15 Aug 2017

Watchdog decides against steel test certificate prosecution

9:12 am on 15 August 2017

A steel supplier that gave customers wrong information on its test certificates will not be prosecuted by the Commerce Commission.

The commission faulted Steelforce Australia in three ways over test certificates for hollow structural steel.

The commission said Steelforce put international logos and numbers on some certificates when it shouldn't have, and claimed a particular set of tests had the backing of a big global accreditor when they did not.

Some certificates also referred to a wrong welding standard.

The commission said it considered that some of the representations "may have been misleading, giving rise to a possible breach" of the Fair Trading Act.

But after a nine-month inquiry the regulator decided to give the company advice on how to comply with the law, rather than pursue it through the courts.

RNZ obtained the ruling under the Official Information Act after first reporting in May that the regulator was investigating.

The company that complained to the commission in October 2016 said in a statement: "When a well-founded complaint about structural components... takes so much time, effort and money, and still ends up with an indecisive outcome, nobody can be satisfied.

"Everybody - from producers to customers - needs a compliance regime that we can rely on. This episode shows that New Zealand's steel compliance regime needs a total re-think."

The complainant has not been publicly identified.

In China, the regulator there [http://www.radionz.co.nz/news/national/332401/china-disqualifies-steel-testing-lab-after-nz-warning disqualified Steelforce's lab in Beijing in April for using false accreditation.

Here, the Commerce Commission said Steelforce "moved quickly" to take remedial action when the investigation began.

"We acknowledge that Steelforce had relied on information supplied by other people," the commission said.

The commission said Steelforce customers Fletcher Building, United Steel, Steel & Tube and HJ Asmuss did not know there was any problem with the test certificates.

As for the quality of the steel itself, the original complainant submitted to the commission the results of two independent tests that showed the steel was not compliant with New Zealand standards.

But the commission said other tests contradicted these results.

"However, weighing these against other independent tests received that did report compliance, there was insufficient evidence to conclude that the composition of the steel did not comply with AS/NZS1163," the commission said.

Thousands of tonnes of the hollow structural steel have been supplied by Steelforce to New Zealand in recent years.

Steelforce has previously said it was not aware of any issues with the steel.

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