Given the events of recent years, it is clear that Australia has a problem with regard to products being used in construction which do not meet performance and/or safety standards under the Building Code of Australia.
From a viewpoint of safety, the fire that ripped up the Lacrosse building allegedly because of combustible cladding has raised concerns that firefighting efforts will be hampered by the existence of products which do not conform to standards under the National Construction Code (NCC) and therefore may not behave predictably in the event of a fire.
Despite a nationwide recall, meanwhile, electric cables which have been found under testing to become premature and break if disturbed remain in thousands of homes and businesses
The impact upon business, too, cannot be understated. Respondents to an Ai Group survey in 2013 reported that widespread prevalence of non-complying product (NCP) penetration across sectors such as steel, electrical products, glass and engineered wood were robbing them of revenue and profit margin and in turn impacting their levels of employment.
Builders are often left carrying the can and having to replace faulty products. In cases such as the Lacrosse fire, meanwhile, it appears that consumers will be on the hook for thousands of dollars per square metre in terms of materials and scaffolding, fixing and other costs.
The prevalence of non-conforming products cannot be understated. The Engineered Wood Products Association of Australasia reported in 2013 that approximately 70 per cent of samples did not meet required safety standards during targeted testing over a one-year period.
The problem is being taken seriously: no fewer than 74 submissions were received for a Senate Inquiry into the issue in mid-2015. A report from the committee is expected in March 2016.
To understand where we are going wrong, we need to look at the journey of products from the factory floor to final use in buildings, and the areas within the process where the system is breaking down.
First, there is the point at which products enter the system through either domestic manufacture or overseas manufacture and subsequent importation. Since the best way to stop faulty products from being used in buildings is to stop them entering the market in the first place, stopping NCPs at this point is the first and best line of defence.
Here, however, is also where a number of weakness lie. While mandatory certification must be obtained prior to the offering of plumbing and electrical products for sale, this is not the case for other materials - even those which are pivotal in terms of structural integrity and/or building safety. Voluntary certification schemes exist for materials such as concrete, lighting, engineered wood and glass, but these are not mandatory and offer little in the way of enforcement action where products are offered for sale which are not certified under these schemes.
Moreover, whether products are imported or manufactured locally, little exists in the way of guidance which sets out how the Australian building supply chain operates, the circumstances under which a product is required to comply with the National Construction Code or other technical standards, and the type of evidence which would be given to the market upon supply of products.
Further, with regard to imports, while a host of federal agencies such as Customs and Border Protection, Austrade and the Department of Foreign Affairs have involvement in the framework for importation of products including those used in building and construction, no singular agency has either the obligation or the power to confirm that products entering Australia meet relevant standards. They also lack the resources or authority to monitor and take action should a non-conforming product enter the Australian market.
The next line of defence revolves around wholesalers, retailers and the product supply and distribution framework. While it is typically the manufacturer rather than the supplier who has intimate knowledge of the product’s design and use, and is typically in the best position to ensure goods are safe and compliant, opportunities have arisen through the rise of large hardware retail chains to influence product design and safety considerations. In theory, this gives rise to another potentially robust line of defence against faulty product entering the built environment.
But this, as the Housing Industry Association points out in its submission to the Senate Inquiry, also creates a double-edged sword in that there is a growing volume of ‘one-off’ type purchasing transactions where neither the overseas manufacturer nor the importer/retailer has much incentive to establish an ongoing relationship. This situation is hardly conducive to the retailer or importer in question having much understanding of the quality control measures which the manufacturer has in place, nor the overseas manufacturer investing a great deal of time in understanding Australian building codes and standards.
Moreover, the ability of smaller builders to make direct purchases from overseas online presents a new area of weakness that could be opening up as these builders often have neither the resources nor the expertise to understand what type of verification documentation to ask for.
The next layers of defence before a product gets into buildings are the builder and building surveyor.
Obviously, the builders are required to obtain suitable evidence to verify that products they intend to use will meet relevant standards as referenced by the National Construction Code. The building surveyor, likewise, has an obligation under respective state based building legislation to confirm that the building work will comply with the NCC if built in accordance with the plans, and needs to check that the proposed building products are consistent with the NCC as part of this process.
In practice, however, even something as simple as a single-storey detached house typically contains as many as 70 different discreet building items, according to the HIA. In many instances as well, there will be multiple building product options for each item (a bench top, for example, might be made of stone, laminate, timber or several other materials).
Furthermore, there are five different ways to verify that a material or product meets the requirements of the NCC. Accordingly, to expect the surveyor to have the necessary expertise or capacity to verify that every product has been correctly tested and certified (false certifications from overseas parties are a growing problem) would be unrealistic.
Finally, the absolute last line of defence revolves around the removal of products which do make their way into buildings – as the ACCC is trying to do with Infinity cables and which is also being done with the combustible cladding at Lacrosse. Any reliance upon these mechanisms, however, is reactionary and foolhardy.
For one thing, recalls are reactive in nature and generally happen only after complaints have been lodged. Moreover, much confusion and dissatisfaction surrounds the reporting process; around 43 per cent of respondents to the aforementioned Ai Group survey had not lodged a complaint when encountering a faulty produc. Close to half of these reported that they did not know who to complain to or how to lodge a complaint, or reported that previously lodged complaints had not achieved any results.
As the Docklands experience shows, meanwhile, removing or rectifying products which have been already installed can be expensive.
Finally, getting rid of a product after installation is difficult; despite the ACCC’s efforts, more than half of the dangerous Infinity cable product supplied to more than 40,000 homes remains in place.
Add all this up and the bottom line is that there are gaps at various stages of the system. While there is no one ultimate solution, a number of steps could help.
First, there has to be clearer and better information provided both to overseas and to local manufacturers about the standards products have to meet and the evidence required to attest that products have met those standards.
Mandatory certification could be expanded to cover more of the higher risk products. The idea of a sampling and testing regime for products should be looked into, as should that of a national register of building products that have been determined to comply with government and/or industry based certification schemes. If testing every type of product proves too expensive, focus could at least be given to structural or other products which impact building safety.
Confusion about the role of the various regulators within the system could be cleared up and clarified.
Finally, tougher enforcement action and greater visibility on the part of regulators would, as Ai Group said in its submission, send a strong message about the seriousness of non-complying products within the marketplace.
Australia has several weaknesses in its system for dealing with non-complying products within the building supply chain, and it is pleasing to see that this issue is finally gaining attention. To rectify this, action is needed on several fronts.