RECOMMENDATIONS

Improving the Business Enterprise Inspection

System:

Background of the Project

Purpose: Identify needed reforms to reduce the cost of doing business and improve the competitiveness of LGUS

Focus: Inspection SystemLegal Basis – ordinance or lawProcedure – manner, requirements, forms, frequencyFees – reasonableness and basis

Inspections

I. Business registration-linked (BR linked) Inspections

CommencementRenewal

II. Non-BR linked Inspections (NBR)

Construction

BR-linked Inspections

Zoning FireHealth and SanitationBuildingRadial Distance

Summary of Findings

Different Inspection Models Pre-business Inspection Post-business Permit Inspection Hybrid Inspection Systems

Legal Basis Conflicts and lack of local ordinance

Fees Bases used differ No logical relation Duplication of fees or imposition of similar fees

Summary of Findings

Duplicate InspectionsDispensable InspectionsLack of clear basis for categorization of businesses

for the purpose of determining whether or not they will be subjected to actual inspection

Procedure for Inspection Prior Notice not always given Checklists not always provided and used Immediate and categorical report of findings not assured Clear procedure to contest adverse findings not always

provided

RECOMMENDATIONS

Coverage:1.Process Improvements2.Statutory/Legal3.Institutional Development Measures4.Fee Rationalization5.Streamlining

Process Improvement

Timing of InspectionsPrior disclosure of inspection standardsPrior notice of inspectionUse of inspection checklistPrompt notification of results Clear remedies with specific timeframes

Legal Basis

Fire Code AmendmentsBuilding Code AmendmentsIssuance of Appropriate Ordinances

Institutional Development

Qualification of InspectorsProvision of facilities

Vehicles for inspection Use of computerized system/automation Linking of data bases across the various LGU sections

conducting inspectionsDevelopment of Inspection Manuals/Manual of

OperationsSetting up a Dispute Resolution Mechanism

(particularly to address disputes on adverse findings, imposition of penalties, etc.)

Information dissemination

Fee Rationalization

Benchmarking type of business classification of the LGU location of LGU

Basis for benchmarking Total fees Types of fees Amount of fee per type of fee

*Assistance of DILG may be indispensable*

Fee Rationalization

Factors to be Considered in Imposition of Fees Cost to conduct inspection Risk profile of the business Size of the business

Revenue, number of clients, number of staff, area of business premises

Other relevant consideration such as— Impact of the business to the general

public/environment

Streamlining

Elimination of duplicate inspectionElimination of unnecessary inspection (and

corresponding elimination of the related inspection fee) Risk-based inspection Adoption of formal criteria for determining risk

classification of various businesses for each type of risk

Joint inspection teams

Implementation

I.National Level Statutory amendment Nationwide benchmarking

II.Local LevelA. Short TermB. Medium TermC. Long Term

Implementation: National Level

Benchmarking Project Data gathering Data summary Data analysis Reporting and Recommendation Dissemination and Operationalization

Statutory/IRR Amendments Amendments to the Fire Code

Classification of businesses according to risk classification Elimination of firs inspection within one (1) year from the

issuance of an Occupancy Permit unless renovations were made

Assessment and collection of Fire Code-related fees through the LGUs but subject to strict remittance deadlines and appropriate consequences in case of late remittance

Timing of fire inspection

Implementation: National Level

Amendment to the Building Code IRR Annual inspection: scope/rationalization of fees Annual building inspection vs. per occupant inspection Timing of inspection

Amendment of the Local Government Code Provided for staggered schedule for renewal of business

licenses Allow the adoption of risk-based classification of business

To serve as basis for elimination of certain inspections To serve as basis for risk-based fees

Sanitary Code Staggered expiration of Sanitary Permits (instead of

simultaneous termination on 31 December of each year)

Implementation: LGU Level

Requisite: Profiling of registered business – to enable the LGU to know how to prioritize activities during implementation stage

Short Term (1-2 years)1.Development of checklists and forms2.Address the manner of conducting inspections – adoption og an inspection ordinance3.Information dissemination4.Elimination of duplicate or unnecessary inspection5.Fee evaluation

a. to eliminate duplicate or similar feesb. match the description of the fees with the actual purpose

of the feesc. align with available benchmarks

Implementation by the LGUs

Short Term to Medium Term (includes implementation in phases which will take up to 4 years to complete)

Requisite: Development of a criteria to be used in assessing risk (for each type of risk)

a.Adoption of risk-based fees

b.Adoption of risk-based inspectionc.Revision of ordinances to reflect the

foregoing