In the ASEAN construction sector, compliance is no longer just a buzzword – it’s a foundational requirement of doing business. ASEAN Sectoral Mutual Recognition Arrangement for Building and Construction Materials and the global push towards Net Zero 2050 means companies are facing intensifying pressure to demonstrate a compliant culture, with strict adherence to regulations. Yet despite the looming threats of debilitating fines and operational disruptions, many still view compliance as an arduous task that shackles productivity.
Avtandil Mekudishvili, Regional Lead at PlanRadar ASEAN
However widespread this perspective might be, it’s one that is dangerously short-sighted. If you think compliance is expensive and burdensome, then try non-compliance. Or rather, don’t; the potential costs, aggravation and damages of non-compliance are increasingly incapacitating to businesses that fall foul of the regulations. Already this year, between February and April 2025, Singapore’s Ministry of Manpower (MOM) conducted inspections at approximately 550 worksites, uncovering over 1,330 safety violations. These led to 13 Stop Work Orders and fines totaling more than S$375,000.
Now the consequences extend far beyond straightforward financial penalties, encompassing severe reputational damage and even possible criminal charges. It’s time for the construction industry to wake up to the challenges, but also to see the benefits that a culture shift can bring, concerning compliance.
The four pitfalls of (non)compliance
Without wishing to be unduly alarmist, yet still being level-headed; let’s look at the four critical areas where non-compliance can wreak havoc on construction firms:
- Health & Safety Act violations – In recent years, penalties have gone stratospheric. Effective June 2024, Malaysia’s Occupational Safety and Health Act has significantly increased penalties for safety breaches. Employers now face fines up to RM500,000 (~US$106,000) and/or imprisonment for up to two years for non-compliance. A stark reminder of the serious consequences of cutting corners where worker safety is at stake.
- Building Regulations failures – As of Q1 2024, Vietnam had nearly 430 green-certified building projects, with expectations to rise to 582 by 2030. The government is actively promoting green building development to achieve a 9%-27% reduction in greenhouse gas emissions by 2030 and net-zero emissions by 2050.
- Environmental breaches – There are no longer any upper limits to the potential penalties that can be imposed. Beyond immediate fines, companies face increased insurance premiums, reputational damage and lost business opportunities. In Indonesia, fines of up to IDR3 billion (~US$190,000) could be imposed or up to 5% of the investment value for companies operating without both an Environmental Approval and a Business License.
- Fire safety non-compliance – Perhaps the most sobering risks stem from fire safety infractions. In Singapore, The Workplace Safety and Health (WSH) Act amendments in 2024 increased maximum fines from S$20,000 to S$50,000 for breaches leading to serious harm. Additionally, mandatory video surveillance systems are now required at construction sites with contracts of S$5 million and above. While the human cost and reputational damage associated with fire safety failures remain incalculable.
Bridging the compliance gap with digital solutions
Despite these risks, compliance gaps continue throughout the industry. The root cause? A persistent reluctance to adopt digital technologies and data-driven solutions. This hesitancy creates an entirely unnecessary and potentially dangerous vulnerability in a heavily regulated landscape. The good news is that there are digital solutions, when integrated in conjunction with well thought out compliance strategy, that can help:
Adopting a culture of safety advocacy
Forward-thinking companies are changing the game by using digital platforms to empower their workforce from being passive rule-followers to becoming active safety promoters. This cultural shift not only reduces the likelihood of accidents and violations; it also strengthens the case for lowering regulatory barriers. According to recent data from the PlanRadar Global Housebuilders’ Survey, which surveyed 669 housebuilders across 17 countries, nearly 75% of respondents desire fewer regulatory obstacles to boost housing stock7; however, without a consistently safe and compliant workforce, these obstacles are likely to persist. By adopting digital tools to track safety efforts, companies can demonstrate a measurable commitment to compliance, supporting their push for regulatory reform.
Channelling the power of data
According to FMI Corp, the construction industry generates an enormous amount of data, approximately 2.5 quintillion bytes daily. Yet, nearly 95.5% of this data remains unused.8 By implementing robust data analytics practices, companies can proactively identify risks, monitor compliance in real-time, and predict potential problems – before they escalate into costly violations.
Benefits of data-driven compliance
Data-driven solutions enable construction firms to take a fundamentally different approach to compliance. Rather than reacting to violations after they occur, companies can prevent fines through early risk identification. Instead of treating safety as separate from operations, predictive analytics creates an integrated approach that enhances safety and efficiency. The streamlined processes of digital compliance solutions remove redundant paperwork, creating robust documentation that satisfies the strictest regulatory requirements.
Integration of compliance across the project lifecycle
Compliance should not be a one-off checklist but embedded throughout a construction project. Digital solutions enable continuous tracking and verification of regulatory requirements, from planning through to completion. They also promote collaboration among teams and enable transparency around readiness and reporting.
Reframing compliance as best practice
It’s time to shift our perspective on compliance from being a hurried afterthought or being viewed as ‘a necessary evil’ – to being part of an aspiration for excellence. Safety regulations exist not just to protect individuals but also to safeguard businesses. As technology evolves, so should our attitudes toward compliance. By embracing effective digital solutions, we can start to make a true culture shift and alter compliance from a box-ticking action into a sound cornerstone of our industry, paving the way for a future where compliance is synonymous with best practice and flawless service.
