One's head would be in the sand if one failed to register the mounting chorus of criticism and disenchantment with the system of private certification in Australia.
In certain quarters, some skeptics are agitating for a return of the function to local government. It would be interesting to know whether local government in the eight states and territories of Australia would welcome such an overture, for it is a given that there would be the resumption of significant risk for local government, not to mention the funding costs and possible agitation on the part of rate payers already burdened by escalating rates.
There must also be recognition that returning the function to local government may not be a cure all. After all, the NZ leaky building syndrome that has cost the country anywhere between 11 and 23 billion dollars in remediation costs and the vertical fire incidents in China and Britain, the supermarket roof floor collapse in Latvia that killed 54 people all occurred within local government paradigms. It follows that policy makers have to be very careful in divining the solutions for the modern day conundrums as what may at first instance appear to be a solution may in the fullness of time miss the mark.
With this end in mind, what follows are some law reform initiatives that will, under any criteria, improve antipodean building control, particularly in so far as it relates to private certification.
Regardless of whether the building approval process ever returns to local government – and that is by no means a given – there is a lot that can be done to reduce the risk profile of this profession with the attendant benefits of improving public safety.
Compulsory peer review for performance based solutions
Under the National Construction Code, there are two pathways to achieving compliance: the “deemed to satisfy” route (i.e. prescriptive provisions) or the alternative solution route (the non-prescriptive innovative route).
The prescriptive route comprises codified provisions and regulations that have been forged over many decades. The alternative solution route enables building surveyors to approve design scenarios if they are satisfied that the design proposals will satisfy the performance benchmarks and objective based criteria under the code.
When private certification was introduced in the early 1990s, there was at that time no contemplation of the performance based building code that came into being in 1996. A performance code simply was not on the radar. Hindsight is a wonderful thing, but what ideally should have occurred was cross-jurisdictional uniform risk management amendments to every building Act in the country to holistically integrate with B.C.A. 1996.
Some 20 years ago, I wrote a paper titled Holistic Considerations to do with Performance Based Building Codes for an American Society for Fire Protection conference in Washington DC in 1997. In reviewing the piece, there was an eerie if not spooky observation in the sense that there was a prediction that performance, absent the requisite level of regulatory belts and braces could well fail to deliver:
“There is a developing awareness that the performance approach is not just about the development of technical codes which contain objectives, functional statements, deemed to satisfy provisions and acceptable solutions. Rather it is about a holistic system, a legislative, regulatory package that is complemented by expertise, accountability and responsible allocation of risk. Yet some jurisdictions have approached performance solely on a technical basis. Unless these complements exist, a performance system may not reap the imagined benefits.”
Suffice it to say, some of the more prominent consumer advocates would agree with this prediction in that they are on record now as saying that alternative solutions in the multi-unit development setting tend to cut the cost of construction but also cut quality of the building.
One fears that Australia approached performance on a technical basis rather than on the basis of a “holistic system, a legislative regulatory package.” The fact that the building regulation operates under the eight countries of Australia model (the eight states and territories) hasn’t helped because although the Building Code is one code, it is called up by eight separate and sovereign Acts of Parliament. A jurisdictionally based ‘silo-centric’ reality that is one of byproducts of a federal system is not useful when divining solutions for an Australian problem rather than a state-specific problem.
It is now a historical fact that uniform amendments to the Building Acts never occurred. Ideally, what should have occurred was an agreement by the states and territories that a uniform regulatory amendment should be designed to ensure that building surveyors were denied by statute the ability to sanction alternative solutions without at first instance obtaining independent peer review. Such an amendment would have brought to bear some of the holistic belts and braces that would have minimized the risks posed by sole discretion based sanction of alternative solutions.
There was a precedent for such a system in the form of the Building Referees Board in Victoria that predated the Building Appeals Board. Under the Building Control Act 1981, the provisions were essentially prescriptive. In circumstances where a developer wanted to seek a variation to the technical requirements of the regulations, the applicant had to apply to the Referees Board to seek a modification of the regulations.
The Board would convene a panel of three independent peer reviewers who would assess the submissions and if satisfied that there would be no compromise to the integrity of the regulations would grant the modification.
The process was:
- Totally removed from the site and, in both the actual and the perceptual sense, conflict of interest free
- Bound by robust peer review
- Swift and essentially holistic
Ideally, the proclamation of BCA 1996, for fear of belabouring the point, should have culminated in uniform regulations being called up by every state and territory to reinstate the equivalent of an independent peer review system to ensure that alternative solutions could only be sanctioned by independent peer reviewers.
Moving forward – with haste
Such a regime should be introduced throughout the nation as a matter of urgency as it is long overdue. It’s just a question of logistics and some pretty straightforward legislative amendments. The system can be user pays in that alternative solution applicants would pay into a Crown trust an amount commensurate with the deployment of the independent expert panel.
The upshot will be the removal of a discretion-based regime that enables a natural person to sanction alternative solutions; a situation where a phenomenal amount of risk laden discretion is vested in a natural person or a corporate sole will be removed. This amendment will immediately significantly reduce the risk profile of private certification without compromising the opportunity for innovation.
Mandatory annual auditing
Auditing of building surveyors in Australia is not mandatory. Compare this to lawyers in Australia who choose to operate trust accounts and handle client monies. They are required to be audited annually at least twice, in circumstances where an independent auditor nominated by the relevant Law Society audits the financial records of the solicitor.
The law firm pays for the auditor, and if the auditor identifies any anomalies, he or she debriefs the lawyer. If there are serious irregularities, they are brought to the attention of the investigatory body.
Compare this with the building industry where auditing:
- Is not annual
- Is not mandatory
- Is more often than not complaint driven
- Is reactive rather that reactive and preemptive
Again, the eight states and territories should give serious consideration to introducing mandatory and annual auditing on a user pays basis. Although economic rationalists will be ill-disposed to the introduction of an additional fee, griping that it will impose an additional cost of doing business, it is conceivable that the cost will be infinitesimal in comparison to the cost of post-calamity or building failure intervention.
Further, in an environment that is still reeling from Grenfell, the establishment of such a regime would ensure that non-conforming composite panels could be identified early in the construction cycle rather than belatedly. This would be just one of the many benefits of an approach that would impose overarching controls and brakes upon the individual discretion based power to issue alternative solution based building permits.