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Economics References Committee
Non-conforming building products

GREGSON, Mr Scott, Executive General Manager, Consumer Enforcement, Australian Competition and Consumer Commission

RIDGWAY, Mr Nigel, Executive General Manager, Consumer, Small Business and Product Safety Division, Australian Competition and Consumer Commission

CHAIR: I now welcome Mr Ridgway and Mr Gregson, representing the Australian Competition and Consumer Commission. Would you like to make an opening statement?

Mr Ridgway : We imagine time is tight, and given that the ACCC has already provided a submission we figured we would go straight to questions. We are very interested in being as helpful as we can be to contribute.

Senator MADIGAN: Thank you. In the space of building products and the ACCC's role of non-conforming product that is finding its way onto the Australian market, what role does the ACCC currently play to protect the Australian consumer in this market?

Mr Ridgway : The ACCC has two roles as regards consumer products in the Australian market. One is the defective goods regime that deals with consumer product safety and defective goods. The other relates to misleading or deceptive conduct in relation to the supply of goods and services more generally. We do receive a small number of contacts in relation to building products and building product conformity. Just having a look at our records in preparation for today's discussion to make sure we are as clear as we can be, in the last two years where we have received approximately 300,000 contacts generally 25 of those have related to building product conformity concerns—so a very small number. The standout of course is the Infinity cable example, which the committee would be familiar with, but otherwise there is a very small number.

To be more specific, the ACCC's defective goods regime and misleading or deceptive conduct regime are general protections for a range of products in the marketplace, as I have explained, and we are conscious that there are a number of specialist safety regimes that are complimentary to the work that we do, and in some ways these could be seen to overlap. Those regimes include the building regulation, the electrical safety regulation, the gas regulation and to some extent the plumbing regulation. I am less familiar with the plumbing, personally. Those regulators have expertise in relation to their areas of responsibility, and they have greater prescriptive controls and requirements as to what is required in those areas they regulate. We work with those specialist regulators, and on rare occasion—and Infinity is really an exceptional one—we have found that we have been able to contribute to a solution to a non-conforming product that has also had a substantial safety concern associated with it.

Senator MADIGAN: Correct me if I am wrong, Mr Ridgway, but from what you have said you do not take a proactive role, but you take a reactive role. Do you not do anything until such time as a complaint is lodged with you?

Mr Ridgway : Where we think there is a substantial, emerging problem in an area that is our direct responsibility we do look at emerging trends, not just at the complaints we receive. But we also are alert to coverage in the media and other sources of intelligence from other agencies and so forth. If we identify something that may not have come to us as a direct complaint we will engage and do some digging, so it is not just being reactive. In the areas of building product conformity—and Infinity is a good example—we were alerted to the fact that there was a concern associated with Infinity cable by electrical safety regulators and we were also alerted that those regulators, at the time they contacted us and negotiated the original recall under the electrical safety regime, were confident in addressing that without support. It only became apparent later when some of the particular challenges with this product emerged that there was a role that we could play, so that was not a response to a complaint so much, but more an invitation to assist.

Mr Gregson : I think Mr Ridgway is being modest with respect to his product safety team's proactiveness. For those matters that they have direct responsibility for, that is the mandatory standards and consumer products, they have a very active survey program that identifies products that would be breaches of the mandatory standards. But that is a different scenario when it comes to building products. That is not an area that the ACCC or the product safety area of Mr Ridgway's division has direct responsibility for, so it is quite different. We are very proactive for those matters we have responsibility for but, as you would expect, the ones that we do not we leave to specialist regulators.

Senator MADIGAN: When we are talking about building products, which is what we are speaking about specifically here today, the ACCC has no proactive enforcement role of standards—is that correct?

Mr Ridgway : That is correct.

Senator MADIGAN: And you mentioned earlier where there are some overlapping roles but specifically to building products the ACCC has no role in this space. So really the committee cannot gain much out of you because you would act in the building products space after the event more so, as in the Lacrosse tower or Infinity cable issues. Thank you for clarifying that for the committee. On the issue of the Infinity cables, the ACCC did get involved in that issue—is that right?

Mr Ridgway : Yes.

Senator MADIGAN: Of the recall of Infinity cables, at this point in time, what is the latest figure on how much of that cable you have been able to get back?

