Bill introduced on motion by Mr Matt Kean, read a first time and printed.
Second Reading Speech
Mr MATT KEAN ( Hornsby—Minister for Innovation and Better Regulation) (10:16): I move:
That this bill be now read a second time.
I am proud to introduce the Building Products (Safety) Bill 2017. This bill delivers on the New South Wales Government's commitment to put consumers first and make families across New South Wales safer in their homes, as part of the Government's 10-point plan for fire safety. The bill has been expedited in response to the Grenfell Tower fire in London, where the external cladding attached to the building is believed to have accelerated the spread of fire in the building. The potential health and safety risks from the misuse of building products was also seen in the 2014 Lacrosse incident in Melbourne. The passage of the bill will ensure this new and improved legislative framework becomes operational as soon as possible, to stop future safety risks and the use of unsafe building products that may give rise to similar incidents.
It is essential that consumers, home owners, builders and the public are adequately protected from the risks associated with building products being used in an unsafe manner. The bill closes the legislative gaps that exist as a result of the incomplete coverage of the Australian Consumer Law [ACL] and other legislation when it comes to building products used in commercial, residential and industrial sites. As recent events have shown, there is a need for the safety of the community to be prioritised and for the Government to be empowered to identify, ban and rectify unsafe cladding that is used on buildings. This bill comes at an important time as the building and construction industry is growing. According to the Australia Bureau of Statistics, $38.3 billion worth of building and engineering work has been completed throughout the State this year, up a whopping 13.6 per cent compared to the same period last year.
In this environment where the amount of construction work is rising, the bill has been developed as a forward-thinking piece of legislation to account for safety risks that arise from the unsafe use and misuse of building products in buildings both now and in the future. The demand for speed and cost-efficiency in modern construction has seen the rise of building products that are cheaply made and are unsuitable for certain uses. The use of these products has the potential to expose individuals to serious safety risks in buildings such as office towers, high-rise residential buildings, individual homes and shopping complexes. The bill links the use of a building product with any safety risk that may arise from that use. A safety risk is posed by a building product if its use causes, or is likely to cause, death or serious injury to a person who occupies the building.
Further, the bill provides that a safety risk exists even if the risk will only arise in certain circumstances or if some other event occurs, such as fire. These important concepts target the application of the bill so that the provisions only apply where the use of a building product poses a serious safety risk. It is in these situations that the New South Wales Government must have the necessary mechanisms and powers in place to take action to prevent people from getting hurt or killed as a result of the use of unsafe building products. Currently, there is no fast and efficient way for the New South Wales Government to stop people using building products in an unsafe way, or misusing products that are safe for a particular use only. The bill draws upon similar provisions of the Australian Consumer Law that have been nationally tried and tested to establish a mechanism that the Commissioner can use to ban the use of building products in the marketplace. The Commissioner will be able to prohibit specified uses of a building product by issuing a building product use ban where the Commissioner is satisfied on reasonable grounds that the use is unsafe.
The bill allows a building product use ban to be applied to a particular use only, to any building or a class of buildings or for use by certain persons or classes of persons. A building product use ban may also apply subject to specific exemptions, conditions or any other way authorised by the regulations, depending on the circumstances. To ensure that persons affected by a ban and the community understand why a building product use ban is imposed, the Commissioner will be required to specify the reasons for the ban. The Commissioner must also, if practicable, give notice of the intention to make a building product use ban to the manufacturer of the building product. Notice must be given at least 48 hours before the ban is published on the internet. The notice requirements will depend on the circumstances, and no prior notice will be required in situations where the safety risk posed by the use of the building product is so serious that it is in the public interest that the ban is not delayed. This will ensure the Government can act immediately and restrict the use of building products that can cause serious injury or death.
Where appropriate, the Commissioner may also call for public submissions on the question of whether a building product use ban is warranted and the proposed terms of the ban. The bill is drafted so that, if the Commissioner is unable to call for public submissions before a use ban, she will be able call for submissions after it has been made. This mechanism means that the usual requirement to afford procedural fairness will be able to be satisfied even where a fair hearing cannot be afforded prior to a decision being made because safety considerations require a swift decision.
I should also add that the purpose of the notice requirements in the bill is to exhaustively set out the secretary's obligation to give notice to affected persons. Where products are used widely in the industry, it will be impractical to give personal notice to all interested persons. The notice requirements here ensure that such persons will be able to make submissions, through the public submission process, before or after a ban is made, whilst also providing a clear and unambiguous mechanism for the secretary to follow in order to ensure that her decisions are not rendered invalid for a failure to afford affected persons a fair hearing. Ensuring that there is certainty as to the effect of bans is an object of the scheme provided by this bill.
On the issue of certainty, it is appropriate to say that the uses to which building products may be put change all the time and there may be subtle variations to the ways in which building products may be used from one to design to another. Now the Commissioner of Fair Trading will have to issue use bans quickly for public safety reasons, and she will of course try to make those as targeted as possible. However, the drafter of these bans will not be able to foresee every possible variation in the ways products can be used. We cannot have use bans being rendered invalid because of these sorts of issues.
