NSW TASKFORCE REPORT: LOOSE-FILL ASBESTOS INSULATION …

NSW TASKFORCE REPORT: LOOSE-FILL ASBESTOS

INSULATION IN NSW HOMES

Disclaimer

This publication may contain work health and safety and workers compensation information. It may include some of your obligations under the various legislations that WorkCover NSW administers. To ensure you comply with your legal obligations you must refer to the appropriate legislation.

Information on the latest laws can be checked by visiting the NSW legislation website www.legislation.nsw.gov.au

This publication does not represent a comprehensive statement of the law as it applies to particular problems or to individuals or as a substitute for legal advice. You should seek independent legal advice if you need assistance on the application of the law to your situation.

© WorkCover NSW

http://www.legislation.nsw.gov.au

Contents

Executive summary 4Scope of the report 4

PricewaterhouseCoopers independent investigation 4

The NSW Make Safe Assistance Package 4

NSW Ministry of Health Interim Report 5

Stakeholder views 5

Purchase/demolition options 5

Program costs 6

Implementation 6

Taskforce recommendations 7

Abbreviations 9

Chapter 1: Background 10Establishment of the Taskforce 10

Parliamentary Joint Select Committee 10

What is asbestos? 10

What is different about Loose-Fill Asbestos Insulation? 12

How to confirm the presence of LFAI 12

Who was ‘Mr Fluffy’? 12

What does having LFAI mean for homeowners? 12

The ACT experience 13Remediation efforts 13

Further attempts to identify affected premises 13

The ACT Asbestos Response Taskforce 13

The ACT Buyback Program 13

The social realities 14

Obligations for non-participants in ACT Buyback Program 14

Policy challenges 14

Different legislative frameworks to regulate asbestos in the ACT 15

Chapter 2: Loose-Fill Asbestos Insulation in NSW 16Historical approach to LFAI in NSW 16

Requests for Commonwealth assistance 16

Identifying affected premises in NSW 17

The Queanbeyan Study 17

Analysis of historical records 17

Why there is a need for a clear definition of LFAI? 17

PricewaterhouseCoopers estimates 18

Proximity Model 18

Capacity Model 18

Financial records model 18

Summary of results 19

How best to determine the number of premises built before 1980 19

Property transactions 19

New guidance material 20

2010 Review of vendor disclosures 20

Chapter 3: The NSW Make Safe Assistance Package 21Sample testing service 21

Technical assessment protocols 22

Exposure pathway sealing and environmental cleaning (building works) 23

Building works protocols 23

Replacement of soft furnishings and/or porous materials (clothing) to the value of $1,000 23

Short term accommodation 23

Counselling services 24

NSW Ministry of Health Interim Report 25Analysis of technical assessment 25

Communication of results 25

Summary of results 26

Interim conclusion from NSW Ministry of Health 26

Chapter 4: Voluntary purchase/demolition options 27Considerations 27

Guiding Principles 27

Australian Tax Office enquiries 27

Legal liability issues 28

Stakeholder views 28

Remediation works (asbestos removal) 28

Exposure pathway sealing and environmental cleaning (building works) 29

Complete remediation (purchase, demolition and remediation) 29

Analysis of options 31Option 1 – Purchase of house and land 31

Option 2 – Purchase of house only 31

Option 3 – Ex gratia payment (@ 50 per cent valuation of house) 32

Option 4 – Ex gratia payment (Make Safe + annual inspections indicative costs) 33

Guiding principles table 35

Cost benefit analysis 35Conclusion 36

Chapter 5: Taskforce and program implementation 37Establishing an Implementation Taskforce 37

Implementation Taskforce governance 37

Risk management 38

Assistance 38

Purchase 38

Staged approach 40

Valuation process 40

Disputed valuations 40

Legal advice ($1,000) 41

Stamp Duty – Office of State Revenue inquiries 41

Relocation assistance 41

Home contents 41

Additional assistance 42

Demolition and block remediation 42

Waste disposal 43

Owners requesting to stay in affected premises (short to medium term) 43

Resale of remediated blocks 44

Units 44

Chapter 6: Identifying affected properties in the future 46Establishment of a public LFAI Register 46

Emergency services 47

Mandatory tagging 47

Proactive disclosure 48

Property transactions and tenancy 48

Mandatory notification (at point-of-sale) 48

Conclusion 49

Mandatory reporting by Licensed Asbestos Assessors 50

Chapter 7: Additional Taskforce considerations 51Mandatory testing 51

Training, education and waste disposal 53

Mandatory asbestos training awareness program 53

Reducing the costs levied for the disposal of asbestos waste 53

Community awareness 53

Chapter 8: Connecting with the community 54Community engagement 54

Stakeholder consultation 54

Emergency services 55

Communications products 55Standalone microsite 55

Fortnightly e-newsletter 56

Social media 56

Living in premises with LFAI video 57

Mechanisms for contacting the Taskforce 57

Media 57

Appendix 1: Terms of Reference Loose Fill Asbestos Insulation Taskforce 58

Appendix 2: JSC Recommendations 59

Appendix 3: Proximity Model results 61

Appendix 4: Median home prices in the 26 LGAs 62

Appendix 5: Average land values 2014 63

Appendix 6: Structure, roles, responsibilities of proposed Implementation Taskforce 64Roles and responsibilities 64

Key Taskforce members – Staffing 66

Appendix 7: Analysis of proposed options for mandatory notification 67Option 1: Prescribed document /warning 68

Option 2: Prescribed document/asbestos report 68

Option 5: Warranty 69

Bibliography 70

4 NSW TASKFORCE REPORT: LOOSE-FILL ASBESTOS INSULATION IN NSW HOMES

Executive summaryThroughout the 1960s and 1970s, pure loose-fill asbestos was sold as ceiling insulation for residential and commercial premises. Loose-fill asbestos insulation (LFAI) was installed in an unknown number of homes in the ACT and NSW; however, a large number of current owners in NSW are only now discovering its presence in their homes. ‘Mr Fluffy’ was a primary supplier of LFAI and based his business out of Canberra, installing LFAI into the ceiling of at least 1000 residential premises in the ACT and an unknown number in NSW. While some individuals had raised concerns about this practice, the risks associated with LFAI were not widely known at the time1.

