On doing the right thing. Pure and simple.

UPDATED 23-01-15: At the end of last year, the day after The Fifth Estate went on its annual break, the government finally released a national review into the systemic weaknesses and perceived widespread non-compliance regarding energy efficiency requirements of the National Construction Code.

The review, conducted by pitt&sherry and Swinburne University of Technology, was expected to be scathing and to propose some uncomfortable solutions, as the government had been sitting on it for months, most likely waiting for the perfect time to minimise its impact. Christmas: ideal.

But we’re a tenacious bunch, and following the popularity of our last look into failings of residential energy efficiency – Frustration with NatHERS sparks new verification body – we weren’t going to forget about it.

What the review has found is a scandal, but industry sources tell us it’s nothing everyone didn’t already know: the whole building supply chain has been turning a blind eye to a system that has created a “pervasive culture of mediocre energy performance” – across both residential and commercial construction.

Buildings aren’t being built to meet the energy performance they’ve been designed for. What this means for homeowners and tenants is higher energy use, more carbon emissions and bigger bills.

It’s one big mess in there, according to the report. Apparently consumers don’t care, because they’re falling in with the scam (against themselves).

Maybe they have no idea what they’re letting themselves in for.

But here’s a sobering thought – tens of thousands of people are being cut off from their electricity supply because they can’t pay their bills. In Queensland that figure was more than 7000 households just between July and September last year, according to the Queensland Council of Social Services. In Victoria the figure was 34,000 in 2013-14 a 36 per cent increase on 2012-13. In NSW it was 33,000 in 2013-14.

Builders know they can get away with removing energy efficiency features – sometimes with clients’ approval, sometimes on the sly.

State regulators, vastly underfunded, aren’t enforcing energy efficiency requirements, and are focusing on more pressing concerns such as structural integrity and bushfire safety.

Energy assessors are being treated as a burden and forced to compete with unscrupulous unaccredited and offshore service providers. Building surveyors don’t fare any better, often pressured into signing off approvals for fear of being labelled “difficult” and dropped for a less demanding service provider. And the governments we need leadership from to address this problem don’t look like they’re interested in fixing the mess, either.

How do we work our way out of this?

Suggested solutions are plentiful, and both short-term and long-term. Key is mandatory inspections of energy efficiency features to try and get some motivation for compliance back into the industry.

It makes sense. We check on compliance of many other regulated products – electrical appliances for instance. And don’t mind slapping big fines on those who don’t meet the standards.

So far, industry groups that have come under scrutiny in the report have been quiet.

It’s been over a month since the report was released, and we’ve had to press hard for responses. Whether that’s because of the timing of the release, or because the massive cultural change needed is a bit too inconvenient, it’s not clear.

But this is one story we’re going to be keeping on top of, because the performance of our buildings is too important an issue to ignore.

Ethics and climate

Great news to kick start the year included Australian Ethical hitting the $1 billion funds under management benchmark and the new kid on the ethical investment block, Future Super, notching up $30 million in less than five months and 1300 members.

According to both companies this is a symptom of a major trend that shows no sign of abatement. Even better is that the growth is not coming from other ethical funds but from conventional super funds. Strangely that’s mostly industry funds such as Australian Super and HostPlus.

Now you have to wonder how member and industry focused super funds are that don’t seem to care about their members actual retirement universe and keep investing in things that can blow it away, such as fossil fuels and other nasties.

But it’s not easy being green, as the frog said. So at AE we know the ethics of what to invest in is complex. For instance AE still invests in gas (though not coal) because to suddenly switch fossil fuel off would cause chaos and hardship for many.

But hang on a minute. If AE switched out of all fossil fuels we bet there are a lot of other investors that will keep the old oil-burning junk heaps afloat, so we not sure we buy that argument.

Thankfully the company last year hired Stuart Palmer as head of ethics, previously from the highly regarded St James Ethics Centre, to help it work its way around these issues.

We hope to bring you some of that thinking because as the ethical investment universe expands, so do the list of issues that add to complexity.

But what a beautiful problem to have.

We hope more of the conventional investment houses start to apply some of this thinking themselves.

In our interview with Investa’s Ming Long last year, it was good to hear her mention how the issue of sustainability and climate resilience was not just on the radar but almost dominating the agenda during her recent roadshow tour of investors.

The East West Link

On the topic of ethics, here’s an interesting issue (in the Chinese sense of “interesting”) – the East West Link in Melbourne and whether the new Andrews Government in Victoria will be forced to pay a $1.1 billion kill fee embedded in contracts signed by the previous government for the freeway project.