Mr Ridgway : We have a monthly reporting regime by the suppliers who are recalling their cable, and because of where we are now we do not quite have the most recent month's figures. But the latest figures we have show that 38 per cent of the cable has been accounted for. It has either been returned from warehouses or has been remediated or has been scheduled for remediation.

Senator MADIGAN: When you say 'remediated', does that mean it has been removed from those houses and that conforming product has replaced the non-conforming product?

Mr Ridgway : At one level, yes. The more detailed answer is that not all of the product that is installed in the homes is considered to be unsafe. It is that portion of the cable that is exposed or close to a heat source which is of a safety concern. So in the homes that have had remediation strictly in accordance with the recall it is the cable that is exposed or close to heat sources that is removed and replaced with compliant cable. And there is a sticker attached to the fuse box of the household indicating to any workers or householders in the future that if they commence to do any work behind the walls or renovate there are cables there that may look fresh and not brittle but in actual fact are likely to be brittle and that additional care needs to be taken.

Senator MADIGAN: So in spite of the recall and where you have identified it in properties, it has actually been left in homes?

Mr Ridgway : Where it is not exposed to consumers or workers, that is correct. The presence of brittle cable is not unique to Infinity. There is quite a large number of Australian homes that have quite brittle cable behind the walls. This is something that is known to electrical contractors, and they take care when handling that cable. The particular aspect of risk with this Infinity cable behind the walls is that, while it may be no more brittle than old cable that has become brittle, it has become brittle quite early in its life cycle.

Senator MADIGAN: So the point here is that there is brittle cable, but it is predominantly old cable. This is relatively very new cable. People are, in effect, not getting what they pay for. And it is being allowed to stay in people's homes. I note the point that you make, Mr Ridgway, that it is not where it is exposed to heat, but the fact of the matter is that people paid for new cable to be installed in their homes and, in effect, they have not got what they paid for, have they? And you are telling me that it is being left there. Do you think that is fair to the consumer?

Mr Ridgway : From a safety perspective—and it is a safety perspective that the ACCC is—

Senator MADIGAN: No, it is partly a safety thing, but it is also that people have not got what they paid for. They did not pay for brittle cable. That is the point I am trying to make here.

Mr Ridgway : Indeed, they did not pay for cable that would become brittle sooner than was intended or would be the norm.

Senator MADIGAN: So should it not be ripped out, Mr Ridgway? Because that is not what the people paid for.

Mr Ridgway : Under the Australian Consumer Law there is a consumer guarantee regime that entitles consumers to seek remediation in the circumstances that a product is not fit for the purpose for which they acquired it. Typically, these issues are negotiated, and either an accord is reached with the supplier or it can be tested in the tribunals. We are aware of a number of circumstances of householders asserting their consumer guarantee rights against the supplier, whether it is a builder or an electrical contractor. Most typically, in the experiences I have heard of, it has been builders. The builders, in those circumstances that I am aware of, on occasion have replaced the entire cable on the basis of a consumer guarantee control.

Mr Gregson : I might add that in dealing with regulatory responses to consumer issues difficult choices often have to be made. In this instance, the ACCC has certainly prioritised the immediate safety issue based on expert advice. I would hope that senators would agree that is the appropriate triaging. As you can see, there is still work to be done on that front, and we would be investing in that. We are in a situation here where there is a number of parties involved in the supply chain, and that makes some of the remediation and other issues for consumers quite challenging. We are talking about large amounts of money in total. I think the ACCC is quite comfortable in indicating that we have certainly prioritised the immediate safety issue based on that expert advice.

Senator MADIGAN: I do not doubt what you are saying, Mr Gregson. You are saying that you have dealt with the safety issue. But the issue here is that a home is a person's castle, and a lot of those people—I would imagine—would be a lot of first home owners, people with huge mortgages and those who are paying enormous interest back to banks. What have they got for their money? They have a product that is already brittle. In effect, they might as well have bought a second-hand home and renovated it.

Senator XENOPHON: It has devalued their home, too.

Senator MADIGAN: Their home is devalued. Can you see that from a consumer's perspective? To tell a family to take legal action when they are paying a huge mortgage, educating their children—to have to take on the supplier when it is not realistic that they have the means and/or the ability to do that. They have paid out good, hard-earned money for a product that is not what it was purported to be.

