The Development and Environmental Professionals’ Association ABN 19 624 162 863 106/118 Great North Road, Five Dock NSW 2046 Phone 02 9712 5255 www.depa.net.au

24 July 2019

The Secretary NSW Department of Finance, Services and Innovation

To whom it may concern

Building Stronger Foundations Discussion Paper

Thank you for the opportunity to participate in a process established by the government for all the right reasons but which will be needlessly bounded by decisions the NSW Government has made over more than 30 years affecting the quality of buildings.

As you may be aware, depa has been a hostile critic of the steps the NSW Government has taken since the late 1980s to remove control of building and construction from local government. There are some areas of regulation which can only be properly carried out by government, and planning instruments and compliance with planning instruments must remain entirely within the province of government.

We all know that there is more protection for consumers who buy a $20 toaster at Target than there are for people buying into residential apartment blocks. There’s something wrong with that, isn’t there.

In the late 1980s the Minister for Local Government, David Hay, introduced an amendment into the NSW Parliament to amend Part XI (Building Regulation) of the Local Government Act. The purpose of the amendment was to allow councils to contract out to the private sector parts of their building control responsibilities. The Department of Local Government as the primary driver at the time misrepresented their initiatives as having been the subject of widespread consultation in the industry, when they hadn’t. These misrepresentations were rejected by the NSW Chapter of the Australian Institute of Building Surveyors and, certainly for our part, there had been no discussion at all.

Masquerading under guise of “Professional Certification”, the DLG took the first steps to establish forms of private certification. In particular, one of the former DLG staff had a vested interest in these initiatives as he subsequently became a private certifier and operated as one until, after the investigation of 11 complaints (resulting in a $5000 fine, a $1000 fine, a $7500 fine, a further $5000 fine, a $10,000 fine and suspension of accreditation for 6 months, a further $10,000 fine and a further two months suspension of accreditation) was on 22 November 2012 “disqualified from being a certifier for 5 years; $50,000 fine”.

Lovely.

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about flammable aluminium cladding created a crisis for certifiers of apartment

building unable to obtain professional indemnity or building insurance.

It’s no coincidence that the collective noun for a group or flock of Building

Ministers is a hapless, because no one looked more hapless than those

ministers faffing around about an industry that has been deregulated now for

more than 20 years, scratching their heads, and wondering what has gone

wrong.

While the meeting reached an agreement between the states and the federal

government to pursue national building standards, fund an implementation

team to carry out the recommendations from the recent Building Confidence

report and tried to do something about insurance companies acting properly by

refusing to insure things that are too high risk, so what? What about the

elephant?

The NSW Premier Gladys Berejiklian was the first to throw her hands in the air.

On 10 July she admitted “it hasn’t worked”. While she wanted to “assure the

community that we know there’s a problem” she said the problem was “there’s

a gap in legislation. We allowed the industry to self-regulate and it hasn’t

worked. There are too many challenges, too many problems, and that’s why

the government is willing to legislate.”

This was before the fourth vacant development was identified - having

remained uninhabitable following a private certifier signing off that the

developer had done remedial work, which apparently hadn’t been done and the

toxins on the former industrial site were not remediated before the

development was constructed. Sydney City is preventing its occupation because

it’s too dangerous to health but where the developer had told the purchasers

that the delay in occupation was due to a “planning issue”. Oh yeah.

In the Sydney Morning Herald on 13-14 July the front page ran the headline

“Developers to Berejiklian: Fix building laws now” but it’s 20 years of

governments doing what developers have wanted that put us precisely in this

situation: less regulation, less compliance with regulation, certifiers paid for by

the developers, corner cutting, cost savings, lightweight untested materials,

inadequate BCA standards on flammability and on, and on.

The Premier was right. It hasn’t worked and while she’s been a member of the

NSW Parliament since 2003, so coming in right at the time of the Campbell

Enquiry into the Quality of Buildings that identified multiple failures of the

private certification system, and a variety of other investigations, consultations,

discussion papers and other reports, only now has she acknowledged It hasn’t

worked. Too late Gladys, you’ll say better late than never, but what you do

now, having acknowledged the folly of government lawmakers for decades, will

be a test of your commitment to evidence-based policy-making. Want to fix it,

or just try to get yourself off the hook for a few more years?

