25 Aug 2017

'In need' regulator restructures in face of building boom

7:17 pm on 25 August 2017

The country's building regulator admits it needs a major overhaul after years scrambling just to react to leaky homes and the Canterbury and Kaikōura earthquakes.

no caption

Photo: 123RF

The restructure of the Ministry of Business, Innovation and Employment's Building Performance branch will add 22 positions and begins next week.

The agency was the worst performing out of all 16 regulatory systems run by the ministry.

The construction industry is under intense pressure from a boom in infrastructure spending amid a shortage of skilled workers.

At the same time, the policing of quality and safety standards remains very patchy.

"Generally, you guys are earning less and you're taking on more risk, and that's not a good thing for you, or for us, or for the system," BNZ Bank head of institutional banking Paul Blair told a recent Registered Master Builders conference.

"So the opportunity here in a really small country is to find a way to really lift the whole system up, make it simpler, which is the thing that really, really needs to happen for all of us because we'll get better quality, we'll get more certainty and we'll get more done."

The ministry also said the building system was too complicated, citing the number of building consent authorities - some 69 local councils - as evidence of that.

Wellington lawyer John Goddard, who led a team that challenged thousands of house repairs after the 2011 Christchurch earthquake, said the system was flawed in ways that jeopardised safety and the changes need to go further.

He said it allowed builders to "pull the wool" over the eyes of engineers and councils.

"Once a cladding goes on a building, or a floor goes down, it's quite possible that defective building work is covered up.

"There needs to be checks and balances, and there should be a proper paper trail and independent auditing, but that's not part of our system," Mr Goddard said.

Mr Goddard said New Zealand needed a watchdog and disclosure protection for whistleblowers.

"The two biggest drivers in the construction industry are time and cost. So quality assurance often gets compromised in those conditions.

"There's immense pressure on engineers to do what the builders want them to do."

Whistleblowing would allow the extent of the problems to be gauged, he said.

He said the weakest links of all were the Producer Statements that councils rely on to show a job has been done properly. Any legal standing the statements had was also removed in 2004.

The Building Performance branch is promising action, though this comes only after years of reaction.

When the regulator became part of the super-ministry in 2012, it lacked clout, shed key staff and was too reliant on outside consultants, deputy chief executive of building resources and markets Chris Bunny said.

The ministry rated its building branch as the most in need of attention last year. A restructure begins next month, but it is now playing catch-up to the building boom.

"It's quite difficult to just wind back to 2012," Mr Bunny said, rejecting a suggestion they should have fixed the branch sooner.

"There was quite a bit of pressure on the organisation in the work programme at that time.

"What we're saying now is we've taken stock, we've done this in a considered way.

"We have now, I believe, a structure that will support us to do things properly, and the challenge now is to climb into it."

That new structure includes 22 extra positions, including around trying to increase building product quality and gauging how policies impact at the coalface.

Chris Bunny said they would be kicking all the tyres, as well as talking to the government about simplifying the system.

At least two key things are not being considered.

One is import controls to catch dodgy building products, much like the one Queensland is introducing.

The other is in setting up a watchdog that builders can confidentially raise the alarm with as happens in the UK. When the head of the UK watchdog visited New Zealand some time ago, he was met with little interest, he told RNZ.

You can hear more about this on Insight, just after 8am on Sunday Morning with Wallace Chapman.

Get the new RNZ app

for ad-free news and current affairs