New assurance pathways

Building consent authorities hold too much responsibility for overseeing compliance with the Building Code and there are weak incentives to get building work right the first time. The options paper identified four high-level options:

1. develop guidance to support building consent authorities take a better risk-based approach to decision-making
2. introduce self-certification pathways for approved professionals and accredited companies
3. introduce a new consent pathway for commercial buildings
4. repeal the inactive risk-based consenting regime established under the Building Amendment Act 2012 (subject to self-certification and the commercial consent pathway being progressed).

Submitters were asked whether the proposed options would align assurance with risk levels and skills, what the potential risks and mitigations are, as well as questions to inform the detailed design of these options.

Just over half of submitters agreed or somewhat agreed with MBIE’s preferred approach to progress all options as a package. These submitters generally supported repealing the in-active risk-based consenting regime on the basis that the new assurance pathways would be progressed. Submitters recognised that the sector has changed since the 2012 risk-based consenting regime was developed and the new assurance pathways provides an opportunity to ensure the right checks and balances are in place to manage potential risks.

Of those who were not sure, the most common reasons provided were concerns with how the detail may increase complexity and costs and the need for further consideration and engagement on the detail. Those who disagreed with MBIE’s preferred approach did so on the basis that they did not agree with one or more of the proposed options.

Consistent concerns were also raised across all options relating to the sector’s readiness to take on extra responsibilities and accountabilities and the impact of removing building consent authorities’ role in monitoring compliance. To address these concerns, submitters emphasised the importance of ensuring strict entry requirements, requiring regular monitoring, implementing a robust auditing regime, and creating hard penalties to disincentivise non-compliance.

Option 1: Guidance to support building consent authorities

Effectiveness of guidance is dependent on building consent authorities’ appetite for risk

The overall consensus from submitters is that MBIE guidance could be helpful in providing consistency in decision-making across building consent authorities and provide additional support in assessing risk. However, 19 submitters noted that the effectiveness of guidance is dependent on building consent authorities’ appetite for risk and their confidence in the sectors capabilities.

Some building consent authorities commented that they already adopt a risk-based approach, and this is often shared within cluster groups. However, they acknowledged that guidance could be helpful to improve consistency of decision-making.

Option 2: Introduce new self-certification pathways

Submitters were broadly supportive of introducing self-certification, as long as a sufficient enabling and protective framework is established around the scheme.

Most submitters agreed with the desired outcomes for self-certification and the means to achieve them

MBIE identified 3 desired outcomes for self-certification (high confidence that work complies with the Building Code, remedy for non-compliant work, and that careless or incompetent certifiers are identified and held to account).

Most submitters agreed or somewhat agreed on the desired outcomes. A small portion of submitters were either not sure or disagreed with the proposals.

A key theme amongst those submitters who somewhat agreed was that they agreed with the desired outcomes but were not confident that the proposed means would lead to achieving them. These submitters wanted more detailed information about how a self-certification system would be implemented, monitored and enforced.

Both those who agreed and disagreed with the proposals re-iterated the importance of ensuring any self-certification scheme was supported by accreditation, quality assurance, and an enforcement regime, as identified by the options paper.

Submitters identified a number of risks with introducing self-certification

The 2 most common risks identified by submitters who disagreed with the self-certification proposals was that they believed self-certification could expose the system to abuse by individuals or companies who have a conflict of interest between compliant work and financial gain. These submitters suggested consenting should remain with building consent authorities. Further, without sufficient skills and knowledge, self-certification could lead to non-compliant certification practices due to insufficient and inconsistent competency which exists in the sector, and across different professions.

Other risks identified by submitters include:

• mandatory insurance requirements are necessary to protect consumers but are reliant on the availability of such insurance in the market which is very limited
• liability may still fall on building consent authorities for work they have not overseen or certified
• the benefits may not outweigh the costs that come with self-certification (e.g. insurance).

Submitters broadly agreed the proposals outlined in the options paper would provide sufficient mitigation of risks; noting they would protect consumers, prevent building authorities from being liable for work they have not certified, and may lead to an increase in the quality of building work across the sector.

Other mitigations identified by submitters include:

• a national register of all those who can self-certify should be publicly available and should include details of their insurance
• self-certification should be phased in over time and trialled first on low-risk work
• instead of focusing on remedying already non-compliant work, the focus should instead be on avoiding mistakes to begin with or identifying them early on.

Submitters identified three key types of work that should be excluded from a self-certification scheme:

• high-risk or complex building work (e.g. structural, fire design, weathertightness)
• critical infrastructure (e.g. schools and hospitals)
• design and architecture work.

A small portion of submitters were of the view that there should be no restrictions on the types of work that can be self-certified. These submitters stated that with a sufficiently rigorous system in place, self-certification should be able to be used on all types of work. Some also suggested that having no restrictions in place would avoid complication and ensure responsibility is taken on by self-certifiers.

