Important: On 1 September 2020 the Certifier Practice Standard was published. All certifiers will be expected to adhere to chapters 1 and 2 which cover the role of certifiers as public officials, and conflicts of interest.
Registered certifiers are independent regulators of building and subdivision work must comply with the conflict of interest provisions set out in the Building and Development Certifiers Act.
This is to ensure the impartiality of their assessments.
A conflict of interest is a situation where a certifier, or someone to whom they are related, is in a position to unlawfully gain private benefit from actions or decisions made in the certifier’s official capacity.
A conflict of interest exists if a reasonable person would conclude that a certifier has a private interest in the certification work, and the private interest comes into conflict with, or may affect the duty of, the certifier to act in the public interest.
The legislation lists situations that are considered to be private interests, such as the certifier being the applicant for the development, being involved in its design, or (for private certification work) the certifier being a council employee in the area of the development.
It is also a conflict of interest if the certifier is related to the person with the private interest.
This is any type of relationship whether family, personal, employment or business.
If a certifier has a conflict of interest, they mustn't:
- do any inspection
- issue any certificate (other than a compliance certificate under the EP&A Act, provided the certifier is not the ‘principal certifier’)
- do any certification work prescribed by the regulations.
Fair Trading may grant a certifier an exemption from a conflict of interest provision. In assessing an application for exemption, the overriding priority is ensuring the public interest is maintained.
A penalty of up to $33,000 applies to a certifier who breaches the conflict of interest provisions.
What is a conflict of interest?
In addition to the general list of private interests, the legislation also prescribes:
Prescribed conflicts of interest (summary of legislative provisions)
- A certifier issuing a strata certificate for a strata plan, strata plan of subdivision or a notice of conversion if the plan or notice was prepared by the certifier or someone related to them
- A certifier doing certification work if the certifier did any of the following:
- advised how to amend plans/specifications to comply with the BCA or a legislative requirement (other than advice on how to comply with the BCA’s deemed-to-satisfy provisions for a class 1 or 10 building)
- proposed a design option for the development, such as a BCA performance solution.
Situations that aren't a conflict of interest (summary of legislative provisions)
- A council certifier issuing a certificate on behalf of the council:
- where the applicant is the council or an employee, and the development is valued up to $2,000,000, or
- for development where the certifier was involved in the assessment.
- A certifier certifying a swimming pool under the Swimming Pools Act and carrying out work to make the pool barrier compliant, provided:
- the work is for the purpose of issuing a certificate of compliance
- the work (including parts and labour) costs no more than $1,000
- the certifier has a supervisor certificate or endorsed contractor licence under the Home Building Act, that authorises them build a swimming pool or do structural landscaping.
- A certifier doing certification work under contract to the council, as well as private certification work in that council area, provided the contract and private work does not relate to the same development.
- A certifier advising on what legislative requirements apply and whether or not the development complies – in general terms, certifiers may advise what is needed for compliance, but not how to achieve compliance (except for how to meet BCA deemed-to-satisfy provisions for class 1 and 10 buildings).
- A certifier (if not the principal certifier) issuing a compliance certificate under the EP&A Act where the certifier, or a person related to them, was involved in the design or carrying out of the work.
- A certifier participating in a fire engineering brief for the purpose only of determining the scope of work for a fire engineering analysis and the basis for that analysis.
Exemptions from conflict of interest provisions
Fair Trading can grant an exemption to a certifier from the conflict of interest provisions. This is for unforeseen circumstances where the legislation unintentionally restricts certification work. Maintaining the public interest is the overarching objective regardless of circumstances.
Types of exemption
An exemption may relate to a specific certification work, or class of work, and may be granted unconditionally or subject to conditions.
For example, an exemption might relate to class 1 and 10 buildings in the Penrith local government area, subject to the condition that the exemption is valid for 2 years and the certifier must reapply for an extension.
How certifiers can apply for an exemption
Fair Trading will notify you in writing on the outcome of your application.
Certifiers’ questions about conflicts of interest
What is the difference between professional services and certification work?
Certification work is defined in the legislation. Professional services fall outside this definition. One way to look at it is to consider that any paid service that is not certification work, and is not covered by cl.24 or cl.25 of the Building and Development Certifiers Regulation, is likely to be a professional service.
Why can’t certifiers give design advice? If I know how to fix something, why can’t I say so?
As a certifier, you can say exactly what provisions apply, exactly what those provisions require, and exactly what is yet to be satisfied. You can be as specific as you like with this advice, provide it in any format (e.g. verbal, email, formal report), and receive payment for it, as long as it does not constitute design advice.
A certifier’s role is not to solve design issues. The applicant is free to engage a BCA consultant or other relevant specialist.
Can a company provide pre-DA planning or consultancy services, as well as certification services?
Yes, but it’s unlikely that both types of service could be provided for the same development.
If the company provides both services for the same development, the certifier has a private interest, from either having provided or being associated with someone who provided professional services. Whether the private interest could be perceived as an influence would need to be assessed, case by case, as per s.29 of the Building and Development Certifiers Act.
Certifiers often provide comments in the planning process, and their comments may influence the chosen design. Is this allowed?
The advice certifiers can give is largely outlined in cl.25 of the Building and Development Certifiers Regulation. Certifiers are qualified professionals and it is natural that their comments will carry weight. It doesn’t automatically mean they have a conflict of interest.
Fire safety certifiers are often consulted at the DA stage. Is this a conflict of interest?
In general terms, providing consultancy advice is a ‘professional service’ and thus a private interest under s.29 of the Building and Development Certifiers Act. See ‘situations that aren't a conflict’ above for relevant exemptions.
Can a certifier who works for a council do certification work if the applicant is another council employee?
Yes, for development valued at up to $2M. If the certifier and the other employee have a relationship (e.g. close friendship) that could influence the certifier’s impartiality, then another council certifier may have to certify the development.
Can a certifier share office space (and potentially administrative staff services) with a builder or town planner?
If the situation could reasonably be seen as likely to influence the certifier, the certifier can’t do any certification work on development if the builder or town planner is involved.
Sharing office space suggests, perhaps, just having the same landlord, but common administrative staff suggests a closer business relationship that’s more likely to be a perceived (or actual) influence.
Refer to s.29 of the Building and Development Certifiers Act for the two-step process to determine if the certifier has a conflict of interest.
Can a swimming pool certifier give paid consultancy advice before issuing a certificate?
Certifiers should not act as both consultant and certifier on the same pool. This is likely to be a perceived conflict of interest.
If a pool is non-compliant, the certifier is required to give enough information, as per s.22E of the Swimming Pools Act, so the pool owner can address the issues. This information is provided after the inspection; it is not consultancy work.
Can a pool certifier offer a free first inspection, and charge a large fee for each subsequent inspection?
Certifiers are required to be impartial in their assessments and are subject to audit by Fair Trading. The audit process would uncover whether a certifier is deliberately failing the first inspection to secure subsequent work.