The ban

From 15 August 2018, it is prohibited to use aluminium composite panels (ACPs) with a core comprised of more than 30% polyethylene in New South Wales in any external cladding, external wall, external insulation, façade or rendered finish in the following buildings:

• Class 2, 3 and 9 buildings with a rise in storeys of three or more (Type A)
• Class 5, 6, 7 and 8 buildings with a rise in storeys of four or more (Type A)
• Class 2, 3 and 9 Buildings with a rise in storeys of two or more (Type B)
• Class 5, 6, 7 and 8 buildings with a rise in storeys of three or more (Type B)

The ban was made by the Commissioner for Fair Trading pursuant to the Building Products (Safety) Act 2017 (BPSA) and will remain in force indefinitely and until revoked.

The ban applies irrespective of when the building was constructed. In effect, it applies retrospectively to all existing buildings that have the banned ACPs in the external cladding, external walls, external insulation, façade or rendered finish.

Are there any exceptions?

Yes. Two exceptions apply:

1. the ACP has successfully passed the AS 1530.1 test for combustibility prescribed by the National Construction Code (NCC) and an Accredited Testing Laboratory has produced the test results on or after 1 July 2017, which describe the methods and conditions of the test and the form of construction of the tested ACP or prototype wall assembly or façade; or
2. the ACP and the proposed external wall assembly has successfully passed the AS 5113 test and the person or entity wanting to use the ACP documents has declared by statutory declaration that the ACP will be installed in a manner identical to the tested prototype wall assembly or façade and an Accredited Testing Laboratory has produced the test results on or after 1 July 2017 describing the methods and conditions of the test and the form of construction of the tested ACP or prototype wall assembly or façade.

Impact on existing buildings

If you own an existing building that has the banned ACPs in any external cladding, external wall, external insulation, façade or rendered finish then:

1. the Commissioner of NSW Fair Trading (Commissioner) may issue a building notice to you, the occupier, your local council, the relevant enforcement authority or the Commissioner of Fire and Rescue NSW;
2. the Commissioner may publish a building notice on the internet if it is in the public interest to do so; and
3. your local council and other relevant authorities have power to issue you with a building product rectification order requiring you to:

• eliminate or minimise a safety risk posed by the use of the banned ACPs; and/or
• remediate or restore the building following the elimination or minimisation of the safety risk.

Building owners may be compelled to remove and replace the banned ACPs on existing buildings if they cannot eliminate or minimise the safety risk without removal.

Who may be liable under the ban?

Builders, manufacturers and suppliers may potentially be liable for contravening the ban under section 15 of the BPSA. It will be an offence if they:

• 'cause' the banned ACPs to be used in a building, for example they built using ACPs or supplied the ACPs for use in the construction of the external cladding, external wall, external insulation, façade or rendered finish; or
• in trade or commerce, represent that a banned ACP is suitable for use in the external cladding, external wall, external insulation, façade or rendered finish of a building.

Penalties for non-compliance

Corporations may be fined up to $1.1 million for contravening the ban, with a further penalty of $110,000 for each day the offence continues.

Contravening the ban is also an executive liability offence, meaning directors and managers may be personally liable if they knew or ought to have known of the offence and failed to take all reasonable steps to prevent it.

Individuals may be liable for fines of up to $220,000 and/or 2 years' imprisonment. There is a further penalty of $44,000 for each day the offence continues.

What does this mean for you

1. The ban applies even if it can be shown that the ACPs were used in accordance with the NCC at the time of construction - the Commissioner has openly stated that the NCC is not sufficient to regulate building products and cannot be relied upon in isolation to manage the risk of using the banned ACPs.
2. If you are buying a building, ensure you enquire about the external cladding, external wall, external insulation, façade or rendered finish of the building because if banned ACPs have been used, the responsibility for undertaking rectification rests with the current owner of the building.
3. If you are selling, seek legal advice as to whether you need to disclose that your building has or may have the banned ACPs in the external cladding, external wall, external insulation, façade or rendered finish, that you have received a building notice or a building product rectification order.
4. If you are planning or designing a building using the banned ACPs, take steps to change the design before construction begins.
5. If you are in the process of constructing using the banned ACPs, act now to remove and replace them. It will often be easier to do so during construction than later when the building is occupied, operational or tenanted.
6. Check to see whether the ACPs on your building have passed either an AS1530.1 test (most ACPs are unlikely to pass this test) or the AS5113 test (this is a relatively new test) to take advantage of one of the two exceptions.
7. Consider conducting an AS5113 test of your external wall assembly to establish if the second exception applies. Note, testing must be conducted by an Accredited Testing Laboratory and a statutory declaration as to how the wall assembly has been installed will also be needed.