To possess standardized financial status, to regularly and fully pay off obligatoryduty and taxes;

4. To meet with other conditions as defined in the bidding document.Article 51 The Contract Agreement

After the completion of the survey/designing and before undertaking

the construction, both the project owner and the contractor for the

construction have to enter into the contract agreement as stipulated inthe law pertaining to the provisioned and non-provisioned obligations.


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Article 52 The Contents of the Contract Agreement

The following are the primary contents in the contract

agreement:

1. Goals, list of work items of the construction project;2. Value and mode of payment on the construction cost3. Period of time and schedule for processing the work of the construction

project;

4. The provision of construction materials;5. The inspection, the adoption, and the hand-over of the construction project;6. The fine in case of agreement infringement and/or the non-performance of

the obligations in pursuant to the schedule;7. The security term and value on the structure, in conformity with the laws and

regulations;8. The modification, the revocation or termination of the agreement;9. The settlement of disputes;10.The language used in the agreement;11.The designation of techniques and the technical standards for the

construction.

Article 53 The Bidding and Conditions set forth for the Entrance into the Bidding

of the Contractor Companies

Generally, the construction contract has to be made through the

bidding by implementing in accordance with the law pertaining to the

state investment, specifically the project funded by the state.

The entrance into the bidding of the contractor companies must be

with the following complete conditions:1. To be legally established;2. To possess the actual experience and achievements propitious to the category, the

scale, the level of the construction project;3. To have good financial status with the certification from the bank;4. To have architects and engineers with good knowledge, competence,

qualifications and experience appropriate to the scale and level of each project

category;5. To adequately possess vehicles, tools, and construction equipments with high

quality;6. To regularly fulfill the obligations on the duty and tax payment7. To have other conditions as defined in the bidding document.

CHAPTER V

THE VOCATINAL CONSTRUCTION ASSOCIATION

Article 54 The Vocational Construction Association

The vocational construction association is a social organization acting

as the center to gather architects, engineers, technicians, and the business

entrepreneurs on the construction.

Such a vocational association must be established in accordance withthe laws and regulations.


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Article 55 The Standing and Role of the Vocational Construction Association

The vocational construction association is a social organization

attached to the Public Work and Transport Division. Its role is to

integrate the harmony, the wisdom of all construction professionals andthe business entrepreneurs on the construction so as to make the

operations be under the constitution, laws and regulations, and their own

ethics so as to protect, promote, develop their professions as the

contribution for creating the benefaction to the society and the

development of the nation.

Article 56 Rights and Duties of the Vocational Construction Association

Here are the principal rights and duties of the vocational

construction association:1. To announce, disseminate the policies, laws and regulations, and the state

socio-economic development plans in relation to the construction; to take partin the implementation;

2. To assist, build, and encourage its members in the work performance like tomake their career undertaking move forwards to the effective progress;

3. To manage and protect the legitimate rights and benefits of its members bybasing on the policies and regulations;

4. To act as the master in making the study and research on how to preserve,promote the special characteristic of the architecture and structures which arethe heritage of the nation;

5. To introduce the modern scientific techniques-technology into theconstruction;

6. To swap lessons, varieties of experience related to the construction in orderto continually upgrade the knowledge and experience to its members;

7. To enhance the harmony, the unanimity among the constructionprofessionals, and to contact and cooperate with other domestic and foreignvocational associations.

8. To regularly summarize and report the output of its own work performance tothe Public Work and Transport Division and to other relevant sectors.

Article 57 Architects

Architects are the technicians who possess the knowledge and

competence in architectural designing and decorations.

Architects have the duties and roles in determining ideas in relation to

models, forms, shapes, framework; making the technical-economic

designation; designating the construction materials to be used; making a

follow-up, checking the correctness upon the architectural design or the

technical standards; and directing and materializing the construction.

Article 58 Civil Engineers

Civil engineers are the technicians who possess the scientific-technicalknowledge and competence related to the construction work.


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Civil engineers have the duties and roles in making the analysis, the

computerization of engineering design, the direction, the inspection, and

the control on the construction quality in pursuant to the design.

