Aruba’s Chamber of Commerce and Industry (ACOC) organized a meeting in November 2017 that was dedicated to the construction industry. The main purpose of the session was to touch base with the players in this sector. The meeting gave them the opportunity to voice their concerns and challenges
in regard to doing business. The session also offered participants a chance to brainstorm on possible solutions and how to encourage the stakeholders to create a level playing field for the construction business in Aruba
The Construction Sector in Aruba
The construction industry in Aruba is one of the largest and most active industries on the island. With a total of 1965 active registered companies,
the sector represents a significant group of entrepreneurs that contribute to the economic development of Aruba. The continuous monthly flow of newly registered entrants at the ACOC clearly demonstrates that the industry is one of the most active sectors. Most of these construction related companies are based in either Oranjestad with 35% or Noord with 23%, as the extracted information from the registry shows. The array of businesses in the construction sector varies from carpentry to electricity, from masonry to paintwork, and so on. Many construction companies combine all these construction related areas of expertise under one roof and offer their customers a complete package. In Aruba the industry is a very competitive one and just like everywhere else value for money is the main concern for the projects of the customers.
In a free enterprise economy people will always try to find creative ways to cut the costs and in some cases this can turn into illicit activities and managing of the contracts. Therefore, the ACOC organized the session in order to pinpoint the issues and formalize solutions for a level playing field.
Connecting with the Industry
During the session the participants expressed their concerns on issues they had to deal with in the sector. The issues they were tangling with varied from cheap labor to unqualified workforce, from illegal workers to permits limitations, and from red tape restrictions to financing.The entrepreneurs indicated, for example, that opening a bank account is a very complex and bureaucratic process. According to the group the banks have restrictions that are counterproductive.
The disability to complete a transaction from a current account to a commercial one, was another related issue, but most important seem to be the fact that banks do not open a bank account without a business license. Which led to the second problem: the granting of permits. Everybody agreed that it is a tedious process. The work and residency permits obtained from DIMAS (Department for the Integration, Management and Admission of Foreign Nationals) take time and consequently cost businesses time and money.
A suggested solution to speed up the process of issuing of permits could be to automatically approve applications that take longer than four months.
In addition, the examination and results from DOW (Public Works Department) regarding building projects took to much time as well, according to the entrepreneurs.
Thirdly, many contractors pointed out that the start-up procedure is too complex and not attractive for (foreign) investors or business people. There are lots of obstacles that need to be dealt with when someone wants to incorporate a new business. The ACOC made a list of the most important ones:
• Long process duration for the notarial deed of incorporation;
• Long process duration at the High Commissioner for company name approval;
• Business establishment license and director’s license at the Department of Economic Affairs take too long;
• Residence and work permits take at least eight months;
• Opening a bank account is a complex and tedious procedure and requires lots of paperwork and time;
• Additional permits take too long and the procedure is too complex;
• There is hardly any inspection or supervision concerning the ‘black market’. The department that is in charge is not capable to handle the workload;
• Scholars do not have enough experience or do not deliver quality work and the language curriculum at school is not the most adequate for work or daily practice. At work people do speak Papiamento, Spanish or English, but hardly any Dutch. The participants also proposed possible solutions, which the ACOC will take into consideration and present to concerning stakeholders in an effort to eliminate the red tape that many of the entrepreneurs are facing when doing business. A few of their ideas and statements included:
•Exchange workforce and experience between sister islands. Aruba could provide for projects in Curacao, for example, or help rebuild Saint Martin;
•Make contact with the right authorities to create more business opportunities among the islands and share knowledge and manpower;
•Simplify the process of acquiring workforce abroad.
Introduce a fast-pass procedure or implement a structure that makes the contractor completely responsible for his acquired employees even if they are illegal immigrants.
• Because many procedures such as the LAR (local legislation) are too complex and take too much time, the suggestion was made to introduce a certain amount of time to issue a denial. If the time period has passed, the request should then be considered approved.
• Opening a bank account should be simplified by minimizing the requirements of the banks.
• Introduce a pre-clearance system for foreign workers and create fast track processes including conditions to assure a fair handling of permits.
• Facilitate the permits and introduce a certification system that allow foreign workers to prove their qualifications and expertise in the construction sector.
• Create a better collaboration between the different stakeholders in order to eliminate paperwork and waiting time. The Civil Registry,SIAD (Tax and Customs Department), Economic Affairs and the ACOC should be able to have access to the same information in order to speed up and simplify the process to start up a business.
• Make it possible to connect a foreign employee with a new worker who just graduated and let them share their knowledge and experience. That way both will be able to grow and learn from each other.
Looking back at a successful meeting the ACOC will continue to pursue the creation of a level playing field for industries in Aruba.
After discussing the results of the meeting with the Government of Aruba, the ACOC will organize another session to discuss and deliberate on how to move forward with the construction sector.