The Virtues of Risk-Based Building Classifications & Mandatory Inspections
Proponents of good practice building regulation are increasingly extolling the virtues of building regulatory systems that adopt risk-based building classifications and calibrate the risk profile of buildings with mandatory inspection regimes.
Depending on the jurisdiction, the inspection regimes are either under-resourced or over-resourced. One model is the one-size-fits-all approach, where the legislation requires, say, five mandatory inspections regardless of whether the building is a complex or high-consequence building, such as a hospital, or a simple building structure such as a warehouse. A one-size-fits-all approach may over-resource inspections of low-risk buildings and can in some instances under-resource inspections of high-risk buildings.
The Importance of Building Risk Profiles
The World Bank is on record as stating that buildings should be classified according to their risk profile. As noted by the World Bank:
“Since 2005, 18 economies have incorporated elements of risk-based building inspections… Risk-based inspections, as opposed to random untargeted inspections, allow governments to allocate resources where they are most needed without compromising worker and public safety… Risk based inspections have become more popular in the past decade, resolving some of the issues from random and phased inspections. Though many risk-based inspections systems include a minimum number of phased inspections for all buildings, they typically give priority to buildings with high risks – such as environmental ones and optimize the process…. Risk based inspections are conducted to ensure a buildings structural safety, fire safety, worker safety and public safety but in a more efficient manner. Having fewer inspections for less risky buildings lowers costs without compromising safety, in increasing flexibility and enabling inspections move away from random and phased inspections.” 
The European EN 1990 standard is an exemplar in that it ensures that risk-based building classifications of buildings are calibrated with the relevant inspection regime. There are three gradings in terms of building categorisation:-
- High consequence;
- Medium consequence; and
- Low consequence.
The ‘consequence’ term is the technical narrative for the grading of the potential of a given building to generate a deleterious outcome. Hence, a low consequence building classification will have a technical criterion that recognises that the type of building or potential use of a building would not in ordinary circumstances culminate in compromised outcomes.
High consequence building classifications on the other hand capture buildings that have the potential to generate far more deleterious outcomes insofar as they can pose as a threat to life or limb and or cause major economic prejudice.
When one looks globally, there is considerable disparity in terms of the risk criteria that are applied to the building classification regimes. Furthermore, very few countries deliberately calibrate the risk profile of the building classification with the inspection regime. Many building classification systems are designed to differentiate the different building forms i.e. hospitals vis-à-vis domestic detached homes vis-à-vis warehouse. So the classification criteria are more about such considerations as height, size, use and proximity to other buildings.
A risk classification profiling, however, is entirely different as risk-based building classifications will be heavily underscored by the potential harms that may flow from a compromised building outcome emanating from the particular building. It is considered that the risk classification approach has much to commend it, as it can generate far greater consumer dividend if one measures that dividend against the minimisation of risk to public safety.
The Importance of Mandatory and Frequent Building Inspections
There has been a trend in the current debates concerning building regulation in Australia that private certification is no longer sustainable. Interestingly, the frequency and sustainability of building inspections was a key driver for reform in Japan that led to the privatisation of building inspection functions in that country. As noted by the World Bank:-
“Japan introduced private sector involvement in building regulation in 1998, when it became clear that the public sector lacked the capacity to handle the required inspections and confirmations with adequate scope and depth. In 2016, thanks to private sector participation the rate for final inspection was more than 90% – compared to a rate of less than 40% before 1998. It was the great Hanshin Awaji Earthquake in 1998 that revealed the consequence of the low inspection rate: the damage pattern showed construction deficiencies (such as lack of bearing walls for wooden houses) that final inspection would have detected and required remediation for. In response, Japan made changes in its system for confirmation and inspection, including the use of private inspectors to meet demand.”
The Japanese experience underscores the importance of a nuanced approach to ensuring frequent and mandatory inspections. Private certification can in certain circumstances improve the viability of risk-based inspections – Japan proves this is the case. Auditing of private certifiers will be a necessary concurrent reform with the implementation of mandatory risk-based building inspections (see an article on point HERE), as for mandatory risk-based inspections to be viable, they must be adequately resourced and would therefore be best conducted by independent private sector actors.
The Need to Marry Building Risk Classifications with Inspection Regimes
The EN 1990 standard calibrates the inspection regime with the risk classification building profile of the jurisdictionally specific construction code.
Low risk buildings predictably require a lesser number of mandated inspections. Medium consequence buildings as one would expect require a greater number of building inspections. There is an upping of the ante with high consequence buildings in that there will be a significantly greater number of building inspections mindful of the fact that more inspections by practitioners with skills that are bespoke to the particular building system or element will generate a superior construction outcome.
Japanese research has established that buildings that have been impacted upon by earthquakes are afflicted by less structural fallibility if there has been a robust inspection regime when compared to buildings that have not experienced inspection frequency. Furthermore, one of the reasons for the introduction of private certification in Japan was to increase probity control by way of increasing the frequency of mandatory inspections (as noted above). It was recognised that local government inspection resources would not necessarily be able to generate a critical mass of inspectors and the establishment of a privatised bevy of inspectors would be better suited to optimising the resourcing of a mandatory inspection regime.
