Construction Industry Unites To form a National Umbrella Body

By Construction Alliance South Africa

South Africa’s construction industry has now united to form an umbrella body, the Construction Alliance South Africa (CASA) that is made up of 29 of the sectors’ professional, contractor, supplier and other bodies. The alliance was officially launched on 21 January 2021.

Industry stalwart, John Matthews who is the chairperson of CASA explained that the alliance was an important step towards uniting the voice of the industry and in facilitating smooth dialogue with government. “The need for unity in the sector cannot be over-emphasized, and because we all have the shared vision of an innovative, competitive and transformed industry, the formation of CASA is a historic and welcome achievement. It is also important as it comes at a crucial time when the industry is in engagements with the Presidency on the rollout of Strategic Integrated Infrastructure Projects to revive the economy” said Matthews.

Emphasizing the need for a united industry voice in confronting the industry’s challenges, Gregory Mofokeng of the Black Business Council in the Built Environment (BBCBE) who is the Deputy Chairperson of CASA, said it was important for the industry to forge a united front to demonstrate a serious commitment to collectively respond to industry issues.

CASA is made up of different industry bodies from across the sector with the broad objective of having joint representation in engagements on matters of mutual concern. It is expected that the alliance will not only lead a post-COVID recovery of the industry, but also tackle other long-standing industry issues that include accelerated transformation of the sector, protection of the industry from subsidised foreign competition as well as dealing with corruption and unethical business practices.

The construction industry successfully formed a COVID-19 response team at the beginning of the pandemic in April 2020. The Construction COVID-19 Rapid Response Task Team (CC19RRTT) was key in developing a well-co-ordinated industry response to the coronavirus pandemic including the safe re-activation of construction sites as lockdown restrictions were eased. The Task Team was also instrumental in co-ordinating and presenting the industry’s thinking on the national economic recovery plan. Following these recorded successes of the joint effort, the industry was in agreement on the need to form an alliance built on the shared goal of re-building the sector.

According to the Alliance’s MOU seen by SA Builder, Membership of CASA is for organisations whose members are engaged in the construction industry, through the provisioning of either goods, construction services or professional built environment services. These are classified in 2 broad categories consisting of Members and Associate Members.

Members are organisations operating in the construction industry responsible for the planning, design, construction, manufacture and/or supply of materials in the process of land development including the delivery of new buildings, public open space and services infrastructure, as well as the maintenance or rehabilitation thereof. Associate Members are organisations representing manufacturers, suppliers, professionals, and other organisations which provide supporting services and/or goods to the construction industry. This includes expert organisations, statutory bodies and special interest groups providing services linked to the construction industry.

Currently, participating organisations include the Association of Construction Project Managers (ACPM), Association of South African Quantity Surveyors (ASAQS), Association of Construction Health and Safety Management (ACHASM), Association of Architectural Aluminium Manufacturers of South Africa (AAAMSA), Black Business Council in the Built Environment (BBCBE), Builders Warehouse (Suppliers and Manufacturing), Clay Brick Association of South Africa (CBASA), Chartered Institute of Building (CIOB), Construction Management Foundation (CMF), Consulting Engineers South Africa (CESA), Concrete Manufacturers Association (CMA), Council for the Built Environment (CBE), Cox Yeats Attorneys, Institute for Landscape Architecture in South Africa  (ILASA), Master Builders South Africa (MBSA), National Construction Incubator (NCI), National Spa & Pool Institute of Southern Africa (NSPI), South African Institute of Architects (SAIA), South African Black Technical and Allied Careers Organisation (SABTACO), South African Geomatics Institute (SAGI), South African Institute of Black Property Practitioners (SAIBPP), South African Property Owners Association (SAPOA), South African Affordable Residential Developers Association, (SAARDA), South African Association of Consulting Professional Planners (SAACPP), South African Green Industry Council (SAGIC) , South African Paint Manufacturing Association (SAPMA),Southern African Plastic Pipe Manufacturers Association (SAPPMA), South African Women in Construction and Built Environment (SAWIC & BE), The Aggregate and Sand Producers Association of South Africa (ASPASA), The Concrete Institute of South Africa (TCI), The Federated Employers Mutual Assurance Company (FEM), The South African Institution of Civil Engineering (SAICE), Western Cape Property Development Forum (WCPDF), and Master Builders KwaZulu-Natal (MBA KZN) as the Convener.