CHAPTER VIPHOHIBITIONS

Article 59 General Prohibitions

All individuals and/or organizations are prohibited to:1. Carry out the construction operations without proper permits from the

relevant sectors;2. Conduct the construction in the areas not permitted by laws such as: The

military strategic zones, the archeological sites, the historic standing areas,the cultural heritage areas, the conservation forest areas, the restricted zones

of the highways, of the railways; the swamps, natural ponds, rivers, paddyfields, the irrigation systems, the hydropower dams, the airfield zonestogether with the vicinity associated with the aviational safety, the protectivezones of the bank erosion and the likes;

3. Make the survey, construction, supervise the state or private constructionproject by the same person;

4. Scatteredly make the construction, repair, expansion, and/or modification ofthe design without permission; not in consistent with the socio-economic

development plans, the infrastructure and the urbanization plan;5. Make the earth excavation, piling or refilling without proper permission from

relevant sectors;6. Cut down small trees for frame supporters without authorization;7. Move the construction materials such as earth, gravel, mountainous rock, and

sand, the action if which is dirtying the road surface, the public facilities, orthe others areas without permission from relevant sectors;

8. Unreasonably hinder, not offer conveniences or cooperation to theconstruction processing;

9. Make the conspiracy in offering or receiving bribes in relation to theconstruction processing;

10.Commit other acts which are against the laws and regulations.Article 60 Prohibitions for Relevant Officials and Authorities

All relevant officials and authorities are forbidden to commit thefollowing:

1. To undertake the business by acting as the consultant or the technician to thecontractor company of the construction project, which has the relation to

his/her responsibility;2. To reveal any data on the bidding;3. To accept bribes in relation to the construction for private or group benefit;4. To ignore his own liability, to delay the documentation of the construction or

of the structure building, and to take negligence on any impropercommitment of the contractor;

5. To issue out the permits for the construction of hotels, pub houses, and/orentertaining places near the temples, hospitals, and schools;

6. To commit other acts which are subject to the law violation.


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Article 61 Prohibitions for the Project Owners

The project owners are prohibited to commit the following:1. To conspire with the officials, relevant authorities or the contractor, the

consultant company, the architects or engineers in making the certification

and adoption of any non-standardized structures;2. To accept any bribes concerning the construction from the contractor;3. To delay the cost payment on any completed structure(s), unless there has

been a separate agreement;4. To delay the contractor on the methods and measures for solving problems

occurred in the construction;5. To neglect in making the monitoring, the inspection of the construction work

performance made by the contractor;

6. To commit other acts which infringe the laws and regulations.Article 62 Prohibitions for the Construction Entrepreneurs

All construction entrepreneurs are forbidden to commit the

following:1. To undertake any construction work apart from the categories registered in

the Enterprise Registration and/or the Concession Registration;2. To conduct the construction not in consistent with the drawings, the

designated techniques, and the technical standards of the construction;3. To undertake the construction work without the safety protection measures

and/or the measures for the socio-natural environment protection;4. To sell or transfer the construction project to another individual and/or

organization without a prior approval from the project owner;5. To make the earth excavation, piling or refilling outside the designated areas

during the construction, except otherwise approved by relevant sectors;6. To ignore the work or the construction project which (s)he has entered into

agreement with the project owner;7. To cut down trees as the frame supporters without permission;8. To make any commitments which deem to violate the laws.

Article 63 Prohibitions for the Consultant Companies, the Architects and Civil

Engineers

The consultant companies, architects and civil engineers are

prohibited from committing the following:

1. To copy any architectural and engineering drawings of another party forcommercial self-benefits;2. To disclose the data related to the fixed floor price of the construction project for

the bidding open;3. To conspire with the project owner or the contractor so as to seek for private

benefits from the construction project;4. To behave against its own ethical professional principles;5. To make any infringement against the laws.

CHAPTER VII

THE SETTLEMENT OF DISPUTES

Article 64 Forms for the Dispute settlement


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The dispute settlement may be proceeded in the following forms:1. The conciliation and/or the mutual compromise;2. The administrative solution;3. The solution through the Committee for Economic Dispute Arbitration;4.

The court judgment.

Article 65 The conciliation and/or the mutual compromise

In case any disputes occurred during the undertaking of business in

relation to the construction, both parties are able to settle the matter

through the negotiation, the conciliation and/or mutual compromise.

Article 66 The Administrative Solution

Providing that such disputes cannot be solved through the mutual

compromise, either of the parties has the right to submit the case torelevant sector, which it received the approval, for making the solution.

Article 67 The Solution through the Committee for Economic Dispute Arbitration

In the event that the relevant sector is unable to make the conciliation

for solving such a matter, either of the parties has the right to submit the

case to the Committee for Economic Dispute Arbitration for further

consideration in pursuant to the laws and regulations.

Article 68 The Court Judgment

For any disputes regarding the construction occurred during the

business undertaking, and unable to reach the final agreement through

the conciliation or compromise, or the administrative solution, or the

solution through the Committee for Economic Dispute Arbitration, either

of the parties has the right to submit the petition to the court for final

decision in conformity with the laws and regulations.

