Steel standards, certification and non-conforming products
This chapter outlines the background to steel standards and third-party
certification in Australia, and discusses issues raised by submitters in
relation to inconsistent standards and certification requirements expected of
steel fabricated in Australia compared to imported steel.
The chapter also examines the financial and other impacts that,
according to some inquiry participants, result from a lack of clarity on
standards. It further looks at examples of non-compliant steel products, and outlines
evidence given to this inquiry regarding the lack of monitoring and a reporting
scheme for Australian companies to report non-complying products.
Senate inquiry into non-conforming building products
There is some overlap in this chapter with the concurrent Senate inquiry
into non-conforming building products, due to report on 30 April 2018. This
overlap includes, for example, the economic impact of non-conforming products
on Australian industry.
However, this chapter focuses broadly on steel—not just steel used in
the building industry—and the issues that submitters raised in this inquiry
regarding, in particular, standards and certification of steel used in
Defining standards, certification and product conformity
Some of the primary concerns expressed by a range of inquiry
participants related to standards, certification and product conformity in the
steel industry and market. These three areas, while interrelated, have distinct
The World Trade Organisation defines standards as follows:
Standards are approved by a recognized body which is
responsible for establishing rules, guidelines or characteristics for products
or related processes and production methods. Compliance is not mandatory.
They may also deal with terminology, symbols, packaging, marking and labelling
Certification is 'a form of conformity assessment' carried out by a third
Certification indicates that a product 'is compliant with a mandatory standard
like the Australian Standards or a voluntary third party certification scheme...which
confirms that a required standard has been met'.
Non-conforming products are 'products and materials that are not of
acceptable quality, do not meet Australian standards, are not fit for their
intended purpose, or contain false or misleading claims'.
These false or misleading claims may include falsified certification that a
product conforms to a required set of standards when it does not.
Also relevant to this inquiry are non-compliant building products—that
is, products that, while not necessarily non-conforming, are used in situations
that do not comply with the requirements of the National Construction Code.
Evidence to this inquiry did not focus on non-compliant products, but some
submitters and witnesses mentioned these in passing in relation to
Australia is obligated to adhere to the World Trade Organisation's
Agreement on Technical Barriers to Trade (TBT), including the requirement that
'[m]embers shall ensure that technical regulations are not prepared, adopted or
applied with a view to or with the effect of creating unnecessary obstacles to
international trade'. The agreement states that technical regulations should
'fulfil a legitimate objective, taking account of the risks non-fulfilment would
create', and they should 'not be more trade-restrictive than necessary'.
Examples given in the TBT of legitimate objectives that could lead to
the implementation of technical regulations include 'protection of human health
or safety'. However, the agreement stipulates that the assessment of such risks
should draw on, for example, 'available scientific and technical information,
related processing technology or intended end-uses of products'.
Standards in Australia
Australian standards are developed and adopted by Standards Australia,
the peak standards organisation.
These are then available for purchase through SAI Global Limited.
Standards Australia is a not-for-profit and non-government body, comprised
of governments, industry peak bodies and other stakeholders who contribute on a
voluntary basis to the creation of standards in a variety of fields, including fabricated
Mr Adam Stingemore, the General Manager of Stakeholder Engagement and
Public Affairs at Standards Australia, emphasised the non-mandatory nature of Standards
[T]here is a great misunderstanding in the Australian
community that Standards Australia is the standards police, that we get out
there and inspect, licence, watch, audit and certify...We are not the police. We
are not an enforcement agency. We are not an agency of government. We bring
people together to set a particular level.
Mrs Kareen Riley-Takos, the General Manager of Standards Development at
Standards Australia, outlined that Standards Australia has no role in how its
standards are certified or enforced:
In terms of how we develop standards, we have this principle
of impartiality, which means that we are not to define in our standards how
compliance with the standards shall be achieved. That means that it can be a
self-declaration or it could be a third-party certification or an independent
body undertaking that certification. We do not define that in the document.