Mr Gregson : No-one is defending the supplier of product that does not meet its description or the required standard. What I am indicating to you is that choices have to be made in resolving matters when there is a supply chain that involves multiple parties with different capacities to meet this—including small traders who installed the product, who may have done so in good faith. So there are challenges there about how you deal with it. We have made the decision to remediate in the way that we have based on priority given to the funds available to deal with the safety issue. I do not think you would encourage us to take a different path, and that is: to not be able to do that because difficult choices meant that we solved it for a small number of consumers but could not deal with the safety issue. So those are the regulatory challenges. But no-one is defending the situation or suggesting that the supply of this product is a positive experience for anyone involved.

Senator XENOPHON: You said there are funds available. Are there enough funds available, given that it is a critical safety issue? Are there the resources to minimise or to make absolutely negligible the risk that there will be an electrocution or a fire? I would have thought that if there is an imminent risk of danger to the public then money should be no object on the part of the Commonwealth. Presumably, if the ACCC asks, 'We need this amount of money to do our job properly,' I cannot see any minister knocking you back on that.

Mr Gregson : Just to be clear before Mr Ridgway answers—he has got the answer—my reference to funds is to those in the supply chain. The ACCC is not saying that its funding is the issue. I was commenting about the remedial action that we expect those responsible for the conduct to take.

Senator XENOPHON: Presumably you have got a role to enforce that, if they are not doing their job in the supply chain. Have you got the funds to enforce that—to deal with those people to ensure that they can do the right thing?

Mr Ridgway : The authority that the ACCC has, in relation to that conduct of those suppliers, is authority that we exercise on advice to our minister. The engagement we have with Infinity cable, and the suppliers of Infinity cable, relates to the product safety/defective goods regime. The authority to require suppliers to do something more than they would otherwise want to do is the authority of the minister on our advice. In the work we have done to date with industry and with our fellow regulators, we have had positive indications from other regulators and from a number of the suppliers as well. We have seen recent figures on progress with the recall and we believe there is more to be done by the suppliers involved. We have invited them to advise us on what they are prepared to do. If we are not satisfied that that is sufficient then we have a capacity to recommend certain further action be considered as mandatory for those suppliers to take. That is not enforcement in the courts of the law; that is by the authority of the mandatory recall power that the minister can exercise.

Senator XENOPHON: So you could actually order a recall of this cable within homes—technically?

Mr Ridgway : The authority to order a recall of the cable within the homes turns on whether or not the minister is persuaded that there is anything more that can be done to deliver safety that is not being done now. That is the point that we are considering actively at the moment.

Senator MADIGAN: What is the role of the ACCC? Are you there to protect consumers or aren't you?

Mr Ridgway : The ACCC's role, along with the state and territory consumer law regulators, is to take action where there is conduct that is not acceptable in the marketplace and to assist in remediating.

Senator MADIGAN: Who determines what conduct is acceptable in the marketplace?

Mr Gregson : Senator, that is your role as a legislator. It is obvious, at one level, that our role is to look after consumers. It is what drives us, either through our competition or our consumer protection provisions. We do so through a legislative environment. We enforce the provisions of the Competition and Consumer Act, the Australian Consumer Law and some other ancillary provisions. There are specific provisions that deal with misleading and deceptive conduct. They deal with misrepresentations, product safety and competition provisions. That is the framework in which we are able to take action.

Senator MADIGAN: Would it be fair to say the average person on the street assumes that the ACCC is there looking out for them?

Mr Gregson : I would hope so.

Senator MADIGAN: But, as is demonstrated in this case, what they think and what the reality is do not marry up, do they?

Mr Gregson : I do not accept that connection. Any regulator needs to operate within the legislative remit that the parliament gives.

Senator MADIGAN: Well, obviously the legislation is not fit for purpose, is it? As far as what the public expect—what the reality is and what they think it is are not aligned, are they?

