The Industry Alert follows the release last week of the VBA's External Wall Cladding Audit Report, an audit prompted by the Lacrosse building fire at Docklands in Melbourne in November 2014. This audit was the first of its kind in Australia. However, it no longer stands alone.

The Western Australian Building Commission took the VBA's lead in June last year and implemented its own audit of 70 high-risk buildings in the Perth CBD. Recent media reports suggest that the NSW Department of Planning and Environment is concerned that up to 2,500 buildings in the Greater Sydney region contain possibly non-compliant cladding. Such reports have sparked the attention of industry bodies around Australia, from strata and community title management groups to insurance brokers. If industry groups have their way, similar audits are likely to follow in Sydney, Brisbane, Gold Coast and Canberra.

In this Alert, we bring you up to date with the following recent developments and what it means for the industry:

VBA's External Wall Cladding Audit Report; and

VBA's Industry Alert.

The VBA Audit Report

Using its coercive powers, the VBA contacted more than 20,000 building practitioners and registered architects requested information about the possible use of aluminium composite panels as external wall cladding. The VBA audit covered some 170 high-rise residential and public buildings constructed over the last 10 years in central Melbourne and the immediate surrounding suburbs.

Of the building permits audited, 51% were assessed as potentially non-compliant with the fire resistant requirements of the Building Code of Australia (BCA). Despite being potentially non-compliant, all but one building (apart from the Lacrosse building) were deemed to be safe to occupy because of the presence of other fire safety features, such as automatic sprinkler systems.

The VBA audit revealed some important lessons for the industry, including the following that go to the heart of the practices that have developed in the industry.

• The BCA requirements for external walls, including suitability of products and materials, are inconsistently applied and poorly understood.
• Non-compliant use of products and materials was not caused by one particular type of practitioner. Rather, it appears to be the manifestation of different types of practitioners at different stages of the design, approval and construction of buildings, each having differing degrees of understanding of the requirements of the BCA.
• Decisions made by different practitioners at different stages (design, specifications, design approval and construction) appear to have contributed to non-compliant use of materials and products.
• Documentation received by the VBA illustrated that the materials and methods used by the builder were sometimes inconsistent with the approved building permit or was inadequate to demonstrate whether the as-built condition complied with the building permit.

The release of the VBA Audit Report does not conclude the VBA's work. Consistent with its findings noted above, the VBA has indicated that it will now move to do, amongst other things, the following:

• further investigate and audit practitioners who have been identified as involved in multiple instance of non-compliance;
• publish a technical document for use by practitioners that clearly explains the BCA requirements in this regard;
• conduct future audits that will focus on the application of the technical advice published by the VBA;
• conduct future audits that will assess the documentation provided as part of the building permit process to ensure that sufficient detail is provided; and
• work with industry bodies to inform relevant building practitioners of the requirements in relation to documentation.

Not only is the VBA intending to provide technical clarity, it is intending to monitor compliance in a 'hands on' way that is unprecedented in Australia.

VBA's Industry alert

As anticipated in its Audit Report, the VBA yesterday released its Industry Alert intended to be a technical document for use by practitioners to clarify the circumstances in which combustible materials may be used in the construction of external walls of Type A and Type B buildings, typically being high-rise buildings.

The BCA fundamentally requires that to meet the Deemed to Satisfy fire resistance requirements, external walls of Type A and Type B buildings must be non-combustible. In the context of the BCA, non-combustible means that a product or material has passed an AS1530.1 test or is deemed by the BCA to be permissible to use as non-combustible materials. Alternatively, the BCA permits the use of combustible materials and products (such as aluminium composite panels) in certain circumstances, namely where they are attachments to external walls with a required fire resistance level (FRL).

The BCA does not define what constitutes an external wall or an attachment to an external wall.

In its Industry Alert, the VBA provides its interpretation of these BCA fire resistance requirements. In doing so, the VBA defines what the words external wall and attachment mean and the circumstances that call for those requirements to be met. The VBA provides this clarity recognising that practitioners are giving differing, and often inconsistent, meaning to those words and, consequently, differing and inconsistent views about what needs to be done to meet the fire resistance requirements.

In providing this clarity, the VBA also recognises that the issue of non-compliant facades concerns not only the type of material or product used to construct an external wall but, perhaps more importantly, how that material or product is fixed or installed.

Non-Compliant Combustible Facades: Wall or an attachment? 