Most steel fabricated in Australia complies with appropriate standards, whether
on a voluntary basis or as required in contract terms and conditions. The
Welding Technology Institute of Australia (WTIA) submitted that:
...over 90% of steel structures fabricated in Australia [comply]
with Australian standards and...a significant proportion is subject to
independent inspection during manufacture, at completion and prior to
commissioning. Nevertheless, all fabricated steel made in Australia will
require a compliance certificate.
However, despite widespread certification at the level of steel
fabrication to the set of standards produced by Standards Australia, Mr
Stingemore said that different states have different 'standards and
specifications, and some enforce them and some do not'.
In its submission, the WTIA claimed that Standards Australia's work was
unduly influenced by Australia's international trade obligations, leading to
The quality of technical Standards published by SA [Standards
Australia] has fallen dramatically over the past 5 years...SA has become a puppet
of the Federal bureaucracy rather than an organisation representing its members
who in turn represent the industry. Much needed revision to important Standards
now has to be funded by industry associations, whose members freely give their
time to SA for development. These same members then purchase the Standards they
have written from SAI Global at an onerous price. This approach has created
enormous animosity, which SA seems to hope will simply go away.
In response, Standards Australia submitted that the contention of
decreased quality in its published standards had 'been provided without
substantiation'. Standards Australia emphasised that it must 'align with public
policy with respect to trade, as determined by the Government of the day',
including the requirement of the TBT that 'Standards do not result in technical
barriers to trade'. It also stated that the 'federal bureaucracy' is treated as
any other stakeholder, and the organisation's objectives do not extend to
representing its members but, rather, require it to 'facilitate consensus in
alignment with our rules for the benefit of the Australian community'.
The Senate inquiry into non-conforming products received evidence
indicating that the cost of purchasing Australian Standards may deter companies
from ensuring their products comply with relevant standards. In its interim
report for the inquiry, the Economics References Committee recommended 'that
the Commonwealth government consider making all Australian Standards and codes
Imported steel and Australian standards
Evidence provided to this inquiry suggested that while most Australian
steel has been certified as conforming to Australian standards, legal loopholes
in contracts and gaps in regulatory regimes in some instances may allow
imported fabricated steel to avoid complying with the same standard as steel
made in Australia.
The Welding Technology Institute of Australia claimed that '[w]hen
fabricated structural steel is inspected[,] as much as 80%, predominantly
imported structures, is found to be non-compliant with Australian standards'.
Some types of imported steel are covered by well-regarded third-party
compliance schemes, such as the Australasian Certification Authority for
Reinforcing and Structural Steels, and the National Structural Steelwork
Compliance scheme for fabricated steel:
Steel reinforcing and structural steel product manufactured
in or imported into Australia is covered by a compliance scheme managed by the
Australasian Certification Authority for Reinforcing and Structural Steels
(ACRS). This scheme seeks to certify compliant structural and reinforcing steel
by auditing at the steel mill level. We should clarify that this scheme covers
'mill gate' products and not manufactured or fabricated products.
Some imported steel meets the standards of other countries which, it
should be noted, may be the same or more comprehensive than Australian
standards. Mr Mark Vassella, the Chief Executive of BlueScope Australia
and New Zealand, gave evidence stating that '[s]teel can come into the country
meeting a different standard...It can meet a JSA Japanese standard or it can meet
a US standard...it complies to an external standard'.
'Australian standards or
However, the committee received evidence indicating that inconsistent
application of standards requirements can be problematic. The use of the phrase
'Australian standards or equivalent', according to some witnesses and
submitters, allows room for certification to standards that may pose a safety
Mr Geoff Crittenden, the Chief Executive Officer of the WTIA, suggested
that even where contracts specify that a product must conform to Australian
standards, this requirement is often expressed in vague terms like 'to be built
to an Australian standard or equivalent. What does that mean?'
Mr Tony Dixon, Chief Executive of the Australian Steel Institute, also
highlighted that the vagueness of the phrase 'or equivalent' often found in
legal documents 'leaves enough room to drive a truck through'.
