According to a new survey, use of products which do not comply with the Building Code of Australia and relevant standards and regulations is widespread within the Australian construction industry, with more than nine out of every ten firms reporting non-compliant products in their supply chains.
Published by Australian Industry Group, the The quest for a level playing field: The non-conforming building products dilemma report was based on face to face interviews as well as a survey of more than 220 people and companies across the manufacturing, fabrication, supply and building industries.
It identifies serious gaps and weaknesses in the building and construction conformance framework, including areas such as surveillance, audit checks, testing, first party certification and enforcement, and calls on industry and government to examine how to best address these gaps, including by promoting awareness of the role of regulatory bodies in the sector and how non-conforming products can be reported.
The report also suggests building certifiers bear a disproportionate share of the burden for product conformance and calls on state and territory governments to review arrangements in this area, including by asking whether more responsibility to should be taken by builders and product suppliers.
“The impact of non-conforming products is a major concern for industry and this report clearly suggests the need to reform the current system to ensure quality and safety and to ensure Australian importers, manufacturers and fabricators have a level playing field” Australian Industry Group chief executive Innes Willox says.
Amongst survey respondents:
- 92 per cent reported non-conforming product (NCP) in their sector
- Nearly half indicated market penetration by NCP of between 11 per cent and 5o per cent
- 45 per cent reported NCP had adversely impacted revenue, margins and employment numbers.
The report sets out a number of case studies where non-conformance was serious.
Once removed, the structure was found to contain cracking of welds and steel sections, permanent bending of main structural members beyond specifications, under-strength steel, non-conforming welding types, poor welding and finishing – including undercutting (reduced wall thickness), oversize and elongated bolt holes, water filled hollow sections and paint for which the top coat had not been applied as was required by design specifications. Repair costs associated with the debacle amounted to more than $800,000.
Industry bodies are becoming increasingly frustrated.
Pointing to data showing 70 per cent of samples in its segment had failed to meet safety standards during targeted check testing over the past 12 months, the Engineered Wood Products Association of Australasia lamented a 'total lack of enforcement.'
“The system is there however regulators are not resourced and lack the will to act," the association said in the report. "The situation of non-compliant product is not taken seriously and regulators do not act on complaints nor impose penalties.”
The Australian Steel Institute expressed similar sentiments.
“The construction products industry in Australia is faced with a choice: it can follow a path of the lowest cost denominator in which case be exposed to the worst in quality the world can produce or it can implement product conformity systems similar to what is in place in most of the developed world that inform the client of achievement of levels of quality compliance benchmark,” it said in the report.
The report comes amid increasing concern within the industry about the prevalence of non-compliant products.
In March last year, the Housing Industry Association launched a campaign aimed at establishing evidence about the extent of the problem, exploring the idea of a product compliance register and developing an industry education and awareness program surrounding the issue.
Below is an outline of how the report describes the state of compliance within each product segment:
- Electrical products are being particularly had hit with every respondent reporting non-conforming product in their market and 71 per cent saying they have lost revenue, margin and employment numbers as a result. Both lighting and electrical equipment accessories and being impacted by counterfeit products (many of which fail safety standards) and false claims made by competitors, as well as a perceived reluctance of regulators to act and a lack of knowledge about how to report NCP.
- Steel is also a problem area as 95 per cent report NCP in their market, with steel fabricators as well as steel building product manufacturers being hit by a conformance framework that is overly reliant on first party certification and an increasing exposure to non-conforming imported structures and products.
- Glass and aluminium products (81 per cent reporting NCP) are also being impacted amid concerns about the building certification scheme being a ‘paper exercise’, a perceived lack of a visible regulator and component substitution. Many suppliers in this segment reported quoting at a loss in order to maintain customers.
- NCP is prevalent in the structural plywood section of the engineered wood product segment amid a lack of testing to Australian standards even though contracts may require this, formaldehyde used in resin systems, watered down resins, a lack of labelling, incorrect and fraudulent labelling and understrength products.
- Thanks to a combination of high brand loyalty, product characteristics favouring local production, aggressive domestic competition, a widely embraced third party certification scheme and high awareness of concerns such as volatile organic compounds, there is minimal evidence of NCP in the paint sector.
- Meanwhile, the plastic pipe and fittings product sector also reported low penetration of NCP in its market.