SPECIAL FEATURE: A few years ago former New South Wales Building Commissioner David Chandler went to a nearby outlet of giant hardware outlet Bunnings and filled a trolley with products that included moisture-proofing membrane that was one-third the thickness that it should be to be used under slabs, non-compliant fireproofing caulking, non-conforming pool fencing and non-compliant waterproofing caulking. At the checkout, a representative of NSW Fair Trading took custody of the trolley and sent the products for testing. Here’s what happened next.
Back in 2018, after years of industry engagement, public consultation and expert input, the final report of the Non-Conforming Products Inquiry was released.
The premise was this would somehow result in effective action to manage the risk of non-conforming products and non-compliant use of products in Australia’s buildings. Spoiler alert: it hasn’t.
When a bank, buyer or insurer looks at the value of a property, the focus is generally around the combination of building and land value of the completed asset. And most would assume that the bulk of this value was created right here in Australia by the developer and builders.
However, former NSW Building Commissioner David Chandler estimates that up to 50 per cent or more of the value of a building generally comes from offshore, in the form of the materials and components.
This introduces risk factors around veracity of product claims, standards and suitability.
“When you create a situation where more value is being added off site and increasingly offshore, that means that the supply chain is moving quickly offshore,” Chandler told The Fifth Estate.
Suppliers often don’t know if their products are up to scratch
Chandler did a tour of the exhibitors at the recent SydneyBuild Expo, for example, and out of more than 200-odd exhibitors, most product manufacturers represented were from offshore. He asked some of the suppliers in the fixing, caulking and sealants categories if their products were compliant with the relevant Australian standards, and all answered that they were unsure of this, but if he left contact details, they could get back to him.
“And I said, well, how could you be on a trade show in a country like Australia and be unable to explain to me whether these materials comply with Australian standards or not? And the reality is that it’s likely that many of them don’t.”
Chandler says the industry is opening itself up to a “pipeline of non-compliant products”.
“Ultimately, when a calamity arises, we’ll have everybody pointing fingers at each other, saying, ‘Oh, the regulator should have done their job better. The regulator should have stopped this.”
Where is value being created?
We need more attention on offshore inputs into products
While everyone talks about the “Australian construction industry”, in Chandler’s view not enough attention is being paid to the degree of offshore input into that industry.
This includes analysis by experts such as the Australian Bureau of Statistics which cited a figure of $568 billion of total income from the construction industry in 2022-23 FY, $242 billion of which was from purchase of goods and materials (excluding labour).
We need to pay more attention to offshore inputs into products.
This figure did not indicate the proportion of spend on imported products and materials.
Chandler estimates more than 50 per cent of the “value” generated by the industry drifts offshore.
And it appears no-one is doing any meaningful checking that the products and materials being brought in are compliant with Australian Standards, he says.
The ole buck pass continues
As the 2018 government response to the non-conforming products inquiry noted, some of it is a matter for the states and territories, some of it is a matter of responsible practices that ensure conforming products are used in compliant ways, and some of it is a matter for federal customs – and “they will get around to it sometime soon”.
How could you be on a trade show in a country like Australia and be unable to explain to me whether these materials comply with Australian standards or not? And the reality is that it’s likely that many of them don’t.”
Investigation leads to some action
In 2020, the Housing Industry Association asked Chandler to investigate products being sold at hardware outlets for the owner-builder and small tradie customers that were not compliant with building code requirements.
Accompanied by HIA NSW executive director, Brad Armitage, Chandler went to a nearby outlet of giant hardware outlet Bunnings and filled a trolley with products.
This included a roll of moisture-proofing membrane that was one-third thinner of what the code requires for under slabs, non-compliant fireproofing caulking, non-conforming pool fencing and non-compliant waterproofing caulking.
At the checkout, a representative of Fair Trading NSW took custody of the trolley and sent the products for testing.
Chandler and HIA took matters up with Bunnings.
Armitage told The Fifth Estate that he understood the hardware chain responded with actions including improved labelling and documentation, and clearly separating trade products from DIY products.
Bunnings confirmed this to The Fifth Estate directly.