CHAPTER VIII

THE MANAGEMENT AND INSPECTION OF THE CONSTRUCTION WORK

SECTION 1THE MANAGEMENT OF THE CONSTRUCTION WORK

Article 69 The Construction Management Agencies

The Government shall integratedly and consensually manage the

construction work throughout the country, by delegating the Ministry of

Public Work and Transport to act as the coordinating center with other

relevant sectors, primarily the energy and mine sector, the agriculture

and forestry sector, the industry and commerce sector, the science and

technology agency and relevant local administrations, each of its own

jurisdiction, to make the management.


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The Construction Management Agencies compose of:1. The Ministry of Public Work and Transport, other relevant sectors;2. The Provincial and Capital Services of Public Work and Transport, other

relevant services within the province or the capital;3. The District, Municipality Office of Public Work and Transport, other

relevant offices within the district or municipality.

Article 70 Rights and Duties of the Ministry of Public Work and Transport, other

Relevant Sectors

In managing the construction work, the Ministry of Public Work

and Transport, other relevant sectors have the following rights and

duties:1. To make a research on the policies, the strategic plans, laws and regulations

on the construction work under its own sector and submit them for

consideration by the Government;

2.

To develop the Governments policies, strategic plans, and decisions relatedto the construction work into precise plans, working plans, and projects of itsown sectors;

3. To announce and disseminate the policies, the strategic plans, laws andregulations to create the common sense among the citizens so that they willparticipate in its own sectors construction work throughout the nation;

4. To direct and make the monitoring on the implementation of the policies, thestrategic plans, the development, the enlargement of the infrastructuralsystem within its own sectors;

5. To research on the designation and the construction technical standards; tostudy and select the appropriate technologies as well as to work out theinstructions for the implementation;

6. Under its own jurisdiction, to make the consideration on issuing the approvalfor the major construction;7. To make a research and give commentaries on the investment, the

enlargement, the suspension, and the revocation of the construction project;

8. To build up, raise, and upgrade the knowledge to construction personnels;9. To coordinate with other related sectors and local administrations on the

construction work;10.To communicate and make foreign, regional, and international cooperation

on the construction work;11.To regularly summarize and report the output of the implementation on the

construction work to the government.

Article 71 Rights and Duties of the Provincial, Capital Services of Public Workand Transport, other Relevant Services within the Province and the

Capital

In the management of the construction work, the Provincial and

Capital Services of Public Work and Transport, other Relevant

Services have the following rights and duties:1. To develop the policies, the strategic plans and the construction development

plans within their own sectors;2. To announce and disseminate the policies, the strategic plans, laws and

regulations in relation to the construction work of its own sectors throughout the

province and/or capital;3. To direct and follow-up the construction implementation within its own region;


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4. To make the survey, data and statistic collection on the construction work withinits own region;

5. With its own jurisdiction, to make the consideration on issuing out the approvalfor the medium-scale construction;

6. To research and comment on the investment, the enlargement, the suspension,and the cancellation of the construction projects within the province and/orcapital;

7. To make the management on the business transaction, the survey, the designing,the construction, and the consultant companies within its own region;

8. To collect data and statistics on the construction of various sectors within its ownregion;

9. To communicate and make foreign, regional, and international cooperation inrelation to the construction as being assigned by the high ranking;

10.To regularly summarize and report the output of the construction implementationto its own relevant higher body and to the provincial or capital administrations.

Article 72 Rights and Duties of the Office of Public Work and Transport, other

Relevant Sectors within the District and/or municipality

In the construction management, the Office of Public Work and

Transport and other relevant sectors within the district and

municipality have their principal rights and duties as follows:1. To organize and implement the plans, the projects, the procedures and the

instructions issued out by the provincial/ Capital Service of Public Work and

Transport, all of which are related to the construction work;2. To disseminate the laws and regulations on the construction work within its own

district and/or municipality;3. To study and give comments in relation to the construction activities within the

district, the development-focusing zones, and the rural areas and propose forfurther consideration by the Provincial/Capital Service of Public Work andTransport;

4. Under its own jurisdiction, to make a consideration on issuing the approval to thesmall-scale constructions.

5. To coordinate with other related sectors, and simultaneously make a follow-up onthe implementation of the construction projects within its own district and/ormunicipality;

6. To regularly summarize and report the output of the construction implementationto its own relevant service and to the district/municipality administration.

