Examples of non-conforming building products
The issue of non-conforming building products affects a range of
sectors—construction, manufacturing and retail. Some specific issues were
covered in the interim reports on products containing asbestos and the
non-compliant use of aluminium composite cladding. This chapter presents a
range of examples from other sectors where non-conforming building products
have been identified, including electrical, lighting, plumbing/water, wood, steel,
The Ai Group's report, The quest for a level playing field: The
non-conforming building product dilemma, was based on the survey responses
from 222 participants and interviews/discussions with a similar number of
stakeholders. The report found that:
...92% of all respondents to Ai Group's survey reported NCP in
their supply chains. Local producers conforming to relevant standards and
regulations can be at a competitive disadvantage when the price at which a
competing product is sold reflects lower levels of attention to the quality
that is required under Australia's conformance framework. Immediate business
impacts of this uneven playing field are usually in the form of eroded margins
and reduced revenues. According to this survey, that is happening to 45% of
companies in this sector.
The Australasian Procurement and Construction Council (APCC) highlighted
the importance of the construction industry, noting that productivity in this
industry is critical to Australia's growth and the economy.
In 2016–17, the building and construction industry accounted for 7.4 per cent
of Australia's gross domestic product (GDP), and employed 9.2 per cent of the
The APCC informed the committee that it is 'increasingly concerned about
the compliance and durability of construction products as the potential risks
to the community and construction industry workers are immeasurable and should
not be underestimated'.
The National Electrical and Communications Association (NECA) raised
concerns about the impacts of non-conforming products for the electrical
contracting sector. Of particular concern was the presence of counterfeit and
non-conforming products in the supply chain, manifesting as threats to:
the risk of electrical fire and shocks;
legal liability issues;
serious injury and death;
cost to businesses operating with the supply chain of the
industry reputation; and
An example of counterfeit products was provided by HPM Legrand. It
informed the committee that it had discovered counterfeit versions of its
socket outlets had been manufactured in China and were being sold in Australia
without its approval. It noted that although the source had been tracked down
and 'with the help of the New South Wales office of fair trading they were
successfully prosecuted and fined because they were [using] the RCM mark
without a licence. Unfortunately the fine was relatively small at $8000, which
was not much of a deterrent'.
Master Electricians Australia (MEA) pointed out a number of
circumstances where the cost of faulty products may be passed on to consumers.
For example, in circumstances where a contractor is not in a financial position
to remove and replace the faulty product without charge, the customer may be
left to pay for the work to be completed out of their own pocket.
In addition, there could be financial repercussions when homeowners come to
sell their properties if they only become aware of faulty products upon
inspection. There may also be adverse consequences for homeowners who do action
a recall, noting that in circumstances such as with Infinity cable:
...the ACCC [Australian Competition and Consumer Commission]
recall did not apply to the funded removal and replacement of cable located in
the inaccessible areas of a home. Should these inaccessible areas include the
cable a sign must be attached to the switchboard notifying anyone to the
presence of the cable. Informing potential buyers about the presence of
dangerous cable is likely to deter many purchasers and make the property
virtually unsaleable. Alternatively, it could cost the homeowners a large sum
of money to pay a contractor to enter these inaccessible areas to remove and
replace the cable.
Ms Leigh Evans' submission to the inquiry outlined her serious concerns
surrounding non-conforming building products in the SmartSpace Kit Home which
she had purchased from Bunnings in 2013. Ms Evans documented the 'severe
financial and personal impacts I have suffered because of the travesty of being
supplied noncompliant and defective components in my house'.
Electrical Components in SmartSpace Kit Homes supplied by Bunnings prior to
July 2015 have since been the subject of a product recall noting the risk of
electrical shock and fire posed by the following defects:
The cables have failed some of the required ageing tests of
AS/NZS 5000.2. The insulation could become prematurely brittle with age. If the
insulation becomes brittle and the cables are disturbed, the insulation could
break and expose live conductors, resulting in possible electric shock or
The circuit breaker and RCD [Residual Current Device] do not
pose a safety risk, however these components are not approved for sale in
MEA highlighted the considerable workplace safety risks that faulty,
non-conforming electrical products may carry. As well as the occupants
themselves, tradespeople who may come into contact with these items while
working in homes and buildings are particularly at risk of direct exposure to
faulty electrical products.
