In June 2015, in the wake of the Lacrosse tower fire in Melbourne in November 2014, the Australian Senate referred an inquiry into the effects of non-conforming building products (NCBPs) on the Australian building and construction industry to the Senate Economics References Committee (Committee). 

What are non-conforming building products?

The Australian Building Codes Board (ABCB) determines NCBPs to be building products and materials that:

  • claim to be something they’re not;
  • do not meet the required standards for their intended use; or
  • are marketed or supplied with the intent to deceive those who use them.

NCBPs differ from non-compliant products (NCPs), which are products or materials used in situations where they do not comply with the National Construction Code (NCC). For example, a building product labelled as non-combustible when it actually is combustible would be a NCBP. On the other hand, a building product that is correctly described as combustible but is used in a situation where the NCC requires a non-combustible product would be a NCP.

Update on the report

The Committee was due to hand down its report on NCBPs by October 2015. This has since been extended seven times. Additionally, in October 2016 the Committee resolved to update the terms of reference to deliver a separate interim report on the illegal importation of products containing asbestos. The receipt of this report has been extended twice.

In response to the Grenfell Tower fire in London in June 2017, where approximately 80 people died (the final death toll is not yet known), the Committee also agreed to prepare an additional interim report on the effects of non-compliant external cladding materials as a priority. 

The current final reporting dates are:

  • 6 September 2017: Interim report on external cladding materials was received
  • 31 October 2017: Interim report on the illegal importation of products containing asbestos due
  • 30 April 2018: Final inquiry report due


Interim report handed down on 6 September 2017


The interim report on external cladding material was handed down on 6 September 2017, which outlined the following eight recommendations to manage the risks posed by aluminium composite cladding:

  1. The Commonwealth government implement a total ban on the importation, sale and use of polyethylene core aluminium composite panels as a matter of urgency.
  2. The establishment of a national licensing scheme through cooperation among the Commonwealth and state and territory governments. The scheme would have requirements for continued professional development for all building practitioners.
  3. The Building Minister’s Forum are to introduce nationally consistent measures to increase accountability for participants across the supply chain.
  4. The Federal Government consider making all Australian standards and codes freely available.
  5. The imposition of penalties for non-compliance with the NCC such as revocation of accreditation or bans from tendering for Commonwealth-funded construction work and substantial financial penalties.
  6. Increased resources for the Federal Safety Commissioner to ensure the office is able to carry out its duties in line with the new audit function and projected work flow.
  7. Support for the Commonwealth government to give further consideration to Director Identification Numbers and a recommendation to expedite this process in order to prevent directors engaging in illegal phoenix activity.
  8. The establishment of a nationally consistent statutory duty of care protection for end users in the residential strata sector.

Industry response

Unsurprisingly, a number of key stakeholders, including industry organisations, have criticised the Federal Government’s inaction on the issue and decision to consistently delay the delivery of the reports.

The Building Products Innovation Council (BPIC), the peak body representing Australia’s building product associations, described “the lack of government action” as “unconscionable”. The BPIC also condemned the cladding audit announced in response to the Grenfell fire. “There has already been a cladding audit done in Victoria in the wake of the Lacrosse fire, and the NSW Department of Planning and Environment conducted their own internal audit and estimated that 1,800 buildings (and possibly as many as 2,500) in metropolitan Sydney could contain flammable cladding material. Calling for more audits is only going to tell us what we already know,” the BCIP said in a statement in June. 

The Fire Protection Association of Australia (FPA) has also criticised the recommendation in the September interim report on external cladding materials to ban aluminium composite cladding in all Australian buildings. “The use of combustible cladding on high-rise buildings is already banned under the NCC,” the FPA said in a statement. “We just need people to adhere to that code. It comes down to people not complying to Australia’s building codes and standards. Banning the product twice is unnecessary.”

The Commonwealth government rejected the recommendation for a full ban on the import, sale and use of aluminium composite cladding due to the fact it can be legally used in some circumstances. The Construction Forestry Mining and Energy Union (CFMEU) has condemned this rejection, saying the government is “inexplicably digging in its heels and refusing to act”.

“There is no question that this product is putting lives at risks or that it continues to be used on high-rise building projects,” CFMEU Construction national secretary Dave Noonan said. “Not only have they failed to act, they are actively fighting against a ban that will almost certainly save lives.”

Current status of the report

Submissions to the Committee closed on 18 January 2017. With any luck, the final inquiry report will be delivered on time in April 2018. No proposed New South Wales or Commonwealth legislation addressing the issue has been seen at this stage. Queensland legislation to regulate the use of NCBPs was assented to on 31 August 2017. The final report is long overdue, which is a real concern as NCBPs have serious health and safety consequences and, unfortunately, have made their way into the construction industry supply chain in Australia.

Editorial: Eleanor Grounds

 

In the media

Soaring Sydney house prices to spark mass migration north: Macquarie
A flood of cashed-up Sydneysiders could inject more than $8 billion into Queensland's economy in coming years as they flee soaring property prices (06 October 2017).  More...

Noise pollution a growing concern for strata developments
Noise is compromising health and quality of life for many apartment dwellers. One of the major issues is that the National Construction Code’s impact sound insulation requirements for floors are simply not adequate, according to the Association of Australasian Acoustical Consultants (AAAC) (05 October 2017).  More...

Governments have burnt up trust on cladding
The failure of all three tiers of government to deal with the problems associated with non-complying aluminium cladding has created a massive trust deficit amongst strata owners who’ve been left to pick up the tab for a problem of others’ creation (05 October 2017).  More...

