Over the last twenty years, the effectiveness of building regulations has been severely tested in light of a litany of regulatory failures in a number of jurisdictions.
Interestingly, many of the failures have occurred in advanced economies, economies that are not constrained by the extreme budgetary constraints of the developing nations. There has been a ‘pan jurisdictional’ or geographically indiscriminate footprint where nations from both hemispheres have experienced construction failures ranging from the significant to the extreme. The leaky ‘condo’ crises in the nineties cost Canada many billions of dollars, as did the leaky building syndrome in NZ which has cost that country considerably more. The Latvian supermarket roof collapse which killed 54 people was a negative legacy of the GFC austerity measures and the dismantling of the national building inspectorate. Then there have been fire spread calamities such as the Brazilian night club 2013 inferno and Grenfell 2017, which claimed the lives of 242 and 72 lives respectively.
When viewed in aggregate, one can conclude that building control in many jurisdictions is not delivering as building failures in one form or another have assumed a serial dimension. So there needs to be a rethink and a redesign of that which can lay claim to being best practice building control. There are many whom consider that it would probably be best if the redesign of modern day building control design could occur in an ‘apolitical’ laboratory that comprises a coalition of internationally venerated experts on enlightened building control, to ensure that critically independent lenses firstly diagnose that which is wrong with regulatory ecology and then secondly to divine the cure. But the writer is the first to concede that there is a utopian naivety in that idea. The reality is that law reform will always be the progeny of the governing sovereign jurisdictions, as that is their exclusive constitutional remit.
Having been deployed as a law reformer in a number of jurisdictions, I have been afforded the opportunity to identify best practice regulatory systems that are worthy of consideration for reforming jurisdictions.
This article is the first in a two-part series in which I outline twelve principles for best practice building regulation in 2020 and beyond.
Should these measures be adopted, Australia’s building regulation system will become stronger and more effective.
The first article discusses the need for a single building act, clear building act objectives, a single set of building regulations, a single building code, a dedicated ministry of construction, a board for practitioner licensing, building officials who oversee building approvals and a final joint inspection. The second will outline the need for a strong builder registration and licensing regime, a user pays auditing regime, a designated division within tribunals and courts to hear building disputes and a strong liability regime which provides ten-year protection for consumers and apportions liability amongst multi-party defendants according to the extent to which each defendant is responsible for poor construction outcomes.
(1) There will be one Building Act
The Building Act will be called a Building Act and it will be the primary, holistic and overarching piece of legislation that will govern the regulation of building control in the State. It will be ‘mission control’, for all things involving building regulation. The Building Act will be easy to locate, there will be no labyrinthine process involved in locating the legislation. One of the best ways of determining whether a governing act of parliament is readily accessible to the consumer, is to google a term like building act, if an internet search can immediately trace and reveal that act, then that is a good start. If one types in the word, building act and a potpourri of ill-defined regulations pop up, then that is a problem. The governing act of parliament will be easy to locate on the web, literally at one`s fingertip.
(2) The Building Act will have Clear Objectives.
The objectives of the Building Act which will be called will be clear and to the point. The Building Act 1993 Victoria, Section 4 is one such act that achieves this, and it does so with an economy of language. Section 4 reads as follows:
Objectives of Act
(1) The objectives of this Act are—
(b) to enhance the amenity of buildings;
(c) to promote plumbing practices which protect the safety and health of people and the integrity of water supply and waste water systems;
(d) to facilitate the adoption and efficient application of—
(i) national building standards; and
(ii) national plumbing standards;
(g) to aid the achievement of an efficient and competitive building and plumbing industry.
(2) It is the intention of Parliament that in the administration of this Act regard should be had to the objectives
set out in subsection (1).
(3) There will be One Set of Building Regulations
There will be subordinate building regulations, called precisely that, ‘building regulations’. These regulations will be promulgated by the Building Act. They will deal with machinery or regulatory ‘drilled down’ and nuts and bolts matters like fines, timelines, penalties, prescribed fees and the like.
(4) There will be One Building Code
There will be one Building Code which will enshrine the technical regulations and codified provisions that dictate how buildings will be built. (The Code will be called the Building Code although it will also mention the name of the State i.e. the New Zealand Building Code).
In the case of a federal jurisdiction where there is a Federal government, the code will be designed for national application, so that the local administrations can call up the Code, courtesy of the regulatory promulgation provisions in their local Building Act.
In the case of non-federal jurisdictions such as Singapore and New Zealand, there will be one National Building Act, one set of building regulations and one Building Code.
