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NSW to take action on building certification failure

Developers of deemed high-risk projects in NSW could have the ability to select their own building certifier taken away as part of sweeping changes to the building certification system designed to help fix failings on fire safety, health and energy efficiency.

When The Fifth Estate first wrote on the failing of the building industry to meet minimum standards on energy efficiency, building certifiers were called out as a key reason why standards weren’t being met. They were part of a “sign-off culture”, with the common practice of developers choosing their own private certifiers leading to conflicts of interest.

Since then the scandal has widened to include building fire safety and asbestos. Here too, the building certification process has been named as an element that has led to outcomes endangering lives.

Now the NSW government has announced it will overhaul building certification regulations, a move that comes in response to a Statutory Review of the Building Professionals Act 2005, which found the Act was not meeting its objectives. While the government hasn’t supported all of the review’s recommendations, it has supported in full or part 72 of them.

“The government will introduce legislation to enhance certifier accreditation, including clarifying a certifier’s roles and responsibilities, improving the independence of certifiers and strengthening complaints processes,” Minister for Innovation and Better Regulation Victor Dominello said.

The review found that there was an “inherent conflict” regarding private certifiers that needed to be addressed.

“There is an inherent conflict in the regulatory role undertaken by the certifier, and the commercial driver of securing appointment from the builder/developer (on behalf of the owner) whose interests may not coincide with regulatory requirements,” it said.

The review said the “most radical” solution would be to go solely to council certifiers, which is what happened in New Zealand following the “leaky homes crisis” in 2004. The review found, however, that this didn’t appear to be a realistic solution in the short term, but may need to be revisited in future. Other options included removing the power from owners, developers and builders to appoint certifiers, and councils creating a panel of recommended certifiers.

The government approach has been to provide the power to the regulator to select certifiers for projects with high risk of non-compliance or where there are issues relating to certifier independence.

A Building and Development Certifiers Bill to be introduced within 12 months would “provide powers to allow the regulator to become involved in the selection of certifiers for some projects where there is a high risk for potential non-compliance or where there are issues around certifier independence”, a government statement said.

The news was welcomed by development lobby Urban Taskforce.

“A crucial change is to make certifiers more independent by stopping the process where a developer choses their own certifier,” Urban Taskforce chief executive Chris Johnson said.

“While in the majority of cases the current system has led to good results there is no doubt that community perceptions have been concerned at a potential conflict. The minister’s proposals will remove this conflict.

“The Urban Taskforce supports the changes to the certifying process as this will lead to a more professional independent process.”

Mr Johnson said it was important for communities to have confidence in the decision making and approval process for new buildings.

The governments bill will also:

  • establish overarching objectives to focus and clarify the legislation’s purpose
  • clarify a certifier’s role and responsibilities, including that certifiers are not responsible for the performance of work, quality control or management issues which are the responsibility of the builder
  • enable better management and oversight of certifiers through improved complaints handling procedures and new mechanisms to facilitate proactive risk-based audits
  • establish strong incentives, independence, accountability and liability for certifiers for checking that building work complies with the terms of its development consent and meets essential standards draw on the experience of the auditing and financial services industries to support the independence of certifiers, including possible rules about the relationships between certifiers and developers or builders
  • allow industry accreditation schemes to be recognised as the basis of, or instead of, government-issued accreditation for some certifier roles
  • introduce new requirements around data collection and reporting to improve ongoing oversight of system performance and improvement over time
  • facilitate better co-ordination of building and certifier regulatory functions by formally integrating the functions of the Building Professionals Board and Secretariat into DFSI
  • amend existing insurance provisions, while noting the effort that has been directed to the development of the industry’s ‘Certicover’ insurance scheme
  • support the integrated planning and building approvals framework currently in place in NSW
  • streamline, modernise and update the language and structure of the Act, including removing the current processes for updating administrative instruments and instead prescribing such details in the supporting regulations.

The government said it would prioritise fire safety reform, including consulting on options for additional inspections during and after construction and tighter controls on who performs certain fire safety roles. The review noted that the current system of compliance certification was “totally ineffectual” in regards to fire safety.

“Certifiers play a critical role in the building process and these reforms will ensure safety and confidence in the system,” Mr Dominello said.

“NSW is experiencing a construction boom and it is imperative that we have first class certification laws that cater for current needs and future demands.”

A related Senate motion to re-establish an inquiry into non-conforming building products is set to happen on 10 October.

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