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Economics References Committee
Non-conforming building products

BROOKFIELD, Ms Kristin, Senior Executive Director, Building Development and Environment, Housing Industry Association

GOODWIN, Mr Shane, Managing Director, Housing Industry Association

HUMPHREY, Mr David, Senior Executive Director, Business Compliance and Contracting, Housing Industry Association

WOLFE, Mr Graham, Chief Executive, Industry Policy and Media, Housing Industry Association


CHAIR: Thank you for appearing before the committee today. I invite you to make a brief opening statement, should you wish to do so.

Mr Goodwin : Thank you for inviting HIA to speak with you today. The Housing Industry Association has been involved for many years in the debate about non-conforming building products. This came to a head in 2012 when we convened a national summit bringing together builders, manufacturers and suppliers to hear about the problems the industry is facing and to learn about the approach taken in other countries to try to manage non-conforming building products. At the summit we were given a number of examples, particularly in the sanitary ware, electrical and tapware sectors of the industry, of some catastrophic failures that have led to injury. We have since had Infinity and we have since had the fire, so nothing has improved since 2012, and this problem just continues to tick away.

Since then, HIA has worked actively with a range of industry groups to better understand the problem, to identify potential solutions and to highlight the risk to the residential building industry if changes do not occur. HIA has prepared guidance material for our members and has assisted in the publication of a number of reports and industry guides in recent year, some of those in collaboration with the APCC, a collection of public works agencies.

HIA believes that problems do exist and that changes can be made to improve the building products supply chain. Therefore, we welcome the Senate inquiry's focus on this important issue. Our submission to the Senate highlights how the building products supply chain currently operates. It identifies the areas where we believe better controls could be used to ensure that building products used in Australia are fit for purpose. Builders have always had an obligation to use conforming building products, so you might ask the question: what has changed to now bring the issue to the attention of the committee? The answer is that builders have not always had the degree of difficulty they now encounter in knowing whether a product is conforming. This has become more difficult in the last decade due to the changing nature of the supply chain for building products in Australia.

For many years, due to distance and cost, Australia has manufactured and supplied the majority of the building products we need for constructing homes locally. Australia is home to many internationally competitive building product manufacturers and thousands of small manufacturers and fabricators. However, the emergence of new manufacturing markets across the globe, more cost-effective transport options, and online purchasing have significantly expanded the supply chain over the last decade. While this has delivered a more competitive marketplace, in terms of price and choice, it has nonetheless created challenges for product compliance.

The regulatory framework in Australia that guides the manufacture and supply of building products, with a view to ensuring they are fit for purpose, is over 20 years old. Our building laws and consumer protection laws all pre-date the new and current supply chain model. Whilst the Australian building industry has continued to invest in the development of technical standards and to improve the performance requirements for a vast range of key building products, the regulatory framework that these standards plug into remains the same. It has failed to keep pace.

The committee's inquiry provides the opportunity to identify the real causes of change in the supply chain and to identify potential reforms that can make a difference. If we do not address this issue now, not only do we risk our buildings of the future not being fit for purpose, but we run the risk of losing a vital manufacturing industry for Australian products, due to the uncompetitive and uneven marketplace, where non-conforming building products find their way into the supply chain. It is essential that all products, regardless of their place of origin, meet Australia's expectations in regard to their conformity with Australian building laws, their quality and their fitness for purpose.

The committee's focus on this critical issue affecting builders, contractors, manufacturers and suppliers, along with customers and home owners, is to be congratulated. HIA welcomes this opportunity to speak to the committee. We hope we can provide you with information to assist you in this process.

CHAIR: I would like to get your response to the fact that it seems that the onus on identifying non-conforming products is falling to your members in the regulatory regime. Your members are therefore very well-placed to provide some information to us. I note that you have done a survey of your members. Could you bring us up to date on the results of that survey.

Mr Goodwin : I will ask my colleague Mr Brookfield to give you some information about that. To emphasise, we are an industry association. Not only do we have builders and contractors as members, but we also have suppliers, manufacturers and building professionals such as certifiers, designers and specifiers. I think it is true to say that the concern we have about this issue is right across the broad spectrum of membership; it is not just restricted to the builders who are fixing the products in place. The manufacturers and the suppliers who are either making or importing the products are equally concerned. With regard to the survey, I will pass over to Kristin.