The World Bank also recognises the merit in concentrating inspection resourcing with high-risk building classifications rather than applying finite inspectorial resources to lower-consequence building classes. There is a compelling logic in such recognition.
Some of the Key Take-outs in the Marriage of Building Inspections with Building Risk Profile
1: Good practice jurisdictions legislatively mandate inspections
2: The inspections occur at critical junctures in the construction process
3: The number of inspections mandated will correlate with the building’s risk classification
There will be fewer mandated inspections for low-consequence buildings such as warehouses that do not harbour toxic or prejudicial goods. It is considered that the building official would issue a building permit for a warehouse once satisfied that the drawings comply with the construction code. There would be no inspection required until the building was completed and fit for occupation.
In the case of a higher consequence building, such as a Super High Rise, designed to house potentially hundreds or thousands of people, it would be recognised that this would be a high-consequence building because of the potential for building failure to generate significant loss of life. In this paradigm a risk classification may insist that the mandatory inspection regime dances with the profile and there might conceivably be nine mandatory inspections. The triggers for the mandated junctures may be motivated by the following triggers:-
- Foundation of footings
- Concrete pour
- Frame stage
- Installation and commissioning of fire suppression systems
- Installation and commissioning of air-conditioning systems
- Installation and commissioning of installation of electrical systems
- Building Envelope, including:-
- Installation and commissioning of water-proofing and resilient systems
- Installation of fascia and cladding installation
- Post-commissioning of all essential services
- Final Inspection to sign off for occupancy purposes
The writer is not suggesting this list is exhaustive as that would require extensive technical know-how, and a final inspection juncture regime would require intensive consultation with industry actors. It should also be noted that this list is not necessarily in any particular order as the ordering would also require substantial technical dexterity.
Furthermore, the legislation might dictate the following:-
- A building official such as a building surveyor is appointed to manage the totality of the inspection regime and to obtain compliance certificates from all key practitioners that sign off the construction outcome, where the outcome is reliant upon specialised skills, such as fire engineering.
- The undertaking of mandatory inspections by particular practitioners such as fire engineers, structural engineers, electrical engineers, and so forth.
Some jurisdictions like Japan require, in the case of high rises, ministerial/departmental approval of that which culminates in the occupancy permit. This is in recognition of the fact that high rises when viewed through their lenses pose greater risk on account of the high population density, and this follows.
Other jurisdictions consider it very important that robust independent peer review is brought to bear when deliberating over whether high consequence components of buildings, such as fire suppression systems, should be sanctioned. As some insurers are increasingly becoming reluctant to insure fire risk, there is increasingly compelling merit in legislatively mandating robust independent peer review particularly in a performance code construct to broaden the risk pool.
A Risk-Based Inspection Protocol for Construction Should Also Be Applied to the Design Team
Michael de Lint AFSDBE PLE, a board member of the International Building Quality Centre and a regular senior law reform consultant to the World Bank was in Melbourne recently and kindly reviewed this paper and thought it was very important to volunteer an additional ingredient that is consistent with good practice and robust inspection.
“The design team which would ordinarily entail the engineering professionals and the architect will carry out site inspections during/throughout construction to ensure that the design that they have developed is properly executed and consistent with approved design. This process complements or parallels the third party inspection system advocated in this paper and provides a holistic inspection system and level playing field.”
This approach would find expression in medium to high consequence buildings and would be proportionate to risk.
Mandatory inspections are a vital component of a good practice building regulatory ecology. Risk-correlated building classifications offer a calibrated medium through which mandatory inspections may be targeted. Enlightened building regulation must adapt to resource constraints and this is a key hurdle in the building inspection regulatory paradigm; the take out on point is that resources for mandatory inspections must be directed according to need, with high risk projects a priority.
The Japanese experience shows that the private sector can work very effectively in tandem with the public sector to provide a good practice building inspection regime. Total delegation of inspection duties to the public sector is no panacea. There must be a nuanced approach to mandatory inspections that balances effectively the need for impartial rigorous inspectorial review with the realities of a resource-constrained public sector.
 World Bank, ‘What role should risk based inspections play in construction’, p 1.
 World Bank, ‘Good Practices for Construction Regulation and Enforcement Reform’, p. 17.
 World Bank, ‘Building Regulation for Resilience converting Disaster into a Safer Built Environment the Case of Japan’, p 42.
Honorary Consul Kim Lovegrove MSE RML FAIB – Law Reform Consultant
Honorary Consul Kim Lovegrove MSE RML FAIB has 30 years’ experience in law reform, strategic advice, the design of building regulation and best practice building dispute resolution, overhauling and re-engineering liability and probity insurance regimes, the design of licensing and registration regimes and the design of regulatory risk management systems.
If you wish to engage Kim Lovegrove or the firm, feel free to contact us via +61 3 9600 4077, our website or by emailing firstname.lastname@example.org.