COVID-19: Impact and Responses in the Construction Industry

By Anastasia Herasimovich & Matthew I. Martin: Baker McKenzie

COVID-19 continues to present challenges to owners and impose new regulatory requirements with respect to workplace health and safety. We are continuing to monitor industry changes and can advise you on the issues above or others you may face related to COVID-19.

As a result of COVID-19, the construction industry has been forced to adapt to significant challenges and formulate project-by-project solutions to mitigate the delays and other impacts caused by COVID-19 whilst protecting commercial interests. This alert discusses how COVID-19 is impacting the construction industry and best practices for owners and developers when responding to these challenges.


Minimizing the spread of COVID-19 has become a top priority for all responsible participants in construction projects. Thus, key participants (including the owner/developer, general contractor, and key subcontractors) will need to jointly develop a plan that identifies COVID-19 related health and safety precautions to be deployed at the jobsite, as well as the party responsible for implementing these precautions. Local governmental agencies, have issued guidance specific to construction jobsites to ensure safe and healthful working conditions during these unprecedented times (although the extent to which such guidance is binding varies). Owners are recommended to take steps (or at least make sure that their contractors are taking steps) that represent local best practice, including:

  • use of cleaning chemicals preapproved by local agencies for cleaning frequently touched surfaces such as tools, handles, and machines
  • screening of all visitors and employees for signs and symptoms of COVID-19
  • performing temperature checks and pre-access jobsite questionnaires
  • establishing protocols to manage employees displaying symptoms of illness in the workplace
  • keeping premises well ventilated
  • instructing employees who travelled to high-risk areas to quarantine for an appropriate period.

Of course, compliance with local social distancing and other binding regulations (including site shutdowns, reduced workforces etc.) will be critical. Local governments may require owners and/or contractors to safely secure a jobsite and suspend construction until a corrective action plan is prepared, submitted and approved by an applicable governmental authority. Owners may also be required to appoint an individual responsible for the company’s compliance with local guidance and safety orders. In geographic areas where COVID-19 cases have elevated or resurged, local governmental agencies may conduct onsite inspections. In the event of an inspection, owners and/or contractors will likely be asked to produce, among other things, a written pandemic plan, procedures for hazard assessment, protocols for personal protective equipment use, medical records related to worker exposure incidents, and information concerning periodic testing procedures.


Before developing specific solutions, we recommend project owners, especially those with multi-site (including multijurisdictional) construction programs, develop a unified approach on how to handle COVID-19 systematically and effectively. Starting even before March 2020 (as supply chain disruptions were first being experienced), many contractors have notified project owners of their intention to invoke the doctrine of force majeure as justification for suspension, shutdowns, and possible delays and cost increases on their construction projects. Before responding to these notices and requests, it may be helpful for project owners to take the following steps:

  1. Analyze the contractual position, which would include analysis of the following:
  • whether force majeure exists as a contract remedy, and if not, whether there is another term such as “excused delay” which may be triggered by the particular circumstances notified
  • suspension (and termination) rights and remedies of the parties, including as to different consequences depending on which party exercises such rights
  • entitlements to additional payment that may arise from force majeure or excused delay (or change in law)
  • analysis of whether there is any business interruption policy or other insurance which could respond to any of the costs and losses resulting from COVID-19.
  1. In addition to examining existing contracts, project owners with multiple projects in different jurisdictions may benefit from a general legal force majeure guidance that would cover the following:
  • what force majeure means and whether it can be used to excuse non-performance
  • differences between common and civil law jurisdictions (e.g., under civil law systems, force majeure generally exists as a doctrine established by a civil code, and force majeure concepts imbedded within that code may actually override the contractual terms agreed to between the parties in the contract; whereas under common law systems, force majeure will not usually apply automatically as it is rather a creation of a contract and subject to a meeting of the minds as to its consequences)
  • if project owners did not have force majeure clauses in their existing contracts, they may want to consider preparing standard force majeure language to include in applicable contracts currently under negotiation, at least to incorporate known effects of COVID-19.


