Minister Maurice Williamson’s uncoordinated and piecemeal approach to building law review will do little except create more crises in the industry, and more stress for affected home owners.
The Building Amendment Bill No 4, now before the House for the second reading, is another example of his need to be ‘seen’ doing something, rather than the introduction of the meaningful reforms urgently needed to avoid a repeat of the leaky building saga.
The Minister has repeatedly ignored submissions from consumers, building professionals and the city councils, as the building consenting authorities. Without a genuine reallocation of responsibility and accountability, as the submitters have proposed, these partial instalments introduced by this current Bill will create more problems than solutions.
Protection for consumers is further reduced under this Bill No.4. It fails to offer consumers any effective remedies when left in the lurch by the cynical collapsing of a $1 shell company, despite that fact that the building sector failure rate is higher than the rate for all businesses before 2003 and after 2008.
No effective measures were introduced to address products warranty, although it is widely accepted that the leaky building saga was primarily caused by the use of inappropriate building products or systems. It is also unclear what the implication is for competition between local and foreign product manufacturers.
As usual, many provisions are yet to be ‘prescribed’ or ‘determined’ by regulation, meaning the law will be ‘prescribed’ by officials, rather than voted in by elected representatives in an open and transparent process.
I agree to the analogy used by submitters that the building control engine will fail if all the cogs are not all aligned and working effectively. A weakness in any of the processes will impact on others and result in risks and crisis.
Building Amendment Bill (No 4) — Second Reading
Sitting date: 27 February 2013. Volume:687;Page:82.
RAYMOND HUO (Labour) : I would like to start by thanking the officials and submitters for their contributions, and in reply to the Minister for Building and Construction’s questions, I would like to name not one, not two, not three, but 47 submitters. Particularly, I would like to urge the Minister to read again the submissions from Hawkins Construction, the Home Owners and Buyers Association, the Auckland Council, the Wellington City Council, the Christchurch City Council, and Local Government New Zealand.
I should reiterate that we support some good initiatives under this bill, the Building Amendment Bill (No 4). In particular, we have no problem in supporting provisions in relation to dams. Being a member of the Local Government and Environment Committee I have learnt a lot about issues in relation to classifiable and referable dams. Indeed, if this bill focused specifically on dams, making it the “Building Amendment (Dams) Bill”, we would support it all the way through. In that regard I would like to thank submitters such as Genesis Energy, the Greater Wellington Regional Council, Meridian Energy, the New Zealand Society on Large Dams, etc., for their thorough submissions.
We did support the Building Amendment Bill (No 4) to go to the select committee. However, listening to submitters and reflecting on the bill and, more importantly, the piecemeal approach this National – ACT Government has taken has led us to the view that this bill should not proceed. Labour supports the building law review process but cannot support the piecemeal and isolated approach, and therefore the passage of this particular bill.
The bill is the second of two bills to implement the building law review policy decisions. The review found weaknesses in consumer protection and a need to better allocate responsibility and accountability among building consent authorities, building professionals, and consumers. Since the introduction of the No. 3 bill, now the Building Amendment Act 2012, we, together with a large number of submitters, have urged the Government repeatedly that “In the absence of a more genuine reallocation of accountability, for example, through mandatory home warranties, the introduction of proportionate liability, and mandatory insurance, all parties (consumers, building professionals, and building consent authorities) will continue to be financially exposed, even for defects not of their making.”
To be fair to the Minister, Maurice Williamson, he might have good reasons for ignoring those issues. One of them is that he had referred almost all important matters to the Law Commission for review, such as the liability models and issues regarding mandatory home warranties or insurance-backed surety—fair enough, and I supported and would continue to support the Minister in doing so. But the problem is that the partial instalment will cause uncertainty and create false hopes for parties in the building and construction sector. This indicates that the Government is not ready to introduce a comprehensive reform package needed to genuinely achieve its stated goal.
For the second term and in its fifth year all we got was nothing but publicity gimmicks. Let me quote something to reinforce my position: “It is important to ensure the proposals are developed as an integrated package with a number of equally important and interdependent processes … To borrow the analogy of the discussion document—the building control engine will fail if all the cogs are not aligned and working effectively. A weakness in any of the processes will impact on others and result in an inefficient regime that is unbalanced and ineffective … It is disappointed that the Bill has been put forward in relation to a relatively narrow range of matters, although it recognises that the Bill is one component of a wider reform programme that Cabinet has approved. In it’s view, it would be preferable to delay legislative amendments until a broad range of changes to the Act (identified as part of the current reform package) can be promoted and consulted in an integrated way.”
Where are the quotes from? From the Wellington City Council in its submission on the No. 3 bill. It is still valid because the Government is still taking the isolated and piecemeal approach. It is dangerous because if all these cogs are not aligned and working effectively, the building control engine will fail, and we cannot afford to have a repeat of the leaky building saga.
There are other issues I wish to touch upon at the bill’s second reading. Firstly, the purpose of this bill is to introduce enhanced and more comprehensive consumer protection measures. However, we note the frustration of some of the submitters and agree with them that the measures included under this bill provide no effective new protection for consumers. Rather, the protection the relevant parties now have is further reduced. I agree with those submitters, particularly structural engineer Mr John Scarry, that the explanatory note of this bill is misleading.
Secondly, regarding company failings, concerns were expressed about companies that are formed for the sole purpose of a single building project and then liquidated as soon as the work is completed, leaving no legal entity that can be directly held to account for defective work that is later discovered. The bill fails to offer consumers any effective remedies when left in the lurch by a $1 shell company, despite the fact that the building sector failure rate is higher than the rate for all businesses before 2003 and after 2008. Even legitimate contracting and subcontracting firms have often ceased to exist by the time defects have come to light.
Thirdly, regarding products warranty, we welcome an introduction of a responsibility provision for product manufacturers or suppliers. It is widely accepted that the leaky building saga was primarily caused by the use of inappropriate building products or systems, or incompetence in, or lack of adequate oversight of, their application. However, given the complexity of the issue, particularly where prescribed compliance with the building code is often difficult to establish, the provision in its current form fails to address the problem adequately. It is unclear what the implication is for competition between local and foreign product manufacturers.
Last but not least are drafting issues. There are drafting issues in terms of how provisions in this bill will be implemented. Many provisions in this bill are yet to be prescribed or determined by regulation. Without proper definition it is difficult to put the clauses into context, which hinders their interpretation and the implementation of the Act. It is unfortunate that in this time of a building sector crisis, New Zealanders are seeing an experienced Minister simply batting away critics rather than showing real leadership. Thank you.