Ms Brookfield : The survey we undertook in June this year was a very interesting exercise for us. We have outlined in the submission to you that in 2012 we did a similar survey and we only received 138 responses. Three years on, in 2015, we received almost 1,000 responses over a three-week period, and 80 per cent of those responses were from builders and contractors. So it has become a much more significant issue for our members. We would be happy to table for you a copy of the full survey results that we have now been able to go through, but essentially what we found is that 50 per cent of building products are sourced from local suppliers and 50 per cent of the market is now an imported product. Many Australian manufacturers source their own products partly from overseas and partly locally. That is not just about where the companies reside. But we found that 80 per cent of our builders have experienced product failures, which is a significant number. Probably looking at the end of the process, builders consistently have difficulty in getting the information they need about whether a product is fit for purpose, and the building certifiers, at the end of the process, also have difficulty getting that information and perhaps are not always asking for that information.

Senator XENOPHON: Could we get a copy of that survey? Is that survey available?

Ms Brookfield : Yes. We shall provide you with that.

CHAIR: Does anyone have a problem with that report being tabled?

Senator XENOPHON: Does it name products or—

Ms Brookfield : There are some comments that have been put in that are directly from members, but I am fairly certain very few of those name names. All the survey responses have been kept unnamed.

Senator XENOPHON: Through you, Chair, we could accept the survey and then the committee can decide if they have got any concerns about any particular identification of parties or products.

CHAIR: Yes. I was just going to ask: in respect of the 80 per cent of the respondents to your survey who said they had experienced product failure, do you drill down into where those products have come from? Are they necessarily overseas products or is it a mixture?

Ms Brookfield : No. The only correlation you could make is that 50 per cent of products are imported and 50 per cent are local. We have not gone to the detail of saying specifically what type of failure occurred: was it a failure of the product when you installed it; was it a failure of the product after you installed it? They are kinds of information that are incredibly difficult to get. HIA in 2011 approached each of the state consumer fair trading agencies to seek that response. We were only provided with information from New South Wales. The government there were able to provide us with an indication that 10 per cent of the claims they were receiving were from product failure separately to workmanship and other issues. That is really the only statistic we have in that space.

Senator MADIGAN: Thank you, Mr Goodwin, for your submission to the committee. The HIA would have small, medium and large builders as part of their membership. Is that correct?

Ms Brookfield : Correct.

Senator MADIGAN: Of your members in those three different categories, most of them go to reputable suppliers to get their products and/or might go to a local hardware, for instance, to buy product. Is it fair to say that most of those people assume that the product that they purchase from these businesses conforms with the purpose for which they are buying it?

Mr Goodwin : To a great extent, they are in the hands of the supplier or the reseller. They do not have the ability or the capacity to test the product. They rely on what information they are given and what labelling might exist as to whether or not it is fit for the application they are going to use it in.

Senator MADIGAN: Amongst your members—small, medium and large—different ones would be subjected to claims from consumers and court actions over buildings that they believe are defective—is that correct?

Mr Goodwin : That is correct.

Senator MADIGAN: We are aware of some pretty high-profile cases, and I am sure you are too, in the market with consumers over houses that have some major problems—is that correct?

Mr Goodwin : That is correct.

Senator MADIGAN: Would it be fair to say that—for instance, in the case of some foundations where there is cracking, I know that your members would go out and ring up the concrete company and say, 'I want 25 MPa or 30 MPa concrete for a footing.' They then buy their trench mesh or their mesh for the slab and they assume—they say it has got a certificate on it and that that product is compliant. They then pour that slab of concrete or the foundations in good faith.

Mr Goodwin : That is correct.

Senator MADIGAN: But then, later on, they find out that there is a problem and the next thing they know, having bought that material and installed that material in good faith, they are the subject of a court action.

Mr Goodwin : That could be due to the use of reinforcing mesh, which was non-conforming. It is a relevant example because some years ago HIA, together with some other organisations, took some steps in relation to the certification of reinforcing steel products and needed to persuade the ACCC that that was a good step to take, because of that potential that once a slab is down and starts to crack, it is too late.

Senator MADIGAN: So, for the Housing Industry Association, for the consumer, for the business and for the builders involved, who are members of your organisation, it would be far better to be proactive in this space than the current system that we have? From where I am sitting, you could drive semitrailers through the holes that exist. If you are a dodgy manufacturer, it is open slather in real effect, isn’t it? You can get through pretty much unscathed and then get out, if it ever got too hot in the kitchen?

