Shimmy's Sports Bar

One of the most crucial aspects for competitiveness and economic growth in Puerto Rico is the permitting process. Unfortunately, it has negatively affected all aspects of doing business on the Island.

For years, governments have been recreating laws, adding multiple layers of compliance, and making changes to the rules that result in greater economic instability. Procedures are complex, unpredictable and therefore, inefficient. Sadly, permitting reforms have mostly focused on creating more and more layers and regulations without considering functionality and effectiveness.

This excess in government regulation has produced an increase to the cost of doing business on the Island, which has and will continue to hinder sustainable investments. Worse still, it has forced a dependency on non-regulated third-party permit “experts,” which ultimately contributes to more informal construction, corruption and legal noncompliance.

The permit system must focus on a process that is agile, simple, digitized, accurate and most importantly, a process with clear oversight where fraudulent information can and will be held accountable.

Here are some recommendations for an agile, accurate and functional permit system:

Optimize the permits office’s (OGPe) processes in the Single Business Portal, to increase user satisfaction and make it an affordable and easy-to-use tool. Improve the system by making it citizen-centric so that it is simple and intuitive. The platform must be uniform and fully integrated with all municipalities. It should provide a clear and standardized set of fees, be robust, transparent, efficient and functional, so that all procedures can be executed in one place. The portal must integrate a measurement dashboard that can be used to streamline the permitting and accountability processes and measure permit award times.

The portal should also provide several automatic permits by self-certification, when there is no environmental impact or dangerous activity, holding the business owner responsible for complying with the requirements and subject to inspections under penalty of cancellation of the permit and imposition of fines. For example, if you need a use permit on a new restaurant, you should be able to submit all the information including health and fire requirements. Certify that you comply and get an automatic self-certification via the Single Business Portal via the internet. This must be accompanied, of course, with random inspections and audits to identify and avoid fraud, corruption and irregularities.

The Government should provide a unique digital identity system to consolidate and digitize all documentation and certifications that are requested by agencies for government procedures. It should be the same Government that can provide the information to the citizen or company so that they do not have to search and submit said documents that are already in the possession of the state, facilitating the process to complete the necessary requirements.

With a potential simplification of the permitting processes and its shifting responsibilities, it will be necessary to ensure compliance with all regulations and building codes to guarantee the health and safety of citizens and have consequences where false or fraudulent information is provided.

One of the biggest challenges is how to help people with limited resources and give them access to designs, permits and formal construction so the system does not encourage informal construction. To address this there should be a Social Justice Program for anyone in need (as occurs in the legal profession). The intent is to give the low-income population access to the best practices in sustainable, resilient design and construction against natural disasters, through consultancies covered by the Good Samaritan Law.

A permit system where economic activity is facilitated to build, expand and create new businesses, with oversite and safety, is a crucial tool for economic growth. It requires training, certainty, an educational campaign, an entrepreneurial vision and a culture of oversight. A shifting in mindset and implementation of the process will ultimately allow us to improve the experience of doing business in Puerto Rico and make us competitive on the global stage.

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