Cladding and compliance scandal: the saga continues

While audits into cladding on high-rise buildings continue to deliver bad news, the long-awaited Shergold and Weir review of building regulations has thrown down the gauntlet to building ministers to step up and adopt a national approach to compliance and enforcement.

Following presentation of the report to the Building Ministers Forum (BMF) at the end of April, minister for small and family business, the workplace and deregulation Craig Laundy said safety was the “top priority” when it came to building regulation, and compliance and enforcement systems needed to be “very robust”.

“The Shergold and Weir report provides the BMF with a comprehensive package of recommendations to establish a national best practice model for compliance and enforcement.

“This report is our roadmap for reform, and I very much hope the states and territories will carefully consider the report and improve their compliance systems accordingly.”

Recommendations include:

• registration of building practitioners
• giving regulators a broad suite of powers to monitor buildings and building work
• that fire authorities be engaged as part of the design process
• minimum statutory controls to mitigate conflicts of interest of private building surveyors
• the creation of a building information database that provides a centralised source of building design and construction documentation
• a transparent and robust process for the approval of performance solutions
• requiring independent third party review for particular designs or buildings
• mandatory on-site inspections of building work
• the establishment of a compulsory product certification system for high-risk building products
• Read the report here

Audits continue to reveal non-compliance

The BMF meeting also discussed the ongoing management of risks posed by non-compliant flammable cladding use. Earlier this month, the Queensland government announced that 1200 buildings had been deemed at risk. In Tasmania, rectifications works are already underway at the Launceston General Hospital, where flammable aluminium composite panel (ACP) cladding was deemed a risk to fire safety.

In the ACT, six buildings belonging to ACT Health have been identified as having the non-compliant cladding, and an undisclosed number of non-health buildings are still being audited.

In NSW, 412 buildings have been deemed potentially risky due to the presence of flammable ACP cladding, and in Western Australia as of April the state audit was still in the process of identifying which buildings fall within the audit scope.

But not only was the whole nationwide debacle preventable, according to industry experts, at this stage there is no reason to be confident we won’t see a similar epidemic of non-compliance identified in future.

Fire Protection Association Australia deputy chief executive and technical officer Matthew Wright said a nationally consistent approach to oversight and enforcement was fundamentalto achieving compliant buildings.

Shergold and Weir made some strong recommendations, however leaving it up to the states and territories to implement in their own way is like “being half pregnant”, he said.

It’s about enforcement, not the code

One of the constants in discussions about improving building outcomes is the Australian Building Codes Board gets “flak” from the state governments and from industry that the code needs to change.

However, Mr Wright said the issue was not that the code was not sufficient, it is that it is not complied with or adequately enforced.

The cladding issue, for example, which has been a “hook” for putting the issues on the agenda, should not have occurred.

The bottom line is that buildings with flammable cladding are not compliant.

So when, for example, Wright was recently asked in an interview on The Project whether the product should be banned, the answer was “it already is banned” in terms of the uses it has been put to on facades for high-rise buildings.

Wright compares the situation to a car.

“Most people’s cars are capable of doing over 110 kilometres an hour. But we don’t ban them, instead we have education and enforcement so people don’t go over 110.”

The same approach is needed for building compliance – and it needs to be the same across all states and territories.

Shergold and Weir recommend a model administrative approach to who should have oversight of buildings, what level of independence they should have, who signs off on compliance, and how compliance should be enforced.

Mr Wright said if only one of the report’s recommendations were adopted, it should be that one, and it should be adopted in the same way across all jurisdictions.

He said there was genuine interest from industry in a nationally consistent approach.

“We are not a big enough country to be doing things eight or nine different ways,” he said.

The differences between states also add to the complexity and administrative burden for companies working across state borders, as the language of the building codes is different in every state and territory.

The other issue with states and territories going their own ways with construction codes is it can leave consumers short-changed.

Currently in Australia we “codify by catastrophe”, Mr Wright said.

“We pass tombstone legislation.”

So in Victoria, for example, following the fire at the Kew Cottages retirement village, retrospective legislation was passed to toughen up fire protection. The same happened in NSW following the Quakers Hill fire.

“But why wouldn’t Australians living in other states deserve the same level of protection?”

A similar flaw is being seen in the cladding audits. While the federal government instructed all states and territories to undertake audits of high-rise buildings, every jurisdiction is doing it differently in terms of the scope, methodology and timeframes.

