Australia: The Shergold and Weir Building Confidence Report: serious reform needed for building certification, compliance and enforcement systems in Australia

Last Updated: 18 February 2019
Article by Scott Higgins, Lucy Hancock and John Hibbard

As we have touched on in previous articles (see here), the building regulation framework in NSW and nationally has attracted widespread criticism, with the recent 'cladding crisis' highlighting industry failure to monitor and prevent the use of non-compliant building products and practices.

In response to those criticisms, the Building Ministers Forum (BMF) 1 requested that Professor Peter Shergold and Bronwyn Weir undertake an assessment of the effectiveness of the building regulation system in ensuring compliance with building standards.  Their observations and recommendations, have culminated in the recently published Building Confidence Report (the Report).  This article will explain the salient features of the Building Confidence Report, as well as the likely regulatory changes to result from the Report.

All relevant Federal, State and Territory ministers have given support for the Building Confidence Report, together with the Australian Construction Industry Forum and other key industry bodies and therefore significant regulatory reform may be imminent.  This article will explain the salient features of the Report, as well as the likely regulatory changes that may result.

Summary of the Report

The Report examines concerns which have arisen from state and federal government responses to the use of combustible cladding, which is understood to be a major cause of both the Grenfell fire in London and Melbourne's Lacrosse fire. The Report contains 24 recommendations to address the key weaknesses of the existing system.  The recommendations can be grouped as follows:

  1. more consistent and higher levels of training and registration of building practitioners;
  2. clarification and strengthening of the roles and responsibilities of regulators;
  3. improving information and documentation relating to construction projects and finished buildings;
  4. strengthening inspection regimes; and
  5. further improvement in the safety of building products.

The Building Confidence Report echoes similar views to those expressed in Michael Lambert's review of the NSW regulatory system (Lambert Review) published in October 2015 (see here for more information on the Lambert Review).

One of the most damning findings by Shergold and Weir is that there has been almost no effective regulatory oversight of the commercial building industry by regulators.

Those involved in high-rise construction have been left largely to their own devices. Where there has been supervision, this has generally been by private building surveyors whom critics argue are not independent from builders and/or designers.

The recommendations set out in the Report are intended to ensure that these key deficiencies are addressed.

Likely Reform

The BMF met on 10 August 2018 to discuss the Report and has since indicated which of the recommendations are likely to be pursued.

The BMF has directed the development of a paper that sets out an implementation plan for reform in respect of recommendations 9 to 11 and further consideration of recommendations 1, 2 and 13. We briefly discuss each of these recommendations below.

Recommendations 9 to 11 (roles and responsibilities of certifiers)

The BMF has indicated that it will focus on recommendations 9 to 11, which are concerned with the roles and responsibilities of certifiers.

Recommendation 9 is that each jurisdiction establishes minimum statutory controls to mitigate conflicts of interest and increase transparency of the engagement and responsibilities of private certifiers.

This recommendation follows criticism that in all jurisdictions, private building certifiers or surveyors have a direct commercial relationship with building professionals and therefore 'this makes them susceptible to the interests of their client in ways which may not align with the public interest'.

In NSW, following the Lambert Review, the government indicated that it intended to rewrite the Building Professionals Act 2005. Public consultation on the draft legislation intended to replace the Act, the Building and Development Certifiers Bill 2018, closed on 4 September 2018. The Department of Fair Trading is currently reviewing the submissions received.

Recommendation 10 is that each jurisdiction must put in place a code of conduct for building certifiers/surveyors which address the key matters which, if contravened, would be a ground for disciplinary inquiry.

This recommendation is in response to the observation that no code of conduct for building surveyors or certifiers existed in five of the reviewed jurisdictions. NSW does have a code of conduct for building certifiers, recently updated by the introduction of the Building Professionals Accreditation Scheme, in force from 1 September 2018.

Recommendation 11 is that each jurisdiction provides private certifiers/surveyors with enhanced supervisory powers and mandatory reporting obligations.