Mr Goodwin : We are getting to the nub of the issue, and one of the things we do propose in our submission is that we need to ensure that there is responsibility through the whole supply chain—that everybody who handles and touches the product in the supply chain has a responsibility and, together, we may have a way there of addressing the problem. It is too late once the structure is up or the houses catch on fire or toilet pans break or light switches catch on fire. Members, by and large, will rectify that, but that is a cost to the economy and it feeds into housing affordability, but then there is the human cost as well. One of the recommendations we do make is some changes to the Australian Consumer Law in relation to resellers. The act says the last person in the chain—the builder who bears the brunt—might have two other people in the chain, and that shifts some responsibility back down the chain so that people will then become more vigilant and insist on proper labelling. If they cannot get it, they do not use it.

Senator MADIGAN: And of course, in this, the suppliers of these products are not equipped to test or assess the veracity of certificates or claims that are attached to company products—are they? To be fair to them, if we have a hardware shop here in Canberra—a family-owned hardware shop or building supply business—they buy those products in good faith, supply them to your members and yet we cannot reasonably expect these people to—

Mr Goodwin : No. The reality is that they need to rely on testing carried out by people further back in the chain. If that is not forthcoming, our position is that you should not be using the product.

Ms Brookfield : The complexity is not only that the supplier does not do the testing but the supplier needs to understand what tests should have been done. If they are reading a certificate that is provided to them they need to be able to match that up with what the National Construction Code says and see if the things met in the middle.

Senator MADIGAN: The point I am making, though—as I am sure you would agree, Ms Brookfield—is that these people are not equipped to do that, and it is unreasonable to expect that they would be equipped to check the veracity of these documents that are supplied with the product.

Ms Brookfield : Correct. We provide information—as you know, suppliers are members of HIA and we provide information to help them understand that process. It is a very complex process to know what questions to ask and what part of the building codes to look at. The combination of standards and the performance requirements make that very difficult to ensure you meet all requirements.

Mr Wolfe : I think it would be an overstatement to suggest that no suppliers had the capability of doing that. I think there would be some suppliers out there that would employ or engage some experts, professionals, to do that on their behalf. It would be a matter for their business, but the fact of a builder going in to buy a particular product from a supplier or retailer, there is no degree of confidence that they know that that supplier has actually checked the testing, the authenticity of the certificate, or the correlation of the testing to the actual application of that building product.

Senator MADIGAN: Would the HIA have a figure on the amount of litigation from consumers that is attributable to dodgy, non-conforming, not fit-for-purpose product in this country and how much of a cost this is to the economy and to families?

Mr Goodwin : No, not offhand. We do not collect that data. I would just come back to my point that with the majority of defective products the outcome is remedied by the builder, at their cost, and the consumer does not go and make a complaint and does not go and litigate. It is just something that is built in the price. By and large builders will come back and fix the problem, unless it is a large-scale catastrophic failure.

Senator MADIGAN: But there is quite a deal of litigation going on.

Mr Goodwin : I would certainly agree with that point. And it is across the industry. It is not just in the medium and high rise. It is certainly in the detached housing and in the renovations sectors of the industry.

Senator MADIGAN: Has the HIA got any idea of how many of your members attribute litigation that they are subjected to product that was installed in good faith by your members and then is found to be not up to—

Mr Goodwin : As distinct from poor workmanship?

Senator MADIGAN: Yes.

Mr Wolfe : The survey did not drill down to that level of detail, but it certainly asked the question about non-conforming products use, and that was the 50 per cent.

Ms Brookfield : And that 80 per cent have experienced a failure. So 80 per cent of builders have experienced a product failing.

Mr Wolfe : So they may have very much avoided litigation by rectifying the problem once it came to their attention—

Senator XENOPHON: Litigation is not worth it. Even if it is $50,000 or $100,000. With apologies to my fellow lawyers, it is a legal system not a justice system, isn't it?

Mr Goodwin : With the law as it currently stands, in most cases the builder cannot claim against the supplier. He would have to claim against the manufacturer, and if it is an imported product it is just not cost-effective.

