Following a number of issues concerning property, the Canberra Auditor General last year undertook a comprehensive investigation into the ACT building regulatory and licensed practitioner regime during which several projects were case studied and the entire gambit of private certifier controlled residential development was examined.

Not surprisingly, the findings - which have been the subject of considerable public attention - are worrying and reflect broader concerns about private certification throughout the nation.

In short, the AG found that:

  • Safeguards for minimising undue influence upon development applications were inadequate.
  • Safeguards designed to evaluate building certifier discretion needed to be bolstered. The wide ranging and powerful discretions of certifiers dictated a high level of probity and controls introduced to ensure that probity was not compromised.
  • Auditing powers of private certifiers were considered insufficient and needed to be improved and it was considered that more targeted audits of certifiers to ensure statutory compliance were required.
  • Certifier training needed to be improved along with improved dissemination by the ACT departmental regulator of information that shed light on that which can be exempted on development applications.
  • Penalties for certifier misdemeanours were considered to be ‘small’ and the penalty regime needed to be overhauled to ensure that penalties were sufficient to dissentivise questionable conduct.

Furthermore, some of the case studies that were reviewed by the auditor general established that some abodes had been built in circumstances where the development applications were granted retrospectively. In two cases, documentation submitted to the certifier did not include key assessment criteria.

In one Civil Administrative Tribunal matter, it was noted that a certifier had 'cut corners.’ A number of directorate offices had opined that some of the relationships between builders and certifiers were ‘potentially improper.’

Moreover, the report found that certifiers needed better training, better communication and the departmental directorate needed to better manage the auditing and investigation regime.

It was noted that only 10 per cent of development application examinations were audited. It was also found that the discretionary powers afforded to certifiers in the ACT created a risk of problematic influence and there was no evidence of independent review of development application assessments in the case studies.

In response, the Auditor General made a number of recommendations, including better communication of regulatory breaches of investigation, improved certifier training, prescribed minimum levels of documentation for development applications, better promotion of awareness about the role of certifiers by the directorate and beefed up penalties.

These issues are not new, nor is the need for this sort of thing restricted to the ACT. Last year, for example, my colleague Stephen Smith called for a number of reforms to private certification more generally, including not only mandatory auditing and CPD for certifiers, independent peer review, more oversight powers and higher penalties, but also a regulated floor on certifier fees to ensure these cannot drop to a level which would compromise professional standards.

The Auditor General has hit on a number of serious issues which extend beyond ACT borders.

Policy makers throughout the nation should take note.

  • Kim Lovegrove's article on the Canberra Auditor General's comprehensive investigation into the ACT building regulatory and licensed practitioner regime is just the tip of the iceberg. It's time for a wide ranging inquiry into the construction industry not only dealing with compliance and certification. It's time for a roots and branches review of how construction is planned, procured and performed. The momentum for this will not come from large contractors, industry associations or unions who seem comfortable with the status quo. Its amazing that while productivity and corruption get headline attention there are very few proposals to drive measurable change. The Australian taxpayer is being let down by an industry anchored in the 1900's.

    • David, you are right on the money, regulatory disfunctionality is becoming more evident. You may recall a time when matters pertaining to building regulations never made the press. Now you can't keep building affairs out of the press. When building regs and controversies generate regular front page media copy something is wrong. There now exists an immense challenge facing policy makers to ensure that utilitarian regulation is forthcoming and the vehicle should be the establishment an independent of an independent regulatory review task force reminiscent of the BRR in the early nineties.

  • Private Certification will never work. There are two philosophies at odds here which the Certifier is being asked to adjudicate on. In my professional opinion the Certifier has a duty to uphold the consumer rights and protect them. However at the same time the Certifier is held at ransom by whoever pays the bills. The Certifier is acutely aware that if there are compliance problems and he or she asks for these to be rectified, the impression given may be that the Certifier spells trouble for the developer.

    This could potentially mean that such Certifier may be starved out of the very industry they are being asked to regulate There has to be a complete separation and independence for the Certifier as far as who pays them.

    • Private Certification can work but it will require far more legislative amendment cross jurisdictionally. Japan has the best model, ironical considering that they adopted some of the Australian concepts in the late nineties. But the Japanese knew that if you deregulate you must have safeguards. Every certifier in Japan is audited annually. Auditing can't happen retrospectively a retro audit is where the damage has been done as it is often complaint driven. If policy makers bite the bullet and make certifier auditing mandatory there will be a paradigm shift. In addition regulation must mandate minimum fees to alleviate fee cannibalisation. Certification is not yet terminally ill but absent best practice regulation it is heading that way.

  • Regards. Awesome information.