NSW parliament 2017

UPDATED: 9am Thursday – the Bill passed both houses

Building industry stakeholders are outraged that the NSW government has covertly and substantially watered down legislation to reduce non-compliant and non-conforming building product use. And the fear is that this will be replicated around the nation.

Somehow, someone had the influence to get the government to de-claw the proposed bill and leave a hollow substitute. But who?

Greens’ David Shoebridge said “half the development industry” had called the Greens asking requesting action to fix the massive shortfall in provisions. A draft of the Building Products (Safety) Bill 2017 was presented to industry stakeholders at a meeting on 6 October.

Those attending included the Housing Industry Association, Australian Industry Group, Engineers Australia, Fire Protection Association of Australia, Property Council of Australia, Master Builders Association NSW, Owners Corporation Network, Australian Industry Group, Strata Choice, Strata Communities Australia NSW, Australian Institute of Architects and the Building Products Innovation Council.

According to BPIC executive officer Rodger Hills, everyone present agreed the legislation was sound and would ensure better supply chain accountability.

However, between that meeting and the tabling of the draft of the bill in parliament on Thursday 16 November, someone managed to convince the government to remove around 80 clauses addressing supply chain responsibility and other key matters.

BPIC responded by writing to all NSW politicians, setting out the deficiencies in the bill and asking MPs to intervene to have the deleted clauses reinstated or the bill in its current form “scrapped entirely”.

The draft that was shown to industry, Mr Hills wrote, would have enabled the government to enact its 10-point plan to put in place a building products scheme that would prevent non-conforming and non-compliant use of products in buildings.

Having almost 80 clauses cut was the “antithesis of good regulation”, he said, and has resulted in a bill that will see the public exposed to “unacceptable building health and safety risks”.

Among the deleted clauses are provisions for:

  • issuing product recalls
  • banning the supply of non-conforming or non-compliant products
  • making it an offence to use non-conforming products
  • powers to issue directions for building inspections or audits
  • duties for all parties in the supply chain to provide evidence of product conformance and suitability
  • consumer protections.

Mr Hills also expressed concern that should the watered down legislation pass, other states and territories may follow suit, and we will “never get adequate national building products compliance laws”.

Aussie Steel rings the alarm bells

The Australian Steel Institute also rang alarm bells.

ASI chief executive Tony Dixon said a key concern was that existing building industry initiatives to shore up supply quality, such as third-party certification schemes, were not upheld in the bill.

“This is a core recommendation of the Senior Officers’ Group of the national Building Minister’s Forum (BMF) group of which the NSW government is represented, as recently as September this year,” he said.

Mr Dixon said the BMF and NSW government agreed to chain of responsibility principles that place “duty of care” obligations on everyone in the building supply chain.

“Shoring up the supply chain in this manner is surely preferable than applying punitive measures after non-conforming product is already built-in or, god forbid, a disaster occurs.”

Greens and Labor team up to tackle bill

Just prior to entering the debate on the bill yesterday (Wednesday), Greens MP David Shoebridge told The Fifth Estate that NSW Greens and Labor MPs are banding together to propose amendments.

“The bill has major flaws,” Mr Shoebridge said. “In its current form it doesn’t grapple with the supply chain. There is no responsibility there.”

Under the proposed legislation, Fair Trading would have the power to ban “unsafe” products, but only after they have already been used. It would also have the power to issue rectification notices for existing buildings that also have either non-compliant product use, such as flammable aluminium composite cladding, or where non-conforming products have been used.

However, this approach is like “having the ambulance at the bottom of the cliff,” Mr Shoebridge said.

“An intelligent government would design a policy that would stop the cladding being used in the first place, instead of relying on ad-hoc reporting after the fact.”

Changes to draft should send a shiver down homeowners’ spines – so who’s pulling the strings

He said the fact someone got in cabinet’s ear and got the bill diluted should “send a cold shiver down the spine of every home owner in NSW”, that when a major public safety issue is at stake, the government has still bowed to some unknown party’s influence.

One of the amendments the Greens wanted added into the bill is where non-compliant product use, such as flammable cladding, has been identified as a major defect, home owners should be able to recover the cost of rectification from Home Warranty Insurance.

As it stands, they could be looking at between $20,000 and $50,000 per owner in an apartment building for rectification works, with no means of recovering the cost.

Mr Shoebridge said “half the development industry” had called the Greens this week requesting action to fix the bill.

Labor proposed 42 amendments to reinstate clauses addressing supply chain accountability, building inspections, worker safety and a broader definition than “unsafe” products, Yasmin Catley, shadow minister for better regulation, told The Fifth Estate.