Mr Gregson : There are a number of regulatory bodies and regimes set up by the parliament. They include the Competition and Consumer Act and the Australian Consumer Law but they also include other specific regimes, including various codes and standards when it comes to buildings. So there is a matrix of responsibilities that government gives. That may not meet everyone's expectations, but that is what has been provided. We think it provides a good foundation for the ACCC to protect consumers, within the roles assigned to it. We think the other provisions provide a good foundation for protection. If you think there are particular deficiencies—I assume that is the role of this committee, to try and establish that—you could consider some further adjustments. But, in terms of the provisions given to the ACCC, they are there in black and white, they have a specific role, and there are other regulators responsible for other things such as building and conformity.

Senator MADIGAN: Does the ACCC think there are deficiencies in the legislation as identified by the case that we are speaking about now?

Mr Ridgway : In our engagement with Infinity, but also with some other gas and electrical safety matters in recent times, we have identified that the Australian Consumer Law, which provides a uniform recall power and other sorts of controls, is not mirrored with a similar set of powers for the state and territory specialist regulators. Whether you are a gas regulator or an electrical safety regulator, there is not a uniform set of authorities, powers and controls that those regulators enjoy across the country, in the way that the consumer law regulators do at a state and territory level with the ACCC.

Senator MADIGAN: What you are telling the committee, Mr Ridgway, is that there is no continuity between state/territory and federal levels.

Mr Ridgway : They are less harmonised, arguably, than the Australian Consumer Law, which was only relatively recently harmonised in 2011. In our engagement with them, we find the specialist regulators do a terrific job with the controls that they do enjoy. There may be a question as to whether or not some greater uniformity and authority for those specialist regulators might assist.

Senator MADIGAN: So as it currently stands, I go down to the local electrical wholesalers tomorrow morning, I buy a roll of 3 core flex, and I give it to the electrician—and I buy that flex in good faith; I pay $100 or $200 for the roll of flex—and I say to him, 'please install that for me, I want five outlets in my workshop.' I have paid the money that they are asking for at the counter in good faith, I have gone to the expense of getting the electrician to put it in, he has put it in—in good faith—and then it is found that it is brittle. If that happens—tough luck. It is tough luck, you say, if it is not going to be somewhere where somebody walks on it—yet I have bought that cable in good faith and I am expecting it to last for maybe 10 or 15 years. That is what I have paid for. But if that happens to me or to any other consumer, it is tough luck. What I have paid for and what I get do not marry up.

Mr Ridgway : In those circumstances that you have outlined, if that were the case, you would be entitled under the Consumer Law to return to the wholesaler on discovering that the cable was brittle, and you have consumer guarantee rights.

Senator MADIGAN: But you are saying I wear all the cost of getting an electrician to come, rip it out and put it back in. I might get new cable, but I have to pay again to put it in.

Mr Ridgway : In the recall expectations of the ACCC, as regards the cable that is exposed—where we are dealing with the safety aspects—it is not simply a case of it being enough to say, 'We'll provide new cable that's of acceptable quality.' The old cable does need to be removed and replaced. That is part of the expectation. Similarly, in a consumer guarantee negotiation, the argument would be that supply of the cable itself is not sufficient to remediate your concerns, so you would be arguing that it actually needs to be removed and replaced. As I indicated earlier, there are cases we are aware of in relation to Infinity where that has been successfully negotiated and that removal and replacement has been undertaken.

Mr Gregson : But I think it is important to be clear here. No-one is saying that it would be tough luck for you as a consumer and that you would be without protections. In those circumstances, as Mr Ridgway mentioned, you have a right to go back to the supplier and deal with it. If that is not satisfactory, you have private rights through tribunals—not necessarily going to the extent that the ACCC does in federal courts. You have the assistance of fair trading agencies in every state and territory, who can assist with those functions. There are various conciliation mechanisms to deal with consumer disputes. There is advice provided along the way. Regulators may not get involved in individual matters, but they will watch for systemic issues. Where we see a trader behaving in a consistent manner, that is when we will step in and make sure we deal with consumer redress.

Again, coming back to the Infinity scenario, we are left with a very big problem, and we are dealing with it in a way that addresses the safety and provides that immediate fix for consumers so that they are not put in a situation where their houses are unsafe. I do not think that is a position that is inconsistent with good regulatory practice for us to be taking that approach.

CHAIR: I have a couple of questions. Mr Gregson, you talked about the fact that the ACCC is interested in systemic issues as a regulator. I am just wondering if you are familiar with the AiG report of November 2013 entitled The quest for a level playing field: the non-conforming building products dilemma.