The Australian Industry Group observed that the resulting 'uneven
approach to standards...often allows foreign suppliers to avoid the same quality
and performance assessment that is applied to local producers'.
Mr Ian Nightingale, the South Australian Industry Participation
Advocate, also was of the opinion that inconsistent standards requirements is a
major issue. Mr Nightingale argued:
...there is a gap in Australia's certification of Australian
standards. The advice I have received is that in the statement around Australia
standards or equivalent there seems to be a fairly big hole around the word
He further outlined that he had advised the South Australian Government
to avoid using the term 'or equivalent' when requiring Australian standards in
It is really a cracker trying to get through that equivalent
argument rather than prescriptively meeting Australian standards...Because we use
'Australian standards or equivalent' because there are so many other mechanisms
to meet Australian standards it leaves the door open. That is why the advice I
gave the government was to look at another mechanism for certification.
Mr Stingemore from Standards Australia argued that 'the equivalence
issue, the use of trusted international standards in areas, is largely a matter
of Commonwealth policy, not a matter of standards development'.
In response to inconsistences in standards requirements, and reports of
first‑party certification, the Chief Executive of the Australian Steel
Institute recommended that 'steel companies supplying need to be third-party
certified to ensure that they supply to the standard, and the fabrication
company needs to be third‑party certified' to ensure that products meet
When outlining the financial and safety impact that differing sets of
standards had on the Australian steel industry, Mr Crittenden from the WTIA
stated: 'I am...here to ask...that we all comply with the same set of rules'. He
suggested that 'every piece of fabricated steel erected in Australia needs to
comply with Australian standards' so that 'we are all working on a level
playing field' in terms of competitiveness. The way to do this, he suggested,
would be 'regulation to make every piece of fabricated steel imported into or
manufactured in this country comply with the appropriate standards for pressure
vessels and structural steel'.
It should be noted that the Code for the Tendering and Performance of
Building Work 2016 requires Commonwealth funding entities to only enter
into building contracts with preferred tenderers where code-covered businesses
can prove that their products comply with Australian standards.
The 2017 Commonwealth Procurement Rules also require, if contracts are above a
certain threshold, that if an Australian standard exists for particular goods
or services being procured, 'tender responses must demonstrate the
capability to meet the Australian standard, and contracts must contain
evidence of the applicable standards'.
The issue of standards in government procurement is outlined further in chapter
Allegations of knowingly falsifying
Besides vague interpretations of what 'equivalence' with Australian
standards means, evidence that the inquiry received indicated that fraudulent
standards certification was also a key area of concern for the Australian steel
Mr Stingemore from Standards Australia noted that 'when you are dealing
with issues of fraud, technical standards come nowhere near being able to deal
with those issues'.
The South Australian Industry Participation Advocate said that he had 'seen
evidence from people in the steel industry where, quite clearly, the
documentation is fraudulent at worst, and vague and misleading at best. That
The Executive Director of the National Association of Steel-Framed
Housing gave evidence that he had seen first-hand a forged compliance certificate:
One of the issues we have had is with getting test
certificates from overseas. I got some overseas steel test certificates from
one member to see whether it was compliant, and it was missing the basic
information like who made the steel. It looked like it had just been typed in...basically
it was a counterfeit certificate.
The Australian Steel Institute in its submission provided an example of
a welding quality statement for an imported product, which 'promised' the
welding was performed in accordance with the requirements of a particular
Australian standard even though it had failed relevant tests (Figure 4.1).
Figure 4.1: Weld quality statement accompanying goods
Source: Australian Steel
The Australian Constructors Association drew attention to the importance
of product conformance in its submission, making the point that '[s]teel
products that are defective, or do not otherwise meet the relevant
manufacturing standard, may potentially place many lives at risk'.
The WTIA summarised the regulatory gap between the issuing of standards
and checks of whether imported products comply with these standards:
Australian Standards are as good, if not better, than any in
the world but very few are supported by regulation and are therefore only
applied on a voluntary basis. Without any compulsion to manufacture or procure
products to a recognised Standard companies take the lowest cost option which
is often detrimental to public safety.
