After more than three years and several interim reports, the final report from the Senate Economic References Committee on Non-conforming Building Products delivered on 4 December contains no surprises. It does, however, draw together recommendations from past investigations* and it bestows a clear sense of priority upon some of these.

Noting that the weight of product failures falls disproportionately on the end of the construction supply chain (3.81), the final report gives strong praise to Queensland’s “Chain of Responsibility” legislation as a “model for best practice” (3.82) and recommends that further consideration be given to rolling it out across the country (Recommendation 6).

Some of the more concrete recommendations in the Final Report concern a new category of “high-risk” products, urging government to:

• Define “high-risk” as a matter of priority (3.75)
• For “high risk” building products, expedite the consideration of mandatory third-party certification and a national register (Recommendation 3)
• Require importers of high-risk products to conduct sampling and NATA testing (Recommendation 4)
• Consider requiring mandatory product recall insurance for high risk products (Recommendation 12)

The final report concludes that the current system of building regulation and inspection is “broken and fragmented, with regulation and licensing spread over eight jurisdictions” (4.14). Hence Recommendation 7: establish a national licensing scheme for all building practitioners, with requirements for continuing professional development. The Committee notes that consideration should also be given to creating a national licensing authority to oversee all this (4.17).

One of the most popular items for consultants will be the strong recommendation to consider making Australian Standards freely available (Recommendation 8) (4.40).

Some of the more nebulous proposals include:

• Consult with industry stakeholders regarding a national database of conforming and non-conforming products (Recommendation 9)
• Consider imposing greater penalties for non-compliance with the National Construction Code (such as revocation of accreditation and a ban from tendering on Commonwealth funded work) (Recommendation 11)
• In-principle support given to a centralised database containing building design and construction documentation (Recommendation 10)
• Improved consultative mechanisms and annual reporting from sub-groups of the Building Ministers’ Forum (Recommendation 1)
• Examine international approaches (Recommendation 5)
• Develop a confidential reporting mechanism for non-conforming products (Recommendation 2)

The September 2017 interim report’s call to ban polyethylene core ACPs has disappeared, and the final report barely mentions the various state-based regimes that now restrict or ban the use of these products on high-rise. The robust language of the interim report has been watered down into terms like “consider”, “consult” or “review”. Also missing are many of the recommendations from the Shergold Weir report, such better regulation of building surveyors, mandated site inspection regimes, and better regulatory oversight (1.45).

The September 2017 interim report on cladding had been largely concerned with non-compliant products (that is, otherwise legal products being used in a way that did not meet legal requirements, such as polyethylene core panels on high-rise). The final report brings the focus back to the original brief of non-conforming products and concentrates on illegal materials like asbestos, counterfeit products, and fraudulent product certification. Addressing the issue of non-conforming products is important, and the report does cite alarming examples such as lead contamination from brass tap fittings (2.19), welds on steelwork made with silicon rubber and then painted (2.27), and $18m of defective glass on a single project (2.15). However, the shift in focus means the recommendations will have less impact on the pressing problem of non-compliant cladding.

Some interesting general points not picked up in the recommendations include:

• Recognition of the contributing role of structural issues in the industry, such as “contractors and sub-contractors working with razor-thin profit margins” leading to “sub-optimal” product choices (1.17), the impact of deregulation and privatisation (1.28), and product substitution (1.32)
• Indications the Department of Home Affairs will list asbestos as a Tier 1 good, under the Customs Regulations, meaning breaches could result in imprisonment of up to five years (5.37)
• A proposal to establishing a Building and Consumer Law Working Group to better use existing laws on misleading and deceptive conduct against dishonest manufacturers and suppliers (3.47)
• A sub-group of the Building Ministers Forum is consulting with industry on a new system of permanent labelling for cladding products (4.29)

Where to from here? The expansion of Queensland’s “chain of supply” laws and specific new regulation around “high risk” building products are feasible in the next year or two. Tightening and nationalising regulation of building practitioners would be a huge step forward, but of all the recommendations, that one will probably require the most work, commitment and time to achieve.

Stay in touch in 2019, when we will bring you further updates as some of these recommendations are turned into concrete legislation.

 

Wendy Poulton

Risk Manager, informed

 

* Past investigations referenced in the final report include:

Interim Report – Safety ‘not a matter of good luck’ (May 2016);

Interim Report – Aluminium Composite Cladding (September 2017);

Interim Report – Protective Australians from the Threat of Asbestos (November 2017);

Shergold and Weir “Building Confidence – Improving the Effectiveness of compliance and enforcement systems for the building and construction industry across Australia” (February 2018)