The shock fire at the Address Downtown Hotel on New Years' Eve just over a year ago put the issue of the UAE's fire safety firmly on the world stage. This was, however, just one in a spate of fires since 2011. A new UAE Fire and Life Safety Code (the New Code) had already been on the cards and was finally launched by Dubai Civil Defence officials at the Intersec Fire Safety Conference on 22 January 2017.

Construction in the UAE

A construction boom followed the UAE's discovery of oil in the late 1970s, and until the issuance of the 2012 UAE Fire and Life Safety Code (the 2012 Code) the industry was subject to light-touch regulation.

As a result, and owing to the appealing cost of aluminium composite panels (ACP), high rise buildings in the UAE were typically built with facades of ACP cladding sandwiching a highly-combustible core. Studies have found that more than 65 percent of the high rise buildings in the UAE were built with external panels containing combustible materials.

Whilst the 2012 Code was introduced in a bid to improve safety in the region, it evidently did not go far enough in its safety requirements. Delays in updating the 2012 Code were likely caused by the desire to incorporate lessons learned from recent fires including the Address Downtown Hotel, the Torch Tower, the Oceana Residences and the Sulafa Tower, where ACP cladding was a key contributor to the rapid propagation of those fires.

The New Code

The New Code addresses the shortfalls of the 2012 Code, and significantly increases accountability across and beyond the local construction industry, bringing rules in line with global standards.

The New Code seeks to instil higher standards of fire safety at all stages of construction. Importantly, companies involved in the installation of materials will now need to be registered and licenced by the Civil Defence.

Previously, such registration was incumbent only on consultants and contractors. Further, it contains more detailed specifications for cladding and construction materials and mandates more comprehensive materials tests, which will be facilitated by the establishment of a new materials-testing laboratory.

Following construction, both the main works consultant and manufacturer of any fire safety materials will be required to jointly sign-off on completion of every project before obtaining final approvals from the Civil Defence, and consultants will remain responsible for defects for at least one year following delivery of a project.

This is evidently more burdensome on manufacturers, and, along with fines on building consultants in relation to faulty or unapproved fire safety material, should act as a deterrent from opting for dangerous (albeit budget friendly) materials. Penalties also include criminal prosecution and fines between AED 500 to AED 50,000 per violation.

Notably, the New Code does not apply retrospectively. To account for this, the New Code contains a requirement to annually renew no-objection certificates (NOC) from the Civil Defence to ensure structures remain fire safe (as opposed to a one-time only completion certificate under the old regime). This also seeks to ensure repair work is in line with new standards.

Major General Rashid Thani Al Matroushi, Director General of Dubai Civil Defence had previously highlighted human error as a key contributor to high incidences of fires in the UAE.

Along with expanding liability amongst construction professionals, the New Code's focus on accountability extends to residents (both owners and tenants) to take practical measures, such as care when barbecuing on balconies, to reduce risk of fires.

The Civil Defence have confirmed that when the New Code is formally released, there will be a[three to six month grace period (depending on the project) for various stakeholders to comply with the New Code.

Given the significant role the Civil Defence and municipalities play under the New Code, it remains to be seen how these bodies will cope with the strain of enforcement, and what practical issues the construction industry will face.

Impact on the Property Market

It is too early to gauge the impact of the New Code on local insurers and international reinsurers. However, with the expansion of accountability and liability to capture stakeholders, and the increased costs of compliance, attention will be insurers to gauge their response.

Higher premiums may be inevitable, particularly for those buildings with combustible ACP. In addition, there is already evidence of increased pressure on local insurers to increase retention levels for high-rise buildings, to ensure that their interests are aligned with reinsurers.

Despite recent events however, there is a surprisingly low penetration rate of property insurance amongst UAE residents. If the New Code brings renewed confidence in the property market, it is unlikely homeowners, unless directed by the authorities, will opt for such insurance.

Much like the pressure on Qatar to improve its legislation and best practices ahead of the 2022 World Cup, stakeholders around the world will be scrutinising the New Code and its practical effects, particularly ahead of Expo 2020.