Mr Ridgway : We are familiar with the report.

CHAIR: Thank you. I note that there is a section in there, and I understand this report to be the result of a survey of, I think, 222 members of the Australian Industry Group. Mr Willox, the head of the AiG, in the foreword to the report says that he has 'serious concerns about the effectiveness of Australia's approach to ensuring the quality and safety of building and construction products'. I go to the electrical product area—which, as I understand it, is an area where the ACCC would have an interest. Is that correct?

Mr Ridgway : We have. Our engagement with Infinity gives us an interest but not a role.

Mr Gregson : We should let you finish your question, but at some point in our response we will indicate the responsible agencies when it comes to building standards, and that is not the ACCC.

CHAIR: Okay. Let me just highlight some of the findings of this report, and perhaps you can help me out there:

Every respondent in the Electrical product sector reported non-conforming product in their market with 71% of respondents indicating that they have lost revenue, margin and employment numbers as a result. Half indicated a NCP market penetration of between 11% and 50% with the electrical lighting industry being particularly hard hit due to—

a number of factors.

Respondents report:

A perceived reluctance of regulators to act;

A lack of knowledge about how and where to report non-conforming product;

Inconsistent regulations and regulatory actions across jurisdictions—

and a number of other points. My question is: is anybody acting on the findings of this report?

Mr Ridgway : We have engaged with the Australian Industry Group along with the Master Builders Association, the Housing Industry Association and quite a number of other industry associations involved in the construction sector as well as looking at our own complaints database to identify what might be characterised as systemic substantive examples of problems. We have not been provided with substantive systemic problems other than Infinity cable in this space. We have a small number—

Senator XENOPHON: Did you say the HIA are happy? They gave evidence today. They are cranky. They have been banging on about this for years and years.

Mr Ridgway : I am not suggesting that any of the industry associations are happy or not. What I am indicating is that while we have asked for substantive examples of systemic problems, we have not been provided with them. They have not come to the attention, as we understand it, of our colleague regulators either.

Mr Gregson : Again, to be clear about our role, Mr Ridgway is quite right, that you have to probe these issues to try to identify the issues that exist. Beyond that, it should be made very clear that the ACCC is not the electrical safety authority. They reside in each state government and there is a regime for them. They have experts and they have regimes to look at those issues. They are the primary bodies who should be dealing with electrical safety standards. Of course, we have stepped in in the Infinity matter. It is a significant issue. I am sure you would be critical if we did not. That is not the specific and primary role of the ACCC.

CHAIR: So the only reason you got involved in the Infinity matter is because it is the only systemic problem that has been drawn to your attention.

Mr Ridgway : Approximately 50 per cent of the Infinity cable was retailed through the Masters hardware business. That brought the Infinity cable much more specifically to our focus because it was a product sold through an outlet that consumers typically use. The other half of the cable was sold, almost all of it, through wholesalers who, typically, only deal with electrical contractors. So that made it unique. If I could qualify my last response. When I said that we have not seen systemic examples, I am not intending to say that those in the construction industry do not have a genuine concern. The question really is one more for policymakers and for the ACCC and it is whether or not the settings for providing for safety are sufficient to provide confidence for consumers and industry. We do the job we do and the other regulators do the job that they do, but there remains perhaps a question to be considered as to whether or not there is sufficient confidence in the system.

CHAIR: We are now two years down the track from the AiG report. Is anybody doing anything about that? You have indicated that you entered into some sort of working group arrangement with the AiG and other stakeholders. Where are you at the moment?

Mr Ridgway : In relation to Infinity or the issue more generally?

CHAIR: No, the issues from the AiG report. You say you are in a working group with AiG. The problems have been flagged for some time now, going back even further than two years ago. I think we would be expecting to see some progress. Perhaps you have a limited area of responsibility in this space, but you say you are in a working group and looking at it. Where are we up to?

Mr Ridgway : Perhaps I could qualify that. We have a building regulatory reference group associated with our Infinity work. The industry associations involved there are the HIA, the MBA, the Master Electricians Australia, the national electrical contractors association and a number of individual suppliers, who were in the process of the recall. We have communicated with AiG from time to time. We do not have a working group relationship with them in that sense—perhaps I gave the wrong impression.