The codified building classification criteria will also have regard to the inherent or potential risks that are posed by different types of buildings such as:
· Uncomplicated construction such as warehouses and storage facilities
· More complicated structures such as high rises
· Hospital facilities
· Residential abodes
· Civil defence facilities
Careful regard in the risk classification will be had to intended use, mindful of the fact that some buildings may designed to contain pernicious components and elements that can cause injury to people and environment. Warehouses that will house combustible or toxic chemicals would be case on point.
From a consumer and industry perspective there are much greater efficiencies to be gained by centralised and single regulatory regimes. In jurisdictions where building regulations are dispersed in a number of statutes and multitudes of departments it is much harder for the user to navigate through the regulatory terrain. This in turn causes delays and a greater opportunity for misinterpretation further it requires a greater diversified skill level, all of the above impact upon the optimum operationality of the building regulatory ecology.
It is not a stretch to realize that users are reassured if there is one Act, one code and one lead agency that administers building regulation.
The regulatory hierarchy and top down approach where the technical code and building regulations are subordinate to the one Act also make it clear which legislation and regulatory instruments assume precedence. When there is no clear hierarchy there is greater risk of conflict of laws.
(5) There will be a dedicated Ministry of Construction
There will be a Ministry or a Department for Building Control. This lead agency will be the responsible body for overseeing the administration of building control in that State and will report to a Minister that will be exclusively responsible for the building regulation portfolio in the state.
The Ministry will maintain regulated interconnectivity with key departments like the Fire Brigade to ensure that regard is had to their policy recommendations, such is the importance of this instrumentality in terms of minimizing loss of life to fire brigade personnel and the public.
The logic in having one lead agency that performs the central administrative role for the building approval regime is compelling. The consumer will be in no doubt as regards whom the paramount regulatory body is and will not have to navigate between different lead agencies that interact in the regulatory ecology.
(6) There will be a Practitioner Licensing Board
There will be a practitioner licensing Board which will license all building practitioners in the state. The Board will come under the jurisdiction of the Ministry of construction.
(7) There will be building officials responsible for the building approval process
The building officials will:
· Issue building permits
· Carry out building inspections
· Issue occupancy permits when the building is completed
The rationale for the establishment of the dedicated discipline of building official, sometimes referred to as an accredited checker (Singapore) or an accredited certifier (Australian state of NSW) is that there is merit in the appointment of one designated person that is invested with the responsibility of overseeing the building approval, from commencement of the process to the end. If multi – actors or agencies are engaged in this process then there can be significant delays to both permit issue, inspection and the issue of occupancy permits. Further the liabilities and accountabilities for oversight of the building approval process at law become more opaque and diffuse.
There is much divergence of opinion internationally about the amount of power the official should have and the role of government vs a vs local government in the building approval process. Suffice to say opinion is mixed as some jurisdictions prefer to see the heavy hand of the local governmental regulator rather than the migration of much of the approval task to the private sector. Key determinants will be whether the oversight and regulatory probity regime is sufficiently robust to ensure that building officials are ‘disincentivised’ from compromising their statutory obligations for fear of attracting dire sanctions by the central regulator.
The building official will carry out at least 3 mandatory inspections at critical and legislatively mandated junctures and random inspections will also be required.
The official can either be an employee of local government or a private sector employee. If the official is a private sector employee that official will be audited on at least 2 occasions annually by a licensed government auditor who will ascertain whether the official has at all times discharged his or her statutory obligations. (Japan has maintained an annual mandatory auditing regime for private certifiers for over 20 years, very successfully)
The building official will ensure that, that which is approved and built, is carried out in accordance with the approved plans and the technical requirements of the building code.
(8) There will be a final joint inspection
Prior to issuing the certificate of final inspection the building official will attend a joint inspection with representatives from the officers of all of the practitioners that have had paramount involvement with the building project. This will include the:
· design engineer
· approving engineer
· any other inspectors
· a representative of the Fire Brigade/Department
The building official upon completion of the work will arrange the inspection and will satisfy him or herself that the work is fit for occupation and will then issue an occupancy permit which will be filed with the local municipality. The joint inspection regime is very common in a great many Chinese jurisdictions and has much to commend it.
Rationale for the mandatory inspection regime
One of the most vital parts of the building approval regime is the inspection protocol. A robust inspection regime operates like an early warning detector system, problematic construction scenarios are identified which they are scenarios rather than as built outcomes.
