Government's Move to Ease Restrictions on Overseas Building Material

On April 2nd, the New Zealand government launched its second action plan, which included a pivotal point aimed at transforming the building industry: "Release draft plan to ease restrictions on building materials from overseas for public consultation." This strategic initiative is part of a broader effort to streamline construction processes and reduce costs by integrating international building products more seamlessly into local markets. (Read the second action plan Here)

Today, as of May 9th 2024, the cabinet paper detailing these proposals was made available on the MBIE website. The release marks a significant step forward in the government's commitment to enhancing the efficiency and affordability of building projects across the nation. In response to this development, we have crafted this article to dissect the implications of these proposed legislative changes and discuss their potential impact on the architectural sector.

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Overview of the Cabinet Paper “Removing barriers to overseas building products”

The cabinet paper proposes amendments to the Building Act 2004 to streamline the integration of international building materials and systems into local projects. The documents core objectives are to broaden access to high-quality building materials, increase market competition, reduce construction costs, and expedite project timelines.

Key Features of the Cabinet Paper:

·         Recognition of International Standards: The government proposes that the Building Act be amended to allow for easier recognition of overseas standards and certifications, enabling quicker integration of international products into the New Zealand market.

·         Streamlining Regulatory Processes: A notable feature is the simplification of the approval process for overseas building products, reducing the complexity and duration of getting these products to market.

·         Legal and Liability Reforms: Amendments include protective measures for building consent authorities and advisors, shielding them from liability when relying in good faith on approved international certifications.

·         Focus on Quality and Compliance: The legislation emphasizes maintaining high quality and safety standards by ensuring that only products meeting or exceeding New Zealand standards are approved.

We reached out to Clarc customer X Studio Architects for their insights on the cabinet paper released today. Here are their thoughts on the matter:

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As architects, we can see the proposed legislative changes present both exciting opportunities and formidable challenges:

Opportunities:

·         Wider Material Selection: Architects will have access to a more extensive array of building materials, offering enhanced flexibility in design and the ability to better meet specific project requirements and sustainability goals.

·         Cost Efficiency: Increased competition from overseas can lead to lower material costs, making projects more financially viable and potentially increasing the scope of design possibilities within budget constraints.

·         Innovation in Design: Exposure to global products encourages the adoption of innovative construction techniques and materials, pushing the boundaries of traditional design in New Zealand.

Challenges:

·         Quality Assurance: There is an inherent risk in using new products whose performance under local environmental conditions is untested. Architects will need to rely heavily on robust certification processes to mitigate potential failures.

·         Supply Chain Risks: Overreliance on overseas products might expose projects to global supply chain disruptions, suggesting a balanced approach in sourcing materials.

·         Regulatory Adaptation: The transition to new standards and compliance processes may require architects to update their knowledge and understanding continually, necessitating ongoing education and potentially incurring costs.

·         Local Industry Impact: The influx of international products could threaten the viability of local manufacturers, impacting the local economy and job market. Architects shall consider the broader economic and social impacts of their material choices.

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‍Concerns Over Liability Distribution

The government's proposed new legislation notably protects building consent authorities from civil proceedings for actions taken in good faith based on building product equivalency specifications. This protection, however, does not extend to architects and engineers, who face significant vulnerability under these new rules. In practice, when building failures occur, clients often hold all parties involved accountable, including architects, engineers, contractors, suppliers, and councils. Historical precedents show that by the time failures become evident, the contractor or supplier companies may no longer exist, shifting the financial burden onto the remaining parties. Consequently, the architects and council's insurance often end up covering the costs of remediation, even though the primary issues may stem from product failures or construction workmanship.

This scenario underscores a critical imbalance in the distribution of liabilities and stresses the importance of implementing protective measures for all parties. For architects, this situation highlights the necessity of advocating for insurance products and legislative changes that acknowledge the complex interdependencies in construction projects and provide fair protections against such risks.

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Importance of Builder Expertise in Product Performance

While the government's proposed new legislation facilitates the use of internationally certified building products, it's crucial to recognize that the mere equivalence in standards does not automatically guarantee the desired performance outcomes. The lack of experience among builders with new, unfamiliar materials can result in poor workmanship, which in turn compromises the integrity and performance of the building product. This scenario highlights a critical gap that needs to be addressed: the training and upskilling of builders.

Ensuring that builders are well-versed and competent in implementing these international products is essential. Without adequate training and experience, even the best materials can fail to perform as expected, leading to building failures that could have been avoided. This situation not only affects the structural integrity but also reflects poorly on the architects and other stakeholders relying on these materials to meet their design and durability criteria.

As part of the broader industry adaptation to these legislative changes, significant investment in education and practical training for builders must be prioritized. This will help ensure that the benefits of innovative and superior building materials are fully realized, safeguarding the investment and trust placed in these products by all parties involved.

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Final Thoughts‍

The government’s move to open its doors to international building products marks a progressive step towards a more dynamic and competitive architectural landscape. However, it necessitates careful implementation. Architects, in partnership with other industry professionals, must navigate these changes thoughtfully, balancing innovation with responsibility to ensure that the new legislative environment benefits all parties involved — economically, socially, and structurally.

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Future Discussions

The cabinet paper also addresses the substitution of building products in approved designs, redefining the scope of what constitutes a minor variation in building projects. This change promises to streamline processes and reduce bureaucratic overhead for architects and builders alike. While this article briefly touches on this important development, a more detailed exploration of its implications will be addressed in future articles.

Furthermore, the paper highlights that further efforts will focus on integrating private insurance within the building regulatory framework. This aspect is especially relevant in mitigating risks introduced by new legislative changes, particularly those affecting liability and compliance. As new documents are published on this topic, upcoming articles will delve into the strategic use of private insurance to safeguard architects and other professionals within New Zealand’s building industry

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For further details, the Cabinet Papers can be accessed here:

- Removing Barriers to Overseas Building Products - Cabinet Paper

- Removing Barriers to Overseas Building Products - Minute of Decision

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Feel free to chat with us, Clarc is always happy to listen to conversations and insights. Do not hesitate to reach out to us!

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