The Upper House was called for an urgent sitting yesterday evening to debate the bill. Despite the united efforts of the Greens, Labor and the majority of cross-benchers to try and get the bill modified, Ms Catley said Fred Nile sided with the government enabling the bill to be passed in its eviscerated form.

HIA expresses disappointment

Kristen Brookfield, chief executive industry policy for the Housing Industry Association, said the organisation had no idea how the changes in the bill between consultation and tabling could have happened.

“We were disappointed,” she told The Fifth Estate. “There were a lot of things in the draft we thought would be useful. We don’t understand why [the government] made the changes.”

The only real positive in the current proposal is it gives Fair Trading the power to ban products. Currently, building products are not covered under consumer law as they are not a consumer product. The bill is filling that gap, Ms Brookfield said.

However, the ability only kicks in “after the fact”, when a product has already been used. Then there is a lengthy process involved in terms of getting it removed or otherwise rectifying the problem.

She said the HIA wanted the bill to also make sure products on the shelf are fit for purpose.

Calls to the Property Council and Master Builders Association NSW were not returned.

How will Fair Trading get its information?

In terms of how Fair Trading may be made aware there is potential non-compliance or non-conformance, Ms Brookfield suggested that information sharing agreements between the states and territories through the Senior Officers Group of the Building Ministers’ Forum could be a channel for intelligence, particularly from Queensland, which recently passed tough supply chain responsibility legislation.

The Fifth Estate asked NSW Fair Trading how it planned to gather information to enforce the provisions of the bill.

A spokesperson said its sources include consumer complaints, phone enquiries, compliance and enforcement activities and education campaigns. Information is also obtained through collaboration with other NSW government agencies, and state and territory building regulators.

“In relation to unsafe building products specifically, information and advice about non-conforming building products is provided on the Fair Trading website, where members of the public can directly make a complaint or raise concerns about a non-conforming building product,” the spokesperson said.

“Anyone with concerns about the conformance of a particular building product is encouraged to notify Fair Trading by emailing NCBP@finance.nsw.gov.au. Enquiries or reports of suspected non-conforming building products can also be lodged through the ABCB website, and this information is provided to Fair Trading and other building regulators throughout Australia.”

Fair Trading also pointed out that under the proposed laws, builders, building product suppliers, manufacturers and importers will be compelled to produce their records so dangerous products can be tracked and pinpointed. Failure to provide this information to Fair Trading will be a criminal offence, with penalties of up to $11,000.

In the case of a product being identified as being wrongly used in a property, local councils will be notified. The new rules give councils the power to issue rectification orders.

Government optimistic legislation is enough

Minister for Better Regulation Matt Kean was optimistic about the impact the legislation could have when he announced it was being tabled.

“Fire safety in high-rise buildings will be enhanced by new powers to crack down on the dangerous use of building products,” he said in a media statement.

“London’s Grenfell Tower tragedy was a horrific and stark reminder of the importance of doing all we can to make people in high-rise unit blocks as safe as possible.

“I am issuing a warning – we intend to be vigorous in using these new laws to make sure building products used in this state are fit for purpose.

“Any shonky operator who thinks they will be able to continue using the wrong product in the wrong place should think twice. We will throw the book at anyone who is found to have breached these new laws.”

Once Fair Trading identifies properties where building products have been used inappropriately, local councils will be notified.

Companies that continue to use a banned product will be liable to fines of up to $1.1 million, with fines of up to $220,000 for individuals.

A spokeswoman for the minister said Fair Trading is already equipped with personnel to get the ball rolling, and cladding is one of the priority products for attention.

“We don’t want to waste any time at all,” she said.

There are other products also to be examined, she said, though exactly what they are has not been made public.

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  1. “local councils will be notified. The new rules give councils the power to issue rectification orders.” and “where building products have been used inappropriately, local councils will be notified.”

    I take it to mean this will shift the cost of enforcement and compliance onto our local councils, hence another cost to existing ratepayers. An example of the poor outcomes of densification on communities across Sydney. Developers take the profit and communities bear the costs via increased rates and compliance costs, reduced amenity, overcrowded schools, transport, roads and hospitals. This government appears to be protecting its donors instead of its constituents.

  2. So, the Department of Fair Trading is going to be very busy. Why does the Liberal government hate the people of NSW so much? Any normal person would have learned from the apartment fire in Britain. Why isn’t this government serving the people, and the committees and groups who do try to protect the people? Is it about money?
    This is a very disappointing outcome.