Very often, COVID-19 guidelines and additional work requirements will impact work schedules and the productivity of contractors. In the event a construction site is shut down due to a governmental order, owners should meet with their contractors to determine the status of their projects at the time of the shutdown and the work remaining. Moving forward, owners should request their contractors to submit detailed reports of impacts and real time itemization. Parties to construction contracts should regularly collect data regarding the circumstances affecting the work and their mitigating efforts. This data collection will allow the parties to accurately track impacts and anticipate delays and extra expenditures.


Parties to contracts predating the outbreak of COVID-19 must analyze the usual time extension and additional cost grounds, as well as any force majeure and change in law provisions, to understand how the risk is allocated between owner and contractor. Some force majeure provisions will extend to pandemics and the typical outcome would therefore be that the contractor is entitled to time extensions but no additional cost (although force majeure remedies are contractual and can therefore vary from contract to contract). Some contracts protect contractors from some or all consequences of change in law, and the contractor may therefore find itself protected against certain regulatory responses to COVID-19, even if not against the direct consequences of COVID-19 itself. In addition, unforeseen circumstances such as COVID-19 may well qualify for certain extensions of time grounds and additional cost through the usual time and cost grounds. In each case, though, it is important to analyze the specific contractual language and to remember that the contractor will be required to mitigate the impacts to secure full contractual entitlements. Where suppliers and subcontractors are the cause of the delays, this may include procuring the materials elsewhere, possibly at higher purchase prices.

There is a spectrum of risk transfer in construction contracts and scope for varying interpretations of provisions, which do not expressly deal with, but which may be triggered by, COVID-19 and the fallout from it. How a particular owner or contractor approaches negotiations will depend upon its analysis of the relevant contractual provisions and the impacts that COVID-19 has on the project (particularly the economic fallout) as well as the relationship between the parties. In the early days of COVID-19 and enforced site shutdowns, amidst a general sense of despair about the growing pandemic (which then was not expected to have the longevity now known), we found many parties wanted to collaborate to establish a framework for cost and/or time adjustments. There was a sense in many negotiations that both parties were simply in this together along with everyone else and that the impacts would to some extent be shared. Many contractors recognized that they could not expect full protection in a world where everyone else was taking a hit, whilst of course also still protecting their bottom lines and looking to owners to accept delays in procurement and progress.

As time has gone on and as the industry has adjusted to the new normal, we have seen both owner and contractors taking a firmer position and digging their heels in, leading to continuing uncertainty as to how certain COVID-19 related time and cost claims will ultimately be resolved but often with a resolve to minimize the delays (in part at least due to the uncertainty as to how delay claims will ultimately be resolved).

In addition, owners should review their contractual pricing structures. For cost-plus contracts, owners will often bear all increases to cost of work caused by COVID-19. Possible cost containment actions may include issuing a stop work order or amending budgets and project schedules to provide for the bifurcation of work between suspended on-site work and ongoing planning and design work. As to Guaranteed Maximum Price (GMP) contracts, contractors bear cost overruns if GMP has been fixed, as owners have price protection and can leave to contractors the discretion to manage COVID-19 related issues, but the abovementioned contractual provisions may provide for an adjustment to the GMP. It is also important to assess how contingencies are structured, whether they are available to respond to COVID-19 costs and which party controls these. Similar to GMP contracts, fixed sum contracts protect owners since contractors agree to perform the work for a predetermined amount, regardless of whether costs and expenses such as labour or supplies rise, but the fixed price may be subject to adjustment for certain COVID-19 related impacts. Notwithstanding the agreed pricing structure, owners should work closely with their contractors to try to prevent liquidity issues and should agree any changes in cost or timing in writing (usually by change order) to avoid uncertainty.


