New South Wales has followed Queensland’s footsteps in bringing in new legislation targeting dangerous building products. The Building Products (Safety) Bill 2017 passed both Houses on 23 November 2017 and is awaiting royal assent

The 2017 London fire at the Grenfell Tower social housing block killed approximately 80 people. It is thought that external cladding may have accelerated the spread of that fire. The potential health and safety risks from the misuse of building products was also seen in the 2014 Lacrosse incident in Melbourne. As a response to these incidents and following on from Queensland, New South Wales is taking steps to crackdown on dangerous building products.

New South Wales Better Regulation Minister Matt Kean stated “I am issuing a warning – we intend to be vigorous in using these new laws to make sure building products used in this state are fit for purpose… Any shonky operator who thinks they will be able to continue using the wrong product in the wrong place should think twice. We will throw the book at anyone who is found to have breached these new laws.”

The Building Products (Safety) Bill 2017 was introduced to parliament on 16 November 2017 and passed both Houses on 23 November 2017. It will enable the NSW Fair Trading Commissioner to impose a ban on the use of a specified building product in a building (such as external cladding) if they are satisfied there is a ‘safety risk’ posed by the use of the building product. The legislation captures building products which are in use in existing buildings before the ban comes into effect.

If the NSW Fair Trading Commissioner is satisfied that a building is or may be an ‘affected building’ (i.e. a building where a building product the subject of a ban has been used for a prohibited use), it may issue a notice giving particular powers to relevant enforcement authorities (which will generally be councils). The NSW Fair Trading Commissioner may also issue a ‘general building safety notice’ giving particular powers to relevant enforcement authorities if satisfied that a class of buildings may be ‘affected buildings’. Following a notice by the NSW Fair Trading Commissioner, the relevant enforcement authority may require the owner of the building to:

  • eliminate or minimise a safety risk posed by the materials
  • remediate or restore the building following the elimination or minimisation of the safety risk.

There is stated to be a ‘safety risk’ posed by the use of a building product in a building if any occupant of the building is or will likely be at risk of death or serious injury arising from the use of the building product in the building. A risk can be considered to arise from the use of a building product in a building even if the risk will only arise in certain circumstances or if some other event occurs, such as a fire. This could mean that a building may be compliant with the Building Code of Australia but still give rise to a ‘safety risk’.

Although a rectification order will be directed towards the owner of a building, building owners will presumably look to designers, certifiers and builders for recourse.

There will be new wide ranging powers given to the NSW Fair Trading Commissioner to carry out building product investigations, including powers to enter premises. It appears these new powers are largely targeted towards builders, building product suppliers, manufacturers and importers.

Information gathering powers state that authorised officers will be able to require information and documents and compel persons to provide responses to questions. There will be an associated power to record evidence about questions asked and answers received. There will also be powers given to authorised officers to enter premises, however residential premises will only be allowed to be entered with permission or a search warrant. Once the authorised person has entered premises, they will be entitled to examine and inspect any thing or document, take samples, make examinations or inquiries and conduct tests. The owner or occupier of premises may be required to provide reasonable assistance. There are a number of offences associated with a failure to assist the relevant officer with the investigation in a manner which is contrary to the Act or regulation with penalties proposed to be up to $11,000.

Continued use of a banned product will attract liability for fines of up to $1.1 million for companies and $220,000 for individuals.

Developers, builders, manufacturers and suppliers should all be looking to audit the materials of completed buildings and buildings in the process of being constructed. Despite a building which has been certified as compliant with the Building Code of Australia, there may be ‘safety risks’, which result in costly rectification orders. Whilst the rectification orders will be directed towards building owners, the consequences of rectification orders could certainly ripple through the whole design, supply and construction chain. Contractual arrangements with design consultants, material suppliers and builders will need to address the specification and use of banned products.