Ms Brookfield : I think the other issue is that with individual builders with individual property and product failures, there is no way to coalesce that information and say there is something systemic going on here. So one builder repairs one house and moves on with business. They are not to know that the next builder has repaired the same product and the same failure. So you need to take it back through that supply chain and ensure that the product is fit for purpose at the point of purchase.

Mr Wolfe : And that was the point of our question to the state agencies a few years ago, to try and see if they collected that information through the complaints mechanism, but we only gleaned some results from the New South Wales agency.

Senator MADIGAN: There is an enormous cumulative effect here, isn't there?

Mr Wolfe : And, with respect, you are talking about products that are non-conforming that come to the consumer's or the builder's attention. The latent defects behind products that are still sitting in houses or buildings that may not be conforming are essentially ticking time bombs and are equally important concerns too. The Infinity cabling is an example of the concern that the industry has for the volume of non-conforming product that comes into the country.

Senator MADIGAN: On a scale of one to 10, where would the HIA rate their concern on these ticking time bombs that are out there?

Mr Goodwin : We have been at this now for about six or seven years. We have been advocating for an inquiry for that period. We invested in bringing in experts from overseas, from Canada and Europe, where they have issues around building products and other frameworks. We have tried to lobby other organisations into recognising the problem, and that is because we regard this as one of the biggest issues facing the industry.

Ms Brookfield : We have also taken a strong involvement in the international work that is going on through the International Housing Association. So this is an issue we are seeing our sister associations—in Canada, America, France, Norway, South Africa and so on—deal with, and we have been a participant in a working group internationally on this topic.

Senator MADIGAN: Finally, where do you think Australia rates in addressing these problems? Are we better—even though things are appalling—than comparative jurisdictions in other countries?

Ms Brookfield : I would suggest we are no better but we are potentially no worse. I certainly have been able to identify that there is an identical issue in the definition of a consumer product in other countries, which leads to a limitation on how you can recall a product, which was the issue we needed to deal with in the Infinity cables situation. There are not consistent approaches nationally in terms of agencies across the country. How Australia is perhaps well placed is that the technical standards we do have are well regarded. We have technical standards for all of the key building products that go to the structural integrity of a building. And we do have a national building code, which most of the other countries do not have.

Mr Goodwin : I think where we do lag behind other countries is in the acceptance that there is a problem and that it needs to be addressed. I think they are further down the track in accepting that they have to do something about that issue in their jurisdictions.

Senator XENOPHON: Ms Brookfield, you said we have good technical standards. But isn't the problem one of enforcement? There is a lack of enforcement. I know the department says it is not piecemeal—they took issue with that, as they are entitled to—but it does appear to be a piecemeal, fragmented approach of enforcement against non-complying and non-conforming products.

Ms Brookfield : Correct. The technical standards are not required to be applied until the last step in the process, which is the use by the builder and the checking by the building certifier. So they are already in the marketplace; they have already been sold and purchased.

Senator XENOPHON: So the horse has bolted?

Ms Brookfield : Yes.

Senator XENOPHON: I want to ask a series of questions—given the time constraints. In 2012 you held this national summit. You have been going on about this for years and years. I am sorry it has taken so long for an inquiry into this, but it is happening now. Can you provide to the committee details of your national summit back in 2012 and details of the correspondence you have had over a number of years with various governments and government departments in respect of this, and the responses or lack thereof in respect of that. That would be useful. I think it is important to build that history there.

Mr Goodwin : We can undertake to do that.

Senator XENOPHON: Thank you. Mr Wolfe referred to ticking 'time bombs'. Mr Goodwin, as Managing Director of HIA, do you support that very strong language, that there are ticking time bombs out there?

Mr Goodwin : I think Infinity cables are a really good example. I think there is 1,400 kilometres out there—

Ms Brookfield : 40,000.

Mr Goodwin : I stand corrected. 40,000 kilometre of cable out there. We have only recovered a very small portion of that. Just locating where it is is an issue—locating who installed it—leaving aside who is going to fix it. From what I understand of that product, it will break down over time.

Senator XENOPHON: So it is inevitable that there will be a fire or electrocution risk?

Mr Goodwin : I think that explains Mr Wolfe's comment.

Senator XENOPHON: That is what you were referring to, Mr Wolfe? That is just one example?

