Laws Governing Industry in Kingdom of Bahrain.

Legislative Decree No. 28 for 1999 Respecting the Establishment & Organisation of Industrial Estate

We, Hamad Bin Isa Al-Khalifa,
the Amir of the State of Bahrain;

In Pursuance of the constitution. Amiri Order No. (4) for 1975, Decree-Law No. (7) for 1970 with respect of the Provisional Law of the Organisation and Development of Land,

Decree-Law No. (13) for 1977 with respect to the Regulation of Building, as amended,

Decree-Law No. (18) for 1983 with respect to the Requirement for Owners of Land to Incur the Expenses of the Reclamation of Their Land,

Decree-Law No. (6) for 1984 with respect to the Regulation of Industry,

Decree-Law No. (11) for 1985 with respect to the Support and Protection of National Industries, as amended

Decree-Law No. (6) for 1989 with respect to the Protection of Industries of National Origin,

Decree-Law No. (9) for 1994 with respect to the Issue of the International Business Arbitration Law,

Decree-Law No. (2) for 1994 with respect to Urban Planning and the Implementation Regulations thereof,

Decree-Law No. (16) for 1996 with respect to the Regulation of Governorates,

Decree-Law No. (21) for 1996 with respect to the Environment,

Decree No. (23) for 1997 with respect to the Reorganisation of the Ministry of Oil and Industry.

(Cabinet Resolution No. (3) for 1998 with respect to the Specification of the Regulatory Conditions for Construction Throughout Bahrain, and In accordance with recommendation by the Minister of Oil and Industry, Consulting Shura Council, and after the approval of. Cabinet Council ;

WE HEREBY enact the following Law:

CHAPTER ONE

DEFINITIONS

  Article 1

In this Law, except where the context otherwise requires, the following terms shall have the meanings duly assigned to each of them:

"the Ministry", means the Ministry of Oil & Industry.

"the Minister", means the Minister of Oil & Industry.

"the Authorities concerned", means the Ministries or other authorities concerned with the development of industrial area and the provision of such Area with services and utilities.

"Industrial Areas Directorate", means the organisation entrusted with implementation of this Law within the implementation rules, regulation and instructions issued by the Minister.

"Industrial Areas", means the areas, including the land, the installations and the utilities erected thereon, which are allocated for industrial purposes and which are defined by a resolution of the Cabinet the recommendation of the Minister.

"Industrial, Craft & Related Activities", means the activities defined by a decision of the Minister.

"Movable and Immovable Industrial Installations", means the Installations erected in the industrial Areas under statutory terms and conditions.

"Industrial Area Committee", means the Committee set up under the provisions of this Law and the Implementation regulations thereof.

CHAPTER TWO

ESTABLISHMENT OF INDUSTRIAL AREAS

  Article 2

Industrial areas shall be established and defined by a Prime Ministerial Edict on a recommendation of the Minister, in co-ordination with the authorities concerned.

  Article 3

The industrial areas shall be divided into two sub-areas and the sub-areas into plots. Such division shall be pursuant to the provisions of Cabinet of Resolution No. (3) of 1998 with respect to the Specification of the Regulatory regulations thereof. An investor may be allocated with the necessary plot of land in the light of the estimation by Industrial Areas Directorate based on the relevant study submitted.

  Article 4

Maps in the scales determined by the implementation regulation of this Law shall be made. The maps shall define the boundaries of the industrial areas, the sub-areas, the plots within each area, the space occupied by installations indicating the required service facilities, development plans and the reclamation required of such Lands.

  Article 5

The industrial areas shall be utilised for the Industrial, craft and other activities related to industry as may be determined by a decision of the Minister. An investor shall undertake to commence his project for which a licence has been issued within a year from receiving the plot. Implementation, however, shall be in accordance with the specifications, conditions and drawings on the basis of which the licence has been issued. Under no circumstances shall, without prior written consent of the Ministry, the investor change or alter his approved project.

  Article 6

The Ministry, in co-operation with the authorities concerned, will be responsible for the management of and investment in the industrial areas.

