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Economics References Committee
15/02/2016
Non-conforming building products

TIGHE, Mr Peter, Chief Executive Officer, Asbestos Safety and Eradication Agency

[12:04]

CHAIR: I welcome the representative from the Asbestos Safety and Eradication Agency. Mr Tighe, I invite you to make a brief opening statement, and then I will ask members of the committee if they would like to ask questions.

Mr Tighe : As you are aware, our original submission to the inquiry was in relation to our concerns about asbestos products that are reaching the shores of Australia and the fact that that is a breach of Commonwealth legislation in relation to the Customs Act and regulations. It is a non-conforming product if it is utilised in Australia, and its use under work health and safety legislation and the customs regulations prohibit its import and use. Our concern is that there seems to be an increase in the number of products containing asbestos, and that has a real effect in relation to legacy issues concerning asbestos and people who would be working with asbestos, because the general view in the construction industry in Australia is that products no longer contain asbestos, so any of the safeguards or the personal protective equipment that is used by contractors who extract the old legacy products are not being used by people who are installing products today, because of the ban.

The economic impact of bringing products into Australia is quite significant, because not only are the fines under the customs regulations in place—there are requirements in fact to have that bonded and captured at ports around Sydney, Melbourne and the rest of Australia, where they are caught up in relation to those costs—but also if it is installed there are remediation costs associated with it, which can be quite expensive, and we are starting to see some of that now. So, we have this problem of not only the difficulty in breach in relation to regulations and legislation but a situation where now it is finding its way into our built environment and there is a remediation cost far in excess of the savings that are made by importing the product directly, and the major areas where these products are coming in from are China and the Indian subcontinent.

CHAIR: I will ask Senator Madigan to ask a couple of questions, but, firstly, in attachment A to your submission you report on the importation of cement compound board which contains asbestos imported from China into the ACT. How was that detected?

Senator XENOPHON: How the hell did it get into the country?

CHAIR: And to what extent has it actually been utilised?

Mr Tighe : High-density boards—and we have had a couple of instances, and growing instances, of that since the initial report, and that is why we put this supplementary submission to the inquiry—is the old fibro asbestos sheeting. The vernacular is fibro, but it can come in a number of forms. High-density board is a much stronger cement board. It has a high-tensile strength, and it is usually used for flooring in relation to wet areas, in buildings, in places where there is a need for a holding of weighty product—bathrooms, for instance. We have had some instances in switch rooms where their switch gear and other mechanical equipment is mounted on top of the flooring. So, it is a stronger form of asbestos cement. It is a high-tensile product. It is also used for cladding. In Australia the domestic cottage industry often used to be a brick veneer. A lot of it is now the Mediterranean style where they have panels that adhere to the exterior of the building and then a render product going over the top of it, or it might be directly painted to give you that Mediterranean feel that it is all constructed of cement, but really what it is is cement board that is adhered to the side of the building. It is quite a popular product.

CHAIR: My question is, how is it detected?

Mr Tighe : It is usually only detected by someone who takes a sample because they feel that the product may in fact be a cement based product. It then has to go to a recognised laboratory for sampling and non-destructive testing which means you might take a scraper and check to see whether there are any asbestos fibres in the dust sample. Sometimes it is picked up by the regulator, sometimes by builders who are familiar with the products.

CHAIR: What are the implications for somebody who is found to have been importing asbestos into Australia?

Mr Tighe : Well, they are in breach of the customs regulations if they have imported the product, so there is a fine. I think it is currently $170,000, but I stand to be corrected on that. It is one of those fines that are adjusted in relation to the CPI, so it might be slightly higher than that now, or three times the value of the product itself. If you are talking about a container load of this material it could be quite in excess of that $170,000 or $180,000. So, that is the first economic impact in relation to the process—that you would have to have that product disposed of, and that sometimes creates a difficulty. The issue is that if it has been found to exist in a built environment then you have to remove the product, and that brings into play all the work that might be associated with that—lifting out the switch gear, lifting out materials and weighty equipment. And the case of I think the rail network in South Australia could mean that you would have to in fact shut down the system for a period of time to do that. They are all on-costs associated with the use of the illegal product.

Senator MADIGAN: Does your agency have any statistics that you could furnish the committee with—numbers of non-compliant product that has entered the country in the past 12 months?