Mr Goodwin : There are other examples, for example around sanitary wear. We have knock-off toilets which are of poor quality and will break sooner or later, with the potential to severely injure people. We have knock-off electrical switches. We do not know what is behind them. We have already had instances of people being injured through them failing. We just do not know what is out there.

Senator XENOPHON: Insofar as your members give you information about products that cause injury as well as products that appear to be effective or non-compliant or non-conforming, can you provide us with those details? The fear I have is that it will take a tragedy or a series of tragedies before governments act on this. I think all of us here want to avoid that. So if you could take that on notice—

Mr Goodwin : Yes.

Senator XENOPHON: I want to go to the issue of imported products. Some of these importers have a two dollar company. I have dealt with it in the issue of medical devices and defective implants, for instance, where the company can just phoenix itself; you cannot sue them; they do not have insurance. Do you think there ought to be some mandated insurance requirements, or insurance requirements for imported products—or indeed for local manufacturers? Presumably a local manufacturer's insurance premiums in terms of conformity and compliance will be much lower because they will be able to show for the purpose of an insurance quote that they are dong the right thing. Do you think that one solution to this—without imposing any trade barriers or getting the WTO fanatics out there upset—is to say, 'If you are going to be importing stuff here you need to have adequate insurance in case something does go wrong, for either product liability, death or material injury'?

Mr Goodwin : In addition you can stand behind the product; you can service the product rather than just having a container load come in and that is it. We need to have a system where warranty claims can be supported.

Senator XENOPHON: And, as Senator Madigan helpfully pointed out, these should not be coming back onto the builders. If the builder buys something in good faith, assuming that it conforms, it is the builder that cops it in the neck, isn't it?

Mr Goodwin : The builder has to rectify it. The builder bears the cost, and then looks to what remedies the builder might have down the supply chain. Again, we think all people in the supply chain should share that responsibility.

Ms Brookfield : Senator, if I can point you to our submission, we refer to the electrical equipment safety scheme. That postdates Infinity cable, and it is important to be aware of that.

Senator XENOPHON: So it does not apply to Infinity cable?

Ms Brookfield : It does not apply to Infinity cable, but one of the most important aspects of that scheme is that it addresses not only the product but also the supplier. You must be a 'responsible supplier'; that is the defined term. Creating that responsible supplier would open opportunities to be looking at the company and ensuring that it is an appropriate operation.

Senator XENOPHON: Just a couple more questions. At page 17 of your submission you make reference to the CodeMark scheme. It goes over on to page 18. I may put some questions on notice to you following evidence given by the ABCB in relation to complaints I have had about the CodeMark scheme. There has only been one complaint I that that they are aware of, but you have raised a broader issue. So I am just foreshadowing that, because it seems to me you are saying that the scheme does have its place but it is being used far too broadly and that brings the problems.

Ms Brookfield : The market has expectations of the CodeMark scheme that it is not intended to deliver. It is not a mandatory scheme; it is a voluntary scheme. Therefore, not all building products must have a CodeMark. Part A2.2, which was referred to in earlier submissions by the ABCB, says that CodeMark is only one of five avenues to prove that a product meets code, and those five avenues are all optional. So, setting aside the operational issues of CodeMark, which is not a matter we address, CodeMark is not necessarily the perfect model of a certification scheme.

Senator XENOPHON: Perhaps I could just go very quickly through a few things, out of respect to my colleagues, who may have questions. You are basically saying that there needs to be a mandatory scheme in place, or that is the preference—to have a much more rigorous scheme for the—sorry! From the look on your face, I think I have misinterpreted what you are saying—

Mr Goodwin : I think there are some things we—

Senator XENOPHON: Compliance at the point of sale is impractical; you actually need to have manufacturer compliance documentation of product approval.

Mr Goodwin : Correct.

Ms Brookfield : Correct.

Senator XENOPHON: So, it needs to be at the source, rather than when it is too late—

Ms Brookfield : Yes.

Senator XENOPHON: and rather than the certification happening when it is already in the marketplace.

Ms Brookfield : Yes.

Senator XENOPHON: Secondly, are you aware—and you may want to take this on notice—that the CFMEU in its submission made points in respect of the impact of the TPP and perhaps other free trade agreements in terms of compliance? Perhaps you could take on notice whether you have had any feedback or communication with the department about the impact that those agreements will have, if any, in terms of issues of compliance. And thirdly, has there been any estimate from you of the number of jobs that could be lost in Australian manufacturing because of this unlevel playing field—that substandard products are getting into the marketplace? Also, there is the issue of dumping: even if they comply, they are dumped in the marketplace below cost.