Article 73. Rights and Duties of the Village Administration

In the construction management, the Village Administration has the followingprincipal rights and duties:

1. To disseminate and organize the enforcement of laws and regulations on theconstruction work, and the implementation of the instructions from the PublicWork and Transport and other sectors in relation to the construction work withinits own village;

2. To encourage the citizens to participate in giving their comments and to take partin the construction and in the protection of structures such as: The evacuation ofthe citizens and the removal of hindrances from the area of construction, repair,rehabilitation, restoration of structures, which are the public facilities within itsown village vicinity;


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3. To report the law infringement circumstances with respect to the constructionwithin its own village vicinity to the Office of Public Work and Transport and

other relevant offices within the district or municipality.

SECTION 2

THE INSPECTION OF THE CONSTRUCTION WORK

Article 74. The Construction Inspection Agencies

There are two types of construction Inspection agencies:1. The internal inspection agency is a part of the construction inspection agency

as having defined in Article 69 of this law;2. The external inspection agencies are:

- The National Assembly as prescribed forth in the law pertaining to themonitoring and inspection of the National Assembly;

- The State Inspectorate Authority as stipulated in the law pertaining to thestate inspection;

- The State Audit Authority and the Independent Audit Team as defined inthe law pertaining to the audit;

- The Lao Front for National Construction, the Public Organizations, thecitizens and the Mass Media.

The external inspection affairs are to inspect the duty performance of

the construction inspection and management agency so as to make it have

the strength, transparency, justice and effectiveness.

Article 75. Rights and Duties of the Inspection Agency

In inspecting the construction work, the inspection agency has the rights andduties to be performed in accordance with the contents and forms as stipulated

in Articles 76 and 77 of this law.

Article 76. The Contents of the Inspection

The principal contents for the construction inspection are as follows:1. To inspect the implementation of strategic plans, policies, laws and

regulations, investment plans, plans for the development and rehabilitation ofthe infrastructure within its own sector;

2. To inspect the implementation on the technical standards in the constructionprocess, to include the construction equipments, and the installation of theinfrastructural system of its own sector;

3. To inspect the implementation on the safety standards and the social welfarepolicies to the workers on the construction processing;

4. To inspect the protective measures, the impact solution, and the damagecompensation to the loss of life, health, the properties of the citizens, thepublic and the environment occurred during the construction;

5. To inspect the bidding, the contract agreement, the construction supervisionagreement, and the agreement on the infrastructural installation of its ownsector;

6. To inspect the progress on the construction performance in pursuant to thescope prescribed forth in the construction agreement.


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In addition to this, the inspection also has to be made in conformity

with the inspection contents as stipulated in the law pertaining to the

state investment.

Article 77. The Inspection Forms

The inspection of the construction must be systematically and regularly made,with a prior notice and/or in the form of immediate inspection.

In making the construction inspection, the inspecting officers must strictly and

properly abide in pursuant to the laws and regulations.

Chapter IXPolicies Towards Persons with Outstanding Achievements

and Measures Against Violators of this law

Article 78. Policies Towards Persons with Outstanding AchievementAny person, individual or organization with outstanding achievements of this law

will be awarded or receive other policies in accordance with regulations.

Article 79. Measures Against ViolatorsAny individual or legal entity that violates this law shall be re-educated, warned,

regulated, fined, including having to compensate for civil damage or brought to

court proceeding based on the nature of the offence.

Article 80. Re-Education Measures

Any person, individual or organization that violates law on construction such asthe light forbidden that is not the penal offence will be re-educated and warned.

Article 81. Disciplinary MeasuresAny civil servant or state employee managed construction work that violate law

on construction such as the light forbidden that is not penal offence, cause not a lot

damage and do not faithful to report their offence, or escape from their offence will be

disciplinary such as verbal warning, postpone the promotion or be dismissed.

Article 82. Fine MeasuresAny person, individual or organization that violate law on construction that cause

damage with the component of penal offence shall be fined owing to the key activities asfollowing:

1. Run business transaction without the approval;2. Construct and install material without the approval;3. Do not implement in accordance with the standard of construction and safety;4. Do not implement the measures in construction, repairing that affect to the

environment.

For the rate of fining will be defined the specific regulation.

Article 83. Civil MeasuresIndividuals, organizations or enterprises who violated law on construction caused

damage to the property of the State, person, individuals or organization shall be liable topay the compensation equal to the damage caused.


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Article 84. Penal MeasuresIndividuals, who violated law on construction that is the penal offence shall be

liable to conduct the case as stipulate in the Penal Law

Article 85. Implementation

The government of the Lao People's Democratic Republic is to implement this law.

Article 86. Effectiveness

This law shall enter into force after one hundred twenty days from the date of

promulgation decree from the President of the Lao People Democratic Republic

Any provisions that contradict this law are repealed.

President of the National Assembly