RBA’s Macro Measures Cool Housing Market
The RBA met industry expectations again this month, leaving the cash rate unchanged at 1.5 per cent for October. The cash rate last moved in August 2016, shifting down to the current rate. Subdued GDP growth and inflation and an easing property market will likely ensure the RBA keep rates on hold. The RBA noted APRA-imposed lending restrictions had curbed growth in borrowing by investors (04 October 2017).  More...

Building surveyors step up with a policy on dodgy building products
The Australian Institute of Building Surveyors has called for urgent, nation-wide overhaul of building regulations to address dodgy building products. According to AIBS president Timothy Tuxford, there are “ambiguities in the National Construction Code, a lack of oversight and auditing, no mechanism for checking whether building products arriving on site are properly certified to Australian standards (03 October 2017).  More...  More...

Building approvals edge up but well below their peak
While building approvals and first home sales rose in August, both are well below where they were 12 months ago and point to cooling activity in residential construction (03 October 2017).  More...

ABS Building Approvals show modest growth in August
The Australian Bureau of Statistics have released the most recent figures on dwelling approvals, which indicated a 0.4 per cent increase to 18,514 in August 2017, in seasonally adjusted terms. The August 2017 data showed that the number of dwellings approved is now 6.5 per cent lower than in the same month last year, in trend terms. That represents a decline of 15.5 per cent from August 2016 (03 October 2017).  More...

Draft legislation could significantly boost affordable housing supply
With submissions closing today on draft Commonwealth legislation that will introduce an affordable housing Managed Investment Trust (MIT) structure, the scale community housing sector providers welcomed the new mechanism which is poised to provide significant additional funds for more affordable housing) (28 September 2017).  More...

Acting Commissioner appointed to ABCC
Cathy Cato has commenced in the role of Acting Australian Building and Construction Commissioner (28 September 2017).  More...

ASBEC release policy platform on Affordable Housing
Housing is integral to health, wellbeing and economic outcomes for all Australians, and the Australian Sustainable Built Environment Council (ASBEC) has released a new policy platform, Improved Housing Outcomes to address Australia’s housing crisis (26 September 2017).  More...

Husband and wife fined $90,000 following Home Building Act breaches
A Sydney husband and wife have been fined a combined total of $90,000 after their company contracted to do significant residential building work without the required licence. In 2015, Tevita and Siosiana Ungounga’s company, T & T Sandstone Construction Pty Ltd, entered into a $350,000 contract with a consumer to build a three-bedroom house and pergola in East Hills (27 September 2017).  More...

How Sydney became one giant construction site
It was dubbed the "year of construction" with more than half of Australia's cranes deployed in the Harbour City in 2017 — these before and after shots prove it (29 September 2017).  More...

Published

Australian Bureau of Statistics
03/10/2017 Building Approvals, Australia, Aug 2017 (cat no. 8731.0)
27/09/2017 Engineering Construction Activity, Australia, Jun 2017 (cat no. 8762.0)

ACI Construction Briefs
A fortnightly communication highlighting key updates related to Australia's construction industry.
26 September 2017: Global & Domestic Outlook for Construction Sector

Practice and courts

ABCB: Stage two of the Holistic Review of Fire Safety
Online survey now open for stakeholder input on the NCC fire safety requirements for Class 4 – 9 buildings (03 October 2017).  More...

ABCB: New energy efficiency Advisory Note released
Calculation method to use for NCC Volume Two’s energy efficiency reference building Verification Method (V2.6.2.2) is explained here (28 September 2017).  More...

ASBEC: Building Sector Nails Solutions for Affordable, Sustainable Housing Outcomes
The Australian Sustainable Built Environment Council (ASBEC) has released a new policy platform to address Australia’s housing crisis (26 September 2017).  More...  More...

NSW BPB:  Certifiers’ PI insurance should not exclude cladding or non-conforming / non-complying materials
Certifiers are responsible for ensuring their insurance policy meets legislative requirements (06 October 2017).  More...

NSW BPB: Advice for certifiers on fire safety regulation amendments
New resources are available for certifiers and building owners about the building fire safety requirements commencing on 1 October 2017.  The improved design, installation and maintenance of building fire safety systems is a NSW Government priority being achieved through amendments to the EP&A RegulationMore...

Building System Circulars: Building fire safety regulation new and changed requirements
The purpose of this circular is to inform certifiers, councils, industry practitioners, and affected building owners of new and changed fire safety regulation requirements that will soon apply in NSW (from 1 October 2017).  More...

Cases

Jankovic v Chandershekar [2017] NSWCATAP 193
Leave to appeal refused. No order as to costs.
APPEAL: Costs – Adjournment of hearing – Order for costs thrown away – Whether leave to appeal. Civil and Administrative Tribunal Act 2013; Civil and Administrative Tribunal Rules 2014; Home Building Act 1989.

Arebelle Pty Ltd t/as Cavallo Kitchens and Appliances v Nelson [2017] NSWCATAP 195
CONSUMER LAW – failure to comply with consumer guarantees arising under Australian Consumer Law (NSW). DAMAGES – assessment of damages under s 267(4) of the Australian Consumer Law (NSW) – whether damages can be recovered where cost of undertaking rectification work has not been incurred.


Contacts:

Christine Jones, Partner - Construction & Infrastructure (Dispute Resolution) 
T: +61 2 8083 0477 
E: christine.jones@holdingredlich.com

Cameron Sheather, Partner - Planning, Property & Environment 
T: +61 2 8083 0461 
E: cameron.sheather@holdingredlich.com

Disclaimer

The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources.

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