  Article 7

The Industrial Areas Directorate shall maintain appropriate records of the industrial lands as may be specified by the implementation regulations. Any person concerned may have access to the maps and records and may have true copies thereof after paying the fees determined by a decision of the Minister upon approval of the Cabinet.

  Article 8

Industrial Lands granted to an investor will not be cancelled or reallocated nor may any industrial installation and equipment thereon be acquired without a Cabinet Resolution and against payment of fair compensation to the investor.

CHAPTER THREE

UTILISATION OF INDUSTRIAL AREAS

  Article 9

There shall be set up in the Ministry and Industrial Areas Committee which shall be responsible for the various affairs of the industrial areas, including the supervision of the implementation of construction or expansion plans. Such responsibility shall be exercised in the manner set forth in this Law and in implementation regulations.
The committee shall be formed by a decision of the Minister which decision shall form the Committee and shall specify the functions and the terms of reference thereof.

  Article 10

The utilisation of land in the industrial areas shall be effectived by a decision of the Minister on the recommendation of the Industrial Areas Committee. Such utilisation shall be under the terms and conditions set forth in the implementation regulations hereof. The rent of and industrial plot shall be effective only from the day the land is delivered to the lessee. Article

  Article 11

Applications for industrial plots shall be made on the forms specifically designed by the Industrial Areas Directorate at the Ministry. Application's must be forward with supporting documents. The Industrial Areas Directorate shall, after examining the documents, refer the applications for industrial plots to the Industrial Areas Committee. The Industrial Areas Committee shall, within a period of thirty days from the date of such referral, consider the applications and issue its recommendations in the respect of each application and forward it to the minister for approval or rejection of such applications.

  Article 12

Entrepreneurs may apply for provisional reservation of industrial plots against a monthly charge determined by a decision of the Minister. However, such reservation may not exceed three months, extendable for a similar period once only. An application for reservation shall become invalid at the end of such period should no licence have been obtained.
The implementation regulations shall specify the reservation procedure, conditions and the monthly charge. A special register shall be maintained for the purpose of reservation and priority thereto. The form and details to be entered in register records shall be specified in the implementation regulations.

  Article 13

Banks or investment institutions and companies may, upon the approval of the Industrial Areas Committee be permitted to construct industrial complexes at the Industrial Areas for rental to private sector investors.
The implementation regulations shall specify the terms and conditions for the construction of such complexes and the manner in which they may be invested.

  Article 14

The land located within the industrial areas is Government property and shall be utilised in the manner specified herein.
No natural of juristic person may possess or otherwise acquire any property within the industrial areas save under provisions of this Law
Any act of disposal or determination of any right in rem in contrary to the provisions of this law shall deem to be null and void and may not be notarised.

  Article 15

The utilisation of the industrial areas shall be by leasing subject to this Law and in accordance with the terms and conditions specifies in the implementation regulations.
The lease agreement of such areas shall be concluded through the Industrial Areas Directorate at the Ministry on the forms specifically made under the provisions of the implementation regulations.
A lease agreement must provide for the referral of and dispute arising therefrom for arbitration with the consent of both parties.
The Minister, where required, may conclude lease agreement of special terms within the provisions of the implementation regulations.
The implementation regulations shall specify the formula to be used in assessing the rent of such industrial plots, the duration of lease, manner in which the rent is payable, restraints in respect of lease agreements of special terms and any other leasing terms.
Under no circumstances shall the duration of a lease be more than (50) years unless otherwise agreed.
The Minister may issue provisional licences for the utilisation of industrial plots for an extendable period of one year for the purposes and under the terms and conditions specified in the implementation regulations.
Except for provisional licences, the lease agreements must be registered with the Notarisation Office at the Ministry of Justice & Islamic Affairs.
The lessee shall pay the notarisation fees.

  Article 16

Subject to the provisions of Decree-Law No. (7) for 1970 with respect to the Provisional Law, of the Organisation and Development of Land, and Decree Law No. (18) for 1983 with respect to the Requirement for Owners of Land to incur the Expenses of the Reclamation of Their Land, the Minister may exempt a lessee from the rent for an appropriate period if it is established that the lessee had reclaimed or improved his land in the manner approved by the technical committees concerned.

