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Regulating the independence of building certifiers

October 17, 2018 Posted by Heath McNab
Regulating the independence of building certifiers

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The NSW Government has proposed replacing the Building Professionals Act 2005 with the Building and Development Certifiers Bill 2018, to strengthen and simplify the building certification system in NSW.

The proposed changes will include an amendment to the Environmental Planning and Assessment Act 1979, introducing an alternative appointment process for Principal Certifying Authorities to avoid conflicts of interest.

 It has been suggested that a conflict of interest may arise where the party responsible for the development engages the building certifier. By regulating the appointment process, the Government believes it can reduce these conflicts of interest.

An Options Paper has been developed for public consultation, seeking feedback on whether an alternative process should be introduced and if so, which process would be most effective at maintaining building certifier independence.

The proposed changes would affect Class 2 to 9 buildings of Type A construction that:

  • are greater than three storeys in height
  • have a total floor area greater than 2000m2
  • are valued at more than $5 million.

These buildings would be subject to one of the following three options considered in the paper.

Option 1: The rotation scheme

This option involves the establishment of an eligibility list with certifiers who are selected at random from the list, similar to a lottery system.

Option 2: The cab rank scheme

This option involves the establishment of an eligibility list where the next available certifier would be appointed to work on the development, similar to a cab rank.

Option 3: The time limit scheme

This option involves enforcing a limit on the amount of time a certifier can continually work for the same client, and would require the certifier to take a three-year break from the client after a certain period.

There have been criticisms of the options by Principal Certifying Authorities, including MBC. We believe any changes to the legislation should maintain a balance between independence and competitiveness.

The options focus on reducing the opportunity for a direct and ongoing relationship between the client and building certifier, with the aim of reducing conflicts of interest.

However, clients won’t be able to choose a building certifier based on quality, service, price and expertise. The options may also lead to increased risks and reduced efficiencies, the costs of which will be passed onto consumers.

Importantly, there is a risk that clients will be forced to work with building certifiers who provide sub-optimal service, or have their project reassigned to another certifier midway through the development.

We believe strengthening existing policies and codes of professional conduct will be more effective than the proposed options, which are unlikely to support the growth of an innovative and competitive building certification industry.

Public consultation on the Bill closed on 4 September 2018, and consultation on the Options Paper will close on 30 October 2018. For further information, visit the Building Professionals Board website or get in touch with our team.

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