Chris Ketter (Queensland, Australian Labor Party) Share this | Hansard source

I rise to make a contribution in respect of this debate. As the Chair of the Senate Economics References Committee, this particular inquiry was probably one of the more harrowing experiences that I've participated in, with understanding of the horrors of what befell the residents of Grenfell Tower and how lucky we are in this country that we were able to escape that eventuality in Melbourne a few years ago.

Unfortunately, this is an area where I would have liked to have seen a more bipartisan approach from those opposite when we have an issue in which the public is rightly very interested. When we see such a huge failure in our system of regulation, it really behoves all of us to come together to try to address this issue. For that reason, I do indicate to the NXT party that in principle we support the approach that is being put forward. We support a ban on this polyethylene core ACP product, and I support Senator Patrick's comments in relation to the fact that this is not a silver bullet and that this is only a part of the overhaul that needs to occur in respect of this terrible issue. Unfortunately, from the opposite side we see more of the same.

If there's one thing I've learnt in the course of this inquiry it is that our system of building construction regulation and enforcement is broken and business as usual is not sufficient. We need to have a root-and-branch approach. An incremental type of approach—getting people together and talking to the states—is not going to cut it. The Commonwealth does need to take a lead in this area, and there are a number of things that the Commonwealth can do. It's unfortunate to hear government senators basically giving up on this issue.

I do want to say though that some credit is due to former Senator Xenophon for instigating this inquiry. I do need to say though that Senator Xenophon is known for liking the headlines but, when it comes to a policy result, he comes up a bit short on the actual detail. In contrast, on our side we have a comprehensive plan to improve the fire safety of Australian buildings. We would not only introduce a ban on combustible cladding but also establish a national licensing system for all building practitioners, requiring continued professional development, and a penalties regime for all building practitioners and companies who knowingly use non-compliant material. Labor would also re-establish a minister for industry as the chair of the Building Ministers' Forum. I find it somewhat amazing that we do not have a minister for industry, nor a minister for science. We certainly seem to have a minister for regulation in place at the moment.

As Chair of the Senate Economics References Committee I do have the benefit of the knowledge we acquired through that inquiry into non-conforming building products more generally. This inquiry has done its job in helping to inform Labor policy. One of the submitters to our inquiry I think hit the nail on the head when he identified the root cause of this problem. It was Mr Savery of the Australian Building Codes Board. The ABCB is the body responsible for the development of the National Construction Code. He said during our inquiry that the performance based code is a highly sophisticated regulation and it needs properly qualified and trained individual assessors. He tracked the evolution of this system. I think it was very enlightening. He said:

In the early 1990s, we introduced a performance based code which is highly sophisticated regulation; it is not something that the average individual can necessarily understand. You need qualified, trained people to understand how a performance based code works. At the same time as that, private certification was incrementally introduced around the country. At the same time as that, we had a process around the country of deregulation or reduction in regulatory requirements around things like mandatory inspections. At the same time as all of that is happening, the world is changing around us. We have global supply chains. We have multinational companies operating.

So we've come to a situation where there is an almost universal lack of compliance in the system. There is an erosion of confidence, which has resulted in this reduction in mandatory testing that's occurred around the country. I think this has been a tragic outcome.

In September last year the committee released its interim report into aluminium composite cladding and through that inquiry we shone a spotlight onto problems in the building and construction industry, an industry where too often choices are being made to cut costs regardless of the consequences—consequences that, sadly, include the loss of life. The Labor led committee put forward eight recommendations on the issue of flammable and combustible cladding. Recommendation 1 was:

The committee recommends the Australian government implement a total ban on the importation, sale and use of Polyethylene core aluminium composite panels as a matter of urgency.

So it should therefore come as no surprise that we do, in principle, support the Customs Amendment (Safer Cladding) Bill 2017. I would like to take some time now to outline the committee's findings through our inquiry—the findings that led us to recommend a ban at the border and a number of other measures, including a whole-of-government response to achieve a nationally consistent approach to the sector, better industry access to building standards and codes, clearer enforcement powers, and more substantive prosecution outcomes. A ban is the most obvious solution that could potentially save lives, but so far the current government has refused to support it, even in the face of evidence overseas and at home that combustible cladding is a matter of life or death.