Mr Tighe : The difficulty is that we do not actually have the responsibility for safeguarding the borders. When we identify a product there is a rapid response protocol which our agency performs the secretariat for, which has all the work health and safety regulators. The ACCC, Immigration and Border Protection also participate in that. But it is really a process for, once you have identified a product, managing the removal and the rectification work. The problem is that unless it has been picked up somewhere and reported through that process we do not know what is coming in by way of non-complying products. We do know that there is a movement to purchase these products directly from the source, and a number of companies are going directly to the manufacturers of these products, which, by and large, is China. We are not sure exactly what is coming into the country. We flagged it with Customs. Each customs manifest identifies a building product and a type of building product. We did run across some of what they call sandwich boards that had asbestos in them. They have a designated identifier in the electronic surveillance process that Customs uses. They were actually able to then identify a shipment, and a full container load of sandwich boards were found when they were inspected by Customs. But it is difficult to assess what comes into the country as a whole, and no-one I would think is recording even the totality of building products generally. Some of them might be complying and some might be non-complying.

Senator MADIGAN: Are you able to furnish the committee with how many products you have identified that have contained asbestos—that have entered the country, even in the last three years, that your department has identified?

Mr Tighe : Again, it is very difficult, because in this situation, as I said, some of the products would be complying.

Senator MADIGAN: Let's narrow it, then. Product that is non-complying: are you able to tell the committee how many non-complying products your agency has identified in the past three years?

Mr Tighe : That is not part of our overall responsibility, but it is difficult to gain that information. The only people who would understand what products have been brought in in those specific building areas would be border protection—looking at border protection's database, which has a specific identification code for building products that are imported into the country. That might be able to be gained from Immigration and Border Protection, but I am only assuming that that is the case, because I do know that they have an international identifier for all ranges of products that are imported into countries worldwide.

Senator MADIGAN: Does your department deal more with existing asbestos in the country as opposed to new asbestos entering the country?

Mr Tighe : No, my agency is there to identify issues associated with asbestos. We have programs in place for eradication and removal. But we do have a responsibility as part of our national strategic plan to monitor any products that might be imported into the country. But we do not gather data in relation to the overall import of products and we cannot discern what are non-complying and what are complying. All we know is that there are more instances of noncomplying products emerging, because of reports and investigations being done in the industry itself.

Senator MADIGAN: So you have no statistics or figures that you can supply us with? How does your agency know if it is being effective or not if you cannot show us any statistics or any information?

Mr Tighe : You are completely right; we cannot give you a totality of that. And nor could anyone give that unless they checked every product that came into the country. What we are seeing is an increase in products—

Senator MADIGAN: But how do you know there is an increase in products if you have no statistics and you cannot give us anything to show what you are doing or what you have done?

Mr Tighe : What we are seeing is an increase in reports under that rapid response protocol in the last 12 months. We have seen recent instances in South Australia where products brought in were installed at 64 different sites. That is quite a large number of sites—not just in South Australia, but in other jurisdictions—where asbestos contaminated flooring boards were brought to a number of different building sites for different reasons. So, if you are seeing the level imported rather than just the odd board being brought in by someone doing home renovations, you are seeing it starting to gain a commercial momentum. All we are saying is: we can see an emerging issue here. We are flagging that issue, which is our responsibility.

Senator MADIGAN: But, Mr Tighe, you mentioned a figure of 64. Where did you get the figure of 64 from?

Mr Tighe : I am having a little bit of difficulty hearing you.

Senator MADIGAN: You mentioned a figure of 64. Where did you get the figure of 64 from if there are no records or statistics?

Mr Tighe : The regulator in South Australia, once the initial asbestos cement flooring boards were identified, investigated that with the installer. The installer indicated that products imported from China had been installed in 64 different sites.

Senator MADIGAN: Thanks.

CHAIR: Senator Xenophon.

Senator XENOPHON: Mr Tighe, can I just go to the issue of your level of cooperation or your association with Australian Border Force, because presumably they are the gatekeepers to not allow this deadly stuff into the country; is that right?

Mr Tighe : They are responsible for oversighting the import regulations; that is true.

Senator XENOPHON: And your agency has a role to educate and to inform and also to make sure there is a robust regulatory framework; is that right?

Mr Tighe : That is true. Our job is to increase awareness; to make people aware of the regulations, restrictions and bans in place. So we do liaise with Immigration and Border Protection—or Customs in its old form—in relation to the issue of asbestos products. They are part of that rapid response protocol that is in place, which is really in place for products once they have been identified in the country itself. But we have had direct involvement with the old Customs department in relation to how they inspect and how they work through their process. I have been out to look at their facility at Port Botany, where they showed us how they go through the protocols.

Senator XENOPHON: This is Australian Border Force now?

Mr Tighe : Yes, that is Australian Border Force now.

Senator XENOPHON: With all those elaborate uniforms they have now?

Mr Tighe : Yes, they all have new uniforms. Our position to Border Force is to say: 'We are seeing the emerging number of these coming in here. How can we work with you to get better levels of diligence and compliance in that area?' Not only do we need to work with that group; Customs forwarders and agents are the administrators of the process to import products into Australia, and we have been addressing their conferences and talking to their members about getting better levels of awareness. But certainly the real issue has to come down to the importer. The importer is the one that is responsible for ensuring that the product is not contaminated. The policeman is—

Senator XENOPHON: I want to get to the importers and penalties and the like in a minute, because that is relevant to the context of this inquiry. But in terms of Border Force, how regularly do you liaise? How do you work with them? What is the level of cooperation with Border Force in relation to asbestos eradication or letting asbestos into the country.

