Participants involved in the supply chain and installation of building products will soon face increased accountability and disciplinary action for the use of unsafe or non-compliant products in Queensland buildings following the passage of the Building and Construction Legislation (Non-Conforming Building Products ‒ Chain of Responsibility and Other Matters) Amendment Act 2017.
Motivated by events such as the 2014 Melbourne Lacrosse Tower fire and this year's fatal London Grenfell Tower fire, both of which involved flammable external cladding, and deaths caused by the use of inferior electrical wiring, the legislation is intended to eliminate non-conforming building products (NCBPs) in the construction of new buildings, and to provide a framework to address scenarios where NCBPs are used.
The start date for the legislation has not been fixed yet, but the Government is keen for it to be soon, so the limited window to prepare is now open.
What is a non-conforming building product?
The definitions are extremely broad. A "building product" is defined as any material or other thing that is, or could be, incorporated into or connected to a building (being a fixed structure that is wholly or partly enclosed by walls or is roofed). A building product is "non-conforming" if, in association with a building, the product:
- is not, or will not be, safe;
- does not, or will not, comply with relevant regulatory provisions; or
- does not perform, or is not capable of performing, for the use to the standard represented.
Who does the legislation apply to?
The legislation will apply to individuals or corporations who are "persons in the chain of responsibility" for a building product. They are the installer of the building product, which could conceivably include head contractors and subcontractors, and any person who designs, manufactures, imports or supplies a building product, who knows or is reasonably expected to know that the product will be, or is likely to be, incorporated into or connected to a building.
The new duties on supply chains, including senior company executives
The Act amends the Queensland Building and Construction Commission Act 1991 and operates in addition to existing obligations of safety and regulatory compliance under the Building Act 1975 (Qld) and Work Health & Safety Act 2011 (Qld).
The legislation approaches the problem of non-conforming building products from several directions. These include:
Extended liability through the supply chain
The legislation strives to eliminate the use of NCBPs from the outset by imposing on those involved at the earliest stage of a typical building product supply chain, and then each subsequent stage, a non-transferable duty to ensure, so far as reasonably practicable, that NCBPs are not used in buildings. The Act contemplates that more than one person can concurrently have the same duty and each person must comply with that duty.
Information about the suitability and use of a building product must be provided by each person in the supply chain to the next person in the chain and ultimately to the owner of the building, so far as that is reasonably practicable.
NCBPs cannot be ignored in the hope that their use has no consequence. A duty is imposed on all the persons in the chain of responsibility to notify (within two days) the Queensland Building and Construction Commission (QBCC) if they are aware or suspect a product is a NCBP or if there is a death, injury or illness or risk of serious injury or illness, which was or may have been caused by the use of a building product.
The senior executives of a company that fall within the chain of responsibility must exercise due diligence to ensure that the company complies with the duties imposed on it, including gaining an understanding of the safety and non-compliance risks associated with the products that the company designs, sells or installs and ensuring that the company applies its resources to remove or minimise those risks.
The QBCC is given a suite of powers to enter, inspect, examine and test building products to ensure buildings are safe, which will better align its powers with those of other Queensland safety regulators. If an offence is suspected the QBCC can seize property and require documents to be produced, information be given and relevant persons to attend interviews.
Duty-holders (and senior company executives) are exposed to significant consequences for contravening the legislation including:
- substantial monetary penalties (some >$100,000);
- cancellation or suspension of building licences;
- stop work orders; and
- recall orders, which can include removal, repair or modification of NCBPs that have been installed.
When will the legislation commence?
The Government aims to have the legislation in effect by the end of the year.
Importantly, there is a retrospective element to the legislation. Recall orders can be issued for building products in existence on the date of commencement and can apply to products that have been incorporated into or connected to a building before commencement.
How to get prepared
Queensland is the first State or Territory to introduce legislation targeting NCBPs in this way, however the Government is hopeful that it will form the basis for nationally consistent legislation in this area.
The Act will have a significant impact on all building product supply chain participants. The task ahead now for all industry members is to:
- get comfortable with the new obligations under the Act, including reporting concerns to the QBCC;
- conduct an audit of all building products and processes used ‒ you could be liable if you don't;
- check liability and recovery of costs clauses in contracts with supply chain participants; and
- check new and existing insurance policies to ensure there are no carve-outs for NCBPs.