Now that the construction industry is adapting to its new normal, with its increased cost-base and productivity and scheduling challenges, many parties are looking to address the impacts of COVID-19 upfront in their contracts to the extent possible. This approach requires adjustments to standard forms and bespoke contracts, often in the form of a tailored COVID-19 clause. Parties should consider the following issues and provisions in future construction contract negotiations:


  1. Compensation:there are now known costs associated with social distancing and other COVID-19 related mitigation efforts on construction sites, and these are unlikely to be avoidable in the near future. Contractors will generally allow for such costs in fixed price and GMP amounts, although some contracts include such costs as an allowance item or provide for a reduction in cost if restrictions are lifted sooner than substantial completion. Other COVID-19 related costs, such as delay costs where the delay is not allowed for in the programme and increased costs of procurement due to localized lockdowns may be the subject of additional cost claims, although contractors will often be expected to mitigate these costs and ensure that they have a resilient supply chain (to avoid both such costs and related delays).
  2. Delay entitlements:many new construction contracts allow for delays that can be anticipated due to COVID-19, but not for further shutdowns of sites, whether due to lockdowns or site personnel testing positive. In most cases, contract terms will then allow for the contractor to claim additional extensions of time.
  3. Force majeure:whether contractual force majeure provisions need to be revised to include epidemics, pandemics and related government orders, as well as other methods to mitigate the effects of force majeure events. Often, a pandemic specific clause will better deal with the impacts of COVID-19 rather than a traditional force majeure clause, although some of the provisions may look quite similar.
  4. Changes or extra work clauses:whether owners can require contractors to perform changed, new, or extra work. The scope and compensation scheme for additional or changed work should also be incorporated.
  5. Changes in applicable law:whether the construction project would be impacted by governmental orders that place restrictions on global supply chain and on the actual construction. Changes in applicable law provisions in construction contracts may grant contractors a right to an extension of time and compensation for inevitable costs incurred due to the changes in applicable law. The bigger challenge is often with best or expected practice around COVID-19 avoidance and mitigation which is not legally binding in nature. Of course, the expectation is then that the contractor complies, but contract protections may not be properly triggered. Parties should be alive to this in their negotiations.
  6. Payment scheme:whether the payment scheme should be adjusted in order to work around the uncertainty of the labor and supply chain markets. For example, owners may want to set a limit on added costs resulting from unforeseen events and any costs beyond such limit may need to be covered by contractors. Owners may also want to pay a percentage of the difference between the actual cost and the maximum price. This encourages contractors to find labor and materials that meet the industry standards but which are also reasonable priced.
  7. Suspension:whether the parties have the right to completely or partially suspend the work and which party will bear the added costs resulting from suspension of work or by increased costs for labor, material, security, additional safety measures, or construction permit extensions. The consequences under many construction contracts will depend on whether the owner or the contractor instructs the suspension, and the consequences should be carefully considered for new contracts.
  8. Termination:whether an owner should have the right to re-evaluate the economic feasibility of moving forward with the project and be able to terminate at will.


This article was republished from the Backer McKenzie with permission.













The 2020 Employment Equity Amendment Bill – What you need to know

By Neil Coetzer and Rod Harper (Cowan-Harper-Madikizela Attorneys) 

The latest draft of the Employment Equity Amendment Bill was published on 20 July 2020, several years after the initial draft appeared for comment. The latest version, which will be heading to Parliament, includes controversial amendments to the Employment Equity Act 55 of 1998 (“the EEA”) which permit far greater intervention by the Minister and more red-tape for employers hoping to do business with the State.

Less regulatory impact on smaller employers

The Bill intends to amend the definition of ‘designated employer’ by excluding employers who employ fewer than 50 employees, regardless of their annual turnover. This means that those employers will not be subject to the affirmative action provisions of the EEA. Voluntary reporting will also be done away with.

These amendments are a welcome relief from the regulatory burden already placed on small, medium and micro-sized employers. It will introduce greater flexibility into a sector which government has highlighted as being an important driver of South Africa’s post-COVID recovery plan. 

Sectoral targets

However, the Bill seeks to double-down on existing measures in the EEA to reach its aim of ensuring equitable representation of suitably qualified people from designated groups at all occupational levels in the workforce.

Firstly, the Bill seeks to introduce section 15A to empower the Minister to identify national economic sectors and determine numerical targets for those sectors. The Bill requires that prior to doing so, the Minister must consult with the Employment Equity Commission on the proposed sectors and targets he seeks to designate and to publish any proposals for comment.

The Bill also requires that the numerical targets set by employers must comply with the sectoral targets set by the Minister. When assessing compliance with the EEA, the Director-General will also consider whether the employer has complied with the sectoral targets set by the Minister. 