The WTIA provided the committee with figures suggesting that the extent
of non-compliance in imported steel products is significant, stating: '[f]eedback
from our members suggests up to 80 [per cent] of imported fabricated steel does
not comply with Australian Standards'.
Other parliamentary inquiries have also received evidence from witnesses
and submitters expressing frustration that imported steel is not required to
conform to the same standards as steel fabricated in Australia.
The Joint Select Committee on Government Procurement received evidence
outlining the growing market penetration of non-conforming products, referring
to an Australian Industry Group report based on a national survey.
This report found that 95 per cent of respondents in the steel product sector
indicated that their market featured non-conforming products, 'with 64 [per
cent] basing their assessment on building site product failure or visual
The Senate Foreign Affairs, Defence and Trade References Committee's inquiry
into the impact of defence training activities and facilities on rural and
regional communities heard evidence from the managing director of a local
engineering company in Katherine, Mr Geoff Crowhurst, that:
There are companies in Darwin that when we see them on a
tender, we close that tender straightaway and do not go near it...We know that
they will buy the steel out of China or overseas somewhere...There is a prime
example that [an] INPEX server stack fell off the crane because the lift lines
were not welded on properly and the whole stack hit the ground. You cannot get
much more proof than that. But the outcome of that...was that they just got it
made again by the same company. They had to make it again to the right
standards. Why was it not given to an Australian company that would have done
it to the right standards in the first place? We have all these rules and
regulations that we have to comply to in the construction space yet you can put
stuff on a ship, bring it in and it has no checks and balances on it. Really,
that there are two totally different tiers is crazy.
However, Mr Crowhurst also noted that not all imported steel is of a
poorer quality compared with Australian steel:
[T]here's a perception out there that all steel from overseas
doesn't marry up to the Australian [steel]. That's not true. A lot of the steel
is coming out of a lot higher grade steel manufacturing facilities—a lot more
state of the art than we are here in Australia. That's one of our problems. If
you buy from the right place, the quality's there. The problem is that you can
buy very low grade overseas as well. That product makes it in already in a
finished form, and the checks and balances aren't done. That's the bit that's
the problem coming in, not the raw product. The raw product, in most cases, is
actually a good product.
Best Bar Reinforcements in their submission also made a similar argument,
stating that some imported steel conforms to Australian standards, and further
contended that international standards are not necessarily inferior:
Best Bar is aware of comments in the media regarding imports
of low quality steel, however it is trite to think that all imported steel is
low quality. As noted at the opening of this submission, the rebar imported by
Best Bar from Singapore conforms to Australian Standards. However there are
other international standards that require equivalent properties,
characteristics and quality.
Examples of non-conforming steel
The inquiry received a number of concerning allegations about non‑conforming
steel products. It should be noted that the Senate Economics References Committee
inquiry into non-conforming building products received many more submissions on
this issue, including from several organisations in the Australian steel
The Australian Steel Institute argued that the safety risks caused by
non‑conforming steel products were considerable, and needed to be dealt
[T]here have been numerous instances where non-compliant
construction products have caused the collapse of buildings, motorway signs,
glass panels and more. The risk of loss of life and severe injury should not be
underestimated. The quality and compliance of construction projects is a major
risk management issue which needs to be addressed. It is vital that we create
an environment in Australia in which all stakeholders in the building and
construction process, including the community, are assured that all
construction products meet a minimum acceptable level of performance and are
fit for the purpose to which they are intended.
The WTIA reported that in the preceding three years, 'the number of
reports of unsafe steel structures received by the WTIA from its Certified
Welding Inspectors has increased exponentially'.
The main reasons for safety concerns were welding that was not fit for purpose
or did not comply with recognised international standards. Examples that the
WTIA gave of unsafe structures included:
pedestrian, road and rail bridges;
light poles and gantries used in road infrastructure;
welded steel beams used in the construction industry;
oil and gas industry safety structures; and
caravans, domestic and commercial trailers and boat trailers.