Mr Tighe : My agency, as you would be aware, falls under the employment portfolio. We are an independent agency, but we have a responsibility under our national strategic plan to work with all Commonwealth departments in relation to the issues associated with asbestos. So we have been in contact directly with Immigration and Border Protection about how they might improve their systems of management and how they might—

Senator XENOPHON: Can you provide details of that correspondence—emails and communications with them?

Mr Tighe : I certainly can. A consequence of that was a decision made by the previous minister under my portfolio, Senator Abetz. He made a decision that there should be a review of the Customs regulations and the legislation associated in relation to that. That has been followed through by the current minister, Senator Cash. My understanding is now that Customs are going to handle an open review of their legislation, and we will be involved in that. But, to date, I have not received any correspondence from them.

Senator XENOPHON: So you wrote to Border Force. When did you write to them requesting some action on this?

Mr Tighe : We wrote to Border Force initially some 18 months ago about talking about the overall problem associated with asbestos. We have had some series of discussion with them and pointed out the concerns we have had. They have now become part of the rapid response process. But the review of the legislation and regulations which was mooted during the latter part of last year has not been put in place as yet.

Senator XENOPHON: Was that from Minister Abetz?

Mr Tighe : I understand it was Minister Abetz that wrote to the then Minister for Immigration and Border Protection.

Senator XENOPHON: I want to get to the penalties and to the importers in a minute. I am just running through this. Can you give us details of the correspondence you have had with Border Force, or the pre-existing agency that had the same role, and the responses you have had—the two-way correspondence—and any meetings you have had with them. It seems to me that there must be some higher risk jurisdictions where this would come from. In terms of building materials coming from a particular source, you would think there would be increased surveillance of that.

Mr Tighe : I could certainly supply you with the email chain and the correspondence from the initial rumblings around this issue to where we are today—including, decisions that have been made at a ministerial level to do some reconfiguration or re-examination of the current regulations.

Senator XENOPHON: Going to the issue of importers, do you have a concern about some importers? At the moment importers can face a hefty fine; is that right?

Mr Tighe : There is certainly a substantial fine, yes.

Senator XENOPHON: Which is what?

Mr Tighe : It is $170,000 for breaching the import regulation.

Senator XENOPHON: If an importer is knowingly or recklessly bringing products into the country—that is, if there is a reckless indifference as to whether it has asbestos or not—and if there was a prior history of this particular source or if the manufacturer overseas had asbestos in their products, do you have a particular view as to whether in those egregious cases there ought to be more severe penalties applying, including jail terms?

Mr Tighe : I think in the case of $170,000—if that was all you were going to apply and you had a serial offender who was putting at risk workers' health and safety—

Senator XENOPHON: and consumers—

Mr Tighe : then the $170,000, you would assume, would be inadequate.

Senator XENOPHON: But the company could just go into liquidation, so the fine wouldn't be payable?

Mr Tighe : It is possible, yes, if they were nothing more than a shell company that is importing. But they must be sourcing and then supplying somewhere. We have not picked up anyone of that ilk, but again we are picking up the information once it is reported not necessarily by—

Senator XENOPHON: Let us say you cannot find the importer—the importer has gone bust—who should next be responsible down the chain? You could have a reputable builder, a large construction company, and they rely in good faith on some certificate of compliance to say that this is asbestos free. What do you do in those cases where documents may be forged and the construction company may take that in good faith?

Mr Tighe : That is the difficulty and that is the message that needs to be put in place. In our original submission, we talked about products that had been brought in and we had certificates of compliance—in fact, laboratory tests—saying they were asbestos free.

Senator XENOPHON: When they were not.

Mr Tighe : When testing took place over here—this is in relation to an import into Queensland—the sample products were found to contain asbestos. You could see from that process that the testing regime that had occurred in the country overseas, which in this case was China, was basically worthless. The instance in South Australia related to what they call the material data sheet. Material data sheets only tell you the compound. They do not necessarily say there has been a testing of that product. Our view is that what should happen is, if you are going to be involved in importing products from overseas and that is going to be a mainstay for your business process, then you ought to make sure that you are getting independent testing in Australia. You cannot rely on testing that takes place in these emerging manufacturing countries, because the level of regulation in relation to manufacturing over there does not reflect the sorts of things that we have in our own country.

Senator XENOPHON: You are saying that an importer should not be able to rely on overseas certification—in all cases or some cases?

