In September 2017, Prof. Peter Shergold and I were commissioned by the Australian Building Ministers’ Forum (BMF) to assess the country’s building regulation systems. The BMF, which comprises state, territory and national ministers responsible for policy and regulation in building and construction, had recognised that inappropriate use of combustible cladding was prevalent in the industry.
It had already been aware of the risks after a fire at the Lacrosse Tower in Melbourne in November 2014, while the Grenfell Tower fire in London in June 2017 had reinforced the urgency of the situation.
In April 2018, the BMF published the Building Confidence report that Shergold and I had written (bit.ly/AusBuildConf), and three weeks later the UK government released Building a Safer Future following Dame Judith Hackitt’s review of Building Regulations and fire safety (bit.ly/HackittRev).
Many have commented that the observations made in the two reports – about building practices, culture and regulatory oversight – are strikingly similar, reflecting deep cracks in both countries’ regulatory systems, as follows.
- Inadequate documentation: both reports comment on the poor quality of construction documentation, meaning that records of what is built and of the ongoing maintenance requirements necessary prove to be inadequate. Hackitt says the principal designer should be responsible for compiling full documentation and demonstrating that key building safety risks have been considered and managed, while Building Confidence recommends that there should be a statutory duty on architects and other designers to prepare building approval documentation proving that a proposed building will comply with the National Code of Construction.
- Conflicts of interest for private building surveyors: the reports share a concern about the conflict between private surveyors’ public duty and commercial interests in issuing building approvals, meaning that their assessments can be perceived to lack independence. Building confidence therefore calls for several minimum statutory controls to mitigate this conflict of interest, and for state and territory governments to review and recalibrate the role of such surveyors. However, the report stops short of recommending either for or against private surveyors issuing approvals; dame Judith on the other hand states clearly that the power for owners, designers and builders to choose their own regulator must be removed. She recommends that all approvals be issued by local authorities, and that private approved inspectors only act as consultants to duty-holders, or supplement public resources when engaged by the government.
- Lack of oversight on design changes: both reports refer to the lack of oversight when design changes are made as part of processes such as design and construct or value engineering. Both reports note that often the primary reason for these changes is to avoid compliance checks or reduce construction costs. In the UK, there seem to be limited regulatory requirements to lodge completed documentation and approval of design changes, and even though there are some legislated controls in Australia they are either weak or not effectively enforced. BMF and Hackitt both call for improved transparency through the use of better digital records as well, to ensure key design and safety information is available to building owners and managers throughout the life cycle of the building.
- Poor record-keeping: Building Confidence recommends that government regulated registration schemes are harmonised across the eight Australian states and territories and professional development is made compulsory. It calls for nine categories of mandatory government registration for practitioners, with subcategories according to discipline and complexity of work, and suggests that industry associations could support this with accreditation or CPD administration. Hackitt meanwhile calls for a comprehensive and robust competency framework to be established and managed by industry associations, suggesting too that certain key practitioners should be covered by these schemes.
- comprehensive regulatory powers are recommended by both reports to support effective enforcement. Building Confidence cites a need for broad regulatory powers across state and local governments, while as well as recommending a similar range of powers Hackitt maintains that substantial penalties should be introduced to provide effective deterrence.
- Need for stronger regulation and oversight: finally, both reports identify that regulatory oversight is fractured, and that this limits its effectiveness. Building Confidence recommends that each jurisdiction establish a panel with representation from the relevant regulatory bodies to focus on integrated regulatory practices, and Dame Judith also proposes increased collaboration between local government, fire authorities and the health and safety regulator in the UK. The UK government recently announced it would create a new national building safety regulator, and a homes ombudsman to which developers must belong.
The issues set out above are not exhaustive, and both reports also make recommendations about the role of fire authorities, enhanced maintenance of fire safety systems during occupation and the safety of building products.
What can be seen from this brief analysis, though, is that the issues governments face across the world are in many respects the same. They will continue to challenge them as they strive to rebuild trust and confidence in their building and construction sectors.
The need for a response to Building Confidence has confirmed by three high-profile failures in compliance at residential towers around Sydney.
The Opal Tower was evacuated in December 2018 when the four-month-old, 37-storey building began cracking. Then in June 2019, the 12-year-old Mascot Tower was evacuated when it began to subside, while in October 2019 the media reported structural safety concerns with balconies on the ten-storey Otto Tower.
These failures indicate that combustible cladding is just one symptom of systemic issues in the construction industry, and so there has been strong support for the report across stakeholder groups.
A media campaign begun by industry bodies in July 2019 is urging all levels of government in Australia to implement our recommendations, taking a coordinated, national approach. Among those making calls are RICS and the Insurance Council of Australia (ICA): insurers have become especially anxious about providing professional indemnity cover to consultants in the building sector globally.
There have been significant premium increases for policies with limited cover because of broad exclusions relating to all non-compliant cladding or non-conforming products, and building insurance premiums have also increased, particularly for those with combustible cladding.
The ICA has therefore insisted that prompt, effective implementation of the Building Confidence proposals is needed to restore trust in the sector. The BMF has established an implementation team to do so, sitting within the Australian Building Codes Board, while a number of states have planning to introduce legislation, with the New South Wales government appointing its first building commissioner in August 2019.
It is expected that recent and forthcoming reforms will implement the report’s recommendations, and also address rising concerns about inadequate protection for owners of apartments with building defects.
The jurisdictions will also continue with their cladding audits, and Victoria has announced it will fund cladding rectification on private multi-level residential buildings that are considered to be of the highest risk.
Ultimately, 18 months on from the publication of Building Confidence there has been little legislative action; however, strong momentum has been built in recent months, and all governments have promised reform. It remains to be seen how far these will go, though, and whether a more harmonised and effective regulatory regime can be established.
Published in the February/March 2020 edition of the RICS Journal – Built environment, Fire safety https://www.rics.org/globalassets/rics-website/media/news/journals/built-environment/built_environment_journal_february_march_v2.pdf