In response to an erosion of public confidence following several high-profile issues with apartment buildings in New South Wales, the construction industry is increasing its collaboration with regulators, property owners, and building occupiers to ensure compliance with a host of new legislation around quality assurance set to take effect on 1 July. The changes brought about by the legislation are expected to impact construction businesses nationally, however, particularly around risk exposure and compliance.
Procore, in collaboration with InnovationAus, recently hosted a panel featuring key industry experts to discuss how the drop in public confidence affects the industry, how to improve collaboration with stakeholders to achieve compliance, and what’s vital for upholding regulation and mitigating operational risk.
The panelists who participated in the discussion were: Bronwyn Weir, co-author of the building confidence report; Professor Chris Bulmer, CEO, Institute of Quality Construction & Greenwich Associates; Carrie Metcalfe, partner at Minter Ellison; and Aparna Reddy, General Manager Policy – Regulatory Affairs for the Insurance Council of Australia.
Building Reforms Sparked by Systemic Quality Issues
The Australian Government recently passed a series of landmark regulatory reforms establishing a new national construction code that will govern building quality assurance. The reforms were guided in part by a 2018 building confidence report commissioned by national building ministers in the wake of the Grenfell Tower fire in West London in which 72 lives were lost. The tragedy put a spotlight on possible systemic issues in the building sector, and the report was intended to provide ministers with a roadmap for how to best ensure proper implementation of the national construction code.
“Within 12 months of our report being released, we had the Opal Tower evacuation, and then shortly after that the Mascot Towers evacuation. Amongst that we had insurers leaving the professional indemnity market, particularly in relation to building surveyors around the country, but also engineers and architects,” says Bronwyn Weir.
“That was really a signal from a global position of insurers around the insurability of the industry and the problems with the quality of construction,” she says.
Among the problems affecting quality in the industry, Weir says, are national or even global issues, around things like corporate structuring and the procurement processes of design and construct, which she says have driven a culture around less planning, less documentation, less transparency, and more make it up as you go approaches to complex construction buildings.
“Our report has really enabled this national conversation around how we resolve these issues and how we improve the sector,” she says.
The new legislation will affect the construction industry in multiple ways, particularly around regulatory compliance. Companies have already been asking how they can ensure they remain in compliance and not run afoul of the new regulations.
“They want to know, ‘how do I comply?’, ‘What do I do?’, ‘Do I need to be registered under this new act?’ If you’re a builder, if you’re a head contractor, likely the answer is yes. If you’re doing design work, likely the answer is yes. You also need to understand what your insurance obligations are under the new legislation,” says Carrie Metcalfe.
Understanding the New Duty of Care
Other issues Metcalfe highlighted around the new legislation that are important for construction companies to know include the need for designs to be declared through a government portal before work can commence, understanding the new duty of care on anyone who undertakes construction work, and understanding the extent of the building commissioner’s authority to enforce the new guidelines.
The Institute of Quality Construction (IQC) was formed in 2019 to help the industry realign in response to the findings of the building confidence report.
“It became very evident that unless the industry was prepared to get together and actually do something about it, it was going to be a pretty tall order for the industry to start to get better at what it does,” says Professor Chris Bulmer, CEO of the IQC.
“It’s just as much about looking at moving the culture of the industry so we’ve actually got a focus on excellence in service. It’s really about trying to promote quality as something that’s a fundamental part of what we do rather than an adjunct on the construction process itself. We have a massive challenge ahead of us to make sure that what we ultimately produce in accordance with the new legislation can be delivered in the field,” he says.
Aparna Reddy, General Manager, Policy for Regulatory Affairs for the Insurance Council of Australia, says successfully adapting to the new regulatory environment will require a concerted effort by all stakeholders across the supply chain in terms of addressing risk.
“We started to see the industry approach us to highlight that they found themselves unable to get the cover that was to be mandated. So we worked across the industry. We needed to engage with engineers, architects, the brokers, and the government to make sure the insurance requirements the professionals could get was commercially feasible, because there was no point in imposing something on the industry which was simply not going to be available,” she says.
Digitisation is Key to Ensuring Compliance
Among the key components to ensuring construction companies remain in compliance with the new regulations are accountability, transparency, and documentation. The rigorous documentation process, including how project documents are stored, how they’re shared, and how information is recorded, is an opportunity for digitisation in the industry.
“It’s even more important to try to make sure that we’ve got a clear understanding of what happens at the start of the process in regards to design compliance. So I think having integrated product software is so much more important now than it ever was,” Bulmer says.
New requirements around transparency means document sharing will become much more prevalent, with key project data being passed around to various stakeholders at different levels to ensure compliance throughout the duration of construction projects.
“We do have to think about the different stakeholders here and different uses of digital platforms. Of course, government is one of them, but you’re also in contractual arrangements where there’s a need to hand over documents, especially for larger buildings. So there’s a whole bunch of different calls on documentation through the process, so any of these platforms need to be alive to that,” says Weir.
“There’s going to need to be close collaboration with industry because you’re going to have other stakeholders that want to see different parts of that information for their own purposes; insurance will want to see a different set, for example, than building managers post-construction. So we need to think about all the potential uses and how the information can be shared so different stakeholders can get access rather than having silos of information that present privacy or information sharing issues,” she says.