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Building Product Compliance – Get Ready for Positive Changes

In recent times Fire Protection Association Australia (FPA Australia) has advocated strongly for changes to building product compliance in Australia. High profile incidents such as the Australian Competition and Consumer Commission recall of Infinity Electrical Cable, which can become a fire hazard in as little as two years and was installed in up to 40,000 homes Australia wide, have eroded confidence in the power of existing regulatory regimes to ensure compliance.

This incident combined with the significant fire at the Lacrosse apartment in Melbourne’s docklands precinct, which was fueled by highly flammable cladding installed on the exterior of the building, have led to a major public outcry.

This public awareness has in turn led to two significant government initiatives: A federal senate inquiry into non-conforming building products and an investigation into a risk-based product compliance scheme, agreed to at a joint meeting of state and territory building ministers.

FPA Australia has displayed significant leadership in both of these political arenas in order to drive positive community outcomes.

Senate Inquiry – Non Conforming Building Products

FPA Australia has lodged a strong submission to the Senate inquiry outlining that the issue of non-conforming building products is having a considerable impact on the Australian marketplace.

The submission outlines that non-conforming products are producing five key consequences:

  1. Reducing the level of community safety expected to be delivered by products required to operate reliably as individual products and/or as part of holistic safety systems.
  2. Preventing an even playing field and reducing incentives for responsible corporate organisations to continue to fund research and appropriate product approvals.
  3. Increasing costs associated with repair and rectification work when non-conforming products are identified and required to be replaced.
  4. Reducing the quality of Australian buildings.
  5. Creating uncertainty and reducing confidence in each aspect of the building supply chain.

There is a need for trade flexibility across local and imported products and this is mandated by the World Trade Organisation agreement for Reducing Technical Barriers to Trade, which Australia is a signatory to. However regardless of where a product is manufactured, FPA Australia believes Australia must re-establish clear standards of product performance. This is especially important for products that are required to be installed or incorporated in buildings to achieve safety outcomes.

The lack of clear expectations and education regarding appropriate product selection and use creates a potential increase of litigation of builders, building surveyors, designers and the like by building owners (or contractors) who pay for what they believe is a conforming product, yet obtain non-conforming products. This is not merely speculation. Such a situation is currently occurring as the Lacrosse apartment fire saga drags on, with the builder and building surveyor being investigated by the regulator and owners pursuing a class action lawsuit.

The Australian Industry Group (AIG) has conducted extensive research into the economic impact of non-conforming product. The AIG document “The quest for a level playing field, the non-conforming building product dilemma, 2013” states that “evidence suggests that the market penetration of non-conforming products in several key construction product sectors in Australia may be up to 50%, this is a sobering and alarming statistic.”

Non-conforming products are generally cheaper than conforming products as they haven’t been tested and certified as being conforming to Australian legislation or Standards and don’t necessarily include the more expensive materials and components required to perform reliably to the expected fit-for-purpose performance standard.

Cost impacts from non-conforming building products are generally passed on directly or indirectly to owners and occupiers of buildings. An owner or occupier may have to vacate a building for the period of time it takes to rectify the issue created by the non-conforming building product. Rectification can often take months or even years. If a non-conforming product is found in a building, it is often a lengthy and costly process to determine the party responsible and have it rectified. These are costs the Association believes can be avoided and our risk-based approach to product compliance outlined below goes some way to addressing this.

FPA Australia’s risk based approach to product compliance has been endorsed at the recent Building Ministers’ Forum.

FPA Australia’s risk based approach to product compliance has been endorsed at the recent Building Ministers’ Forum.

Building Ministers Forum and a risk-based approach to product compliance

In June 2015 FPA Australia wrote to all State and Territory Building Ministers and the Federal Minister for Industry asking them to acknowledge the issue of product compliance and presenting a conceptual framework for the risk categorisation of products and the associated rigour of assessment required to demonstrate they are fit for purpose.

This proved to be a highly worthwhile exercise, with the merits of such a risk-based approach receiving support at the Building Ministers Forum held in late July. The Forum agreed that the federal government will now investigate options for a possible mandatory scheme for high risk building products with life safety implications.

FPA Australia CEO Scott Williams said it was a fantastic outcome but significant work remained.