The Electrical Trades Union also highlighted the risks to tradespeople:
Dodgy imported products represent a risk for workers where
issues can lie dormant for years before becoming apparent when regulators must
go through significant time and expense of a costly product recall.
Further, MEA was concerned that faulty electrical products may result in
insurance costs to consumers:
Insurers will insure buildings based on an expectation that
all electrical installations and equipment in the building comply with the
relevant standards. If some of the wiring in the property does not comply with
the standard and the insured does not disclose this as a materially relevant
fact to the insurer and there is a subsequent claim arising out of, caused by,
or contributed to by the defective cable, the insurer is likely to refuse to
cover the insured on the basis of nondisclosure of a materially relevant fact.
The Lighting Council Australia noted that its members spend a
considerable percentage of their turnover on ensuring their products are
conforming, and are concerned that competitors who do not comply with
Australian laws and safety standards are operating with a significant market
advantage. It raised a number of concerns arising from reports that
non-conforming lighting products are increasingly available in the Australian
Unsafe (not complying with safety standards) lighting products
will continue to pose a shock and fire risk to workers, consumers and
False product claims (lumens output, lifetime, energy efficiency)
will continue to result in reduced productivity including energy productivity,
non-conformance with building regulations and the need to replace products
before their claimed life;
Reduced professionalism in the industry will continue leading to
a further decline in safety outcomes and productivity;
Non-conforming products are overstating their lumen output
resulting in underperforming and unsafe installations—the National Construction
Code requires lighting levels and standards to be met so that particular tasks,
such as safe movement, orientation and particular work tasks, can be undertaken
in a safe and efficient manner;
Non-conforming new technology products that do not live up to
product performance claims are removed and replaced with less efficient
Lighting Council and our members report an increase in new
lighting product suppliers with little or no product knowledge who are
purchasing, importing and installing non-conforming products;
Product certification information has proven to be false and certification
logos are used in advertising without agreement or justification.
Windows and glazing
The Australian Window Associations (AWA) reported that the amount of
non-conforming imported windows, doors and other glass and aluminium based
products including curtain walls, balustrades and balconies products on the
Australian market has reached significant proportions. AWA reported that
failures due to
non-conforming glass products may include 'glass breakage, excessive water
damage, gross deflection, hot box effect—often leading to irreparable damage to
the building envelope, people getting cut (even fatally) or running costs
AWA reported the growth of fraudulent documentation in this industry, as
well as flawed testing and reporting being conducted in overseas laboratories,
as significant threats to this sector.
It stated that:
In 2003, with almost 300 member companies the AWA received
three requests a year to deal with product or installation issues, in 2013 with
more than 600 member companies, the AWA received three requests a week. Year to
date 2015, we have received up to six requests a week. The issue is getting
worse, not better and more compliant companies are closing as they can't
AWA noted that the nature of the high-rise residential and office
market, in which windows and doors tend to be consistent dimensions through all
the levels, lends this market to high volume importation, subsequently leading
to a higher prevalence of non-conforming products.
The Building Products Innovation Council (BPIC) provided an example where
non-conforming glass was discovered in a large building project leading to
additional costs for the developer:
The replacement of sub-standard glass at the 150 Collins St
building project in central Melbourne is estimated to cost $18 million. Grocon
has revealed ...it has to replace half the glass in the $180 million building.
The glass came from Chinese supplier, China Southern Glass.
The Australian Glass and Glazing Association (AGGA) noted that the
manufacture of safety glass is one of the main areas of potential risk of
non-conforming glass products. Of particular concern is the safety risk for
glass processors and installers where glass has not been toughened
appropriately and can therefore break more easily when it is handled, thus
posing a risk of injury. AGGA also observed:
Of particular concern is the hazard it poses for the 'DIY'
market where product can be purchased 'off the shelf' and installed by
unskilled labour. General consumers are unlikely to understand the standards
required for safety glass and thus it is easier for non-compliant product to
enter the market through these channels.