We have a standing invitation to industry associations generally. If they identify conduct in the marketplace or a product in the marketplace that they think would be of concern under the Consumer Law, we wish to hear about that so we can engage. If we hear about a product or services that we think are more specifically regulated by specialist regulators, our standing default is to bring the issue to the attention of those specialist regulators at first instance. That could be occupational health and safety or it could be building safety, electrical safety or gas safety. They are typical examples where we refer in a live way to those other regulators.

Senator XENOPHON: Your submission at page 3 notes:

Stakeholders in the building industry have told the ACCC that:

building regulations lack enforcement provisions which would deter the marketing of building products that do not meet the building standards …

non-conformance involves imported and locally made building products

building regulators have insufficient recall and remediation powers that are not always readily suited to non-conforming building products …

the building regulatory framework needs to provide nationally consistent recall, remediation and enforcement outcomes for building products.

In relation to the AiG report that the chair referred to, the findings of the report said:

There are gaps and weaknesses in the building products conformance framework resulting from:

a. Confusion amongst stakeholders about the responsibilities of regulators and insufficient knowledge of the conformance framework;

b. Inadequate surveillance, audit checks, testing, enforcement and first party certification;

c. Too much responsibility placed on building certifiers by the current conformance framework and inadequate clarity of their role; and

d. The conformance framework placing an over emphasis on regulatory controls at the point-of-installation.

More was said. That is the preamble; the very direct question to you is: what do you say is the ACCC's role in addressing those issues?

Mr Ridgway : The ACCC have engaged with senior officials from industry portfolios around the country both at the Australian government level and at the state and territory level. We met with them at a round table of senior officials last week—

Senator XENOPHON: Sorry. Who are these officials? Is this the Department of Industry, Innovation and Science, state building ministers and who else?

Mr Ridgway : That is my understanding. Attendees at the officials group included, as I recall, representatives of building regulators, industry departments and also—

Senator XENOPHON: The Australian Building Codes Board was there as well.

Mr Ridgway : I do not believe the Australian Building Codes Board was there.

Senator XENOPHON: Are you able to provide us with the minutes of those meetings? There would be nothing confidential in those minutes, would there?

Mr Ridgway : There are minutes taken. We are not a member of the senior officials group. We were invited for a discussion.

Senator XENOPHON: Were you given a copy of those minutes?

Mr Ridgway : Good question.

Senator XENOPHON: Who would we ask for those minutes?

Mr Gregson : We would direct you to the department. I was actually at that meeting. I think Mr Ridgway was absent. My understanding is that the Australian Building Codes Board were there.

Senator XENOPHON: There is no overarching point of contact. We heard from Ms Anne Paten and she told us some terrible stories. She, understandably, got quite upset when she told us about one couple who are quite destitute and in a very bad state physically over what they have been through. She told us about people who had taken their lives as a result of not being able to get a remedy and the stress it had placed on them. It seems to me that no-one seems to know where they need to go. There does not appear to be a unified approach. It is a state-by-state piecemeal approach in relation to this. Does the ACCC have a unifying role here or is there some other one-stop shop, an inspector-general of building products or some mechanism? As Senator Madigan and others have said, this is the biggest purchase that anyone will ever make in their lives.

Mr Ridgway : Just to finish my answer to the earlier question, and hopefully it might help on your second question as well. In the discussions that we attended last week, we identified the benefit that the harmonisation of the Consumer Law brought to the relationship between the Australian government and the different states and territories that we now have consistent laws, consistent expectations and consistent protections for consumers, regardless of where people live or trade. If there is a complaint received by any of the regulators, it gets relayed to the regulator most able to deal with the issue. Arguably, there are benefits in that approach and that mechanism which involve a framework of agreements between regulators that might be of interest in this other specialist area that is not entirely consumer but perhaps shares some of the challenges of a federal system with lots of regulators, who would like to do a good thing but who do not perhaps have consistent powers or are not linked up in the way that the Consumer Law regulators are.

Mr Gregson : But consumers or other stakeholders often have a map of regulators or mechanisms to navigate to have their issues addressed. I think regulators and governments acknowledge the clarity around that and assistance in that, and I would hope that you have seen a number of examples through a broad spectrum of regulators to try to address that. But it is not true to say that there are not bodies and organisations responsible for these things. There are regulators in every state, there is the ABCC and there are ministerial forums, where I know that these issues get raised and that they are looking at dealing with them.

