Australia: The buck stops here: Chain of responsibility for non-conforming building products in Queensland

Proposed new legislation in Queensland will establish a chain of responsibility, placing duties on supply chain participants to ensure building products are fit for purpose.1

The Building and Construction Legislation (Non-conforming Building Products – Chain of Responsibility and Other Matters) Amendment Bill 2017 (the Bill) will amend four current pieces of legislation, including (principally) the Queensland Building and Construction Commission Act 1991 (QBCC Act).

Parties that are involved in any stage of the supply chain and (importantly) their executive officers should be aware of these proposed changes to the QBCC Act.

The Bill is currently before Parliament and has been referred to the Public Works and Utilities Committee for inquiry and report by 7 August 2017.

WHO WILL BE AFFECTED?

All supply chain participants will be affected, including tradespeople, designers, manufacturers, importers, suppliers and installers.

THE OBJECTIVES OF THE NEW LEGISLATION

The objectives of the legislative changes include:

  • making all building supply chain participants responsible to ensure that non-conforming building products are not used on building sites in Queensland;
  • improving safety on building and construction sites through expanded notification requirements for licensees and new information sharing arrangements between the QBCC and other regulatory agencies; and
  • extending the ambit of disciplinary action that can be taken by the QBCC.2

THE KEY CHANGES

The amending legislation will establish a 'chain of responsibility' between each industry participant. Each participant will be held responsible for their respective contribution to the final product.

The accountability mechanism aims to make failures in the supply chain more easily identifiable and increase the accountability of each participant.

Two key changes in the new legislation are the imposition of duties on building supply chain participants and the creation of new offences.

  1. THE IMPOSITION OF NEW DUTIES

The Bill will implement one primary duty, applicable to all participants in the supply chain, and a range of additional duties specific to certain roles within the supply chain.

  1. Primary duty

The primary duty is that each person involved in the chain of responsibility must ensure, insofar as reasonably practicable, that a product is not a non-conforming building product.3

The scope of this primary duty will be dependent upon where that duty falls in terms of the stage of the supply chain.

  1. Additional duties

Additional duties will operate in conjunction with the overarching primary duty.

The additional duties (set out below) will provide further guidance as to how the person's primary duty is to be discharged.

  1. Designers
  2. Designers of products must ensure, so far as reasonably practicable, that if the designer gives the design to another person (who is to give effect to that design), the design is accompanied by the required information for the product.4

    'Reasonably practicable' is not defined in the legislation, and therefore will be subject to the interpretation of the courts in each set of particular circumstances.

    The definition of 'required information' is provided for in the proposed legislation and can be summarised as:

    • information about the suitability of the product and if such product can only be used in particular circumstances;
    • instructions about how the product must be associated with a building; and
    • instructions about how the product must be used.5
  1. Manufacturers, importers and suppliers
  2. Manufacturers, importers or suppliers for the product must ensure that the product is accompanied by the 'required information' for that product before the product is given to another person.6

    This provision will not just apply to persons that sell, supply or transfer the product, but also those that facilitate the sale, supply or transfer of the product.7

  1. Installers
  2. Installers must ensure that the owner of the building is given the information about the product prescribed by regulation.8

    The amending legislation is silent on whether an installer will be at fault if they forward information about the product that is inherently inadequate or insufficient due to failures earlier in the supply chain.

    It is unclear whether an installer would discharge their duty by passing the information from the supplier on, or whether they have a duty to consider the quality of the information before passing it on to the owner of the building.

  1. Executive officers
  2. An additional duty will be placed on executive officers of companies involved in the chain of responsibility.

    Executive officers will need to exercise 'due diligence' to ensure that the company complies with the duty.9

    If an executive officer breaches this duty, he may be convicted of an offence under the QBCC Act (whether or not the company has been proceeded against for an offence under the QBCC Act).10

  1. Multiple Duties

Persons in the supply chain can have more than one duty at any one point in time.11 Each duty held by a person will need to be discharged on its own merit.

If multiple people in the supply chain possess a duty in regard to the same matter, the following applies:

  • each person is responsible for the person's duty in regard to the matter;12 and
  • each person must discharge the person's duty to the extent the person can influence the matter or would have the capacity to influence the matter if that capacity was not limited by an agreement or arrangement.13
  1. NEW OFFENCES

The amending legislation will introduce a number of new offences into the QBCC Act. These include:

  • an offence, carrying a maximum of 1000 penalty points,14 if someone breaches a duty any of the duties discussed above;15
  • an offence, carrying a maximum of 1000 penalty points, if representations are made about the intended use of the product that does not comply with requirements for representations prescribed by regulations;16 and
  • an offence, carrying a maximum of 50 penalty points, if a person in the chain of responsibility has reasonable suspicion or knowledge that a building product is a non-conforming building product for an intended use and does not give notice to the Commission.17

NOTIFIABLE INCIDENTS

There will be an additional duty imposed on all persons in the chain of responsibility to notify the QBCC of any 'notifiable incident'. Notifiable incidents include death, serious injury, or an incident that exposes a person to serious injury or illness.18 Breaching this reporting obligation carries a maximum penalty of 100 penalty units.

Footnotes

1 Building and Construction Legislation (Non-conforming Building Products – Chain of Responsibility and Other Matters) Amendment Bill 2017.

2 Explanatory notes for the Building and Construction Legislation (Non-conforming Building Products – Chain of Responsibility and Other Matters) Amendment Bill 2017, page 1.

3 Proposed s 74AF.

4 Proposed s 74AG (1).

5 Proposed s 74AG (6).

6 Proposed s 74AG (2).

7 Proposed s 74AC (3).

8 Proposed s 74AG (4).

9 Proposed s 74AI (1).

10 Proposed s 74AI (2).

11 Proposed s 74AD (2).

12 Proposed s 74AD (5)(a).

13 Proposed s 74AD (5)(b).

14 Current value of one penalty unit in Queensland, as of 1 July 2016, is $121.90.

15 Proposed s 74AJ.

16 Proposed s 74AK (2).

17 Proposed s 74AL.

18 QBCC Act, Schedule 2.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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