Mandatory inspections at key junctures ensure that there is rigorous regard to each stage of construction so that the building official can if need be regularise matters, by issuing rectification notices and orders. Absent mandatory inspections there is no guarantee that any inspection will occur. Further absent mandatory inspection there exists a greater likelihood that compromised construction outcomes will not be discernible until a much later stage, on account of the fact that they were not identified earlier and at a time when the malaise could have been thwarted.
The idea of a joint inspection which is an approach that is used to great effect in Shanghai, has compelling merit particularly for complicated and high risk buildings. It affords the principal actors the opportunity to peer review in the presence of the official and determine whether indeed the building according to all, is fit for occupation.
Risk Based Building Inspection Regimes
The World Bank has expounded the merits in adopting risk based inspection regimes. “Adopting a risk-based approach can simplify key regulatory processes that govern business activities. This fundamental step involves moving from inspections, licensing, and other regulatory tools that cover all business uniformly to an approach that tailors the instruments used for regulation and control based on the level of risk. The higher the potential risk posed by a specific business activity, the stricter the control and the greater the need for licensing or permitting and more frequent inspections. For low-risk activities, a license or permit should generally not be required, and inspections should be rare. Having a proper methodology and tools to classify enterprises or activities according to risk is thus particularly important. Risk matrices are the primary way used to conduct this sort of classification. Risk matrices are fundamental instruments used to classify establishments depending on their risk level – and adapt the regulatory response (e.g. inspections, licensing) on this basis. This means that resources can be used more effectively and efficiently, and that administrative burden is minimized while positive outcomes are maximized. Creating a risk matrix in itself is not necessarily a complex exercise, and can be done using international experience and examples, and relying also on the regulators’ and experts’ experience in the country. The parameters leading to higher or lower hazard are generally easy to identify, provided that the common mistakes listed above are avoided.” Blanc, Florentin; Franco-Temple, Ernesto. 2013. Introducing a risk-based approach to regulate businesses: how to build a risk matrix to classify enterprises or activities (English). Nuts & bolts. Washington, DC; World Bank Group.
Building inspection regimes provide an ideal setting for the application of risk based inspections. The writers` preference is that inspections be mandated by law. One jurisdiction that requires the carrying out of mandatory inspections is the Australian State of Victoria. The mandatory inspections stages are
· Before footing placement
· Prior to pouring reinforced concrete
· Frame completion
· Inspection of fire inhibitors
· Final inspection
Although there is much to commend the Victorian legislature for regulating the mandatory prescription of inspections, the limitation is that the inspection regime is not a sufficiently evolved risk base regime in that it is a ‘one size fits all approach’.
This inspection regime applies to all buildings regardless of their complexity or their risk ‘pathology’, be it simple and uncontroversial warehouse construction or SHR (super high rise). The Victorian Building Act 1993 fails to index the inspection regime with the inherent risk profile of the building classification and to that extent has limitations.
A best practice inspectorial regime would correlate the number of prescribed inspections with the complexity and the ‘personality’ of the intended building in use. It would follow that the ‘lower the mercury’ on the building risk barometer, the lesser number of prescribed inspections. It may follow that SHRs would require 10 inspections, warehouses 2.
Ideally a regulatory risk matrix would be developed by highly regarded technical experts with the complement of a very capable construction lawyer. The matrix would be divided into different building classifications and those classifications would then be matched with a regulated mandatory inspection regime. The number of mandatory inspections and the type of inspections would be driven by construction complexity and the buildings` capacity to generate harm in circumstances where there are compromised construction outcomes.
Enforcement powers of the building official
If the building official observes any irregularity or construction input that is not in accordance with the Building regulations then:
· A building enforcement notice will be issued
· If the notice is not complied with an order must be issued
· If the building official is from the private sector and there is noncompliance then the matter must then be referred to an auditor at the Ministry.
The auditor will have powers to compel compliance. Furthermore the auditor will automatically refer the matter of non-compliance to the Licensing Board for further investigation.
The auditor will be able to seek full cost recovery for any material noncompliance of an order issued by a building official.
Legislative provisions must be drafted to make it very clear that the building official affords no favours to owners or builders in respect of the impartial and decisive application of enforcement notices and orders. As there is increasing resort to private certification in many countries, strong probity controls are critical. The import of the provisions will be such that if an auditor or investigatory body establishes that a building official has not been impartial in the exercise of the enforcement powers, then that will be a ground for suspension of license and in circumstances where there is corruption or there has been evidence of financial incentivisation to turn a blind eye as it were then resort to criminal prosecution.To continue reading the discussion on best practice building control, click here to go to part 2 of this discussion.
To continue with this discussion, go on to my second article published today.