The VBA release clarifies that:

• an external wall, for the purposes of the BCA, is a reference to the entire wall system which separates the interior air space of a building to the exterior air space of a building including any componentry or elements necessary for the external wall to achieve the requirements for structural performance, weather tightness, thermal performance, non-combustibility and any required FRL if required by the type of construction and any other functionality of an external wall under the BCA;
• in contrast, an attachment is a supplementary element attached to an external wall or other complete building element; and
• a simple test to determine if a product is a component of an external wall or an attachment is to determine whether the wall remains fully compliant with all requirements of the BCA if the material or product is removed.

The VBA also cautioned:

• that it is not appropriate to make simple assumptions about the fire properties of any combustible materials or products;
• as no polyethylene based aluminium composite panel core is non-combustible (within the meaning of the BCA) where it is proposed to use such a material or product as a component of an external wall required to be non-combustible, it must be supported by an appropriate alternate solution;
• aluminium composite panels with a polyethylene based core or any other bonded laminated material with a laminate that is combustible cannot be used as cladding or as any component of an external wall system in Type A or Type B construction unless supported by an appropriate alternate solution;
• where a combustible lining, or other attachment should be fixed to a non-combustible external wall having the required FRL, then unless exempt, the product or material must meet the fire hazard properties of Specification C1.10 of the BCA;
• if a specific method of fixing has been specified by the manufacturer/supplier, that fixing type must be transferred to any approved construction drawing and specification;
• if a specific product, model and fixing method has been assessed in a Fire Engineering Report (FER), the design team must ensure that those details are consistent in all documentation and specifications;
• a brand only nomination may not be adequate where a fire engineer has incorporated a specific material's properties into a design; and
• specifications should ensure that the builder must seek approval from the fire engineer and relevant building surveyor if the builder proposes to use a different product or material differing from that specified in the FER and other approved documentation.

What does this mean for the Industry?

Whilst it is early days, we anticipate the impact of the Industry Alert will be felt by all industry practitioners, be it architects, facade engineers, fire engineers, private and municipal building surveyors, suppliers of materials use in the construction of external wall systems, builders and, of course, building owners and managers.

Practitioners will need to pay particular attention to:

• the quality of information included in specifications relating to facades;
• the special conditions in Building Permits with respect to facades;
• the supplier/manufacturer's product information and fixing requirements;
• certification for materials and products used to clad;
• Australian product certification, or lack thereof;
• the quality and detail included in design and construct drawings (including shop drawings);
• approval processes for material selection and substitution; and
• ensuring the as-built conditions, as well as the design, are compliant.

It will be interesting to see whether there will be a shift in the industry to include more prescriptive obligations in building contracts for Type A and Type B constructions to ensure that consultants, builders and trades provide the level of detail that the VBA suggests should exist in design and construct drawings, implement inspections through construction to verify compliance with drawings, and to define and evidence any approval processes for material selection and substitution.

It will also be interesting to see how the Industry Alert impacts the selection of materials for external wall systems. For example, will designers of Type A and Type B constructions now require each component of an external wall, including insulation, to be non-combustible? On the interpretation given by the VBA, it would seem that the answer to that question is 'yes'.

The VBA's Industry Alert gives an important insight into the attitude of the VBA. That insight may in due course inform what constitutes acceptable industry standard. It may also inform what constitutes reasonable behaviour and standard industry practice in the context of negligence claims and prosecutions under the Building Act 1993 (Vic).

We also do not think that any impact will be limited to Victoria. As the VBA has published the interpretation that it is giving key provisions of the BCA – a national code – it will be interesting whether the VBA's counter parts in other States align with the VBA's interpretation, or offer their own meaning.

As momentum also builds at a Federal level, we may see a nation wide solution to these issues in the near future. At the Building Ministers' forum, the Ministers agreed to work cooperatively to implement measures to address safety issues with high risk building products, in particular cladding used in high-rise buildings. In-principle support was also given by the Ministers for improvements to the regulatory framework to enhance the powers of building regulators to respond to instances of non-conforming building products.

The focus at present is on cladding materials and products, fuelled by the Lacrosse building fire and the more recent Dubai hotel fire. However, with the imminent release of the report as to the effects of non-conforming building products on the Australian construction and building industry (a Senate referred enquiry) the focus will soon turn to all building materials. That report is due for release on 16 March 2016 and is intended to have regard to possible improvements to the current regulatory framework, policing and enforcing of current regulations, independent verification and assessment systems and restrictions and penalties imposed on non-conforming products, whether made locally or imported.

Interesting times ahead.