01 September 2017

A large number of non-compliant building products are making their way into the Australian construction market, as dynamic and flexible international trade becomes the norm. For all professionals involved in building design and construction, this comes with greater professional risks associated with the use of imported building products and the need to comply with the Building Code of Australia (“BCA”).

Each professional involved in design and construction has a duty to use reasonable care in carrying out their role and this extends to using reasonable care when specifying and substituting imported products. This duty requires a strong level of knowledge within the professional’s area of expertise and relevant knowledge of the BCA. In relation to imported products, this duty becomes difficult to define. There are currently numerous ways under the BCA that a product can be compliant and often there is an overlap between the expertise and work carried out by different consultants on the specification of products for a project. These factors combine to make it difficult for construction professionals to know the limit of their responsibility in relation to imported products.

Currently, the BCA provides an extremely flexible approach to determining product compliance. Clause A2.2 of the BCA allows certification of materials and the form of construction or design through one or a combination of:

  • A report issued by a Registered Testing Authority;
  • A current Certificate of Conformity or a current Certificate of Accreditation;
  • A certificate from a professional engineer or other appropriately qualified person;
  • A current certificate issued by a product certification body that has been accredited by the Joint Accreditation System of Australia and New Zealand; or
  • Any other documentary evidence that correctly describes the properties and performance of the material or form of construction and adequately demonstrates its suitability for use in the building

The BCA therefore provides no clear limit to the boundaries of materials that may be used in Australian building and construction. Under the BCA, it is equally valid to use a laboratory test to evince product suitability as it is to rely on opinion of an individual with unknown qualifications or, theoretically, no qualifications at all. The responsibility then lies with design or construction professionals to satisfy themselves that the product is fit for purpose.

For imports, issues arise out of the flexible approach of the BCA, especially when design and construction professionals rely on documentary evidence provided by manufacturers as to the suitability of the imported products. Questions that arise out of this include; to what extent can design and construction professionals rely on their suppliers to ensure that the products are suitable? To what extent do design and construction professionals need to inform themselves of the suitability of a product?

Fresh in everyone’s minds and relevant to this issue is, of course, the Grenfell Tower fire in London which has tragically claimed, at the date of writing, 83 lives with the total death toll not expected to be confirmed until December 2017. Media reports speculate that the aluminium cladding on Grenfell Tower was not compliant and is likely to have been a major contributing cause of the severity of the fire.

Australia has had similar issues with potentially non-compliant materials and has been lucky to escape a similar scenario at the Lacrosse Building in Melbourne. While the Lacrosse Building suffered significant damage, there were thankfully no lives lost. These recent incidents have understandably sparked industry concern about the prevalence of non-compliant building products and the issue is not limited to cladding, with no shortage of examples of non-compliant products posing problems within Australia.

For example, Melbourne in June 2017 saw several glass panels explode during extreme weather with the cause thought to be due to nickel sulphide impurities in the glass. There is usually a simple fix for this problem; a heat soaking process designed to break any glass containing the impurities before the glass is sold on the market. The idea is that the glass will explode during the test rather than once it has been installed. Investigations indicate that the builder may have been given faulty certificates by the manufacturer claiming that the heat soaking process had been carried out.

The Perth Children’s Hospital provides a further example, with imported materials containing asbestos recently installed there, despite an Australian requirement for imported products to be asbestos free. The steel industry has also faced issues with imported raw and fabricated Chinese products that have not been compliant, including in 2003 when a hangar at RAAF Fairbarn collapsed, with thousands of bolts used in the construction found not to meet Australian Standards.

While international manufacturers can continue to provide unwatched products into the Australian market, with lax import laws and inspections, some have observed that companies who provide compliant materials are being disadvantaged by businesses that are prepared to put profit before safety. On the other hand, steel importers warn that increasing regulation on the industry will only drive up costs in an already difficult market, but surely safety should come as the priority. There is however, at present, no financial incentive for businesses to comprehensively check that their products and systems comply.

Despite the clearly evident issues arising out of imported products, the current manner of dealing with imported products, together with the Australian compliance legislation and enforcement of the standards, seems to have lagged behind changes to our economy, global supply chains and how or where products are manufactured or sourced. There is confusion over who is responsible for the regulation, policing, auditing and certifying of standards for building products and installation.

Reform of the current situation is necessary and the Senate Standing Committee on Economics has provided an interim report which highlights that a new regulatory regime requires that:

  • Everybody understands the regime;
  • The regime instils confidence in its effectiveness; and
  • The regime does not allow inadequate products and building practices to slip through the cracks undetected.

Regulatory solutions that have been raised include a register for manufacturers and suppliers to list products and provide compliance information through the register. Others have also called for third party accreditation of manufacturers and fabricators that could be placed on a similar register.

But until legislative reform is achieved, the responsibility still lies with design and construction professionals to remain vigilant about the products they are specifying and installing. The responsibilities for design and construction professionals include:

  • carrying out adequate research of the products specified so that they can make a judgment that any reasonable member of the profession would make;
  • obtaining complete technical specifications of the products specified, rather than relying on trade brochures of the manufacturers;
  • using and specifying trusted products and holding strong to avoid specifications being ‘quality managed’ down.

If a product has been specified, and there is possibility for a substitution, the same care and skill should be used in assessing the substitution as when the original product was specified. For consultants that have been novated, you should provide advice or approval on a proposed solution as you would on a traditional project, however if directed to make a substitution that is illegal, you should refuse, giving a written explanation. If the substitution is not illegal, but toes the line and is likely to pose greater risk than the original specification, you should give a written warning about the risks and seek written direction for the substitution.

The recent events, particularly in London, come as a stark reminder for all in the profession to carefully consider their professional duties in all projects and prioritise the safety to life over potential costs savings on products.

The Focus team,

Focus Underwriting