The AGGA also pointed to the risks associated with non-conforming double
Insulated glass units, commonly known as double glazing, can
also fail if they are not manufactured correctly. Failures typically happen
over time and result in the seal being compromised, leading to internal
condensation ('fogging') that reduces performance and visual amenity. Whilst
such failures do not present major safety issues the costs of replacement can
be substantial when they are part of a building façade.
Plumbing Products Industry Group Inc. (PPI Group), highlighted the
potential public health risks relating to plumbing products and the importance
of ensuring product conformance. It provided a number of examples to
demonstrate the public health risks associated with the failure of plumbing systems:
Loss of life through the outbreak of severe acute respiratory
syndrome (SARS) in Hong Kong;
Spread of the infectious organisms, Cryptosporidium and Giardia,
through the Sydney water supply;
Reported cases of water borne disease outbreaks in the USA
causing some 443,000 reported cases of illness; and
The World Health Organisations (WHO) concerns with respect to
substandard plumbing leading to legionellosis and other water borne illnesses.
An area of escalating public concern is the potential level of lead in
taps. The opening of the Perth Children's Hospital was delayed by nearly three
years due to lead contamination in drinking water caused by brass tap fittings,
and in 2017, the Queensland Building and Construction Commission (QBCC) raised
concerns about lead levels in taps sold at Aldi.
Subsequently, Aldi informed the ACCC that it had undertaken testing of its
tapware through a NATA accredited laboratory which showed the taps to be within
normal lead levels.
BPIC reported instances where plumbing products have failed in regards
to heavy metal contamination in sanitary grade products.
As well as products that fraudulently claim to meet the requirements under the
Water Efficiency Labelling and Standards (WELS) scheme:
The WELS Regulator has noted the increased supply of
non-conforming showers into the Australian market from overseas manufacturers.
These instances of non-conformance include showers supplied without flow
controllers, with substituted flow controllers or flow controllers supplied separately.
These products use more water than their WELS label indicates, therefore
consumers are being provided with fraudulent information.
Engineered wood products
Engineered wood products include interior and exterior plywood products,
structural plywoods used for formwork, residential and commercial flooring,
wind and earthquake bracing, and feature cladding; and Laminated Veneer Lumber
and I-beam products used in both commercial and residential structures.
The Engineered Wood Products Association of Australia (EWPAA) submission
stated that the engineered wood products sector is experiencing significant
problems with product non-compliance, both in the construction phase (for
example, in relation to the structural performance of building and construction
materials), through to the impact of materials in completed buildings on
occupant health and safety (for example, from structures that do not perform
their function to protect against storms and cyclones, through to the risk of
formaldehyde emissions exposure).
The Furniture Cabinets and Joinery Alliance also raised concerns about
the risk of formaldehyde emissions from engineered wood products and
board/panelling materials. The National Industrial Chemicals Notification and
Assessment Scheme (NICNAS) recommends maximum emission levels for exposure to
formaldehyde, as it is a known carcinogen. It noted that:
...as it is significantly 'cheaper to manufacture wood
product/board from glues that emit higher levels of formaldehyde, there is an
economic driver toward non-conformance of branded emission class. This affects
the safety during construction (e.g. cabinetry manufacture where workers are
exposed to fresh product for long periods of time) and occupants of buildings.
The CFMEU noted the example of a NSW apartment block that had to have
all cabinets, which had been imported from China, removed as formaldehyde 'emissions
were going through the roof'.
In addition to submissions to this inquiry, the committee's inquiry into
the future of Australia's steel industry also received evidence relating to
non-conforming building products in the steel industry.
Bureau of Steel Manufacturers of Australia (BOSMA) provided the
following examples of non-conforming products that compete with steel products:
Products with lower metallic coating and/or paint film thickness
than required by standards (AS 1397 and AS/NZS 2728).
