News from the front desk issue 444: The big news on Thursday was that Google, the big daddy of them all, had entrusted an Australian company, Lendlease, to develop its massive new headquarters in San Francisco.
The project will stretch up to 15 years at an estimated cost of $20 billion, from today’s angle. So yes, that’s a mighty big handshake. And a mighty big show of confidence for an Aussie company.
So what’s wrong with the rest of the Australian building industry? You wouldn’t commission some of the builders in the market right now to build you a dog kennel (apologies to dogs), let alone your family’s likely biggest investment.
We’ve got buildings threatening to catch fire or fall over; residents thrown out on the street and untold millions if not billions of faults that are more often than not punted to the buyer to fix. Now the insurers are pulling out of underwriting private certifiers and who can blame them? They are not a social enterprise; they are capitalists, expecting to retain more than a bit of skin if they’re to stay in the game.
- See our story Building industry in turbulence
We have unimaginable legal permission for companies to build something then shut up shop and start another company. Because companies are legal entities they are protected. But not responsible it seems. Their directors skip to the next suburb, everyone knows where they live, the cars they drive, but no one can call them up for responsibility. In what other world is this possible? Who dreamed up this scenario? Oh that’s right, it’s the behaviour of a mature self regulating industry.
It’s about as mature and self regulating as Lord of the Flies on a Big Day Out.
Imagine if car manufacturers could likewise take advantage of the same legal protection for companies that can open and shut with every project?
What if we watched blithely as MotoGreedy Corp built a few hundred thousand cars, and then shut up shop while owners discovered their shiny new investment couldn’t actually make it around a corner without tipping over? Or if the roof blew off?
You can just hear it (not): “Yes we built all those cars, and yes they all have faults so severe it will cost you a new mortgage or your life’s savings or your sanity, but we’ve closed up the company now, so you can send your complaints to the fair trade commission; we’re busy.”
But in building and construction, all this is allowed and legal. You read carefully to find the name of the developer, and there they are denying responsibility, you find the name of the building, the architect, the private certifier (no doubt) but they’re paid by the developer so what can you expect? Let’s look to the government to pick up the tab (thanks Daniel Andrews) but wait, that’s the rest of us – our tax dollars going into welfare for the developer, the builder, the certifier, and probably a bit the architect, and so on instead of schools, hospitals and old people’s homes.
The law is protecting the people who are creating the mess and the government is providing welfare that effectively subsidises the people who expect some god given right to profit at our expense.
The feds need to be in the crosshairs here. They blithely and blatheringly fobbed off responsibility for days, like kids in a playground: “not our fault; not our responsibility”.
So who was it then that wanted self regulation and deregulation? The manic hatred of red tape or green tape or any other tape that puts friction of any sort on the right to profit.
Hopefully, now, the prospect of developers failing to sell their product, builders knocking on doors for work (minus the hubris of a few months ago) and the idea that the state governments could lose their rivers of stamp duty gold have shaken some sense of urgency into the issue.
And now thanks to the pressure, the feds are offering to help with a national approach to work through the Australian Building Codes Board to resolve the issues – if resolve isn’t too strong a word. Interestingly the states rejected the feds idea of a national taskforce and opted instead for the ABCB.
The Property Council of Australia has sensibly suggested the funding offered for the taskforce be now be steered to the ABCB which, it said, is a “well-run and well-regarded agency” and that these funds should be used now to “expand its capabilities, and ensure its governance structure is fit for purpose with an expanded mandate.”
Hmm, we think they mean listen to the ABCB and do what it says.
The Insurance Council of Australia whose members had pretty much abandoned private certifiers because of the mess says it wanted full implementation of the Shergold-Weir report before it would have confidence in the industry. But its language is nuanced.
“This is about being able to monitor the future environment — that we don’t get the sorts of concerns that we’ve had with the current environment,”its chief executive Rob Whelan told The Australian.
“And that’s about ensuring there is appropriate risk mitigation, that action is taken in the field to ensure construction is done appropriately, and surveyed appropriately.