The 2014 Lacrosse apartment building fire in Melbourne forced Australia to switch on to the issue of building standards and cladding. It's only through sheer luck—some might say a miracle—that no lives were lost in the Lacrosse tower when a fire broke out in a lower level air conditioner and rapidly spread up 20 storeys of the Docklands apartment building. Early speculation that aluminium composite material was to blame proved correct, despite Australia having building codes that restricted the use of this material on high-rise buildings. The Lacrosse fire served as a wake-up call and begged the questions: what's gone wrong that's allowed this to happen, and how many inhabitants of other major buildings might be at risk?

In 2015 we commenced the Senate inquiry into non-conforming building products. The committee, which former Senator Xenophon sat on, invited submissions and commenced public hearings. Then last year the terrible catastrophe took place in London where 80 residents of the Grenfell Tower lost their lives in a fire. Tragically, we learned later, the scale of this fire could have been preventable. Lives could have been saved if the building standards applicable to Grenfell Tower were tougher. This tragedy, through the issue of flammable and combustible cladding under an international spotlight, heightened the urgency for Australia to know whether this type of catastrophe could occur in our country. To our horror, we found that the shorter answer was, and is: yes, it could.

Through a number of state and territory audits it has emerged that the use of aluminium composite cladding has compromised safety in tens of thousands of Australian buildings. In evidence to the Senate inquiry, experts told us that homes and businesses were effectively being wrapped in a product akin to petrol. In remarks to the parliament upon tabling the committee's report last year, I said that it's not acceptable that people are injured and killed in their own homes. In 2018, we can do better and we must do better.

Over the course of the inquiry the committee has held five public hearings about cladding and received over 162 submissions. I would like to thank all of those individuals again—experts in the fields of fire safety, architecture, engineering and building, and union groups and manufacturers—for working with the committee and for their advocacy to me outside of the inquiry processes as well. I want to particularly commend the CFMEU for their responsible approach in the course of this inquiry and for the information that they provided to us. They had come to the conclusion, over a period of some years, that it was necessary for us to have an import ban. Some of the points that led to them forming that view are quite salient. The reasons for PE-cored ACP to remain available to buyers who utilise it compliantly, instead of using a fire-resistant core, are not compelling, so there is no reason why we shouldn't substitute for it. The price differences are fairly marginal. The saving that's involved is something in the order of $2 per square metre. Currently, PE-cored ACP is allowed to be used in public buildings of two storeys and below—that is, combustible external walls are allowed. We say that that shouldn't be allowed to occur. We say that it's not safe to use that particular material.

We have seen a lot of finger-pointing and attribution of blame throughout the course of this journey. A couple of key themes have emerged: the chain of supply operates with little or no regard for the end user; regulations are confusing, with a wide range of loopholes; and regulators lack the powers they need to identify, prosecute and deter wrongdoing. Further, we found current testing standards to be vastly inadequate. This was an issue rightly exposed in the Four Corners report in August last year. That program aired evidence given to the committee that it was, in effect, impossible for any material to comply with the key fire safety testing standard AS 1530.1, because of flaws in the testing process itself. I'm happy to say that, since this time, a new standard has been developed, AS 5113, which incorporates international best practice where practicable.

Safety audit processes also prove tricky because materials that conform to building standards appear much the same as non-conforming products, particularly once installed. This, I think, goes to reinforce the argument that this is a product that should be stopped at the border.

The committee also exposed conflicts of interests that occur when the pay cheques of building surveyors and inspectors are written by the same entities those surveyors and inspectors are supposed to police, and also those from whom repeat business is desired. On this matter, in hearings I also asked question about the clerk of works role which once existed. I note the Victorian Cladding Taskforce interim report recommended the restoration of this role. I think this is worthy of consideration. If there are ways that we can make oversight roles financially independent of builders, I'm sure we can see better outcomes.

I also want to point to some positive developments in my home state of Queensland, in the form of the non-conforming building product laws which were passed by the Queensland government in August last year. The new laws place accountability on everyone in the building product supply chain to make sure products are fit for intended purpose and enable enforcement action for breaches. The legislation requires a person in the supply chain who becomes aware, or reasonably suspects, that a building product is non-conforming to notify the Queensland Building and Construction Commission. Importantly, the new laws also empower the QBCC to direct a person to take remedial action where the law has been breached.