The purpose of clause 9 (4) of the bill is to deal with this problem. While the common law already implies a broad discretion, the purpose clause 9 (4) is to expand on that. It is designed to ensure that, where bans are reasonably and appropriately adapted to stopping a building product being used in an unsafe way, they are not rendered invalid because the ban happens to cover a safe use, which was not and could not reasonably have been foreseen at the time. In those circumstances, interested persons should apply to have the ban amended in light of this new information. As I say, ensuring that there is certainty regarding the effect of bans was an important consideration in developing this bill.
Once a building product use ban is in force, it will be an offence to continue to cause the use of the product, or represent the product is suitable for a use, that is in contravention of the ban. A person is taken to use a building product where they do the building work to which the product relates. Contravention of a building product use ban will be an offence with a maximum penalty of $1.1 million for a corporation, or $220,000 or two years imprisonment, or both, for an individual. The size of these penalties reflects the seriousness of this offence and will ensure that banned building products are not used in New South Wales. Where a person continues to contravene a building product use ban the bill also provides for continuing offences where a further penalty can be applied for each day the offence continues. In the case of a corporation a further $110,000 can be applied for each day the offence continues, while for an individual a further $44,000 can be applied for each day the offence continues.
These powers provided to the Commissioner will act as a key source of information and guidance for all members of the community and will enable immediate response to building products unfit for distribution in the marketplace. Of course, while a building product ban will only be applied in specific circumstances where a genuine safety risk is identified, procedural fairness provisions exist to ensure that any bans are duly made and are warranted. The power to ban unsafe building products and the misuse of compliant building products will provide much-needed certainty about the types of products that are being used in buildings to ensure that safety risks are minimised and all steps are taken to increase safety across New South Wales.
Part 4 of the bill deals with the identification and rectification of affected buildings. These provisions will empower the Government to address affected buildings, which are those that are made unsafe by the use of products that are subject to a ban either generally or for a particular use. The Commissioner will have the power to issue an affected building notice to alert the owner, the relevant council, the relevant enforcement authority if the council is not the relevant authority, and the Commissioner of Fire and Rescue NSW where there is a fire safety risk. The Commissioner will also be able to issue a general warning notice to a class of buildings that are identified as affected buildings. This notice will identify the safety risk that arises from the use of a banned building product in a building.
A general warning notice can also be given to any or all councils, and to the Commissioner of Fire and Rescue NSW where the risk relates to fire safety. Both warnings will be used to alert individuals and the relevant enforcement authority of the risks to personal safety and to property, to ensure that work is rectified and risks are minimised or eliminated. The Commissioner may also require the council to report back on the steps it has taken relating to the contents of the notice and the affected building. The council will be required to outline in the report whether it has issued a rectification order, the progress or compliance with any order, or any additional steps taken by the council to ensure that the identified building is made safe.
Powers will also exist to allow relevant enforcement agencies to take their own steps to rectify work. This will enable greater oversight of affected buildings and ensure that the appropriate authority can act as soon as possible to eliminate or minimise any safety risks. A relevant enforcement agency will always be able to make a building product rectification order relating to an affected building notice or a general warning notice, or where no notice has been given, so long as the agency is satisfied that the building is an affected building.
Importantly, building product rectification orders will be taken to be development control orders under the Environmental Planning and Assessment Act 1979 [EP and A Act]. This means any person issued with a building product rectification order will be provided with the same procedural fairness as outlined in the EP and A Act and applicable to any other development control order. Changes resulting from the Environmental Planning and Assessment Amendment Act 2017 have been accounted for in the bill, with consequential amendments outlined in schedule 2 that will ensure these provisions continue to align with the intent following the commencement of that Act. Although agencies that are currently authorised to issue section 121B orders have a wide range of powers, building product rectification orders are specific to building products and link safety to the use of such products in any affected buildings.
Building rectification orders are also distinct from development control orders in that they apply only to affected buildings, where a ban must be in place that prohibits a building product for a specific use or all of its uses, tying in to the product's ability to cause serious injury or death in any identified building. Not only will consumers will be protected by the issue of a rectification order, but also purchasers and successors in title will be alerted to any outstanding rectification orders held against the title of land.
A number of consequential amendments will be made to ensure that full disclosure is given to any purchaser of land. The Strata Schemes Management Regulation 2016 will alert potential purchasers of a strata scheme on the strata information certificate to any outstanding rectification orders put in place by a relevant council. As an additional disclosure mechanism, planning certificates will include any outstanding affected building notices or building product rectification orders, or any notice of intention to make a building product rectification order that the council may be aware of. The building product rectification order will also be captured under the prescribed warranties in the contract for sale of land, and any adverse affections, including an outstanding order, will need to be disclosed. Rectification orders of buildings will provide the Government with the ability to effectively identify, target and rectify buildings and respond immediately to safety risks posed by unsafe products or products used unsafely.