“This announcement demonstrates that the Building Ministers have listened to the industry and the community and acknowledged the extent of the issue,” he said.

“The future establishment of a national register of ‘fit-for-purpose’ products which are high risk will restore confidence and certainty to the building industry and the community.”

“The ABCB will report on the progress of the mandatory scheme for high risk products in six months and we will be supporting the ABCB and working with all stakeholders to ensure that any scheme is sound, robust and rigorous.”

In order to understand what is meant by a ‘risk-based’ approach, it is necessary to examine the current provisions that exist regarding product compliance in the Building Code of Australia (BCA).

Clause A2.2 “Evidence of Suitability” of Volume One of the BCA (replicated by clause 1.2.2 of Volume Two of the BCA) establishes options for manufacturers or suppliers of products to provide different forms of documentary evidence to support a claim that a material, form of construction or design is suitable and fit for purpose.

There is no hierarchy associated with these options. The BCA provides options for different types of evidence that are considered to be acceptable, therefore providing flexibility to product suppliers as to which option they choose to satisfy. The extent to which the documentary evidence of suitability complies with one of these options is ultimately at the discretion of the Authority Having Jurisdiction (AHJ) to accept. Predominately the AHJ is a Building Surveyor (Private or Municipal).

These current requirements represent dramatically different approaches in product assessment rigour to demonstrate fit-for-purpose performance standards are achieved. Accordingly FPA Australia has advocated for change of these requirements based on risk assessment of products. Evidence and identification of non-conformance generally occurs after installation and predominately after a life or health safety incident. For example: the most critical time a fire safety product is required to conform and be suitable is during a fire incident. This is not the time to identify it as being non-conforming and unsuitable.

Recognition and acceptance of the building product non-conformance problem is an important first step towards a safer industry.

Recognition and acceptance of the building product non-conformance problem is an important first step towards a safer industry.

FPA Australia believes that improvements to the existing regulatory product compliance framework can be made, utilising existing testing and accreditation bodies. While it is always preferred to promote and provide positive outcomes for those companies involved in the manufacture, supply, install and approval process there is also the necessity for a deterrent for those who do not comply with a legislated system or process.

At some stage – or stages – during of the manufacture, supply, installation and approval process there needs to be a deterrent that includes significant financial penalties and a willingness to prosecute, where necessary. Without a deterrent there is little reason to provide a complying building product if there are cheaper alternatives. Failure of a regulator to carry out surveillance and enforce against companies or individuals would result in non-conforming products and practices entering the market.

FPA Australia’s proposed solution to address building product non-conformity issues is aligned to the current system and ‘Watermark’ scheme required by the Plumbing Code of Australia for plumbing products. As such, this proposal is not an entirely new concept. It is enhancing and modifying an existing system to make it suitable for all other building products. It is a system that utilises a risk-based criteria methodology to categorise a building product and thereby apply the appropriate rigour of assessment to address the risk.

It should not be left entirely to the federal government to implement and administer such a new system. Implementation and administration of any such new system should be developed and supported via a partnership between the Federal, State, Territory Governments and the relevant & respective industry bodies.

The procedure would utilise a prescribed risk criteria to categorise the appropriate ‘Risk Category’ should failure of a product or system result in adverse risk to life safety, health, economic loss and the environment. There would be three risk categories: High, Medium and Low. In addition, a listing of compliant high risk products would need to be accessible.

Product Compliance – The Way Forward

In summary, In order to limit the impact of non-conforming building products to the Australian building industry and consumer, FPA Australia believes that there are a few key factors that need to be accepted and implemented as follows:

  1. Recognition and acceptance that Australia has a building product non-conformance problem.
  2. Creation of a building product conformance taskforce to develop a National Building Product Compliance System framework and accompanying Regulatory Impact Statement. (This is now underway as a result of the Building Minister’s Forum)
  3. Modification of legislation where deemed to be ineffective, misunderstood, conflicting or a risk to the Australian people.

As an Association we believe we are closer than ever before to achieving these objectives and helping to restore confidence in the suitability of products in the Australian building and construction marketplace. These are important steps towards achieving our vision of minimising the risk and impact of fire.

For more information, go to www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Non-conforming_products

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Joseph Keller is Communications Manager at FPA Australia.