Before Grenfell Tower, in 2014 in Docklands in Melbourne, there was the Lacrosse Building external cladding fire. How could this happen? (Image via @sfe2016dublin)

The Senate Inquiry into lethal building products has confirmed their endemic use across the construction industry. Once again documenting a lawless industry supported by shameful governance, this investigation delved deeper than past inquiries to spotlight the fundamentals of systemic and systematic failure. Most significantly, it has revealed the official "recipe" for disaster — deregulation. 

AFTER THREE YEARS, the Senate Economics Committee Inquiry into Non-conforming Building Products (NCBP) has completed its hearings. The senators excavated the foundations of "systemic failure" and ingeniously unearthed the underlying premise of protecting the industry’s interests. We now know that public policy has been duplicitously manipulated for decades to deliver disastrous consequences for consumers and the community. But the senators most momentous find was in uncovering the blatant betrayal of public trust — and putting it on the public record.

In the early 1990s, the industry was deregulated. Referred to as “cutting red tape”, all controls disappeared. However, the putative governance agencies marketed the myth of "regulation", with officials masquerading as "regulators" to obscure the new reality that the industry was authorized to rule itself  At the same time, privatisation of building surveyors was introduced. It created a new builder-certifier "business relationship", which effectively removed all "independence" from the certification process. Building certifiers were rewarded to act in the builders’ best interests when their legal obligation was (and is) to act in the owners’ interests. As the Committee members were told repeatedly, these two factors changed the dynamics within the industry.

Instantly this led to the demise of any bona fide "inspections" and subsequently the slide down the slippery slope to the catastrophe facing the community today. Simultaneously, enforcement evaporated, punishment virtually vanished and with penalties a rarity and utterly inadequate, nil deterrence empowered a new, ever-increasing class of cowboys.

Non-conforming products the norm

Deregulation accelerated the spread of contaminated building products across the entire supply chain. Despite being extremely hazardous, they were cheaper than their "conforming" or "compliant" cousins. As the Inquiry established, an incalculable number of duplicitously "certified", perilous-for-people products are today integrated into buildings across Australia, including combustible cladding, faulty cabling and asbestos, as well as glass, wood and steel.

Fifteen years ago, the Percy Allan National Review (2002) warned of two contributing factors to an already compromised, poorly regulated building industry. One was the 1994 change to the Building Code of Australia (BCA), making it ambiguous, open to interpretation and granting builders too much discretion. Civil engineer Percy Allan noted was that there was 'no official mechanism for flagging faulty building materials and processes'. But Allan’s warnings on the capricious Code, flimsy "consumer protection" and the dangers of "non-compliant" products entering the market were all ignored.

Then, in 2010, the use of non-compliant flammable cladding was raised with the Australian Building Codes Board (ABCB), but general manager Neil Savery informed the Inquiry that

"... we formed the view that it was now beyond the scope of what was purely the Code."

Not considered the ABCB’s remit, the reprobates continued unrestrained.

It was only after the 2014 Lacrosse apartment fire in Melbourne that the public became aware of the cladding fiasco and its wider implications. Individuals and organisations were disturbed, and many highlighted the enormity of failure and agitated for urgent action.  

Shocked to learn, in 2014, that this major industry was actually unregulated, the Melbourne Metropolitan Fire Brigade (MFB) immediately voiced its fears for public safety and made scathing criticisms of the regulators.

At this Inquiry, Mr Dalrymple from the MFB detailed how cost-cutting works:

"It is left to the builder to determine how they make their own money."

In the Lacrosse building, the cladding was changed to the cheaper "non-compliant" version. Dalrymple was decidedly “disappointed” at the lack of action after the Lacrosse wake-up call in 2014, observing that the focus only sharpened after Grenfell. Thus today we have a smorgasbord of lethal materials — fire, electrocution and exposure to deadly toxins terrifying

The Committee heard that cladding has been installed on buildings across Australia for 25 years. Currently, it seems that at least tens of thousands of medium and high-rise buildings have cladding, potentially the fiery variety. This in spite of the installation of flammable cladding being banned on such buildings under the National Construction Code (NCC). In the case of electrical cabling posing the risk of electrocution and fire, it was installed on 40,000 buildings; at a cost of $80 million to taxpayers, in 2014 it was to be removed from all buildings — although it seems this goal was not achieved. As for asbestos, from the 1980s its use on buildings was illegal, and its importation, supply and use in all products was supposedly banned in 2003.Yet in 2017, asbestos is rife in building products, home appliances and children’s toys.

Reckless regulation

This small group of senators made important progress during this Inquiry. Receiving a colossal number of submissions and hearing from over 100 witnesses, they accumulated an extensive body of evidence. The Committee untangled a massive web of deceit, analysed a brutal legislative framework biased to benefit business and deconstructed the government’s "strategic policy" primed to pretend community "protection". Commendably, for the first time it forced the "fake news" genie out of the "regulation" bottle and lifted the lid off the facade of "safety".

