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Construction Alert

“Buildings Wrapped in Petrol” – Cladding and Facades Under Fire Again

| Published by Paul Somers

The National dialogue relating to non-conforming building products continues, with the release on 6 September of an interim report by the Senate Economics References Committee. The Committee’s recommendations, if adopted, will fundamentally reshape the national building and construction landscape for building practitioners, company directors, and apartment owners.

The Committee’s report examines the use of aluminium composite cladding in the building industry. This is the cladding which combusted in the Melbourne Docklands Lacrosse apartment building fire in 2014, and the London Grenfell Tower fire in June 2017.

The Senate Committee makes eight broad ranging recommendations to the Commonwealth Government. Collectively, the recommendations have the potential to make significant changes to the regulation of building practitioners, and the enforcement of building materials compliance.

By seeking to eliminate most of the factors which encourage, or fail to avert, the use of non-compliant cladding products, many other problems which plague the industry are likely to be fixed.

The proposed creation of a new statutory duty of care will aim to protect apartment buyers from the consequences arising from non-compliant building products. It will make non-compliance untenable for any building professional subject to such a duty. 

The recommendations are:

  1. A total ban on the importation, sale, and use, of polyethylene core aluminium composite panels (described in the report as “buildings wrapped in petrol”).
  2. A new national licensing scheme for all trades and professionals involved in the building industry, including building and project managers.
  3. Prescribing responsibility for building materials compliance earlier in the supply chain, for example, by focusing on requirements affecting designers, importers, suppliers and installers.
  4. Making all Australian Standards and codes freely available.
  5. Imposing a penalties regime for non-compliance with the National Construction Code, such as revocation of accreditation, or a ban from tendering for Commonwealth funded construction work, together with substantial financial penalties.
  6. Ensuring the Federal Safety Commissioner is adequately resourced to undertake its building materials audit function.
  7. Expediting consideration of the introduction of “Director Identification Numbers” in order to prevent company directors from engaging in illegal phoenix activity.
  8. Developing a nationally consistent statutory duty of care, to protect end users in the residential apartments sector.

You can view the interim report here. The Senate Committee expects to table its final report into non-conforming building products on 30 April 2018.

The Senate Committee’s work complements a series of parallel National and State initiatives targeting non-conforming building materials. Last month we reported on proposed amendments to the National Construction Code, to update building standards relating to fire safety (see here).

Other initiatives currently underway include the Building Ministers’ Forum examining compliance and enforcement issues within the building industry, ongoing revision of Standards Australia technical standards, and State task forces targeting compliance and cladding issues.

The Senate Committee’s report is a part of one of the most comprehensive examinations of the Australian building industry in decades. It is expected to deliver substantial improvements in regulation and fire safety for all building users, and enhance the reputation of Australia’s building industry as modern and responsive to ever-changing pressures.

Paul Somers is a Senior Associate in our Dispute Resolution team. He has extensive experience advising building and asset owners about managing and resolving construction and infrastructure disputes.