Prime Minister’s Office Stalling on Plan to Fine Building Contractors for Safety Violations

Social Affairs Ministry wants to introduce fines to arrest alarming number of deaths on construction sites, but PMO wants to conduct analysis that could take up to two years.

Rescue workers from the Home Front Command at the site of the collapsed multi-level parking garage under construction in Tel Aviv.
Ofer Vaknin

The Prime Minister’s Office and a builders’ association have been pressuring the Social Affairs Ministry to shelve its plan to fine contractors for safety violations at their building sites.

PMO officials asked the ministry, which is also responsible for labor issues, to first conduct a regulatory impact analysis of the plan – a process that usually takes anywhere from a few months to two years – even though the Justice Ministry had already deemed an RIA unnecessary.

The ministry has been working since November on new regulations to enable such fines, in an effort to reduce the number of accidents on construction sites. Such fines were recommended by the Adam Committee, a professional panel that studied ways to improve safety at construction sites and which submitted its report in 2014.

Under the plan, construction companies could be fined up to 35,740 shekels ($9,680) for safety violations at their building sites. Moreover, if the company’s CEO doesn’t personally take steps to ensure the problems are fixed, he could be fined up to a quarter of this sum (almost 9,000 shekels).

The Israel Builders Association opposes the plan, and last month asked both the Prime Minister’s Office and government housing czar Avigdor Itzchaky to try to kill or delay it.

In a letter to Itzchaky and Ehud Praver (the PMO’s director of policy planning), the builders association’s attorney, Amir Heller, argued that the proposed fines are excessive, disproportionate and “completely arbitrary, with no severity scale and no consideration of the benefit that will derive from imposing these sanctions.”

The association wants the proposed regulations shelved until they have undergone an RIA. This would require the ministry to do a comparative survey of fines imposed on contractors in other countries, propose alternatives to monetary penalties and prove that the fines would contribute to workplace safety.

Heller argued that an RIA was essential given the fines’ “devastating impact.” Moreover, he claimed that fines imposed on one contractor won’t deter others, noting, “It will simply cause that particular contractor to go bankrupt, thereby hurting all the many parties dependent on him, including subcontractors and employees.”

Due to a cabinet decision, RIAs are supposed to be performed on any new law or regulation. But the Justice Ministry exempted the proposed fines from this requirement on the grounds that the Social Affairs Ministry already imposes similar fines on other types of businesses and, therefore, no further study is needed.

Now, however, the PMO is asking that an RIA be performed anyway, for reasons that one legal source called “unclear.”

“The number of accidents and deaths in the construction industry show that rapid changes are needed to save lives,” he said.

The death toll in Israel’s construction industry is double the average in Europe and the United States. Forty-eight people died last year, with a further eight killed since the start of this year.

The Prime Minister’s Office said it doesn’t oppose fining contractors, but views RIAs as an essential standard practice to reduce unnecessary regulation.

“In this case, too, the Social Affairs Ministry will be asked to present several alternatives, from which the best alternative will be chosen,” it said.