Governments will always do what they want; that’s the nature of their stripes. But from our point of view for one government to booby trap the next government with a watertight contract of $1.1 billion for not going ahead with a project is not just bordering on blackmail; in fact we can’t see the difference.

According to a delighted AFR on Thursday the total cost for this project, fought so bitterly by community groups, but fundamental to the ideology of the fossil fuel governments, might end up costing the taxpayer $3 billion in total, about half the projected $6.8 billion cost, if it doesn’t go ahead.

Sure The AFR is a big fan of roads and fossil fuels so it’s no surprise to see it goading the government to pay up and shut up or just go ahead and build the thing.

But whatever the contracts say, the ethics of the thing is wrong.

If the government is forced to pay, media should use smirking editorials to humiliate the blackmailers, not the victims.

That’s what normally happens in civilised society: we penalise blackmailers for being corrupt; we don’t attack the victims.

And we don’t urge anyone to comply with the wishes of the blackmailers.

So who would those blackmailers be?

Partly of course it’s the former government. But the companies who stand to benefit must also share in the bad karma that would flow from this kill fee.

Key contractors on the build side are Lend Lease, Bouygues and Acciona and on the design side, it’s Hyder and Parsons Brinckerhoff.

We haven’t seen the contract documents so we don’t know who stands to get what. And we understand that some compensation for cancelled contracts – for design and so on – is fair. But $1.1 billion is not fair in anyone’s language.

But here’s a hope that these big leading companies with a huge investment in their brand to protect will do the right thing and won’t participate in whatever these scandalous contracts allow.

UPDATE:  23 January 2014  – A further important point is that the Labor Opposition made it abundantly clear it would not go ahead with the freeway, the contracts were signed despite all parties knowing this, and despite the Opposition leading in the polls and looking like a certain winner in the election. Booby-trap and blackmail – that’s what it looks smells like and looks like and in effect probably is. There is legal protection for parties forced to sign contracts under duress; there should be legal indemnity for taxpayers led down the garden path. See an ABC article on this issue

Climate again

Also on the topic of ethics there’s been a lot of thinking dominating the media on the issue of the right to speak our minds and how that varies from incitement to hatred or vilification, or in our case, insane threats to the planet by ignoring or deliberately perverting sensible action (as our Feds seem determined to do).

When Engineers Australia decided to take a sustainability and climate stance as part of its ethical commitment, the move raised some hackles among the fraternity’s more conservative members who questioned – we kid you not – the science of climate.

Now these are people who are supposed to be quite scientifically minded. Wedded to clear thinking on how things move and hang together. Some wanted to have EA hold an inquiry into whether the climate science is valid.

Wow.

Also early this year, we had the stunning (or stunned mullet) experience of an old journalist friend, ask “where’s the evidence” on climate during a discussion on why we think it prudent to double the storm water capacity at our offices.

It’s like asking for evidence of why we think the Earth is round, or why it wasn’t built in seven days.

Barack Obama clearly has to face similar questions in the US as he commits and recommits to reducing emissions and limiting warming, most recently in his State of the Union address.

Here’s how he handled it: “2014 was the planet’s warmest year on record. Now, one year doesn’t make a trend, but this does?—?14 of the 15 warmest years on record have all fallen in the first 15 years of this century.

“I’ve heard some folks try to dodge the evidence by saying they’re not scientists; that we don’t have enough information to act. Well, I’m not a scientist, either. But you know what?—?I know a lot of really good scientists at NASA, and NOAA, and at our major universities. The best scientists in the world are all telling us that our activities are changing the climate, and if we do not act forcefully, we’ll continue to see rising oceans, longer, hotter heat waves, dangerous droughts and floods, and massive disruptions that can trigger greater migration, conflict, and hunger around the globe.

“The Pentagon says that climate change poses immediate risks to our national security. We should act like it.”

For The Fifth Estate we put out a new comments policy: we’re for free speech and ribald opinion. But we won’t accept questioning of the science because The Fifth Estate‘s very existence is predicated on the science that says we have to act rapidly to slow climate warming. Besides, there is always The Australian for that.

For our friend, we had a deafening silence. But also an understanding that for some people climate change is too awful to accept. It’s not okay and we understand. But seriously there are some opinions it’s best not to share.

One reply on “News from the front desk: Issue No 224 – On doing the right thing”

  1. Great comments!
    Keep going and keep addressing these issues, especially the energy efficiency in housing. (The “star rating” is a laugh at the moment)
    Regards,

    Jan Voorham

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