On the 5th of December the Senate Economics References Committee handed down its 114-page final report titled “Non-conforming building products: the need for a coherent and robust regulatory regime.” What follows is extracted from the executive summary and recommendations which we provide to members so that they can understand what has been reported without having to read the full report.
AIBS directly contributed to this inquiry on four occasions and indirectly via our impact on the heavily referenced and supported “Building Confidence” report from Professor Peter Shergold and Ms Bronwyn Weir.
AIBS notes that the majority of the recommendations made across the four reports from the committee support positions AIBS has taken around the issues considered.
What follows is a summary of the totality of the inquiry reporting:
In the first of three interim reports, “the committee found that there had been a serious breakdown in the regulation and oversight of both non-conforming and non-compliant building products. In particular, the committee highlighted the weakness in the regulatory regime, including the certification process and the disjointed regulation of the use of building products, both manufactured in Australia and overseas.”
In the second interim report, the committee advised that it “found that deregulation and privatisation of building certification processes and the absence of proper regulatory controls, coupled with the increase in ACP product importation, led to the proliferation and installation of non-compliant building products. Importantly, the report was also critical of the lack of any timely government response to the Lacrosse fire, as well as any meaningful resolution between governments, the Building Ministers' Forum, and the Senior Officers' Group on possible steps forward in dealing with the proliferation of ACP panels.”
The third interim report focused on “how best to combat the intentional and unintentional importation of asbestos in building and other materials, including complete machinery.”
The fourth and final report of the committee “supports the compliance concerns raised in the Building Ministers' Forum report, Building Confidence—Improving the effectiveness of compliance and enforcement systems for the building and construction industry across Australia, prepared by Professor Peter Shergold and Ms Bronwyn Weir, and draws attention to the progress being made in dealing with non-conforming products in some jurisdictions. Specifically, the committee was encouraged by the proactive work undertaken by the Queensland Government in their new legislation designed to strengthen the chain of responsibility for the importation and distribution of building materials.”
The final report references the recommendations of the three interim reports and makes a further thirteen recommendations. These are reproduced below and focus principally on matters identified in the Shergold and Weir report. Additional points were noted which summarise the focus of the recommendations including:
In all thirteen formal recommendations were made in the final report as follows:
3.69 The committee recommends that the Building Ministers' Forum develop improved consultative mechanisms with industry stakeholders. In addition, the Building Ministers' Forum should amend the terms of reference for the Senior Officers' Group and the Building Regulators Forum to include annual reporting requirements on progress to address non-conforming building products.
3.74 The committee recommends that the Australian Government develop a confidential reporting mechanism through which industry and other stakeholders can report non-conforming building products.
3.78 The committee calls on the Building Ministers' Forum to expedite its consideration of a mandatory third-party certification scheme for high-risk building products and a national register for these products.
3.79 The committee recommends that where an importer intends to import goods that have been deemed high-risk, the Australian Government require the importer, prior to the importation of the goods, to conduct sampling and testing by a NATA accredited authority (or a NATA equivalent testing authority in a another country that is a signatory to a Mutual Recognition Arrangement).
3.80 The committee recommends that the Building Ministers' Forum, through the Senior Officers' Group, examine international approaches—including the European Union's regulations and processes—for testing of high-risk products prior to import and determine if they can be suitably adapted to benefit and enhance Australian requirements.
3.86 The committee recommends that the Building Ministers' Forum give further consideration to introduce a nationally consistent approach that increases accountability for participants across the supply chain. Specifically, the committee recommends that other states and territories pass legislation similar to Queensland's Building and Construction Legislation (Non-conforming Building Products—Chain of Responsibility and Other Matters) Amendment Act 2017.
4.21 The committee recommends that the Australian Government work with state and territory governments to establish a national licensing scheme, with requirements for continued professional development for all building practitioners.
4.40 The committee strongly recommends that the Australian Government consider making all Australian Standards freely available.
5.10 The committee recommends that the Australian Government consult with industry stakeholders to determine the feasibility of developing a national database of conforming and non-conforming products.
5.13 The committee gives in-principle support to Recommendation 12 of the Shergold and Weir Report '[t]hat each jurisdiction establishes a building information database that provides a centralised source of building design and construction documentation' so regulators are better placed to identify where non-compliant building products have been installed.
The committee has also identified a range of specific recommendations (numbers: 2, 4, 7, 8, 9, 11, 12, and 13) that it believes are best placed for government to progress and, as indicated earlier, a number of these have been proposed in earlier interim reports.
5.22 The committee recommends the Australian Government consider imposing a penalties regime for non-compliance with the National Construction Code such as revocation of accreditation or a ban from tendering for Commonwealth funded construction work and substantial financial penalties.
5.27 The committee recommends that the Australian Government consider the merits of requiring manufacturers, importers and suppliers to hold mandatory recall insurance for high-risk building products.
5.42 The committee recommends that the Australian Government review the Customs Act 1901 (and other relevant legislation) to address the challenges of enforcing the existing importation of asbestos offence, with the aim to close loopholes and improve the capacity of prosecutors to obtain convictions against entities and individuals importing asbestos. This review should include consideration of increasing the threshold required to use 'mistake of fact' as a legal defence.
AIBS will be examining the report in detail and respond accordingly.