Paints with lead content above the 0.1% limit specified in the
Poisons Standard - Paints and Tinters.
Products not marked as per standards requirements (AS 1397).
Products incorrectly described as BlueScope branded products.
Products with false or non-compliant test certificates.
There have been significant increases in prefabricated products
and/or modular assemblies where demonstrating evidence of compliant steel mill
product being used has been variable.
The Australian Steel Institute (ASI) highlighted the risks of quality
issues in a whole range of steelwork from portal frames, guard rails, sheds,
bridge trusses and building construction projects. It stated:
Observable defects such as substandard welding that needed to
be ground out and replaced, laminations in plate that could cause catastrophic
failure, substandard corrosion protection affecting the life of an asset and
generally poor workmanship were found unfortunately to be commonplace on
imported structural steelwork. 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 knock-on effect is that currently many fabricators and steelwork
manufacturing SMEs are unable to maintain a reasonable profit that would allow
them to reinvest in their businesses.
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 behavior 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.
Access covers and grates
Nepean Building & Infrastructure, a company that designs,
manufactures and supplies stormwater grates, highlighted the risks associated
with drainage grates that do not comply with Australian Standards when installed
in building projects.
Nepean Building & Infrastructure noted that 'the issue of compliance
for what is essentially a load bearing asset is almost completely disregarded
by many builders, where grates are sourced and installed based only on price'.
The consequences of drainage grates failing are 'at best the need for
replacement at an inflated reconstruction cost or at worst, serious accident in
the public domain due to product failure'.
The Vinyl Council of Australia noted that vinyl, or PVC, is a common
building material which is used in pipes, conduit, cables, flooring, permanent
formwork, window frames, profiles and membranes. It observed that the growing
number of non-conforming PVC products that fail or become subject to product
recalls is having a significant impact on:
the reputation of all PVC products in certain applications;
the ability of our members to compete with these lower cost,
sub-standard products; and
the safety and sustainability of the built environment.
Infinity cables, subject to a recall in 2014, are an example of a
non-conforming PVC insulated cable product falsely claiming to have met
Australian Standards. The Vinyl Council of Australia noted that the Infinity
cables 'were not fit for purpose, did not meet regulatory standards and present
a high fire and human safety risk'.
It also advised that as PVC is a thermoplastic, one of the issues for
the sector is fire safety. It also noted:
In the case of PVC windows, a growing product segment in
Australia because of their high energy efficiency performance, there are
concerns of non-conforming product failing because of insufficient UV
resistance in the PVC formulation. In the case of PVC plumbing and pipe,
failures can cause contamination of the water system and be a public health
concern. Large scale failure from poorly formulated, cheap product has occurred
in other jurisdictions overseas and wiped out virtually the entire market for
the product because of damage to consumer confidence.
Of particular concern to the Vinyl Council of Australia was that, in
cases where imported products have been found to be non-conforming, it has
fallen on local manufacturers to investigate and pursue the cases. It stated:
Local manufacturers have unfairly borne the cost of bringing
these cases to light to ensure public safety, while at the same time have to
compete with cheaper, inferior non-compliant products in the market.
The committee is extremely concerned by evidence to this inquiry that
illustrates the growing prevalence of non-conforming building products.
Non-conforming building products pose serious risks to the construction
industry, workers and the broader community.
The committee received evidence of products across a range of industry
are not fit for purpose;
do not conform with the required Australian building regulations
and technical standards;
are counterfeit copies of legitimate conforming products; and
are supplied with fraudulent certification or documents.
The costs of non-conforming products are being passed on to consumers through
costs of remediation, devaluation of properties, increased insurance premiums,
as well as costs associated with reduced energy and water efficiency.
Further, importers, suppliers and manufacturers of products that conform
to Australian building regulations and technical standards are being forced to
compete on an uneven playing field with cheaper, inferior non-conforming
The committee is particularly concerned about the potential safety risks
to consumers and construction industry workers including risks of fire,
electrocution, exposure to toxic chemicals and water contamination.
Without urgent and effective action the risk to Australian lives will
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