Legislation cannot be used as an effective means of controlling recalcitrant behaviour unless the enforcement regime has real purchase.
An enforcement regime can only be effective if governments commit very significant resources both financially and in terms of suitable human resources. The allocation of sufficient funding to ensure that the enforcement arm can discharge its enforcement responsibilities effectively is evidence of political dedication to enforcement.
In fact, in certain contexts the introduction of legislation that is designed to eliminate recalcitrant behavior can actually have the opposite effect if the enforcement resources are inadequate. In such circumstances, history has shown that the heinous conduct that statute tries to prevent can increase.
The American experiment with prohibition in the 1920s is case in point. In a 1991 paper tilted Alcohol Prohibition Was a Failure, author Mark Thornton stated that:
“National prohibition of alcohol (1920 -33) – the ‘noble experiment’ – was undertaken to reduce crime and corruption, solve social problems, reduce the tax burden created by prisons and the poor houses and improve health and hygiene in America. The results of the experiment clearly indicate that is was a miserable failure of all counts…although consumption of alcohol fell at the beginning of prohibition it subsequently increased. Alcohol became more dangerous to consume; crime increased and became ‘organized’.”
Lisa Dorr, in a paper titled Why Prohibition Failed, stated that:
“Even honest officials who did their best to enforce law were hampered at the outset by insufficient funding resources. The initial appropriation for enforcement was a paltry 2.1 million. Six years later, in 1927, the head of the [prohibition enforcement asked for at least 300 million per year to enforce the law effectively and he received only 12 million. Inadequate resources at the federal level were matched by a lack of commitment to the law at the state and local levels. Several states refused to pass state level prohibition laws, which meant that the law enforcement personnel had no authority to enforce federal prohibition laws. Other states passed prohibition laws but refused to allocate state funds to enforce them tying the hands of the state forces.”
So what is the take out for the building industry? The Latvian supermarket roof collapse that killed 54 people was, in part, due to the disbanding of the national building inspectorate. The inspectorate was disbanded because of post-GFC austerity measures. Once this state-funded safeguard regime was removed, the holistic elements vital to the sound operation of the regulatory ecology were compromised. Without a well-resourced inspectorial regime, liberties were taken and building regulations were not adhered to, which all led to significant loss of life.
The collapse was yet another episode in a year that also included a Brazilian nightclub inferno that killed hundreds and fatal fires in Bangladesh that killed scores of factory workers. Failures in building control holistics and inadequate enforcement, due in part to the underfunding of regulatory agencies seemed to be a common theme among these tragedies.
Recently, we had the Grenfell fire, but it also pays to remember the Brazilian night club inferno (233 deaths) and Latvian accounts of woe (54 deaths) for fear of forgetting the serial nature of failed building control induced tragedy. Because in thus affected countries, the mourning and recriminations were every bit as intense.
Too often, reforming regimes introduce legislation that is designed to minimize or deter adverse conduct to little effect. Although the statutes may contain powerful penalty provisions that are designed as deterrents, the statutes prove benign because they are not enforced. They are not enforced because either the policing or the auditing regime is inadequate, and the regime is often inadequate because the budget allocated to maintain the enforcement regime is constrained. The post-GFC austerity measures that cut back government funding in key areas in Latvia and the failure of the prohibition regimes are cases in point.
It is ironical that in many Western countries, some of the best funded enforcement departments preside over jurisdictions that concern themselves with parking infringements and driving offences. The reason is that this type of ‘vice’ raises revenue for government instrumentalities. Anyone who is game enough to allow the car meter to tick over for more than the allotted time will bear testimony to the fact that an attendant will swoop in like a seagull on a chip. In fact, local government bean counters factor into budget forward planning the significant revenue that will be raised by parking over stayers to fund the some of the services of local government.
