Product safety: policy makers falling short

Product safety is a serious business because it is fundamentally about ensuring Australians are unharmed. Standards Australia once described standards like guardian angels – mostly unseen but always working to keep you out of harm’s way.

From the public’s perspective this is true – the average consumer expects that the system will always ensure that products purchased are safe without enquiry. My job involves supporting members to influence and keep abreast of change, and to ensure that their company’s products comply with the relevant standards and regulations to ensure that the public can use them safely.

Globalism has brought unparalleled choice and reduced cost for consumers but as the economy has been opened our regulatory frameworks have not kept pace. Our markets have been exposed to an increasing number of suppliers who do not respect our laws and regulations nor hold the value of human life as we do. Enter non-conforming product. These are products that claim to conform to regulation and standards but do not. They result from deliberate decisions to place profit ahead of safety. In the well known Infinity Cables case, the manufacturer reduced the critical ingredients in the recipe for insulation – dramatically reducing its life span from decades to years. According to ACCC data there are still many homes with this cable installed that now may pose a risk to householders due to failing insulation.

Ai Group’s report, The quest for a level playing field: The non-conforming building products dilemma, published in 2013, places a spotlight on the issue.

“Gaps and weaknesses were identified in the building and construction conformance framework allowing nonconforming product onto the market. These include inadequacies of: surveillance; audit checks; testing; first party certification; and enforcement.”

This document was written more than six years ago and yet is still relevant. Since then, reports from Government, including a Senate inquiry, continue to pile up and yet there are still few real initiatives from policy makers to combat the problem. QLD’s Building and Construction Legislation (Non-conforming Building Products – Chain of Responsibility and Other Matters) Amendment Act 2017, which places conformance responsibilities on the supply chain, is an exception to this.

There are still many weaknesses in the regulatory frameworks governing the market; however, product conformance is not unachievable. There are three components namely: 1) standards/regulations/laws; 2) surveillance; and 3) enforcement. If any one of the three are missing then conformance suffers. Hands up all those who have seen their speedos creep above the limit because they thought there was little chance of encountering the highway patrol. The 110 sign is the law, the radar unit is the surveillance tool and the policeman is the enforcer.

Since the 1990s, governments have been outsourcing risk to industry in the building sector by placing responsibility for enforcement on private certifiers. While this has cleared up the backlog of approvals, it has meant a serious curtailment of government involvement with enforcement responsibilities and a reliance by the supply chain on conformance obligations enforced post installation. Ai Group’s research stated:

“The report suggests that building certifiers bear a disproportionate share of the burden for ensuring product conformance. Greater emphasis on conformance at point of sale and increased responsibility on product suppliers and builders may be required.”

In recent years there is an emerging view with building ministers that surveillance and enforcement are matters for industry; however, industry’s conformance schemes are either based on voluntary or contractual mechanisms (third party certification) that depend on companies that wish to do the right thing. Those that flout the law either do not participate in these schemes or find a way around them.

The ex-chair of ASIC, Greg Medcalf, was fond of saying: “lift the fear and suppress the greed”. Put simply, when the regulated fear the regulator, the market will have conforming product and services. Ironically, the recent Royal Commission into Financial Services highlighted the outcomes for consumers when this dynamic does not exist. Regulators must be seen to be enforcing the law through visible surveillance and meaningful penalties.

The  Electrical Equipment Safety Scheme (EESS) effectively wraps together these three elements required for conformance with: model legislation, a register of suppliers and products, a mark, a three tiered risk ranking for in-scope products and a self-funding mechanism that levies fees to finance check testing and surveillance by regulators. This Scheme has been embraced by three jurisdictions in Australia (QLD, VIC and WA to date) with more expected to follow.

Recently a State electrical regulator handed down a record fine to a supplier of a product that did not conform to this Scheme and resulted in a death. This action sends a strong message to the market that there are consequences for suppliers for breaches of the electrical law.

All accidents are preventable. It makes my job worthwhile just to think that the collective efforts of Ai Group and our members involved in product safety in Australia save lives.

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James is a Senior Adviser – Standards and Regulation with Ai Group. He currently manages the secretariat of the Construction Products Alliance responsible for the Non-Conforming Products project. His previous role was as a National Sector Manager at Standards Australia. He holds a degree in Electrical Engineering and a Masters in Professional Accounting.

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