Mr Ian Waters, who appeared as a witness on behalf of 63 businesses,
also told the committee about specific non-conforming products:
We have had personal experience where businesses have
imported overseas steel that does not comply...We had a large steel pipe with a
partial hole in the wall thickness, about that big, filled up with body filler
in China and then painted black, like the rest of the steel pipe. It was
presented as a brand-new piece of pipe that was going to go into a pressurised
The Australian Steel Institute outlined multiple examples of
non-conforming steel that had been fraudulently certified as meeting Australian
standards. These examples covered quality issues and what appeared to be deliberate
Testing by the steel industry has also identified metallic
coated and pre‑painted steels that do not meet Australian Standards and
regulations. Examples include substandard metallic coating and paint
thicknesses and non-conforming levels of lead in paint.
The non-compliances are not limited to poor quality and bad
workmanship but extend to deliberate fraudulent behaviour with examples such as
falsified test certificates, welds made with silicone rubber and then painted,
attachment of bolt heads with silicon rather than a through bolt and water
filled tube to compensate for underweight steelwork with fraudulent claims that
their products meet particular Australian Standards.
Figure 4.2: Steel cracking on imported fabricated product
Source: Australian Steel
Figure 4.3: Diagonal chords on a bridge truss filled with
Source: Australian Steel
The Australian Steel Institute provided the committee with photos of
steel cracking on imported fabricated product (Figure 4.2), and diagonal chords
on a bridge truss filled with water that were 'thought possibly to have been
deliberate to build up the weight of the structure to have a mass within
overall specification' (Figure 4.3).
Impact on Australian businesses
The committee received evidence indicating that the impact on Australian
businesses of imported non-compliant products is considerable. These impacts
range from decreased competitiveness when competing for contracts, to lost
revenue, to a corresponding decline in the quality of Australian steel, to
increased whole-of-life costs involved in rectifying products found to be non-conforming.
Some submitters suggested that the costs involved in ensuring conformity
to rigorous Australian standards may preclude Australian steel manufacturers
from winning contracts because of an emphasis on upfront costs. For example,
the Illawarra Business Chamber contended that:
High volumes of non-compliant imports...are placing pressure on
these domestic manufacturers. Australian steel companies are often locked out
of lucrative contracts due to an undue emphasis on upfront costs, rather than
whole of life costs. Competitors are able to offer a lower price point, in many
cases due to savings achieved through not meeting the rigorous requirements of
Mr Vassella from BlueScope Steel also emphasised the cost burdens
involved in conforming to Australian standards that international competitors
are not always required to meet:
Our contention is that all of the products we make meet
Australian standards and the cost base that we incur to ensure that they meet
those standards is not necessarily applied to our competitors.
The Australian Industry Group provided figures from a report it
published in 2013, in which 40 per cent of businesses 'reported lost
revenue/margin and reduced employment numbers' because of non-conforming
Further outlining the impact of non-conforming products on Australian
businesses, the Australian Industry Group also reported, based on the same
study, that businesses 'say they are downgrading their product quality and
service offer in order to remain viable'.
It suggested that Australian steel manufacturers may have to cut corners to be
cost competitive against competitors who do not have to meet Australian
standards or obtain third-party certification:
Relevant to this Committee's term of reference, there also is
a price depressing effect from these imports that affects a sector of local
fabricators that are forced to chase price at the expense of maintaining their
quality systems and procedures.
The Illawarra Business Chamber argued that ultimately non-conforming
products place significant burdens on the Australian steel industry and the broader
...poorly manufactured, nonconforming steel products place
significant cost burdens on the purchaser. Failed products, components and infrastructure:
project delays due to the need to rework steel components
increase the whole of life cost, due to the burden of increased maintenance and
Where the purchaser of low quality steel products is the
Australian Government, the cost is to the economy – and the public – as a
In addition, the Australian Industry Group highlighted the 'safety
impact' of non-conforming products on workers, stating that many respondents
reported 'that non-conforming steel products and structures can increase the
risk of personal injury to employees and has the potential to affect long term
building and structure safety'.