While it was determined all the products met the relevant Australian standards and were appropriately labelled, for some of the products, they worked with suppliers to make small packaging updates and included additional information on the website.
Bunnings director for merchandise, Cam Rist, told The Fifth Estate in a written response to questions around this issue that: “We take product safety and compliance very seriously and work closely with suppliers to ensure all products meet the relevant Australian regulations, legislation and standards.
“All products and suppliers are reviewed, including products sourced from overseas, to ensure they meet relevant local standards.”
“We serve both trade customers as well as DIYers, and our range reflects that. With any products we sell, we encourage our customer to read labelling and packaging information to ensure products are suitable for their intended purpose, including if being used in a construction setting, which has its own codes and requirements.”
“Nobody’s looking,” Chandler said.
And the risk is these products may also be feeding into the Australian factories delivering prefab and modular, and that there is no oversight of the quality of this part of the supply chain.
Tradies and builders need to pay attention
There remains an issue with tradies getting up to speed on product specifications and National Construction Code requirements.
Armitage says trade apprentices are not taught procurement at TAFE.
The whole area of improving compliance remains an area of activity for HIA.
Simon Croft, HIA chief executive, industry and policy, said: “HIA has worked extensively over the past few years to improve product compliance, practitioner understanding and for reforms to strengthen building product compliance frameworks at both federal and state and territory levels.”
Everyone needs to be checking the fine print
David Chandler says the availability of non-compliant products is still an issue, and as the shortage of tradies continues to bite the industry, more people are looking to DIY as owner-builders.
This increases the number of properties that may include non-conforming or non-compliant products, but who’s keeping score?
“Nobody’s looking,” Chandler said.
And the risk is that these products may also be feeding into the Australian factories delivering prefab and modular, and that there is no oversight of the quality of this part of the supply chain.
There are also issues with fraudulent products, Chandler said.
These are materials branded as coming from a reputable or established manufacturer that are not actually made by that entity. Think knock-off Chanel handbags but in the builder supplies market aisles.
Chandler says that while it’s anecdotally known, it’s difficult to obtain hard evidence, and as a result, there have been no prosecutions or enforcement.
This is where everyone needs to work with regulators
Ultimately, it appears neither the states and territories nor the federal government have been willing to ensure that the inputs for construction are compliant.
“At the moment, they are just focused on turning the taps of supply on and have mostly taken their eyes off materials compliance,” Chandler says.
It’s the ABCB’s job to accredit products
A spokesperson for Building Commission NSW said the accreditation of building products under the NCC is primarily the responsibility of the ABCB, which now sits within the Commonwealth Department of Treasury.
It operates the Watermark and Codemark schemes to “provide an additional level of assurance for consumers that building products comply with NCC requirements.”
“Building Commission NSW regularly conducts proactive audits of Class 1, 2, 3 and 9c buildings throughout NSW.
“As part of these audits, products that are deemed critical to the building’s performance (that is, a failure could constitute a major or serious defect) are reviewed for evidence of suitability against the requirements of the NCC.”
The Building Commission also responds to claims of alleged non-compliant building products, and consumers are encouraged to lodge product related complaints through the home building complaint form, the spokesperson said.
The Australian Building Codes Board (ABCB) has also established a reporting system for products or businesses that are contravening NCC requirements either through selling or use of non-conforming products, or non-compliant use of products.
In addition, the ABCB has created a suite of resources that includes explanations of non-conforming and non-compliant products, the responsibilities of practitioners and the responsible bodies across state and territory jurisdictions.
Work to improve evidentiary requirements continues
The HIA’s Simon Croft said his association’s work has included supporting the ABCB to update the NCC product evidentiary requirements, improving product compliance documentation to better outline NCC and standards compliance, and supporting the ABCB in the production of a product evidentiary handbook.
He said recent reforms had helped to create “better and more transparent product documentation requirements to support product conformance and compliant use of products for builders and tradies on site.”
The organisation continues to advocate for further building product reforms to improve shared accountability across the supply chain.
“We were pleased to see the Australian Building Codes Board, through the Building Ministers Meeting, engaging in further work in this regard, and we are broadly supportive of this work and other initiatives at the state and territory level to improve compliance,” he said.