James Thomson Senior Adviser - Standards & Regulation Standards and Regulatory Services

1. James Thomson Senior Adviser - Standards & Regulation Standards and Regulatory Services

3. REPORT: The quest for a level playing field: The non-conforming building products dilemma

4. Non – conforming product Definition Products that: do not meet regulatory, Australian or industry standards; are not fit for their intended purpose;  are defectively made or not of acceptable quality;  contain false and misleading claims; do not meet performance claims (whether intentionally or unintentionally) or are intentionally counterfeit.

5. Scale of the problem • 92% of the 222 respondents reported non-conforming product in their market sector • 45% of respondents reported NCP had adversely impacted on revenue, margins and employment numbers • 43% of respondents had not lodged a complaint when encountering NCP

6. Weaknesses and failure points • Inadequate: surveillance, audit, testing, first party certification and enforcement • Building certifiers bear a disproportionate share of burden for product conformance – too much emphasis on identifying conformance post installation • Confusion among stakeholders on who has regulatory responsibility and what recourse there is when NCP is found

7. Electrical sector • $8 B market • 46% of respondents were manufacturers / fabricators and the balance distributors • 100% reported NCP in their market • 71% had been adversely impacted • Failure points: lack of harmonisation of electrical laws, lack of surveillance and enforcement

8. Steel sector • $20 B market • 65% of respondents were manufacturers and fabricators • 95% reported NCP in their market • 40% had been adversely impacted • Failure points: (with fabricators) reliance on first party certification, building certifier resp. unclear and lack of complaints mechanism

9. Aluminum and glass sector • $4 B market • 91% of respondents were manufacturers and fabricators • 81% reported NCP in their market • 65% had been adversely impacted • Failure points: lack of a visible regulator, reliance on first party certification, building certifier role unclear and fraudulent certificates

10. Engineered wood products • $2 B market • EWPAA market surveillance :70% of structural ply samples failed • EWPAA “There is a total lack of enforcement. The system is there however regulators are not resourced and lack the will to act. The situation of NCP is not taken seriously and regulators do not act on complaints nor impose penalties.

11. Paint sector • $2.7 B market • No evidence of non-conforming product! • Success factors: • high brand loyalty, • product characteristics that local production, • aggressive competition and • a widely embraced third party certification scheme

12. Plastic pipes and fittings • $2 B market • Non-conforming product - lead based stabilisers • Weaknesses: - who is responsible, - no complaints mechanism, - no surveillance at point of sale, - variation in consistency of certification, - enforcement is post installation

13. WORKSHOP - The quest for a level playing field: The non-conforming building products dilemma

14. Workshop 26 March • Education and communication • Advocacy • Research on international / national conformance frameworks • Third party certification schemes • Surveillance schemes

15. Current situation • Forming a steering committee • Low hanging fruit • Resource availability • Chipping away at the NCP problem

16. Thank you Contact: james.thomson@aigroup.asn.au Phone: 0417 489 349