And while everyone but the Northern Territory has done something, Mr Wright pointed out that an audit was not the same thing as rectification.

The culture of non-compliance needs to change, he said.

Cladding is just one example of non-compliance.

He said if audits were to be conducted on other elements where non-compliance has been an issue – such as waterproofing – there would be a similar outcome of thousands of buildings found to be defective.

It’s a systemic problem that is not one party in the building supply chain’s fault, he said. It’s the whole supply chain.

Mr Wright said the recent Dame Judith Hackitt report reviewing Britain’s building regulations and fire safety in the aftermath of the Grenfell tragedy could be lifted whole and applied to Australia in terms of findings and implications.

Now that’s a sobering thought.

Shergold and Weir highlighted the importance of improving documentation for as-built projects. Suggestions included the digitisation of detailed as-built documentation to form the basis of operations and maintenance information.

Mr Wright said “documentation is everything”, but there wasn’t a premium placed on that in the industry.

The current NCC is evidence that a national approach can be achieved.

Mr Wright said the development of the NCC in the 1980s came about when there was a level of goodwill and enthusiasm in the industry for a national code. It was sold to the industry on the economic benefits it would deliver.

It’s about consumer protection

The need for nationally consistent compliance, oversight and enforcement also has an economic benefit, he said.

Just ask a consumer who has to “stump up” between $50,000-$60,000 for rectifying the facade of their building, and who also faces insurance bills that have quadrupled.

Consumers are “not getting what they paid for”, Mr Wright said. That makes compliance an issue that’s as much about consumer protection as it is about life safety.

“We can’t afford to dent consumer confidence in the building industry.”

Investors already facing legal issues

However, some property analysts are already raising concerns that investor confidence may already have taken a battering.

RiskWise Property Research chief executive Doron Peleg told The Fifth Estate current owners of investment properties were already facing legal issues, especially if they have tenants in their properties.

Under some state tenancy Acts, those tenants may have the legal right to refuse to pay rent without any penalties if the building is non-compliant.

Investors may also face an immediate loss of property value, and will probably need to justify and explain the situation with the cladding on the apartment building’s facade to any potential buyer – along with its implications.

Ms Peleg said it was mainly investor owners facing the burden, as the majority of apartments in at-risk buildings were not designed for owner-occupiers.

It’s really a triple whammy – a drop in price for resale, a drop in rents and fewer tenants wanting to live in an apartment that may be a life safety hazard.

The situation for owners in terms of property values and insurance premiums is also not helped by news of pending class actions, such as the one mooted recently by Slater and Gordon.

Why haven’t the buildings been fixed?

On The Project, Mr Wright was asked why non-compliant cladding identified on buildings around the country hadn’t been fixed yet.

He said it’s not an easy fix. To rectify cladding at say the 20^thfloor level would require a scaffold, and workers at those heights replacing cladding, all while a building remains occupied.

What can a building owner or strata body do?

Where a building has been identified as having non-compliant cladding, and the authorities have not specified a rectification process, Mr Wright said there were some things an owner or strata body could do to make the building safer.

Because the cladding is a static risk, in that it requires an ignition source rather than being capable of spontaneously combusting, there needs to be a complete removal of any fire sources near the building facade. This includes BBQs on balconies.

“Take away the hazard for ignition.”

The strata corporation or owner should also check with the building manager that all the building’s fire safety systems have been routinely serviced and maintained, and that they are in good working order.

Mr Wright said it was important to keep in mind that these systems are not generally designed to protect the facade, they are designed to protect the lives of occupants in event of a fire.

At Lacrosse, for example, the fire safety systems protected the occupants, but did not prevent the facade fire spread.

Those living or working in buildings with non-compliant cladding should also ensure they are clear about where the fire escapes are, what the escape routes are and what the building evacuation plan is.

If that information is not provided when an apartment is purchased or when moving into a rental apartment, Mr Wright said occupants should ask questions to find it.

There is a degree of personal responsibility required in terms of ensuring personal safety through knowing what the plan is in event of a fire.

“It is like people who live in bushfire zones. People understand that if you live in that environment there is a different level of personal responsibility you have to take. You can’t just expect a big truck will show up and put a fire out. You need to have a fire plan.”