Option 3: Introduce a new consent pathway for commercial buildings

Commercial projects are currently subject to the same building consent process as residential homes. In practice, many of these projects are commissioned by well-informed clients, and are designed, built, supervised and peer reviewed by experienced, contractually accountable professionals. Some building consent authorities may lack the in-house technical expertise to carry out detailed design checks and inspections, and instead rely heavily on third-party review of design and specifications, as documented in producer statements.

This option proposed an alternative regulated consent process for some commercial projects.

Submitters were divided on whether the commercial building consent pathway would better align assurance and risk with expertise

Submitters broadly agreed in-principle with the proposed commercial building consent pathway, noting that further engagement is needed at the detailed design stage to ensure risks are appropriately managed and the pathway is robust. 

92 submitters either agreed or somewhat agreed that the pathway would enable a more agile and responsive approach to dealing with design changes as construction progresses. However, this was on the condition that the appropriate checks and balances are in place to ensure any design changes are Building Code compliant (e.g. providing clear documentation of design changes and construction records and ensuring robust quality assurance systems).

26 submitters commented on the sector’s readiness to take on extra responsibility. The key concerns raised were:

• history of issues with commercial buildings and existing failure rates for inspections
• cost pressures leading to the sector working outside their competency
• pressure from profit-driven clients to cut corners if compliance isn’t being monitored
• sector lacks experience working with quality assurance systems.

Submitters also identified a number of risks relating to the sectors readiness. This included their ability to manage quality assurance systems and the potential for dispute over responsibility. Submitters also raised concerns with current practices relating to design coordination, with practitioners often all working on different design versions without coordination or version control, which could be exacerbated through the commercial consent pathway.

To mitigate these risks, submitters suggested improving existing coordination of final designs and emphasised the importance of the proposed project/site coordination role to ensure responsibilities are understood and compliance evidence is coordinated. Submitters also thought it was important to include design and construction professionals in monitoring to ensure shared responsibility and accountability for any declarations.

Other mitigations identified by submitters included:

• setting a high entry bar to reflect the significant risk level associated with commercial projects
• ensuring there are means to address unethical behaviour and those operating beyond their competency level
• provide better education and training to improve sector and building consent authorities understanding of quality assurance systems
• frequently monitor compliance with quality assurance systems and ensure a robust auditing regime is in place to ensure there is confidence in compliance.

Roles, responsibilities and accountabilities need to be clearly defined and delineated

MBIE consulted on the following roles within the commercial building consent pathway: design and construction professionals, owners, building consent authorities, project/site coordination, and overall responsibility. One hundred and twenty-six submitters responded to this question.

Submitters commented that there is a need to provide clear definitions of roles and responsibilities and the consequences of not adequately performing these roles. Submitters also stated that accountabilities for each role needs to be clearly delineated to ensure participants understand their responsibilities and liability. 

Many submitters were concerned with the impact of shifting the role of building consent authorities

3 quarters of those who commented on the role of building consent authorities raised concerns with the proposed shift in their responsibilities. The main themes covered include:

• building consent authorities should retain the ability to monitor compliance to reduce the risk of non-compliance
• conducting audits on compliance with quality assurance systems goes beyond the expertise of building consent authorities and may lead to inconsistencies across building consent authorities.

Differing views were provided on when third-party reviews should be required. Responses ranged from requiring it for all projects, determining this based on the complexity of the project and requiring this throughout all phases of a project.  

Responsibility of commercial building owners

Submitters agreed that commercial building owners should have overall responsibility for the quality assurance system as they are responsible for employing appropriately qualified and experience professionals. However, submitters disagreed with owners being responsible for providing building consent authorities with all supporting compliance declarations, noting this should be the responsibility of someone more qualified.

The majority of submitters were of the view that owners did not need special protections outside the existing disputes regime, third-party review and ensuring tight entry requirements. This is due to the building owner being responsible for employing appropriate professionals, differentiating them from a domestic dwelling owner. However, it was identified that commercial projects can unfairly pass costs onto subsequent owners who have limited options for safeguarding their interest after the project is complete if mistakes or issues are identified.  

Submitters had differing views on what the scope of the commercial consent pathway should be

52 submitters provided a view on the proposed scope of the commercial pathway. Most submitters (35) supported voluntary participation to some extent to ensure only those who are competent are able to participate. This would also give the sector the flexibility to choose. Those who supported mandatory participation (29 submitters) were of the view that the pathway would appropriately manage complexity within commercial projects and their associatedrisks.

11 submitters thought that the scope should be determined based on risk rather than competency levels, and should consider skill level, experience, use of building, owner and ability to follow quality assurance systems.

Submitters were divided on whether residential buildings should be within scope of the commercial pathway. Views ranged from needing to exclude residential buildings (e.g. hotels and apartments) due to the risks to public safety and including them due to the complexity of building work not being determined by the use of a building.

< Strengthening roles and responsibilities | More efficient and streamlined delivery of building consent services >