  Article 17

The Ministry may, on a temporary basis, exempt lessees from the rent for the purpose of encouraging certain types of industries. Such exemption shall be under the terms and conditions specified in the implementation regulations. Such exemption shall be effected only from the date of production.

  Article 18

The land with plots shall be delivered to a lessee pursuant to the provisions hereof, together with the relevant easements, without any right of claim of compensations for such easements.

  Article 19

Rentals payable to the Government in respect to property subject to the provisions hereof shall have lien and priority over any other preference save excluding those wages and benefits payable to workers arising from employment contracts and judicial expenses and fees.

  Article 20

A lessee shall undertake to procure comprehensive insurance coverage for his installations. Such insurance must be in his favour or in favour of those who have rights therein. It shall be established to the Industrial Areas Directorate that such insurance has been made and that the lessee is in regular payment of the insurance premiums.

  Article 21

A lessee may, with the consent of the Ministry, assign the lease to a third party. However, the lessor shall remain jointly liable with the lessee for and financial obligations prior to such assignment.
The industrial plots may not be subleased without the written approval of the Ministry.
The occupation of property by a subsidiary, for change in corporate entity, expansion or merger with another organisations, shall not be deemed to be subleasing. In all circumstances, any assignment, lease or sublease shall be effective against the Ministry of a third party only from the date of registration of such transaction with the Notarisation Office at the Ministry of Justice & Islamic Affairs.

CHAPTER FOUR

CONSTRUCTION IN INDUSTRIAL AREAS

  Article 22

No movable or immovable industrial installations may be constructed in the areas subject to the provisions hereof except with permission from the authorities concerned after approval of the Ministry, subject the terms and conditions specified in the implementation regulations.

  Article 23

No demolition, alteration or improvement may be made to and industrial installation without the written consent of the Industrial Areas Directorate and in subject to the Building Regulation Law and its implementation regulations.

  Article 24

Special buildings for use as warehouses and showrooms for the relevant industrial project products may by constructed in the industrial areas.
No residential buildings for workers may by constructed, However, the Industrial Areas Committee may exceptionally allow the construction of such buildings in respect of certain projects of a special nature, as set forth in the implementation regulations.
A lessee who is permitted to construct such buildings shall abide by the special decisions with respect to the conditions governing the obtainment of permits for demolition and construction on such plots and by the conditions of construction under the Building Regulations Law.

  Article 25

Buildings constructed as industrial installations, for workers, residence of for the display of products shall be subject to the regulatory requirements for construction in industrial Areas as provided for in Resolution No. (3) for 1998 with respect to the Specification of the Regulatory Conditions for Construction Throughout Bahrain.

CHAPTER FIVE

OBLIGATIONS AND RIGHTS OF INDUSTRIAL AREAS LESSEES

  Article 26

A lessee of industrial plots shall undertake to:

pay the prescribed rent on time Repeated failure to observe this obligations, may lead to asking for a deposit in cash equivalent to the rent for a period not exceeding one year after the settlement of any outstanding rents;
construct a fence and erect direction signs at the entrance as provided for in the implantation regulations;
provide car parking spaces and landscaping compatible with the purposed of the project. The implementation regulations shall specify the areas required for each project and the specifications of car parking spaces;
maintain the installations and the land in question. The Ministry, where required, may interfere to enforcing such maintenance and repairs and may appoint appropriate experts to perform such repairs. The Ministry, in case of necessity, may also request the Courts of Instant Matters to require the lessee concerned or to permit the Ministry to carry out such repairs at the lessee's expense and to recover such expenses in the manner provided for herein;
commence the construction of installations within the period specified in the lease agreement and to complete such construction and supply equipment within the time schedule predicated by the lessee and approved by the Ministry;
remove debris regularly and abide by the Environment Law; and, Abide by the rules and regulations of occupational health and safety within his installations.