State contracts

Secondly, the Bill proposes that certain requirements must be met before the Minister may issue a certificate of compliance to a designated employer in terms of section 53. One of those requirements is the achievement of the sectoral targets set by the Minister. It is obvious that a failure to meet these requirements will have serious implications for employers who seek to perform work for the State.

Possible difficulties and litigation

The proposed insertion of section 15A and amendment to section 53 of the EEA will almost certainly lead to litigation. If implemented in its present form, the numerical targets set by designated employers in their employment equity plans would likely be rendered meaningless. This is so because the Minister’s targets are likely to be broad-based and will have little regard for targets which are tailored by individual employers to suit their employment equity plans.

Allowing the Minister to impose such targets unilaterally, without consulting stakeholders other than the Employment Equity Commission, will result in a ‘one-size-fits-all’ approach and will almost certainly be disruptive of existing or future employment equity plans of employers. Disagreements with and litigation over such approaches in the context of bargaining council agreements in various industries have been well documented in the recent past and similar difficulties are likely to arise here.

An important consideration will be which sectors are identified by the Minister and what targets are determined, how they are determined and to which employers in the sector they will apply. In the absence of consultation with the relevant stakeholders in a particular industry, it is difficult to understand how the Minister could arrive at any sort of informed or rational decision. Whatever the decisions are, they are likely to be contentious and could lead to protracted legal disputes regarding their legality and enforceability.

A conceptual problem with the amendments may also arise. It could be argued that the proposed amendments requiring a designated employer to meet the targets set by the Minister and to be assessed on this criteria, particularly before it may do work for the state is not really a ‘target’, but actually more akin to a ‘quota’. Our courts have found that quotas in employment equity plans are not permitted by the EEA and thus the amendments may not find favour with our Courts. In those circumstances, the provisions may be rendered unenforceable.

The Bill also does not provide an employer with an opportunity to apply for exemption from these new provisions. Employers who fail to meet the Minister’s targets may, however, provide a reasonable justification for their failure, although it is not clear to what extent the Minister would be willing to accept any variations given his recent utterances in the media. What constitutes a ‘reasonable justification’ is thus likely to become a contentious issue in due course.

Additional challenges

The amendments come amid a global pandemic which has already had a severe impact on employers and employees. In response to the lockdown, many employees have been retrenched (some 3 million by recent reports) and this may have impacted negatively on many employers’ employment equity plans. The situation is very uncertain, and many employers will be focusing their energies on staying afloat and saving jobs during the next few months.

Nevertheless, the Minister appears keen to implement the amendments as soon as possible given the slow rates of transformation in many of South Africa’s economic sectors. The Minister’s new approach to ensuring compliance with the EEA incorporates both the ‘carrot’ and the ‘stick’. Whether this approach will achieve its purpose remains to be seen.

Construction Alliance South Africa has established a Construction Sector Employment Equity Targets Sub-Committee to develop and present a construction industry position on proposed targets for the sector. Members are encouraged to contact their local Master Builders Association to support this exercise.


The global best practices to mimic to ensure SA infrastructure drive delivers results 

By Simon Norton – International Zinc Association, Africa Desk 

If South Africa is to have any hope of economic recovery, no sector of the economy can afford to do things the way it did before 2020 or as was done in the past.

That’s as true for the civil engineering and construction industry as it is for any other sector. Not going “back to the way things were” doesn’t just mean relooking at supply chains, staffing and winning new contracts. It means thinking with sustainability and longevity in mind, prioritising long-term gains over short-term profit and understanding that focusing on high standards and excellence in the present will reap large future dividends.

Easier said than done, which is why it is useful to look further afield to learn from our global neighbours on what works, how it works and how to change course if it doesn’t work.

Global best practice: Long-term thinking 

Much of our collective time, energy and resources is spent on “patching” our infrastructure, rather than addressing the root cause of the problem which would be mainly the use of cheap materials, substandard contractors and the government tender system.

