Is the problem lax governance, ignorance of building codes or a culpable non-compliance or, most importantly, a failure to enforce existing regulations?
The headline of the recent New York Times article says what many believe: “Why Grenfell Tower Burned: Regulators Put Cost Before Safety.”
Indeed cost is a motive all the way through the supply chain, but all of us as consumers must decide what is most important.
The porous regulatory environment that allowed the Grenfell blaze to happen is replicated in Australia and globally across the building industry and in the realm of manufactured products. The Grenfell fire is just one manifestation of a 21st century malaise of poor governance and cost-based motives driving degraded quality in our built environment.
This non-compliance is a pervasive problem across the $8 trillion global construction industry and is accelerating with the rise of international supply chains, free trade agreements and opportunities for buyers to source product online and bypass traditional systems of quality control.
Investigations underway will determine the root causes of the Grenfell tragedy but here in Australia two recent Senate inquiries have estimated the incidence of non-conforming products to exceed 50 per cent in some sectors, such as cladding, glass and steel, with rework costs exceeding $2 billion annually.
A recent estimate suggests the cost of replacement of non-conforming products is in the order of $40 billion in the state of Victoria alone, and a recent audit by the Victorian Building Authority found the non-compliance rate was 51 per cent.
The preventable Grenfell disaster and the problems caused by the global building industry’s failure to adhere to specifications can largely be attributed to builders seeking commercial advantage through product substitution. Low-cost alternate products result in consumers investing in built assets worth less than face value.
Insurance companies then insure hidden risks in over-valued assets with lower asset lifespans and higher maintenance costs.
Risks to safety as evidenced in London are immeasurable and the social cost devastating to communities. The lives of individuals and families are destroyed or marred forever, along with wide-ranging long-term societal and economic implications.
Building design and operational efficiency relies on adhering to the intent and performance of component parts. These elements in the building are specified as parts of the working whole. When one or more elements are substituted with inferior products, then the whole is compromised and the integrity of the finished building is jeopardised.
The largest single contributor to building sustainability is performance and longevity. The design and construction stage may take 18 months where the investment, use and operation is measured over decades. Occupant well-being, operational efficiency and repurposing will often represent greater value than the initial build cost.
Responsible manufacturers produce compliant products that go through expensive and rigorous testing and certification regimes. Australian and European building standards are some of the highest in the world, but they are worthless unless adhered to and maintained. The cost of testing and certification puts an unfair burden on manufacturers of compliant products if competing with fraudulent or inferior-quality imitations.
Architectural specifications and designs call for proven product solutions but some builders, pursuing profit margins, may be inclined to procure cheaper products that are not fit for purpose. This dilution of quality and undermining of safety, performance and building integrity leads to risks as evidenced in the Grenfell disaster.
There are many similar, but to-date less tragic, case studies in Australia. For example, cladding in Melbourne’s Docklands, electrical cables in over 20,000 homes and asbestos in Perth Children’s Hospital. These are examples of documented instances of non-conforming products in one corner of the globe, but the Grenfell effect is causing a tremor throughout our built environment regardless of location or jurisdiction.
Ultimately, as is often the case, the end consumers pay the price. Buildings are bought at face value with few meaningful ways to verify the integrity or compatibility of internal elements. Purchasers, occupants and investors of buildings are entitled to their reasonable presumption that their homes and assets are compliant to relevant codes and will achieve design intent and longevity of purpose. Non-compliant building products directly undermine this premise and pose risks to life, while insurers subsidise the difference when catastrophe strikes.
The current failure of the regulatory framework as evidenced in London, Perth or Melbourne is caused by poor governance that will only be addressed by a rigorous system of verification and enforcement or, more painfully and dangerously, through market-based corrections.
Verification and compliance can be achieved; global supply chains are digitised, building systems are digitised and financial services are largely online. It is now overdue for the regulatory framework and verification systems to be digitised and brought online to allow the consumer transparent access to the details of construction components.
The political, legal and environmental ramifications of promoting compliance are vast and some efforts by governments, including recent changes to Australian Commonwealth Procurement Rules, are a positive contribution. But, in the absence of enforcement or a market-based verification process, they will be of little effect to curb the profit driven decisions of speculators or unscrupulous developers.
The Grenfell disaster has created an opportunity for us all to reflect on. As consumers will we continue to accept minimal governance, inferior quality and unknown risks, or will we demand disclosure, verification and safety?
By Peter Mulherin