  Article 27

Any natural resources such as petroleum, natural gas, underground water, etc. emerging from or thought to be hidden under and industrial plot, shall be the property of the Government. Where the Government interferes to exploit such natural resources, the lessee shall be indemnified for any loss, partly or wholly, resulting from inability to exercise his usufruct. The lessee may, with special permission from the Ministry, utilise the natural quarry resources within his leased land for the purposed of the construction of his project areas against the charge levied for similar quarries in the state of Bahrain.

  Article 28

The Industrial Areas Committee may, in its own discretion or at the request of a lessee, reserve adjacent plots for future expansion or for and industrial integration with other projects. Such reservation shall be subject to a charge and for the duration required for the land to remain reserved for the purpose.

  Article 29

No industrial area investor shall bury underground or throw at seashores, roads, squares or in front of any public or private building or allow the leakage of any of the following materials:

debris of building destruction or any other industrial waste;
discharge of sewers, rubbish or and other material that is inflammable, toxic or detrimental to health.

  Article 30

A lessee, where justifiable, may request that his plot be replaced.
The implementation regulatory shall specify the conditions and procedure for such replacement.

  Article 31

In the event of any lessee being declared bankrupt , the Ministry may request that the lease agreement be terminated. The trustee of the bankruptcy may chose to terminate or carry on with the lease agreement. If it is decided by the trustee to continue with the agreement then he shall pay any rental arrears and give a sufficient guarantee for the payment of any future rents. Where such a guarantee is insufficient, the Ministry, within fifteen days from being notified of the trustee's desire to continue with the agreement, may request the Court to terminate the lease agreement.

CHAPTER SIX

PENALTIES

  Article 32

The lease agreement of plots shall be terminated in the following circumstances:

If the lessee fails to pay the rent or refrain from procuring the insurance coverage provided for in Article (26) (i) here of.
If the lessee, without any reason acceptable to the industrial areas Committee, fails to commence construction of the licensed project within one year from the date of receiving the plot.
If the lessee, without any reason acceptable to the Industrial Areas Committee, suspends work in the installation for a period of one year.
If the lessee, after being warned, has used the land for purposed other than those allocated thereto.
If, without the approval of the Ministry, the lessee has subleased the land, assigned the rent thereof or mortgaged any right in rem.
If the lessee dies before the termination date of the lease agreement and his heirs or any one of them does not desire to continue the agreement with the Ministry.
If the duration of the lease agreement expires without being renewed. The termination of the agreement and the evacuation of the lessee from the property shall be effected by a decision of the Minister on recommendation of the Industrial Areas Committee. The lessee may appeal against such decision before the Civil High Court within a period of not exceeding forty-five days from the date of serving the Minister's decision by registered letter with recorded delivery.

Unless otherwise agreed, the Ministry, in the event of the cancellation or termination of the agreement without being extended, may maintain the buildings and installations against compensations to the lessee, to be determined in accordance with the relevant formulas prescribed in the implementation regulations.

  Article 33

Subject to the provisions of Article (32) of this law, if the Ministry finds no justification for terminating the agreement, the Minister may, by administrative procedure, order the closure of the installation for a period not exceeding three months.

CHAPTER SEVEN

GENERAL

  Article 34

The Minister may, be a decision, authorise certain staff of the Industrial Areas Directorate to have access to the industrial areas for the purposes of inspection and of ensuring that the provisions of this Law and any decisions issued in implementation thereof are properly enforced. Such staff shall be authorised to record andy contravention to the provisions of this Law and make the appropriate reports in this respect. Reports of this nature will be forwarded to the Industrial Areas Committee for review and for recommending and appropriate action to the Minister.

  Article 35

The Minister of Oil & Industry shall issue the implementation regulations and the necessary decision required for the enforcement of this Law.

  Article 36

The ministers, each in his respective capacity, shall implement the provisions of this law, which shall come into effect from the date of its publication in the Official Gazette.

-----------------------------------------------------------------------------

Amir of the State of Bahrain
Hamad bin Isa Al-Khalifa
Issued at Riffa'a palace:
On 7th Rabi Al-Awal, 1420 A.H.
Corresponding 21st June 1999