Public infrastructure serves as a focused example of how long-term thinking could save money, create jobs and deliver a better outcome overall in South Africa. If we were to vigorously promote and require in government tenders that, where appropriate, all steel used for infrastructure projects be galvanised, then we’re thinking long term. Galvanised steel structures can give a lifespan of over 50 years in the right environment and offer exceptional performance at the coast. Hot dip galvanising is only marginally more costly at the outset, but the savings in terms of long-term maintenance-free service are exceptional.

If we can get to a point where our public infrastructure lasts longer than at present and requires far less maintenance, the focus can shift to new build projects that will improve the general state of the economy and, by extension, the welfare of South Africans.

Global best practice: Prioritise local 

Over two million jobs were lost in the second quarter of this year in SA and the economy, already struggling prior to the crisis, is now under severe strain. Critically, unemployment is expected to reach an all-time high of 40% in coming months as entire industries face collapse. The country needs a New Deal to get people back to work and to boost GDP rapidly. A local-first approach will be instrumental in achieving this together with a boosted manufacturing drive.

To stimulate a virtuous cycle of capital formation, market stimulation, and job creation, we could turn to our non-ferrous metal mineral wealth but not in its raw unprocessed form. We must increase its value by processing our non-ferrous metal ores into refined material and harvest the rare and highly valued metal by-products that go with it such as gold, silver and germanium.

The construction of a new South African zinc refinery, as just one example, will reduce dependence on SHG zinc imports; will give a much needed boost to the construction, steel and manufacturing industries by offering local supply; boost the secondary zinc industries such as recycling, fertilizer, die casting and tyre making; and create much-needed jobs in both the short and the long term.

Building such a facility will only make it easier to buy local and save on foreign exchange, it will also speed up time of delivery to galvanisers inside SA. Again, this benefits everyone. If South Africans buy local, manufacturers will have more capacity to hire skilled staff. And, where those skills don’t exist, there will be a driver to offer training, resulting in more people in higher-paying jobs. This adds value across the chain and doesn’t just include economic benefits but will also go a long way to creating a more socially cohesive, united country.

Global best practice: Circular solutions

The United Nations projects that the world population will grow to a staggering 8.5 billion people in the next decade. Supporting a global citizenry of this size will necessitate economic development and the expansion of the global economy at an unprecedented scale.

Meeting these needs will place enormous strain on our finite natural resources, which is why thinking in “circles” when it comes to the use of metals and minerals is crucial.

Optimisation in mining, production, product life cycles and recycling need to be a foremost priority. Currently, one of the biggest barriers to greater sustainability is the linear economic model of “take-make-dispose”. It’s key to rethink this model to keep waste out of the system.

One resource that adheres to the “virtuous circle” approach is the versatile and abundantly available zinc. An essential element for all living things and presenting useful metallurgical and chemical properties, zinc features in our daily lives with applications in everything from agriculture and building to wellness and hot-dip galvanising of iron and steel structures.

Zinc can be recycled without losing or compromising any of its metallurgical properties or overall value, meaning it can be used over and over again. Zinc is not only a sustainable option during use, but the recycling thereof also works to reduce concentrate demand, energy use, emissions and reducing waste disposal.

In line with global best practices, South Africa’s infrastructure development efforts needs to take its cue from zinc to find more materials and resources with this “circular” ability.

Global best practice: Shift road freight to rail 

Transnet’s road-to-rail strategy has been on the public enterprise agenda for some 20 years now and has the potential to accelerate SA’s economic recovery, which is why it’s crucial that it should be implemented and acted upon now with no further delay. Furthermore, a project to widen the rail gauge on South African rail links would allow high speed intercity travel and fast goods movement.

The shifting of freight from road to rail has many benefits. Rail transport systems are six times more energy efficient than road, and four times more economical, which further drives the case for a safe, reliable cargo rail system as being fundamental to a country’s economic growth. Shifting from road to rail will obviate the need to spend so much on roads and road repair.

Equally significant, particularly considering the global drive for a sustainable future, is that rail is amongst the most climate-smart transport options. The upgrade and expansion of our rail networks and infrastructure also has the potential to create employment opportunities on a large scale and is now more urgent than ever.

Best practices that offer both an environmental and economic benefit need to be top priority in a country like South Africa which needs to feed its people and offer them a good working life. It is hard to argue against solutions that can guarantee long-term savings because savings mean more available spend on other, much-needed infrastructure projects.