The Strategic Role of Construction Contracts in Supporting Green Construction Practices in Developing Countries: Terms and Conditions Matter

Green construction has emerged as a strategic response to the environmental challenges posed by the construction industry, particularly in developing countries. Despite growing awareness, its implementation remains inconsistent due to regulatory gaps and contractual limitations. This study investigates the strategic role of construction contracts in supporting green construction practices within the Indonesian context. Using a qualitative approach, twelve expert interviews were conducted across government, private, and state-owned sectors. The interview guide was developed through an extensive literature review and refined through a pilot test prior to data collection. Data were analyzed using a systematic coding process in NVivo to identify recurring themes and patterns. The findings reveal that while stakeholders demonstrate an increasing awareness of sustainability, adoption is often reactive and cost-driven. Furthermore, the inclusion of green clauses in construction contracts has an important impact on the compliance and implementation of sustainable practices. However, the absence of clear technical guidelines, incentive structures, and standardized contract templates undermines consistent implementation. The study identifies five key prerequisites for effective contractual support: robust government regulation, specific green clauses, alignment with policy frameworks, incentive and sanction mechanisms, and integrity pacts. These elements collectively enhance stakeholder commitment and legal certainty. This study is limited to expert perspectives and the Indonesian regulatory context, which may constrain the generalizability of the findings to other regions. The research concludes that construction contracts, when strategically designed and supported by policy, can serve as powerful instruments for mainstreaming green construction in developing countries.