But it is certainly not the role of the ACCC to bring together the building regulators. Just as it is not for us to bring together the health regulators and just as it is not for us to bring together other regulators in other spheres—

Senator XENOPHON: But in terms of a consumer who has been misled, where there has been an allegation of a misleading claim in relation to a building product? If a consumer comes to you and says, 'I've got this dodgy building product,' or, 'It's not the right product; it's non-compliant,' do you send them off to the states or do you see that as your role—to be involved in launching a prosecution, for instance?

Mr Ridgway : The nature of building product conformity requirements is one that goes beyond the bare product itself. There are design solutions for pretty much all of the standards that are expected of builders and contractors, such that you may have a product that, on the face of it, is not one that is deemed to comply with a certain building code requirement but which can be acceptable as compliant if accompanied by the correct design solutions.

This is typical for products in the building sector, whether they are glass, aluminium, timber or steel, to come together in one structure where the design solution is required to deliver the conformity required that cannot be delivered individually by the individual product components. It takes the expertise of building regulator specialists to understand and know whether that building design is one that meets the expectations or not. The ACCC does not have the expertise to make a call on whether this or that design solution, for example, is adequate.

The fact that a building product may be imported or fabricated in Australia but is not strictly compliant with the Australian Building Codes Board is not the end of the question, because we are aware that there are a number products that can be used, and intentionally used, with design solutions that bring them into conformity. Arguably, the product used in the Docklands fire, which I am sure the committee is familiar with, is one that we understand was not the right material being used. It could have been brought into conformity with the right design solution.

Mr Gregson : With your hypothetical complaint to us—and we do get them both in this area and other areas—our triage would be that if it is related to a building standard issue we would pass it on to the building regulators. If it is in relation to a misrepresentation about the product that the person has bought and if it is a state-isolated issue and not suggestive of a broader-scale issue, it might be appropriate to assist the consumer to get to a fair-trading agency which has a more on-the-ground facilitation role. If it is a national company with a national and systemic issue, then the ACCC may escalate that for investigation. That is the triaging we do with matters—the 160,000 complaints that we get a year, across the whole economy.

Senator XENOPHON: I will put the question about product stewardship and a couple of others on notice, I think. Thank you.

Senator MADIGAN: Mr Gregson and Mr Ridgway, you have mentioned how you attend a lot of meetings. The ACCC is on different bodies and different advisory councils for the states and territories. At those, how many consumers or consumer advocacy groups are represented that you know of?

Mr Ridgway : The ACCC has a very active consumer consultative mechanism itself. We have regular dialogue and meetings chaired by an external consumer representative of consumer organisations on a number of occasions each year. We also host a consumer congress. That is a forum for issues to be raised and challenges to be put in the event that they wish to put them to the ACCC and the other state and territory regulators who attend.

Senator MADIGAN: For the benefit of the committee, would you be able to furnish us with the names of consumer organisations that you have liaised with, or know of in the building problem space?

Mr Ridgway : We can certainly provide the names of the Consumer Consultative Committee members who we have discussed the Infinity cable issue with. We do not have a dialogue, typically, on building product conformity, given that we do not feel that it is our responsibility. But we certainly do touch on those aspects that we do feel that we should engage with.

Senator MADIGAN: You mentioned earlier about the different organisations that consumers can navigate through. Can you supply to the committee a map of what you suggest the organisations are that consumers can 'navigate', as you put it? From where I am standing, this is like one of the roughest coastlines in the world and yet it has no lighthouses to guide the consumer.

Mr Ridgway : It has taken us some time, especially to work with the number of regulators, to identify what we consider to be a map of the regulatory controls. We have just concluded that exercise with feedback from those regulators and, yes, we are prepared to provide that to the committee.

Senator MADIGAN: Also, has the ACCC done any assessment of the regulators to whom you refer the consumers?

Mr Ridgway : Assessment of the regulators themselves?

Senator MADIGAN: Well, does the ACCC ever look at who you refer consumers to, and their satisfaction with how their concerns have been addressed?

CHAIR: Mr Ridgway, can you take that one on notice as well?

Mr Ridgway : Yes.

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