On regulation, Scott Williams from the Fire Protection Association Australia (FPAA) reflected that the "hands-off approach" epitomized the "no enforcement" mentality. In agreement, Travis Wacey from the Construction, Forestry, Mining and Energy Union (CFMEU) stated aptly that the system "has been undermined by nonconformity". Benjamin Hughes-Brown from Ignis Solutions dropped the bombshell. Responding to Senator Xenophon on the “broken” regulatory and enforcement system putting people’s lives at risk, he resolved it to be "non-existent".

The senators learned that through a ruinous regime of "no rules", Australia’s building stock has been decimated to third world status, with many deadly materials deemed compliant and fraudulent certificates commonly the conduit. The shocking news is that for more than 30 years our buildings have been poorly constructed, many are totally unsafe and devastating detriment has been inflicted upon consumers, workers, subcontractors and the whole community. Purely to boost illegitimate profiteering.

Loopy laws

Over the course of this lengthy Inquiry, the senators became conversant with Australia’s laws, including the mishmash of Federal and state legislation. By 2017, they were educated on Australia’ NCC, the Australian Standards (AS), Building Regulations, Building Acts and the many consumer and safety laws proclaimed to protect consumers, workers and the community. However, as they examined more witnesses the ambiguities crystalised, the botched legislative framework became blindingly obvious and senatorial scepticism intensified.

Scratching beneath the surface on non-compliant combustible cladding, to their horror, the senators hit upon the construction industry’s bedrock of "loopy laws".

Graham Attwood from Expanded Polystyrene Australia testified:

"There are loopholes in the Australian standards, and there are loopholes in the NCC."

His first-hand experience was that contractors adapted "ambiguities" to sidestep the Standard "while still supposedly compliant"

He enlightened on the financial motivation

"... to look at ways and means to minimise cost in the construction phase."

Rodger Hills from the Building Products Innovation Council (BPIC) endorsed Attwood’s testimony.

His reason was that "people aren't complying with standards is that they don't know what the standards are because they haven't bought them", hence not purchased, no need to read or comply. He instructed that any products can be used because "nobody checks", again designating compliance as “a cost burden”. Hills called attention to the fact that regulatory bodies do not actually carry out inspections. In the unregulated industry, the mantra is "profits over people".

On the NCC and AS, Attwood noted the gaps of the "no inspections" model, stating:

"Basically it's a state inspection mechanism, but it is also across the board."

The continuous themes were: regulators do not regulate; certifiers do not carry out inspections, or alternatively approve non-compliance; auditing is rare; and in the absence of punishment for offenders, the law of "no consequences" has sanctioned industry-wide recalcitrance.

Ramifications of fraudulent certifications

Many witnesses informed the Committee that false certificates are rife throughout the industry. Hills advocated the use of fraudulent certificates as a “massive issue”.

He confirmed that, in a past role,

"... we were constantly looking at fraudulent NatHERS documentation that was submitted."

Additionally, he advised that

"... the Australian Window Association, has literally thousands of documents that are fraudulent."

He then related the BPIC’s unsuccessful attempts over years to implore state governments to act.

Troy Olds from the Australian Institute of Building Surveyors was candid in his comments.

"I think the problem with false documentation is companies, products and suppliers who are doctoring up documents and supplying them to the system which can't be controlled."

Throughout the Inquiry, the senators asked about prosecutions for those fabricating certificates. To their astonishment, the witnesses persistently recounted not being aware of any prosecutions. This prompted the senators on the question of fraud and criminal prosecution. Senator Kim Carr was visibly incensed over false certification and several times expressed his concern for the threat to people’s lives. He saw fake certification as it is — fraudulent. 

He unashamedly announced:

"It is criminal. This is a crime school."

In relation to the ugly ogre of secret commissions, Senator Carr concluded

"That is a criminal offence."

The consensus from those committed to genuine change was that without inspections, audits and prosecutions there will be no turning the tide. The far-reaching ramifications of fraudulent certifications are that people’s lives are critically at risk, solely because the bureaucracy’s core business is to administer to the interests of business.

Formula for Failure

Mystified as to how the non-compliant, highly dangerous cladding could possibly have been installed on the Lacrosse Building, the senators were doggedly determined to find out.

On drilling down, Neil Savery from the ABCB explained to the senators that deregulation led to

"... highly sophisticated regulation; it is not something that the average individual can necessarily understand."

Then Joseph Genco, a technical regulatory expert at the Victorian Building Authority (VBA) synchronized with Savery:

"It's difficult to describe to people outside of the industry."

This illogical language invented to be confusing and unintelligible for the "unsophisticated". But these senators were smart and their painstaking efforts paid off.