Additionally, in the state of Queensland, back in 2003, the Beattie government brought in five prescribed licence classes which can install cladding under the Queensland Building and Construction Commission Regulation 2003. The committee determined that this requirement for licensing and, therefore, training of installers is very likely the reason for the significantly reduced prevalence of flammable cladding in Queensland relative to other states.

I also note the release of the Victorian Cladding Taskforce chair's interim report on 1 December. That's leading the Victorian government to take action on cladding by restricting the use of aluminium composite products with a PE core, as well as expanded polystyrene on buildings over two storeys. It's empowering the VBA to conduct further building audits with new annual quotas and ordering rectification on buildings found to be non-compliant.

I am relieved to hear about these steps being taken in my home state and in Victoria. I think we need to follow their lead at a national level. Unfortunately, I do hold reservations that action by the states on this issue will be one more justification the current government uses to pass responsibility back to the states and territories.

As I've already said, we are talking about a matter of life and death here. It's not enough anymore for us at the national level to just make the rules. We need to take real action. The simple fact that aluminium composite cladding, with its flammable polyethylene core, is legal in Australia means it will end up on buildings. The government will probably vote against this bill and say that the National Construction Code restricts the use of flammable products, as government senators have already said, but we know they're being used outside of the code's stipulations. There are a number of reasons for this. First, the regulations are confusing. The National Construction Code has been described to the committee as being contradictory, containing competing clauses and having no hierarchy of control. One submitter, Mr Hughes-Brown, of Ignis Solutions, pointed out that the ABCB had to write a nine-page document just to clarify the competing clauses. And the Victorian Building Authority submitted that 'code requirements were inconsistently applied and poorly understood'.

Additionally, the NCC contains options for performance based and 'deemed to satisfy' pathways. In other words, if you do this then don't worry about that, or, if you want to do this, then just make sure you do that. This essentially provides legal loopholes for people to do the wrong thing, even through claiming ignorance, plausible deniability or through genuine confusion, misunderstanding and mistakes.

Secondly, the system of regulation in Australia is confusing in itself. Whilst the NCC sits at a national level, responsibility for enforcement lies with individual states and territories, each with their own state based development codes and enforcement agency and each agency needing to be resourced.

At the national level we have the national Building Ministers' Forum; the Australian Building Codes Board, which has also set-up its own senior officers group; and the Federal Safety Commissioner. Each of these federal bodies has responsibility for oversight but no powers of enforcement. In fact, total responsibility for licensing and regulation is spread over eight jurisdictions and 19 regulators, all of which have different requirements and standards for building practitioners.

The issue of licensing is what I wanted to touch on. Despite the number of regulatory bodies we have, there is a distinct lack of comprehensive, consistent licensing requirements across the country. Across our country, penalties and prosecutions for wrongdoing are paltry or non-existent. This is probably due in part to the difficulties in discovering faulty work and product substitution. The Queensland legislation is a sign that state regulators don't have the inspection powers they need to identify and prosecute breaches.

When it comes to the federal level, the committee heard evidence from the Federal Safety Commissioner that they do not have the resources or expertise to carry out the function of auditing and compliance with National Construction Code performance requirements in relation to building materials. A better licensing system with required education and training components should lead to better product knowledge and another intercept point for non-conforming and non-compliant products. But it needs to be accompanied by appropriate and enforceable penalties for criminal activity and negligence. At the moment, there are two few prosecutions and too many loopholes. Because of this it continues to be too easy for product substitution to occur. That is another issue. We have blatant fraudulence going on there. A second type of substitution occurs where someone in the supply chain makes a decision to use flammable cladding, rather than the properly fire-rated product, because it is cheaper. These decisions are made to save money or to maximise profits, but these decisions are risking lives. This can go undetected until a tragedy strikes.

Senator Carr has talked about the little action that the government has taken in relation to this, despite the fact that we have buildings effectively wrapped in petrol, so I won't elaborate on that. We've also heard that firefighters are still concerned about being put in situations where they must decide who lives and dies, because our system of building regulation has failed. This is exactly what happened at Grenfell Tower. The industry could have regulated itself, as other industries have done in a number of areas where we've expressed concern, but it has not. Now we must respond to community pressure for change. That is why we need an immediate total ban at the border, combined with stronger licensing and compliance measures throughout the building industry. The government must act to restore public safety and community confidence. Labor has a plan. The Nick Xenophon Team is already following our lead. I urge the government to do the same.