Senate Investigates Non-Compliant Building Products

Australia has world class building standards and regulations, but we have a third world enforcement regime says Ray Thompson, General Manager Innovation – CSR Building Products

On June 23, 2015, the Australian Senate referred an inquiry into non-confirming building products to the Senate Economics References Committee for inquiry and report by 12 October, 2015. (Submissions close August 3, 2015: see below* for Terms of Reference and contact details).

During this July, the Building Ministers Forum has also included non-compliant building products as an agenda item for the national building industry.

The background

For some years now the industry has been concerned about the deteriorating product compliance enforcement regime in Australia.

Following the reduction in resources at the CSIRO’s Building Division, the privatisation and increased workload for certifiers and the large volume of products directly imported by the industry, it has effectively been left to local manufacturers to undertake legal action against competitors who are not providing and installing compliant products.

The Australian Competition and Consumer Commission (ACCC) does not consider compliance of building products to be within their scope of responsibility, nor does the Australian Building Codes Board. So, who does? The Senate Inquiry will hopefully provide some necessary answers.

 

In the last few years we have seen a dramatic increase in imported products hitting the market. The vast majority of all products available are manufactured and distributed by reputable companies (domestically and internationally) who comply with the relevant regulations and standards.

However, there are failings emerging in our system for ensuring products used in construction are:

  • Fit for the purpose they are being used for
  • Comply to the relevant standards and codes
  • Satisfy basic standards for the health of trades and building occupants.

High profile examples

Two cases have grabbed headlines in mainstream media recently. The Infinity cable episode involved cheap electrical wiring imported from China with inferior insulation properties and presented a serious fire and electrocution risk to thousands of homeowners across the country.

Of major concern to the industry has been the falsification of compliance documentation including the forgery of test certificates. Another potential problem is suppliers submitting a quality product for testing eg with fire retardant included, but then subsequently supplying products with expensive fire retardant omitted.

And even when products are fully compliant to Australian Standards they must not be used in unsuitable, unapproved applications.

There is no doubt that the Lacrosse building fire at Docklands in Melbourne late last year has been the final catalyst to prompt action by Government. A non-fire rated aluminium composite product was installed on the façade of a Type A building which requires fire rated product according to the NCC.

Other less publicised incidents include the importation of plasterboard products containing asbestos and composite flooring/cladding boards that degrade upon mild exposure to moisture.

The consequences of non-enforcement

If Australian Standards and Building Code compliance are not enforced then there is no constraint to lower cost sub-standard products being installed on building sites by unaware contractors.

If this continues it could undermine the competitiveness of building products manufactured to Australian Standards by law abiding manufacturers and distributors in Australia, threatening thousands of jobs and reducing the product development and innovation capacity of the Australia building industry.

This is a classic ‘boiling frog’ issue that has been slowly creeping up on the industry with potential serious and life threatening consequences to workers and building occupants. The recent examples quoted above will only proliferate unless action is taken to implement improvements.

This cannot be done by the industry alone. Indeed, it is in the public interest to ensure that an effective compliance system is in place to reduce the risk of unsafe products being installed by companies with inadequate resources to pay for rectification works resulting in Government being forced to cover the costs out of taxpayer funds – as was the case with Mr Fluffy and the Home Insulation Program.

Where to now

While Australia has world class building standards and regulations, we have a third world enforcement regime.

We have a black hole of enforcement with the Australian Competition and Consumer Commission (ACCC) claiming this to be the domain of the Australian Building Codes Board (ABCB) and the ABCB identifying this to be a competition watchdog (ACCC) problem. Hopefully it won’t take a death or another major fire incident to prompt more effective action.

In November 2013, the Australian Industry Group issued a report The Quest for a Level Playing Field which highlighted serious flaws in the current system. The Construction Products Alliance (CPA) has subsequently been formed under the auspices of the Ai Group and includes most major industry players.

The CPA has reviewed the local and international status of compliance in the building industry and developed a number of recommendations for government consideration.

Enforcement means we need a complaints process, an independent testing institution and a penalty enforcement authority to enable our certifiers to be confident in the documentation provided to them, verifying that the correct product has been installed in the correct location.

While these are the agreed key areas to be covered by the Senate Inquiry, any funding of random site testing and enforcement will be an issue for Government in tight budgetary times. Overseas systems include funding from fines, construction levies or from consolidated revenue.

Whatever the outcome we are hopeful that improvements can be implemented sooner rather than later to ensure the safety of works and building occupants, the delivery of product performance as per their claims and the levelling of the playing field for product suppliers.

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Senate Inquiry Terms of Reference

On 23 June 2015, the Senate referred an inquiry into non-confirming building products to the Senate Economics References Committee for inquiry, with particular reference to:

  1. the economic impact of non-conforming building products on the Australian building and construction industry;
  2. the impact of non-conforming building products on:
    1. industry supply chains, including importers, manufacturers and fabricators,
    2. workplace safety and any associated risks,
    3. costs passed on to customers, including any insurance and compliance costs; and
    4. the overall quality of Australian buildings;
  3. possible improvements to the current regulatory frameworks for ensuring that building products conform to Australian standards, with particular reference to the effectiveness of:
    1. policing and enforcement of existing regulations,
    2. independent verification and assessment systems,
    3. surveillance and screening of imported building products, and iv. restrictions and penalties imposed on non-conforming building products; and
  4. any other related matters.

Committee Secretariat contact:

Senate Standing Committees on Economics

PO Box 6100

Parliament House

Canberra ACT 2600

Phone: +61 2 6277 3540

Fax: +61 2 6277 5719

economics.sen@aph.gov.au

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