As I wrote in a Sourceable article titled Are Trees More Important Than People:
“The poor relation status of building compliance [being] further borne out by the fact that planning departments in local government receive far more funding than their building counterparts. Planning offences are about amenity and aesthetic diminution and prejudice, yet people don’t get physically injured on account of aesthetic diminution. Carnage can, however, be visited upon people when municipal authorities shy away from building regulation enforcement, with the building collapses in India and Bangladesh this year serving as prime examples. These catastrophes were all about building failure, which leads one to ask why so much funding is afforded to municipal planning departments and enforcement and not building departments.”
For fear of belabouring the point, in the case of building regulatory enforcement, budgets are often seriously inadequate in terms of the generating a regime that is capable of delivering a sound compliance outcome. The worrying thing is this: as countries in a post-GFC world take on more and more debt and council resources become further strained, the likelihood of funding for law enforcement of building regulatory matters is not likely to increase in the near future. Nor is it likely in the event of increase to be sustainable.
It is therefore important that alternative models of funding are considered. Yes, high profile calamities do generate a flurry of activity that results in periods of superior funding allocation for enforcement. But once as built tragedy leaves the front pages, invariably the status quo of budgetary parsimony resumes currency. Building enforcement is greatly affected by economics, so it follows that alternative funding models need to be explored, models that are both resilient and sustainable.
User pays auditing and policing regimes
The legal fraternity has for many years now had in place a user pays compliance regime. When law firms operate a trust account for the handling of client monies, the law firms are subjected to annual audits by a qualified auditor. The auditor has access to all of the trust account books; anomalies are picked up very quickly. The law firm has to pay for the audits and the auditors are totally independent and arm’s length as the Law Societies that accredit and nominate the auditors. This is a classic user pays and effective auditing regime. Do lawyers complain about it? No, auditors come with the territory.
The same model can be introduced to building regulation. Legislation can be promulgated to make audits mandatory and annual. Furthermore, the regulator can accredit qualified and experienced auditors to inspect not only the practitioner’s books, but also live building projects. Legislation can also be promulgated to enable the cost of the annual audits to be visited upon the practitioner or the building company.
Such a system requires the existence of a licensing and registration regime that requires annual registration, compulsory CPD and a qualification and experience criteria that ensures that the skill sets are as they should be. Token qualifications and skill levels lead to compromised outcomes.
The advantage of such user pays regimes is that the auditing and policing regime is economically sustainable and will not fall victim to the ebbs and flows of the boom bust conditions of the building industry. The system would have the requisite level of elasticity, as it were, and will be in sync with the ebbs and flows of building industry market conditions. Such a system is proactive, preemptive rather than reactive but it will come at a cost.
In Japan, private building surveyors are audited annually. This is not the case in Australian jurisdictions, where building surveyors are audited spasmodically and often in circumstances where they result from complaints. By the time a complaint is lodged, the damage has been done. Mandatory and annual audits conducted without notice would be even better as problems may be rooted out at their geneses.
Economic rationalists may in non-controversial times be ill disposed to the establishment of what they consider another cost to business in the form of user pays auditing. However, in the overall scheme of things, would the establishment of well-resourced investigation and auditing regimes actually increase the aggregate cost?
If one reads the newspapers, one hears of concerns that the cost of replacing non-conforming skyscraper cladding could cost countries billions of dollars. If indeed there had been a potent auditing regime established in thus affected countries, it is not inconceivable that practices that led to the proliferation of non-conforming composite panels could have been eliminated from the get-go. The likely cost of retrofitting non-compliant buildings will be significantly more than the cost of establishing and maintaining a best practice auditing and enforcement regime.
Reforming jurisdictions intent on legislating to eliminate the future use of non-conforming products or errant practitioner conduct will find that their intentions are frustrated unless they are prepared to boost their enforcement regimes. This presupposes a healthy bottom line of money being put aside to fund the enforcement arm.
Legislation, unless it can be enforced and the probity regimes upheld, will assume little more gravitas than a paper back novel. The “noble experiment” bore testimony to the utilitarian dividends of good intentions being thwarted by a parsimonious commitment to the funding of the vital organ of enforcement, the indispensable prerequisite to the orderly workings of publicly motivated regulation.