On why it’s time to get a move on

We’ve known about non-compliance in the building industry for years now.

Let’s go back to 2013 when the Australian Industry Group released a damning report, The Quest for a Level Playing Field: the non-conforming building products dilemma, which detailed problems with non-compliant materials that extended much further than cladding.

There were examples of engineered timbers, electrical cabling, plastic piping, glass windows and lighting that failed to meet standards, and posed a risk to life. A massive 92 per cent of the 222 companies surveyed reported non-conforming products in their sector. Almost half noted a market penetration of NCPs of between 11 and 50 per cent.

Back then AIG chief executive Innes Willox said that “the lack of independent verification and visible regulatory authority is making the conformance framework ineffective and unfair”.

“The end result is undermined confidence in the regulatory system.”

Today he’s saying much the same thing.

Submissions made to the current Senate Inquiry into non-conforming building products – due to report back on 16 March – are also enlightening regarding the extent of the problem, and the real risk to human life we face.

The Australian Forest Products Association told the inquiry there were examples of imported wood products that did not conform to Australia’s standards, and were creating an uneven playing field as well as safety concerns, as many were used as structural elements.

It noted an Engineered Wood Products Association of Australasia program that found 50 per cent of imported formwork plywood broke well below loads that the supplier claimed were fit for purpose. There are also examples of engineered wood products such as laminated veneer lumber, used in composite beams, that had failed tests for bond quality and durability.

The Construction, Forestry, Mining and Energy Union used the Inquiry to list a multitude of failures in the building industry.

Top of the list was the 22,000 Australian homes (the CFMEU says 40,000) that have been affected by the non-compliant Infinity Cable, which could degrade and pose a fire and electric shock risk in the future.

“Only 60 kilometres of the 4000 km has been returned despite the fact the ACCC recall has been going on for nearly a year,” the submission states.

The CFMEU said 90 Australian workers who manufactured cables had lost their jobs due to imports from China but, despite this, the federal government confirmed it was not testing or monitoring imported products to ensure they reach Australian standards.

It also noted instances of plasterboard containing asbestos and engineered wood products laced with formaldehyde, which caused one apartment block into a $1.3 million rebuild.

The Vinyl Council of Australia said it worried about reputational damage in relation to its products, and noted that some PVC products had been stamped as complying with a third-party certification, yet was found to be non-compliant. Non-complaint PVC products, the council said, could be fire and health risks.

The Australian Steel Institute noted instances of excess levels of lead in paints and substandard metallic coatings.

“The non-compliances are not limited to poor quality and bad workmanship but extend to deliberate fraudulent behaviour with examples such as falsified test certificates, welds made with silicone rubber and then painted, attachment of bolt heads with silicon rather than a through bolt and water filled tube to compensate for underweight steelwork with fraudulent claims that their products meet particular Australian Standards,” it said.

It noted its member companies had been involved in rectification work or had cited extreme examples of NCP in a number of Australian buildings. Recent high-profile buildings of NCP include the Transgrid building in Ultimo, Sydney; Barangaroo, also in Sydney; and the TLF Medical Centre building in Perth.

So it’s not like the government hasn’t been aware of these problems and their safety implications, which makes the glacial pace of the Building Ministers’ Forum process so frustrating.

The BMF – the body of Commonwealth, state and territory ministers responsible for building regulation – meets annually, or on a needs basis, to consider issues affecting Australia’s building regulation. The forum only met on 31 July 2015 to talk about fire risk and non-conforming products, more than six months after the Lacrosse fire.

At that meeting last year, the BMF tasked the ABCB to investigate options for mandatory certification.

Ministers agreed “the ABCB will investigate options for a possible mandatory scheme for high risk building products with life safety implications and report to Ministers within six months”.

Now this week we heard the news that the Australian Building Codes Board would spend the next six months investigating a third-party accreditation scheme for cladding materials.

According to ABCB general manager Neil Savery, a report was provided to the BMF on options for a mandatory scheme for high risk building products, but the BMF decided not to proceed. Instead the ABCB will take another six months to investigate a third-party mandatory certification scheme for cladding – a “much narrower focus”, Savery says, but also more stringent than some of the options that were contained in the first report. What these were Savery won’t be drawn on, but may have contained options like self-certification.

With the third-party certification option, a regulatory impact assessment will need to be produced, adding more time to an already lengthy process.

While it’s great news that the BMF is taking substantive action, with reports that hundreds, perhaps thousands, of buildings are already affected by non-compliant products across Australia, the pace of reform seems almost leisurely, and little has been said about tackling the lack of oversight that has been a causal factor in non-compliance spreading.

And what of those buildings affected by non-compliant materials? Will another high-rise fire like Lacrosse have to happen before we take action?

It’s something Engineers Australia has already flagged. Robert Hart, an author of Engineers Australia’s Defect-Free Construction in NSW – How It Can Be Achieved, told Domain last year that a major fire would occur in a new Sydney high-rise within the next two years.

“And when it does, it will be the NSW government that has blood on its hands for its total failure to provide a proper system of certification for the building industry,” he said.

NSW’s certification system, he said, was the worst in Australia.

This backs up an “in confidence” briefing note from the NSW Department of Planning and Environment, recently obtained by The Australian, that estimated up to 2500 high-rise buildings in metropolitan Sydney could contain the non-compliant aluminium cladding implicated in the Lacrosse and Dubai fires.

While some have suggested the note refers to number of apartments, not buildings (2500 high-rise buildings does seem inordinately high), it paints a picture that extends across the entire building industry, and not just in Victoria, where 51 per cent of the 170 buildings audited by the VBA were found to have non-compliant cladding.

What’s certain is that this scandal is undermining confidence in the real estate industry, and that has follow-through effects for other sectors.

Over the next weeks, we’ll be covering how industries like insurance are responding to the news that Australia’s buildings are routinely failing to meet basic standards.