Monitoring and reporting non-conforming products
Many submitters and witnesses to the inquiry stated that there is
currently a regulatory gap between the creation of standards, who monitors
conformity to these standards, and who businesses can contact to report
The Australian Industry Group highlighted that 'the key failure points' in
the regulatory system that businesses in the building conformance framework
identified were 'gaps and/or weaknesses' that resulted from:
inadequate surveillance, audit checks, testing, enforcement and
an over‑reliance on first party certification;
inadequate clarity on the role of building certifiers; and
a lack of clarity for stakeholders in terms of how and where to
report NCP [non-conforming products].
The WTIA outlined how goods that do not meet Australian standards are
used in most cases without inspection:
On major projects this is often discovered on arrival when
the goods are inspected for compliance to the relevant code by a qualified
Welding Inspector; in which case they are normally sent to a local fabrication
company for remedial work. Unfortunately this is not a satisfactory solution as
often the steel is not certified and contractors accept compromise, as often
the only alternative is to start again. In the majority of cases low‑medium
value pressure vessels and structural steel modules are imported, erected,
installed or sold without any inspection.
However, the committee heard that even where non-conforming products
were identified, there was confusion as to whom this should be reported to. The
Australian Steel Institute emphasised that 'for structural steelwork there is
currently no reliable system for surveillance of imported building products
apart from product failure'.
It noted that even though builders and project managers may take responsibility
for site inspection, they 'often do not have the skills or knowledge to
understand compliance at a material or fabrication level'.
The WTIA explained that often no one is willing to take responsibility
for non-compliant products, leading to financial losses and safety issues:
When product is inspected and found to be noncompliant many
refuse to accept responsibility for rectifying the structure opting instead to
take the risk or try and pass on liability to another part of the supply chain.
The resulting merry go round is not only a significant cost to the economy it
often remains unresolved leaving an unsafe structure in place.
The Australian Steel Institute contended that the use of non-complying
products in infrastructure projects is a source of frustration for its members
because often they are unable to do anything about the issue besides rectify
[T]hey are unable to safely report non-compliant product due
to confidentiality clauses in construction contracts and sensitivity of
relationships in the building products supply chain which may cause them to
lose future contracts.
This makes continuous improvement or a 'Safety Alert' process
impossible. The key to the success of reporting non-compliant product is the
ability for anonymity of the person reporting, coupled with qualified review of
the matter reported.
As mentioned earlier, Standards Australia is not responsible for third-party
certification of its standards or monitoring product non-conformance. However,
the committee heard that people often try to report non-conforming
products to Standards Australia in the absence of a reporting scheme. Mr
Stingemore told the committee that:
Someone will come to us and say, 'I've bought a dodgy widget,
and there's a certificate here that says that it meets the standard'...We will
say to them, 'Go and talk to the fair-trading department in your state,' and
then they will come back and say, 'They say that's not their job.' And then we
say, 'Well, you might want to go and talk to the ACCC.' And then they go to
talk to the ACCC, who say, 'Go and talk to the fair-trading department in your
state,' and they come back to us. We actually have a call centre where we deal
with these kinds of circumstances.
The South Australian Industry Participation Advocate was of the opinion
that 'our Commonwealth agencies do not have the resources, the time or the
energy to investigate whether or not steel coming into this country is fully
The Chief Executive of the Australian Steel Institute contended that it
is unrealistic to expect Customs to examine whether imported products comply
with Australian standards before they enter Australia:
My view is that it is almost impossible for us to have
Customs stop and check product at the borders. That is why we advocate third‑party‑certification
programs to make sure that the suppliers have been certified such that their
process delivers to the Australian standard, and therefore we advocate
third-party-certification schemes, both for steel and for fabrication.
On the question of how standards could be enforced, Mr Stingemore
...getting the governments, plural, to move, because it is such
a multifaceted beast that people are trying to deal with. The industry
frustration that we see in our organisation around this issue is not getting
any better. It is not directed at anybody or any agency or any government, but
the challenges that are faced particularly within the construction sector at
the moment with all of the trading conditions and the economic issues and this
on top of it—it is a first-priority issue to be dealt with, and getting the
right people in a room would be a good start.