“So in those circumstances, if these initiatives are implemented in a consistent fashion, then yes, the insurance industry will be able to respond accordingly and the market will normalise. At the moment it is not a normalised situation.”
Here’s the list of recommendations in the Shergold Weir report he’s talking about:
We recommend a nationally consistent approach to the registration of certain categories of building practitioners and compulsory Continuing Professional Development, which includes mandatory hours/units dedicated to training on the NCC and the establishment of supervised training schemes which provide better defined career paths for building surveyors.
Recommendations 5 to 7 address the roles and responsibilities of regulators.
We recommend a focus on collaboration between state and local government and (where applicable) private building surveyors to improve regulatory oversight. We also recommend the provision of broad powers to audit building work and take effective compliance and enforcement action. We recommend that each jurisdiction implement a proactive audit strategy for regulatory oversight of the Commercial building sector.
Recommendation 8 goes to the role of fire authorities in the building design and approvals process.
We recommend that, consistent with the International Fire Engineering Guidelines, jurisdictions require early
engagement with fire authorities on designs which include performance solutions on fire safety matters.
Recommendations 9 to 11 focus on the integrity of private building surveyors.
We recommend minimum statutory requirements for the engagement, and role, of private building surveyors, a code of conduct with legislative status and enhanced supervisory powers and reporting obligations.
Recommendation 12 addresses the issue of collecting and sharing building information and intelligence.
We recommend the creation of a central database by each jurisdiction and collaboration to develop a platform that can provide for information sharing to inform regulatory activities and the work of the BMF. Information in the databases would also be accessible as appropriate, by authorised persons including owners or purchasers of buildings.
Recommendations 13 to 17 focus on the issues of adequacy of documentation and record keeping.
We recommend that there be a statutory duty on design practitioners to prepare documentation that demonstrates that proposed buildings will comply with the NCC. We recommend a more robust approach to third party review of designs and to the documentation and approval of performance solutions and variations.
Recommendations 18 to 19 emphasise the importance of inspection regimes.
We recommend that jurisdictions require on-site inspections for all building works and that there be greater oversight of the installation and certification of fire safety systems in Commercial buildings.
Recommendation 20 addresses the issue of post-construction information management.
We recommend that for Commercial buildings, a comprehensive digital building manual be created for owners which can be passed on to successive owners. This would include all relevant documents for the ongoing management of the building, such as as-built construction documentation, fire safety system details and maintenance requirements.
Recommendation 21 relates to building product safety.
We recommend that the BMF agrees its position on the establishment of a compulsory product certification system for high-risk building products.
Recommendations 22 to 24 deal with the implementation of the recommendations laid out above.
We recommend commitment to a three year timetable for the implementation of the recommendations. We recommend that the BMF establish a plan for implementation which is reported against by each jurisdiction annually. We also recommend that, to deal with the issue of differing terminology across jurisdictions, the BMF develops a national dictionary of terminology.
Will these reforms happen? If you’re one of the people out on the streets because your apartment building is dangerous, don’t hold your breath.
None of this is new to our readers. As Phil Harrington reminded us this week all these issue emerged in 2014 when Harrington led the team at pitt&sherry and Swinburne University of Technology with a seminal report that after interviews with more than 1000 stakeholders found systemic flaws in building code implementation.
“This work was completed for and delivered to all state and territory and the Australian Government,” he said in a comment on our site this week.
“By 2019, precisely one of 37 recommendations had been acted on – making the code document free, to increase the chances that professionals might actually read the thing…
“What we have here is a systematic failure on the part of governments to actually govern – at least, in the public interest.”
So here’s a message: Lendlease and other big companies who still have some standards: surely you’d be getting nervous by now that this mess will spread like a virus and impact on your own prospects.
So how about you lay down your anti redtape/greentape swords for a bit and combine your considerable weight to demand the state and federal government not just write the rules but actually implement some compliance heft to make them stick?
Why don’t you ask Peter Dutton to the job? He’s got war and retribution in his DNA and it would give him something useful to do.