This recommendation is to address a key criticism of the building regulatory system, which is that there is no effective mechanism for ensuring compliance with the National Construction Code (NCC) throughout the construction phase (i.e. after the submission of building approval documentation). The Report notes that private building certifiers/surveyors in most jurisdictions have a statutory responsibility to inspect work during the construction phase and determine whether it accords with the building approvals and NCC.

Although this is the case, it is frequently noted that building certifiers/surveyors are not a "clerk of works" and therefore they have a limited regulatory role (see here the report by the Building Products Innovation Council (BPIC) and also here the NSW Court of Appeal decision in Ku Ring Gai Council v Chan [2017] NSWCA 226 which absolved a Certifier of responsibility for defects and commented on the limited nature of their regulatory role).

A lack of auditing for compliance and also enforcement is one of the key criticisms of the regulatory landscape in Australia, and given the constrained role of certifiers and surveyors, it is questionable how effective implementation of this recommendation will be to address these concerns.

Recommendations 1 and 2 (registration of building practitioners)

Recommendation 1 is that each jurisdiction requires the registration of categories of building practitioners (such as builders, project managers, building certifiers, architects, engineers etc.) involved in the design, construction and maintenance of buildings.

Similarly, Recommendation 2 is that each jurisdiction prescribes consistent requirements for the registration of building practitioners.

Both these recommendations are to address criticism that, while all jurisdictions register building practitioners, the categories and registration requirements differ and this creates complexity in applying mutual recognition.

A lack of harmonisation between states and territories in the context of building regulation is another criticism which is frequently made (see here the report by the BPIC), noting that even the language used between jurisdictions is different (for example a 'certifier' in NSW is a 'surveyor' in Victoria).

Overall, the Report takes a pragmatic approach to this issue by acknowledging that focusing on national harmonisation at the expense of actual improvements to compliance and enforcement would be to the detriment of the industry. Complete harmonisation does not seem likely in the short-term, however it is encouraging that the BMF is attempting where possible to achieve some consistency.

Recommendation 13 (responsibility of design practitioners)

Recommendation 13 is that each jurisdiction requires building approval documentation to be prepared by appropriate categories of registered practitioners, demonstrating that the proposed building complies with the NCC.

This is to address criticism that documentation prepared and approved as a part of the building approvals process is often inadequate.

Further reform?

Whilst the recommendations highlighted for action by the BMF will certainly assist to improve failings by the industry to properly ensure that safe building products and practices are being used, it is unclear how many salient shortcomings identified in the Report will be addressed.

Notably, recommendation 5, that each jurisdiction establish a formal mechanism to acknowledge the shared responsibility for regulation, thereby defining each role in legislation, and presenting a regular report to the responsible Minister so that progress can be monitored, is not adopted by the BMF as a priority.

Recommendation 5 is in response to the finding that:

In each state, multiple state government bodies and local councils have a role in building regulation. Private building surveyors may also have enforcement powers in relation to building work for which they have been appointed. This results in a fragmented system of regulatory oversight which is prone to duplication, confusion, unclear lines of responsibility and lack of information sharing.

This is arguably one of the limitations which is having the most serious impact on the industry, and an issue raised in both the Lambert Review and the report by the BIPC. Arguably, meaningful reform must include mechanisms to address the lack of auditing and enforcement which has allowed products such as combustible ACP to be used so prolifically by practitioners. The Report also highlighted the fact that we have a performance-based building code with very little in the way of industry guidance or published decisions by tribunals.  Several recommendations were targeted at these issues, but were not adopted by the BMF as a priority.

Further, the Report recommended that regular inspection at identified intervals during the construction process be mandated, that regulators be given wide-ranging powers to investigate and make orders in relation to construction works, and that a publicised audit regime of commercial buildings be established. These recommendations have note been identified for action by the BMF.

These sorts of measures would go a long way to improving the effectiveness of building regulation in Australia and the industry will no doubt be closely monitoring whether the BMF expands its focus.

Footnote

1 The BMF is made up of Commonwealth, State and Territory ministers that are responsible for building and construction portfolios

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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