Mr Goodwin : I think we could probably ascertain some figures around the demise of the industry, rather than attribute that to any particular cause. But the reduction in our manufacturing over the past 10-odd years has been profound, and I am sure we could get together some figures that demonstrate—

Senator XENOPHON: That is fine.

Mr Goodwin : and the loss of jobs.

Senator XENOPHON: As a nation we have gone from 12 per cent to just under seven per cent—6.8 per cent—in about a decade. So, we are just under seven per cent now, which is just above Botswana and Rwanda; that is where we are at the moment.

Mr Goodwin : But it might be more severe in the building products sector.

Senator XENOPHON: Yes. If you could give those details, then at least we can know what the decline has been.

CHAIR: I have just a couple more questions. Mr Goodwin, I think you mentioned in your opening statement that there is an element of building products being bought online.

Mr Goodwin : That is true.

CHAIR: Can you tell us a little bit more about that—who is doing that and where those products are coming from?

Mr Goodwin : Anybody in the supply chain can source products online. The examples that come to mind are builders who might decide to get a container load of windows, manufactured offshore. South-East Asia is the source in most cases, but you can buy hydraulic pipes for use in plumbing from Canada or South Korea; you can buy steel from India. But it is predominantly South-East Asia.

Ms Brookfield : We also receive a significant number of phone calls from members who have customers sourcing their product online. That might be windows, or it might be kitchen cabinetry or tap ware, and less often electrical products, and those customers are coming to the builder and asking the builder to use those products, and then they contact us after there has been a problem.

CHAIR: So, that is another layer of complexity to this.

Mr Goodwin : Yes. It could be a kitchen coming in a flat pack, for example, which may have levels of formaldehyde that are not compliant in Australia, and we do not really know.

CHAIR: In your submission you referred to your initiative of having a building product register, and you have sought federal funding for that. How recently have you tried to do that?

Mr Goodwin : Ms Brookfield can probably give you a better time frame, but in recent terms we worked with the AiG and the steering group to try to get support for that initiative to give it a broader based platform. The problems are not just restricted to building products. There are manufacturers who manufacture for other industries, so we are trying to get broader cross-industry support. That is a Rolls Royce solution, if you like, but we are still plugging away.

CHAIR: What would be the benefit of the building product register?

Mr Goodwin : It would be having a repository of information where all people in the chain can check whether or not a product complies, whether or not the supplier or the importer is reputable, that they are of substance, that they can support the product. And the information register would have details of any testing and what uses the product was suitable for. We accept that some products are unsuitable for some types of building but may be suitable for others. So, we would lift the veil in relation to that as well.

CHAIR: Are there any other countries that have gone down that track?

Ms Brookfield : Not that we are aware of.

CHAIR: And what is your estimate as to the cost of establishing that database?

Mr Goodwin : We were seeking some funding to do that process to set up some true costing and do some cost-benefit analysis and work out what seed funding we would need to get it going. The model proposed that once it was established it would be owned by industry, not by HIA or the government. It would be owned by industry and would be self-funding.

CHAIR: So, it would be a user-pays system.

Mr Wolfe : It is envisaged that it would be a simple mechanism whereby you could press an app on a mobile phone and put in a building product and if that building product was on the register there would be a degree of confidence that the test material that I think Senator Madigan was talking about—the testing documentation and certification—existed and was bona fide and could be obtained via a phone call.

CHAIR: Thank you very much for appearing before us today.

Proceedings suspended from 11 : 02 to 11 : 15

Senator XENOPHON: I understand that Ms Brookfield wanted to add one more thing to her evidence which I think may be useful to the committee. It is about the difference between non-conforming and non-complying products. I think you had a very neat summary that you did not say on the record. It may be useful to say it on the record.

Ms Brookfield : Thank you. It is quite an important issue to get the definition of your inquiry correct. The way that HIA has looked at this issue is that products conform and people comply. If you can keep those two definitions in your conversations, that will enable you to separate out the incorrect use of a product by a person versus the use of a product that did not do what it was supposed to do.

CHAIR: Thank you. That is very helpful.