To ensure the provisions of the bill can be enforced and implemented, all necessary powers required by the Commissioner for Fair Trading are established as part of the bill. Part 5 of the bill allows the commissioner to accept a written undertaking from a person who has contravened a building product use ban. This encourages compliance and aims to discourage first-time offenders and ensure repeat offenders are closely monitored. Contravention of a building product undertaking will be penalised with a maximum penalty of $1.1 million in the case of a corporation, or $220,000 in any other case. These offences are also continuing offences, with a further $110,000 for each day the offence continues for a corporation, or a further $44,000 for each day the offence continues in any other case.
Part 6 of the bill confers the investigation and enforcement powers of the commissioner. The commissioner will be able to authorise an investigation into a building product to determine whether any safety risks are posed by the use of a building product, to determine whether a building product is unsafe or to determine the location of any building in which a product has been used that may be unsafe. An investigation will provide necessary information which can be used to inform the commissioner's decision to impose a ban, or to amend or revoke the prohibitions contained in a ban already in existence. Powers of authorised officers to gather information will work alongside a building product investigation, where officers can use their existing powers to assist in any component of the investigation. Principles of procedural fairness will be adhered to and the commissioner must, if practicable, give the manufacturer notice of the building product investigation and an opportunity to make submissions in relation to the investigation. When appropriate, the commissioner will be able to assess building products to determine whether a safety risk exists.
Clause 39 of the bill enables the commissioner to require a manufacturer or supplier of a building product to conduct a product assessment and to provide the commissioner with a product assessment report outlining any findings. As part of any requirement for a product assessment, the commissioner will be able to specify the tests or inspections that must be conducted, or any qualifications or experience that is required in order to perform those tests. This will enable the building product to be properly assessed by the most appropriately qualified individual, to produce a result that indicates the actual safety of a product in relation to any or all of its uses. To ensure product assessments are always performed, the commissioner will have the power to perform an assessment where the manufacturer or supplier fails to do so. Any costs incurred by the commissioner in respect of the product assessment will be recoverable from the manufacturer or supplier. The bill provides the appropriate appeal mechanisms where a manufacturer or supplier disagrees with a decision of the commissioner. Part 7 covers the investigation powers of authorised officers.
There is currently no system in place that monitors the use of building products which are unsafe to use. The bill gives authorised officers a range of powers that will allow them to assess any safety risks, determine whether a product is safe or unsafe, as well as ascertain the location of a possibly unsafe product in a building. To support the objectives of the bill, authorised officers will be able to require a person to obtain and provide information. This will enable an officer to gather information, to assess or ascertain the use or misuse of a building product and determine any safety risks. Officers will have powers that will require answers from any individual to questions for an authorised purpose. Similar powers exist in other legislation that NSW Fair Trading administers and officers are careful and experienced in their application.
It is proposed that officers will be provided with the powers to enter and inspect any premises, but only if it is necessary to do so, or to urgently gain entry or obtain evidence when there is a safety risk at the premises. Although safety of a person or a building is always the greatest priority, authorised officers will require a search warrant or permission of the occupant to enter residential premises. To make sure that the powers of the bill are utilised in their greatest capacity, an authorised officer will have additional powers, such as the power to examine or inspect anything, make inquiries or tests, or take and remove samples of a thing. Where the commissioner requires records or information or questions to be answered, information or answers will not be admissible in certain circumstances if an objection is made. Of course, protections will be available for those who are affected by the operation of the bill. A range of remedies will be established for contravention. Proceedings for an offence under the bill or regulations will be dealt with through the Local Court or the District Court in its summary jurisdiction. Proceedings can be commenced up to two years after evidence of an alleged offence first came to the attention of an authorised officer. This time period allows offenders to be appropriately monitored and prosecuted, and encourages people who engage in building work to comply with the law.
To respond to situations of imminent danger or prevent repeat offenders, the Supreme Court will be able to grant an injunction on application by the commissioner made with the consent of the Minister. The bill also provides for the sharing of information about the safety of building products with any relevant agency. Relevant agencies include an agency of the State, Commonwealth, another State or Territory or an overseas jurisdiction that exercises functions related to fair trading or consumer protection, or functions relating to residential building work or plumbing and drainage work. A council or other law enforcement agency is also considered a relevant agency for the purposes of the information sharing provisions of the bill. These provisions are important to ensure regulators from across Australia are able to continue to collaborate effectively with each other to minimise consumer detriment caused by the use of unsafe building products.
The bill provides avenues for an individual to appeal any decision or order made by the commissioner under the provisions of the bill. Any person who is aggrieved by prescribed decisions of the commissioner can apply to the NSW Civil and Administrative Tribunal to seek review of that decision within 28 days of the notice of the decision being first published on the internet or served on the person. To support this, a reasonable excuse defence will exist where a person did not know an order was in place. This is a common provision in legislation that NSW Fair Trading administers and provides a person with the opportunity to review decisions of the commissioner.
I am pleased to introduce this bill and look forward to the valuable protections it will bring to the building and construction industry and the public. This bill is about putting consumers and residents first in this State. It will do that by banning unsafe uses of building products and by ensuring instances of unsafe uses can be dealt with. I commend the bill to the House.
Debate adjourned.
