Phil Harrington

It could be one of the biggest industry reforms in many years – the shakeup of widespread rorting of energy efficiency and other environmental measures mandated by building codes and regulations, but routinely ignored. So how did the report that proved the anecdotal evidence come about? Who drove it and what will happen now?

Here’s an alert to local councils, builders, building certifiers, property owners, and even residential selling agents – your world could be about to face a radical shakeout. That is if the recent explosive report on widespread rorting of environmental codes and regulations in the sector has its intended impact.

The big changes could include councils enforcing the codes and regulations – instead of turning a blind eye – revival of council-appointed building certifiers, a tranche of high profile legal cases to prosecute offenders to send a strong signal to the rest of the industry and even an “electronic passport” for houses. This will contain information that the agents won’t or can’t share – such as what the track record of the house is in terms of planning and building work, and how it will perform on energy and other metrics.

According to lead author of the report, Phil Harrington, there’s every likelihood we could start to see some serious reforms.

In some ways it could resemble the shakeout in the household appliance sector, which, a decade ago, was rife faulty and sub-standard equipment but is now much improved.

Harrington says the same will happen in the building industry.

Call it an inevitable shift in the culture, that will be propelled, as it was in the appliance industry, through a bunch of sticks and a few carrots.

The report that could create this hopeful momentum is the National Energy Efficient Building Project.

Harrington, a principal consultant with pitt&sherry, worked on the report with Swinburne University in a program led by the South Australian government and with various levels of support from most of the other states and territories.

More than 1000 stakeholders nationally were interviewed in the work to reveal systemic weaknesses and widespread non-compliance with the energy efficiency requirements of the National Construction Code.

This includes certifiers “ticking off” elements that don’t exist, substitution of inferior products and almost the entire suite of stakeholders involved turning a blind eye.

Interestingly, Harrington says the mood from the industry is positive.

Since the report’s findings were published by The Fifth Estate, the feedback has been “very positive, there’s been not one bit of negative feedback yet,” Harrington says.

This was a “bit surprising and reassuring,” he says. “It was about time and it needed to be said. A lot of people have known about this for years but no one has been willing to say it.

“No one suggests that the figures are not correct.”

But Harrington is not keen on our use of the word “rorting” and wishes we would use something else. It’s not so much rorting, he says, as a “culture of indifference” and much of it is driven by ignorance.

“A number of councils I’ve spoken to about this in the course of the project basically said, ‘Wow, we didn’t know this mattered and why this mattered.”

“It’s a quasi acknowledgement they’re going through the motions and not really paying a lot of attention to the regulatory process if you like.”

Among the thinking is to bring back council-employed building certifiers, to remove the perception (and sometimes perhaps the reality) of bias toward the client who pays the bills.

“Councils gave it all up [on staff certifiers] but now there is a bit of a trend back the other way, even if only enough to do quality assurance to keep the others honest.”

The attitude is, he says, “No one’s watching, no one cares. And everyone else is doing it.

“It’s very much a cultural thing. And we’ve got the same stories in all parts of the country, not just the back blocks.”

Household appliances industry 

What this industry needs, he says is a shake-up along the lines of what happened to the household appliance industry 10 years ago, which strongly resembles today’s building industry.

In the appliances sector there was a decision made by the Australian Consumer and Competition Commission to go after some of the law breakers but with an agreement that it would retain any fines imposed and direct them to educate the industry.

Some high profile and expensive cases for appliance distributor LG ensured the message got through to the whole industry.

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Harrington says there is considerable interest in pursuing a similar strategy for the building industry.

The drivers

Initial driver for the project came from Victoria, which under the previous Labor government led the way on energy efficiency until the government changed hands and went to the Coalition (which lost office last November).

According to Harrington, it was “very much their energy efficiency policies that persuaded the federal government to fund this project”.

He believes the process started in about October of 2013 with his commission starting around November of that year.

The momentum was then picked up by the South Australian government, which  ran a strong agenda under project leader Sabina Douglas-Hill, manager – national energy efficient buildings project, Department of State Development South Australia.

The project reference group comprised:

  • Vanessa Morris, principal policy officer – Construction Services, ACT
  • Clare Culross, director, Australian Building Codes Board
  • Daniel Heath, senior program officer, Business & Government Programs, Public Utilities Office, Government of Western Australia
  • Jodie Evans, chief project officer, Building Policy Unit, Government of South Australia
  • Tim Farrell, director, Residential Buildings Team, Department of Industry, Australian Government
  • Craig Walker, a/manager, Energy Markets and Programs, Department of State Development, Government of South Australia
  • Natasha Palich, ALGA representative and coordinator, Council Alliance for a Sustainable Built Environmen
  • Jim Woolcock, managing director, Sustainability House

Three projects are now likely to be rolled out. One is an “on the ground” audit of building practices and site inspections, another the electronic passport, with about 10 councils involved in a trial, and a third is consideration of alternations and additions.

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  1. Excellent development! In the past 7 years over 2000 students have come through our training and heard this exact message! I’ve copped enough stick for my similar position in calling for reforms. The noise is getting louder!The construction industry will get dragged kicking and screaming into building energy efficiency, but it will happen! Well done!

    1. Can’t agree more Steve. It will be very interesting to see how the suggested reforms play out. One thing for sure is that the call for the quality assurance of new homes needs to come from consumers – the question is whether home buyers require regulation so that they know what questions to ask (and what to demand), or whether this can happen by some other mechanism. I suspect not.