Smith Nick: Standards and Conformance Bill — Second Reading 
Smith Nick: Standards and Conformance Bill — Second Reading 
[Volume:633;Page:5164] 
Hon Dr NICK SMITH (National—Nelson) 
: 
 Standards New Zealand was created in 1932 in the wake of the Napier earthquake as part of establishing a national building code. I put it to the House today that the leaky homes disaster affecting 15000 homes is on an equal scale of calamity to that earthquake and should trigger not just the tinkering that is in this bill but a major restructuring of Standards New Zealand. Things went wrong in 1988 when the Government at the height of Rogernomics removed all State funding for Standards New Zealand unlike standards authorities in Australia the UK Canada and the US. The implications of that combined with other State sector reforms are that Standards New Zealand’s technical committees have become dominated by commercial interests and the consequence of that for consumers has been a disaster. 
This evening I want to expose just how rotten things have become in the timber industry. The mischief began in 1995 when timber industry advocates persuaded Standards New Zealand against the advice of the Forest Research Institute to allow untreated kiln-dried timber. Let me make it plain that untreated timber is not the only cause of leaky homes. Other causes like poor design sub-standard construction and inadequate inspection also played a part. However the scale and cost of the problems would be only a fraction of what they are had all those homes been constructed of treated timber. The Government made the right decision despite vehement industry opposition to require full treatment in 2003. The new standard 3640 required framing timber to be fully treated and the key words in that standard are that the treatment must fully penetrate the sapwood. 
The subsequent attempts and tactics by some in the timber industry firstly to get around secondly to fudge and now to change the requirement for full timber treatment have me very concerned. The new timber treatment standard was first got around by the now-defunct Building Industry Authority in 2004 approving a surface-only treatment known as T1.2. That had several major problems. First the alternative solution mechanism was never intended to override the standard and was intended only as an exceptional circumstance. Second the product was cunningly marketed as T1.2 and misrepresented as being the same as the H1.2 or fully treated complying product. Third the conditions of its use were impractical and not followed. Nor was the testing and trial of that surface-treated product nearly robust enough to replace 50 years of experience with the fully treated boron timber product. 
After those concerns were publicly highlighted by scientists certified builders building certifiers building consultants and myself last year the product collapsed. The public did not want a product that did not comply with the new standard. The aftermath of that episode is that Dr Wakeling and myself face a $16 million writ each and that the chief executive officer of the Certified Builders Association was pushed out after industry pressure over his public statements which were similar to ours. 
Another new product Tru-Core was also launched at about the same time. Today it is marketed and widely sold as a product that is compliant with the new timber treatment standard. Tru-Core unlike T1.2 claimed it complied with the H1.2 standard. Again it sought to avoid the traditional pressure treatment process by a process involving a spray-on and then a heating of the boron. In March I received a copy of a report written by scientist Dr Robin Wakeling showing that of 120 samples of the Tru-Core product taken from stores in Whangarei Rotorua Palmerston North Feilding and Taupo 88 percent of them failed. I wrote to the Timber Preservation Council questioning what it intended to do about that deeply concerning report. It said it would do nothing and further it refused to disclose to me its test results concerning the compliance of that Tru-Core product saying for goodness’ sake that they were commercially confidential. 
I also want to draw to the attention of this House the fact that when test results on the Tru-Core product were first reported by Veritec—and that is a Crown research institute—they showed 100 percent penetration of the timber on all the samples. It was later found on questioning that Veritec had found anything but 100 percent penetration of those samples as required by the standard. In fact across a 50 millimetre cross-section of a typical timber member penetration ranged from only 3 millimetres to 9 millimetres with an average of just 5 millimetres. The explanation by Veritec of why it had reported the results in that way which was that that was what the industry had requested raises very serious questions about the integrity of that Crown research institute’s reporting of laboratory test results. 
 In June the Building Industry Federation’s chief executive sought a meeting with me because the federation had seen the Wakeling report on Tru-Core timber. He advised me that the federation had sighted a further report from another scientist Neil Mora an employee of AgriQuality that confirmed Dr Wakeling’s concerns. He agreed to arrange a meeting between Mr Mora and myself. A week later the American company behind Tru-Core Kop-Coat had Russell McVeagh serve another set of writs on Dr Robin Wakeling personally for doing no more than testing the product for compliance with the standard and informing relevant bodies of the concern. Not surprisingly Mr Mora the AgriQuality scientist who had similar test results to Dr Wakeling’s has subsequently decided not to allow his test results to be available because he too feared receiving writs for millions of dollars. It is that sort of heavy-handed silencing of scientists and stonewalling citing commercial sensitivity that leaves me feeling uneasy about whether houses today are being built of treated timber of sufficient quality to last. 
A further dimension to the issue is the bid by Kop-Coat the owners of the Tru-Core product to water down the timber treatment standard and allow timber that is surface-treated with boron for hazard class 3 uses. On 11 May of this year the technical committee of Standards New Zealand had a vote on that matter. Two men Neil Mora and Paul Oliver voted against the change which meant that it failed. In June those two members were sacked as a consequence of industry pressure. Standards New Zealand then by a unanimous vote agreed on 18 August to that amendment to water down the standard making a complete mockery of the standards process. 
In a surprising move the department issued a press release on 21 August distancing itself from the new standard and stating it was not satisfied that the product met the requirements of the building code. I suspect that the department too feels distinctly uncomfortable about that process. The Certified Builders Association rightly issued a press release last week stating it was “infuriated” at the situation whereby the Department of Building and Housing and Standards New Zealand had different views on whether the surface-treated timber was OK. The Minister of Commerce Lianne Dalziel has stated that changes in the standard would be made only by consensus or on rare occasions by an 80 percent vote. That has not occurred in respect of this amendment. At a time of huge sensitivity over timber treatment we have two Government agencies saying different things. The message to homeowners and builders 4 years after the whole issue of rotting homes broke is that we still do not have our act together as to what is required with regard to timber treatment. 
To summarise a new timber treatment standard was adopted in 2003 and we have had repeated efforts to get around it to fudge it and now to water it down. We have had multimillion-dollar writs flying scientists who are fearful of speaking freely standards committee members being fired because they opposed lesser standards Crown research institutes producing grossly misleading laboratory test results and Standards New Zealand and the Department of Building and Housing at odds over what is required. 
I put to this House that our building industry deserves better than that mess. Questions need to be answered. A fresh new look needs to be taken at our building standards—how they are set who funds them and how they are enforced. That is the key to regaining public confidence in the $13 billion a year building industry. This bill will not do. Far more substantive reform of Standards New Zealand is required. 
I seek leave to table a number of documents that I referred to in my speech. The first is a report on the testing of 120 samples of the Tru-Core timber product that was produced by Dr Robin Wakeling and submitted to the Timber Preservation Council. 
Document by leave laid on the Table of the House. 
Hon Dr NICK SMITH 
: The second set of documents are both my letter to the Timber Preservation Council about that report and the council’s response refusing to release its test results. 
Documents by leave laid on the Table of the House. 
Hon Dr NICK SMITH 
: The third document I seek leave to table is the report from Veritec which is a subsidiary of Scion formerly the Forest Research Institute which shows quite misleading test results on those timber samples. 
Document by leave laid on the Table of the House.