The South Australian Industry Participation Advocate gave evidence that
the South Australian government now requires that:
...all steel, the source of the steel, the mill...be certified by
the Australasian Certification Authority for Reinforcing and Structural Steels.
They do that globally. There are many steel mills globally that are accredited
by this body, but equally so are BlueScope and OneSteel. What you can then be
assured of is that the steel itself is certified by that particular body...What
the state government has now done is that the fabrication of steel will also be
certified by the National Structural Steelwork Compliance Scheme. Again, it is
available to other businesses overseas so we do not interfere with any free
trade agreement issues, but it will assure the government that the fabricators
that are delivering on government projects are delivering on a fair and
The Australian Steel Institute recommended that as a first step compliance
with Australian standards be made compulsory to resolve the current problems
caused by inconsistent standards requirements:
The implementation of a system that requires the supplier and
all stakeholders in the construction chain to ensure that the products that
they are selling are certified to comply with relevant standards and fit‑for‑purpose
responsibilities within their scope will be good for Australia.
They further outlined that they believe that 'for specific identified
products or processes (such as welding, galvanizing and painting)', standards
certification is not sufficient, and:
...there should also be conformance testing—that is, a regime
that tests whether Australian standards are in fact being met by product
supplied and being used for a particular project.
The WTIA also proposed that regulation be introduced 'to ensure that all
fabricated steel manufactured locally or imported in Australia is fit for
purpose by subjecting it to conformity assessment'. They expressed their
willingness 'to ensure compliance to the proposed regulation by introducing a
risk-based industry managed scheme through a suitably accredited third party
compliance organisation'. They further suggested that compliance certificates
be 'lodged on a national database'.
Senior Officers' Group on non-conforming building products
On 31 July 2015, the Building Ministers' Forum (a ministerial-level body
consisting of Commonwealth, State and Territory Ministers responsible for
building and construction industries) established a Senior Officers' Group
(SOG) 'to investigate and develop a national strategic response to the issues
of non-conforming building products' (NCBPs).
The SOG released its Implementation Plan: Strategies to Address Risks
Related to Non-Conforming Building Products in September 2017, including a
number of recommendations relevant to this inquiry. These recommendations
included the following:
Improve 'the regulatory framework to enhance the powers of
building regulators to respond to incidents of NCBPs e.g. providing the ability
to conduct audits of existing building work or take samples from a building for
Establish 'a national forum of building regulators to facilitate
greater collaboration and information-sharing between jurisdictions'
Improve 'collaboration between building and consumer law
regulators and consistency in the application of the "false and misleading
claims" aspect of the Australian Consumer Law'
Develop 'a "one-stop-shop" national website to provide
a single point of information for consumers and building product supply chain
participants, including examining arrangements for hosting and maintaining a
Develop 'mechanisms that ensure that, where all states and
territories prohibit the use of a NCBP, evidence is provided to the
Commonwealth enabling proportionate action to be taken based on the risk posed
by the product'
Implement 'an information sharing arrangement where import data
collected by the Department of Immigration and Border Protection can be
provided to state and territory regulators to facilitate compliance and
enforcement activities for NCBPs'
Initiate 'a review, with the ABCB [Australian Building Codes
Board] and Standards Australia, of Australian Standards related to high risk
building products referenced under the NCC [National Construction Code],
including assessing the costs and benefits of mandating third party
certification and establishing a national register for these products.
The committee recognises that Australia is obligated, under its
commitment to the World Trade Organisation's TBT agreement, not to prepare,
adopt or apply technical regulations with the intention or effect of creating
obstacles to international trade, beyond those necessary to avoid particular
However, the committee considers that the current system, in which
Australian fabricated steel generally is required to conform to Australian
standards while imported steel often is not, has created an unequal playing
field that has negatively impacted the Australian steel industry, in terms of
both product safety and cost competitiveness.
