Concerns about the safety of some types of cladding panel systems had been raised in Australia long before the disastrous Grenfell tower fire in London. However, as in many other jurisdictions around the world, this issue was brought into shocking focus by the Grenfell tragedy. Perhaps unsurprisingly, the scope of Australian investigations has now been expanded and there is a heightened sense of urgency around this issue.
At a Federal level, an existing Senate Inquiry into building products was expanded following Grenfell to focus on non-compliant cladding.
An interim report was released on 6 September 2017 which made a number of preliminary recommendations with respect to a ban on ACM panels and increased monitoring to prevent non-compliant products being used in the future. These recommendations have yet to be implemented.
The final Senate Inquiry report is due to be released on 30 April 2018.
Taskforces and investigations
The Victorian government has established an expert taskforce to investigate the extent of use of non-compliant cladding on buildings in Victoria. The taskforce's role includes overseeing the continuing audit which was instigated following the Lacrosse fire and making recommendations to the State Government on how to improve compliance with and enforcement of building regulations to better protect the public.
NSW, Queensland and the Australian Capital Territory have also established taskforces, with the aim of conducting audits and making recommendations to their respective State governments.
Western Australia has increased the scope of its existing audit to include all high-risk, high-rise buildings in WA that have cladding attached. South Australia has accelerated its audit, which initially found 77 buildings warranting further investigation. In Tasmania, a new audit has been commenced.
Estimates of the number of buildings in Australia that have non-compliant cladding vary, but the latest indicate that there are between 2,500 and 10,000 nationwide. As the state audits are completed, a more accurate estimate is likely to be forthcoming.
In its submission to the Senate Inquiry, IAG suggested that the audits be expanded to include all types of plastic foam cladding, outlined the consequential impacts on how it would underwrite, by moderating its capacity levels, tightening acceptance criteria and more appropriately reflecting the increased risk that cladding may present in its pricing.
The various State taskforces appear to have adopted this suggestion, as they have broadened the scope of their investigations to look at all types of cladding (rather than just the ACM type found in Grenfell and Lacrosse). It has also been suggested that the scope could be broadened yet further to take in other construction products which might have an as yet unrecognised risk profile.
Legislation and Regulation
Queensland has enacted legislation to improve the building regulatory system addressing non-conforming cladding among other things.
Similarly, New South Wales has enacted a new regulation which introduces new requirements affecting the design, approval, construction and maintenance of fire safety measures (including the use of flammable cladding). These new requirements came into effect on 1 October 2017.
Other states are likely to follow suit.
As for what the future holds, it is too early to say. The Senate Inquiry’s final report is due to be published in April 2018. Once the various audits are completed, it is likely that the States will enact legislation and introduce new regulations. This may have wide reaching consequences for the construction industry, the insurance industry and beyond.