On 17 July the property development industry got in on the act wanting strong

government action. What a hide! In what was described as an “unusual joint

statement”, the Property Council of Australia, the Master Builders Association,

the Insurance Council, AIG and the Building Construction Forum called for the

Premier to “fix the building safety crisis” but their immediate concern is

insurance for building surveyors signing off on the residential apartment

buildings members of those organisations have constructed. And before we

move off this group, the Insurance Council of Australia, when private

certification was first proposed in NSW more than 20 years ago, opposed it

because of insurance risk.

On 18 July, the morning of the Building Ministers’ Forum, the CEO of the Master

Builders’ Association, Denita Warn, was interviewed on ABC News Breakfast

begging for more regulation and compliance over the buildings her members

built. Really, that’s a bit of an embarrassing admission isn’t it. She spoke of

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“systemic problems” and said “we need that safety net and that confidence that

the rules are being enforced by our regulators”.

Quite an admission from the Master Builders Association but only after the

indefatigable Virginia Trioli had said “I do want to pause there and get a

straight answer from you” and was told that she agreed they needed a new

level of “re-regulation back into the building industry as well as compliance and

enforcement. The industry supports that.”

Then the hapless of Building Ministers focussed solely on flammable cladding on

residential buildings, insurance woes, and at no stage acknowledged that 20

years of deregulation did us no good. Made lots of people rich but they would

have done better letting the CEO of the Master Builders’ Association inform

their deliberations.

This morning, the front page of the SMH lead with “Councils condemn building

codes” with Independent Sydney City Lord Mayor Clover Moore describing the

state government’s regulation of the building industry as “breathtakingly

irresponsible” and “that a lack of independent certification had paved the way

for buildings that were ‘unfit for occupation’”.

“This has resulted in arrangements that have allowed buildings unfit for

occupation to be released to the market and certified for occupation”. Cr Moore

called for “Independent on-site construction inspectors” and said that

“engineers and building professionals working on those sites needed to be

adequately qualified and registered, and all buildings should be assessed by

independent, third-party inspectors.” Go, Clover!

It wasn’t just the Independent Lord Mayor. The Labor Mayor of the City of Ryde

, Jerome Laxale, said “industry-wide changes were needed, but rethinking the

role of private certifiers was a ‘good place to start’”.

“I think it’s a deliberately under-regulated industry and that needs to change”.

And the Labor Mayor of Canterbury Bankstown, Khal Asfour, called for national

standards and highlighted the “over-relaxed guidelines governing private

certification”.

The Independent Mayor of North Sydney, Jilly Gibson wanted tighter regulation,

“I think (buildings) are being certified that shouldn’t be”, she said. And the

Liberal Mayor of The Hills Shire, Michelle Byrne, wanted better oversight of

structural designs and a better system to monitor standards during

construction.

The NSW Legislative Council Public Accountability Committee has established

an inquiry into the regulation of building standards, building quality and

building disputes including the role of private certification, the adequacy of

consumer protections, the role of Strata Committees in responding to building

defects, case studies related to flammable cladding on NSW buildings, the

defects discovered in Mascot Towers and the Opal Tower, and the current

status and degree of implementation of recommendations of reports into the

building industry including the Lambert report 2016, the Shergold/Weir report

2018 and the Opal Tower investigations final report 2019.

The inquiry will be chaired by the David Shoebridge as Chair, Robert Borsack

from the Shooters is Deputy Chair, two Liberals, two ALP and one member of

the Nationals. Here’s a link. We’ll be putting in a submission by Friday as well.

The NSW Liberal Government in the late 1980s introduced amendments to the

Local Government Act to allow Councils to contract out (that means, privatise)

building and development approvals, with no considerations of risk, no

insurance protections and one of the most flawed pieces of legislation that the