New guidelines on the way in 2019 to reduce ACP cladding risk

  • Andre Mierzwa, Chief Engineer, FM Global Australia and New Zealand

2018 was a busy and eye-opening year for those working to resolve our ACP cladding risk but much remains to be resolved

It happened in a flash. The fire began on the 22nd floor at around 5am, and raced upwards, spreading fast. Aluminium Composite Panels cladding the outside of the building were thought to have contributed to the fire’s spread. 

This was the reality that confronted almost 200 residents of the Neo 200 apartment building in Melbourne’s CBD in the early hours of February 4. It could have been a re-telling of the deadly Grenfell Tower fire in London on June 14, 2017. 

The incident highlights how a year and a half on from Grenfell, Australia is still grappling with its approach to reducing the significant safety risk posed by aluminium composite panels (ACPs) in our own backyard. 

2018 was an eye-opening year, with multiple stakeholders – including FM Global - grappling with determining how to reduce the risk to property from the use of this highly prevalent form of building material in multi-storey commercial and residential buildings. 

Even before Monday’s fire, we knew the stakes were high. ACPs are prevalent in Australia. We need to get this right. So where do we stand?


The state of the States: We have been working against a backdrop in whichstate and local governments have undertaken a mixed and largely uncoordinated range of measures to minimise the use of dangerous cladding on high-rise buildings. For example, whileNew South Wales and Victoria have effectively banned ACP panels with a polyethylene core of more than 30 per cent on all multistorey buildings, Queensland has asked owners of class A and B buildings to register with the Queensland Building and Construction Commission online and undergo a fire safety risk assessment. Western Australia has taken a lighter touch, choosing not to ban the cladding but to ensure they satisfy the requirements of the Building Code of Australia and that any performance solutions meet fire testing standards. 

Efforts to bring together all stakeholders in a united front on the issue of ACPs:The Society of Fire Safety formed a committee which has been working on a new set of guidelines on ACPs. The critical difference between these guidelines and others is that the assessments of the risk and remedial action will be agreed on by all key stakeholders: fire safety engineers, insurers, building owners and surveyors, and the fire brigade. Without having the input of each of these groups, we will fail to capture and mitigate the true consequences of ACPs and their risks. The guidelines have recently been released here.

A shift from ALARP to FAIRP:The guidelines suggest a key shift. Drawing on the perspectives of legal specialists, they will take a ‘as far as is reasonably practical’ (AFAIRP) approach to risk management as opposed to the traditional ‘as low as is reasonably practical’ approach (ALARP) that is more familiar to fire safety engineers. Both concepts have at their core the idea of “reasonably practicable”, but AFAIRP invokes a greater level of scrutiny with the starting point being the elimination of the hazard. By leaning on an AFAIRP approach, we hope to reduce risk and the potential for major consequences significantly, as well as hopefully making it easier for building surveyors and fire safety engineers to acquire professional indemnity (PI) insurance against any future claims on results of their assessments and subsequent retrofits.

Aligning the Insurance Council of Australia (ICA) protocol: The Insurance Council of Australia’s residual hazard identification and reporting protocol around aluminium composite panels and other combustible facade materials had allowed up to 35 per cent polyethylene in ACP cores for their Category B rating due to the uncertainties in core testing.  With updates to the legislation at the state level, this protocol now aligns with the hard and fast lines drawn. 

Test, test, test: In conjunction with upgrading the ICA protocol, FM Global has worked with the ICA, Society of Fire Safety and the Fire Protection Association Australia (FPAA), to add another accredited ACP testing lab. This brings to a total of five the number of labs across New South Wales, Queensland and Victoria where samples of panels can be taken to be identified and verified from a safety perspective. In conjunction with the Society of Fire Safety guideline, it is expected that this will accelerate the process of determining which buildings are at risk from ACP cladding and, ultimately, how to rectify them.

Hoping for a breakthrough: One of the reasons why the Grenfell and Lacrosse fires spread so quickly was the fire’s ability to rapidly spread up a continuous cladding wall. In line with FM Global’s research and testing-based approach to risk management, FM Global is carrying out research into whether it is necessary to completely remove all ACP panels, or if the same result could be achieved by creating fire breaks between panels covering spandrels which are the sections of wall between continuous horizontal rows of windows. There is also a proposal in place for local research testing on fire breaks up continuous vertical panel clad walls. Preliminary proof of concept testing has shown this could be feasible, but more testing will be required.

While we wait for these developments to be formally finalised, in many cases, those developing new buildings are not. We’re already seeing changes taking place in the market. New developers, particularly FM Global clients and other commercial developers are choosing not to take the risk of having to pay more down the line: they are installing solid aluminium panels in place of aluminium composite panels. This is positive but also conservative given the high level of uncertainty that remains with respect to how legislation, and issues regarding professional indemnity and building insurance, will play out in 2019.

Financing a way forward

How to pay for necessary changes appears likely to remain an unsolved challenge in 2019. While everyone will undoubtedly welcome forthcoming clarity around how to treat cladding, it appears likely that a gap will remain between knowing what is right and getting it done. 

Victoria is offering low interest loansfor replacement exercises but NSW has not gone down this route. This leaves legal action against developers a more likely route for recouping any costs associated with replacing the cladding. As just one example, residents at Haymarket residential complex, The Quay, were told they may each have to pay $45,000to cover the $12.5 million bill for replacing 10,000 square metres of panels. How to finance fixes will slow progress in making buildings safer for those who live in and use them. 

As we await the conclusion of these varied efforts to provide further clarity and reduce the risk from ACP panels, building owners can still act. Working closely with insurers to ensure building cladding materials identification and evaluation processes are sufficient for ongoing underwriting could be a starting point. 

The rude awakening of over 200 residents in Melbourne that Monday shows just how live the issue of ACPs in Australian buildings remains and why it is incumbent upon anyone with responsibility over buildings to do what they can to reduce risk - as soon as we can.