This inquiry and other Senate inquiries have received evidence
indicating that some imported products pose a considerable safety risk because
they do not comply with Australian standards, or their certification
certificates stating compliance are fraudulent.
Without a clear and enforceable requirement to adhere to Australian
standards or to provide evidence of third-party certification, companies may
cut corners and choose the cheapest methods to produce and supply steel.
Evidence provided to this inquiry demonstrates that a number of third
party certification schemes to Australian standards operate globally, meaning
that foreign companies providing steel to Australian markets are able to obtain
this certification. The TBT allows space for technical regulations aimed to
protect human health or safety, and third party certification schemes exist
that would not preclude foreign companies from obtaining certification meeting
The committee notes the recent recommendation of the SOG group to
initiate a review of Australian Standards related to high risk building
products. This review would assess the costs and benefits of mandating third
party certification, and look to establish a national register for these
The committee is of the view that the government should also investigate
the possibility of making third-party certification of steel, where relevant
standards are available, compulsory for structural and fabricated steel used in
The committee recommends that the Australian Government investigate the
possibility of making third-party certification of steel compulsory for
structural and fabricated steel used in Australia where relevant standards are
The committee is also concerned about the impact on the steel industry
of inconsistencies and differing standards regimes across jurisdictions. As
such, the committee considers that the Commonwealth Government should continue
to encourage state and territory governments to apply consistent standards
across jurisdictions and different regulatory bodies.
The committee recommends that the Australian Government work with the
states and territories to improve consistency in standards between different
Australian jurisdictions and regulatory bodies, with a view to harmonising
current standards requirements.
The committee notes that recommendations arising from the Senate inquiry
into non-conforming building products are yet to be finalised. Dependent upon
these recommendations, the committee further supports the recommendation from
the SOG that mechanisms be developed to ensure that evidence is provided to the
Commonwealth about non-conforming building products, including steel, and
proportionate action is taken based on the risk posed by the product.
Currently, reporting mechanisms are available through the Australian Building
Codes Board, but submitters must provide various forms of identifying
information. The committee is of the view that there should be an option for
confidential reporting so that businesses are not accused of breaching
Subject to forthcoming recommendations from the Senate inquiry into
non-conforming building products, the committee recommends that the Australian
Government develop a confidential reporting mechanism through which industry
and other stakeholders can report non-conforming steel products so that the Commonwealth
Federal Safety Commissioner can take proportionate action based on the safety
risk posed by the product.
Given the considerable gaps in the current regulatory framework,
including lack of clarity surrounding what can be done once non-conforming
steel is discovered and reported, the committee is of the opinion that a
clearer regulatory framework should be developed that could include stricter
penalties for non‑conforming steel products. The Australian Government
should consider compiling a database of these products, sharing this
information with state and territory regulators, and implementing temporary
bans on companies exporting non-conforming or fraudulently certified steel
products to Australia.
The committee commends the recommendation of the SOG that a
'one-stop-shop' national website be established as a single point of
information for consumers and building product supply chain participants, and notes
that the Australian Building Codes Board now performs this function. However,
this website does not provide steel-specific information.
Subject to forthcoming recommendations from the Senate inquiry into
non-conforming building products, the committee recommends that the Australian
Government develop a clearer regulatory framework to deal with non-conforming
steel products, with consideration given to stricter penalties for
non-conforming products or products found to have fraudulent certifications,
and the development of a public database of these products and their origin.
This inquiry heard that very little inspection of suspected non-conforming
steel products takes place, partly because inspectors lack qualifications and
partly because of the cost involved. The committee considers that the
establishment of a confidential reporting system and a public database may not
be enough to identify non-conforming steel posing a considerable safety risk.
Therefore, the committee proposes that the government convene a national
steel forum consisting of representatives from industry, government and other
stakeholders to investigate the possibility of establishing and funding an
industry‑managed steel compliance scheme that involves random independent
The committee recommends that the Australian Government convene a
national steel forum comprised of representatives from industry, government and
other stakeholders to investigate the possibility of establishing and funding
an industry-managed steel compliance scheme that involves random independent
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