At the Melbourne hearing, Dalrymple from the MFB had referred to the NCC as being "a bit like a cookbook". Later, the Senators quizzed the reputed "regulatory" officials who agreed that there was indeed a "recipe" for "systemic failure".

Genco from the VBA tried to clarify. He said that the NCC was like a recipe book.

He illustrated:

"Basically, you have your prescriptive requirements, which is your recipe-type book of 'You do this, this and this and it becomes compliant,' but at the higher level there are the principles of performance, which allow a bit of trade-off."

Senator Xenophon was dumbfounded: "You call it a recipe book?"

Genco replied that the "prescriptive requirements" of the Code directed "deemed to satisfy", but "performance" elements consigned the scheme as open to interpretation. Senator Carr was aghast as to how somehow could ignore the "prescriptive part" of the "recipe" and install this cladding.

Frustrated, he grumbled:

"'Deems to satisfy' — so it is clearly not compliant. It is a combustible wall element."

The senators were ever more aggravated as Genco continued about “this higher level stuff” - irrational balderdash of this malleable mix allowing the industry’s operators to finagle irregular ingredients into the "recipe" for puffed up profits.

Senator Carr judged"So the prescription is really not a prescription at all!" 

And Senator Xenophon spelled out: "It's not much of a code is it?"

Although it was not easy, the Senators got it. Senator Xenophon summed it up: "You know that doesn't pass the pub test!"

And Senator Carr concluded: "It doesn't pass any test!"

They had decoded the not-to-be cracked Code and solved the construction conundrum. The Code was formulated to be convoluted, incomprehensible to the clueless, senators and the public alike. However these senators managed to understand the byzantine legal framework. They unscrambled the Code’s exceptional "mitigation measures" authorising "non-compliance". They comprehended the flexible "formulated-to-fail-recipe" feigned to define "compliance". And they succeeded in distinguishing the role of the regulators as the key collaborators in sustaining the crockpot of craziness for the benefit of business.

Construction in the commercial interest

The Office of the Federal Safety Commissioner (OFSC) sent Alan Edwards as a witness. As Commissioner, he described his role for companies bidding for government contracts as:

"... to administer the work health and safety accreditation scheme, which is designed to reduce workplace fatalities and incidents that tragically continue to remain at too high a level."

Conspicuously, each year in Australia 200 workers are killed at work and around 500,000 are seriously injured

Edwards’ testimony was hard to top.

First, companies can choose whether to be accredited.

Senator Carr’s astute summation:

"It amounts to a voluntary scheme of goodwill for people who want access to Commonwealth contracts."

Second, Edwards conceded that, in the last seven months, the OFSC had not completed any audits.

Third, Edwards attested that before undertaking its 200 health and safety site visits, the OFSC provided advanced warning to the companies.

Asked if any companies had ever lost their accreditation, the senators shuddered as they digested Edwards’ riposte. There had been just two companies in 12 years.

Edwards rationalised:

"The reason there are not more losing their accreditation is because it would be the end of the company."

Here, Edwards articulated the OFSC’s rationale of safeguarding the interests of business at the exclusion of safety.

Edwards’ emphasised that companies are afraid of losing accreditation, saying it "is such a massive threat". In truth, as the facts demonstrate this is nonsense. Out of the OFSC’s 422 accredited companies (August 2017), in 12 years only 2 have ever lost their accreditation. Therefore with a 0.47% chance of losing accreditation, there is basically no risk. The Edwards’ "fear factor" a fantasy.

After this, Edwards was pressured to disclose the names of the two companies, but he refused.

He stated emphatically:

"I do not name them because it would put a commercial detriment on them."

He added:

"I respect the commercial-in-confidence requirements of my office."  

The Senators’ questioning continued, but Edwards would not budge:

"I believe I am constrained by legal considerations in terms of commercial-in-confidence."

In spite of assurances that he had full legal privilege and even with the Senate’s powers of compulsion, Edwards remained steadfast.

Senator Xenophon pressed on to raise the issue of public interest.

Edwards replied that

"... it is unrelated to the work of this committee."

Astonishing! The role of our public officials who we pay (25 in the OFSC) is allegedly to "police" the industry in the public interest — but evidently they take no umbrage in using their "controls" to advantage the commercial interest.

Spotlighting chaos

As we await the Senate Inquiry’s findings, there is one thing of which we can be certain: we are at a tipping point with no end to chaos in sight. The epidemic of lethal building products persists unabated, just as Australia’s unscrupulous, lawless, construction industry flourishes unimpeded.

Our scandalous governance arrangements, built on "systemic and systematic failure" are undiminished. And most unpalatable, our obsequious officials continue to serve the interests of the building and construction industry and no matter the punishing costs to our people.

Anne Paten is the president of the Victorian Building Action Group Inc.

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