Mr Tighe : If they do rely on it in good faith, and they are found to breach because they did rely on it, I do not think it should be a reasonable defence, because we know that—

Senator XENOPHON: You are saying that they cannot rely on an 'in good faith' defence if they know it is coming from a jurisdiction which may be quite problematic?

Mr Tighe : That is right. If you are going to be in that sort of business, you need to ensure that you are making a double-check in relation to the product, because relying on someone who is actually selling you the product to provide you with a compliance certificate from a laboratory in China does not necessarily give you the protection you should be wanting.

Senator XENOPHON: What is your estimate of the number of building products that we are still getting coming into this country that have got asbestos in them?

Mr Tighe : The problem is, as I said to Senator Madigan, I cannot supply details in relation to the number of products and the numbers that are non-compliant versus compliant, but what we have is an emerging number of instances, some of which involve full containers full of products. The issue in South Australia with 64 sites means that there is quite an amount of material coming in here. So we are not talking about two or three sheets which were imported for a household refurbishment.

Senator XENOPHON: This is the state government's rail project?

Mr Tighe : That is true. It is the same builder who was involved in the rail network over there who has now reported to authorities that there are 64 sites other than those that were identified in the rail sector. Not all of them are in South Australia. I think New South Wales and Queensland come into play. There was a further instance of that product in a gas-pumping station in New South Wales, where there was a direction by the regulator to remove that material. I think that was one of the sites of the 64 that were nominated.

CHAIR: Thank you, Mr Tighe. I only have one question before we finish. Are we the only mugs still importing asbestos into our country? Are other countries doing better in terms of detecting these types of building materials?

Mr Tighe : There are over 50 countries that have across-the-board bans in relation to importing asbestos and asbestos products, but it is still widely used. It is still mined in South America and the old Eastern bloc countries. The use of asbestos has dropped by about 50 per cent, but it is widely used in manufacturing in India and some of the Asian countries—China. Vietnam is in the process of putting a ban in place. It is still used in Indonesia, for instance, in the Philippines, in Laos and in a number of other countries. So there are still lots and lots of asbestos building products being manufactured. It is a question of whether they hit our shores and what we can do about that.

CHAIR: Of the 50 countries that have banned the product, are there countries that are doing better than us in identifying where the certification process is being circumvented and preventing these materials coming into their country?

Mr Tighe : It is worldwide. Some countries are better at it than others. Even the USA does not have a ban in relation to the import of asbestos. You can still import asbestos products in some of the other areas. It is not a problem just for the building area and noncompliance. We have had recent instances of brake shoes and brake pads with asbestos again being imported into the country. So there are a lot of products coming out of the manufacturing powerhouses that are working their way into Australia. Toyota had an issue with brake pads. We have had heavy duty trucks with imported brake shoes that have asbestos in them. The problem is the same as in the building industry: motor mechanics who might be working on those vehicles do not know they are working on asbestos dust around the brake shoe pad area. So, from our perspective, it is not just limited to non-complying building products.

Senator XENOPHON: Through you, chair, if I can put some questions on notice. In terms of the contacts that you have had with Border Force, can you provide on notice the level at which you are dealing with Border Force. How senior is the level in Border Force that are you dealing with this issue? How many prosecutions have occurred in relation to these breaches? Also, there is the issue of high-risk products. Can you tell us what your views would be—and I am happy for you to take this on notice because it is technical—should there be a requirement of a positive assurance that a product is asbestos free, if it is coming from a jurisdiction where there have been breaches? And would there be barriers in relation to that positive assurance regime, if a free trade agreement has been entered into? Would it potentially be in breach of a free trade agreement?

Mr Tighe : I think we could certainly target the areas that we think are the source of the problem. Whether that is something that would go into a free trade agreement, I am not sure; but I can give you that information, certainly.

Senator XENOPHON: Yes, if you consider this your positive assurance. Also, I am not sure if I got your view on whether you think in certain circumstances with the view of the agency that there ought to be a more severe penalty—that is, in terms of reckless indifference or where there has been wilful blindness as to whether a product has asbestos or not, whether it should carry a jail term in those extreme cases.

Mr Tighe : In the instance of—and I am not digressing here—the dumping of illegal asbestos products, legislation has been changing in some of the jurisdictions for serial offenders to get jail terms. That is for dumping legacy products. If someone is doing it on a wilful basis and putting the public's health and wellbeing at risk, I think it is appropriate for a penalty which involves a jail term.

CHAIR: Thank you so much, Mr Tighe, for appearing before us. I just want to put everyone on notice that the committee hasresolved to bring the afternoon program forward by 15 minutes. So we would appreciate if the Australian Glass and Glazing Association could be back at 1.30 pm to provide your evidence and ProductWise at 2.05 pm, and consequent changes to other parties as well.

Proceedings suspended from 12 : 33 to 13 : 29