To address community concerns about LFAI, the NSW Government established the LFAI Taskforce (the Taskforce) on 19 December 2014 to assess and consider the cost and benefits of a Government purchase/demolition scheme and make recommendations on the most cost effective options for Government. In accordance with the Terms of Reference (Appendix 1), the Taskforce members have considered a range of reports, investigation findings and other evidence to determine an appropriate and enduring solution to the risks posed by LFAI.

The ACT Government established the Asbestos Response Taskforce (The ACT Response Taskforce) in July 2014. The ACT Response Taskforce rejected further attempts at costly remediation, citing that there was no effective, practical and affordable method to render a house containing LFAI safe to occupy in the long term2. Instead, the ACT Response Taskforce recommended the demolition of all affected premises to eradicate the continuing health risks posed by the presence of LFAI. This recommendation was accepted by the ACT Government.

Scope of the report

The Taskforce considered only LFAI in privately owned, non-commercial, residential properties in NSW. The term “LFAI affected premises”, used throughout this report, is defined as:

A premises, or part of a premises, that contain loose-fill amosite or crocidolite asbestos used as ceiling insulation.

This definition is in alignment with the definition provided under the ACT legislative framework to eradicate LFAI in the ACT.

Issues associated with other asbestos products that have been identified as part of the consultation process have been referred to the Heads of Asbestos Coordination Authorities (HACA) for attention.

PricewaterhouseCoopers independent investigation

In October 2014, PricewaterhouseCoopers (PwC) was tasked to conduct an independent investigation to help qualify the scope and number of properties affected by LFAI in NSW. PwC used three models, identifying that the proximity model was the most reliable in their estimations. The proximity model estimates the number of residential properties affected by analysing each of the 26 Local Government Areas (LGAs) identified as affected areas from historical records and then calculates a potential number of affected properties. Based on this methodology, PwC estimated the following number of affected residential premises in NSW: Low 272; Medium 511 and High 927. The Taskforce views the medium number (511) as the more realistic range of affected premises likely to be identified. This is based on the free sample testing program results, the absence of any positive results in the majority of the 26 LGAs eligible for testing and the differences between local council and the PwC estimate of pre-1980s housing stock.

The NSW Make Safe Assistance Package

In August 2014, the NSW Government announced free ceiling insulation testing for property owners in the designated 26 LGAs. In December 2014, the NSW Government announced increased support and assistance for affected residents, through the Make Safe Assistance Package, which included free technical assessments, building works (exposure pathway sealing and environmental cleaning), short term accommodation, reimbursement for soft furnishings and/or porous materials and counselling services. A comprehensive Project Plan was then developed and implemented by the Taskforce.

As of 1 May 2015, 2,580 premises in the 26 LGAs had registered for the free testing service, 1,735 have been tested, with seven positive results in Berrigan Shire, Yass Valley Shire, Queanbeyan City and Greater Hume LGAs. The Taskforce received reports from a number of sources that there were a number of residents who were aware or suspected that they were living in affected premises; however, they would not take up the free sampling or other forms of assistance until the NSW Government made a decision in respect of a purchase/demolition program.

The Taskforce has determined that the NSW Government would have an ongoing obligation to ensure properties were maintained appropriately in the future by continuing the Make Safe Assistance Package compared to any purchase/demolition program. This assessment was based primarily on the ongoing nature of the obligations under a continuation of the Make Safe Assistance Package namely, the potential liabilities in the event of mistakes or omissions occurring in the course of delivering the assistance package into the future.

1 ACT Government Asbestos Response Taskforce, August 2014


NSW TASKFORCE REPORT: LOOSE-FILL ASBESTOS INSULATION IN NSW HOMES 5

NSW Ministry of Health Interim Report

The NSW Chief Health Officer’s Expert Advisory Committee (the EAC) provided advice to the Chief Health Officer (CHO) regarding the potential health risks for those living in NSW premises containing LFAI. This was done by reviewing the technical assessments of affected premises identified in NSW as containing LFAI as part of the Make Safe Assistance Package. The EAC is comprised of experts in public health, with specialities in environmental and cancer epidemiology, respiratory medicine, toxicology and exposure science.

The NSW Ministry of Health provided an Interim Report summarising the results at 20 March 2015, which consisted of 13 houses and 32 units. One house was found to contain a level of risk where intervention was required; all other premises were classified as low risk. The study outlined in the Interim Report shows that occupants residing in premises containing LFAI are generally at low risk of developing asbestos-related diseases due to this type of potential exposure. This is consistent with the earlier advice provided to the Chair of the HACA by the NSW CHO in October 2014.

Stakeholder views

The Taskforce considered informal input from Licensed Asbestos Assessors (LAAs), technical experts, industry specialists, real estate agents, some local councils and homeowners to enable evidence based recommendation regarding a purchase/demolition program. The Taskforce considered the impact that LFAI had on property owners and tenants: financial and social, as well as the practical consequences of living in or owning premises affected by LFAI.

Owners and tenants all highlighted that their biggest concern was the uncertainty involved in owning or residing in LFAI affected premises, for example:

• Is it safe to live in my home?

• Can I afford the ongoing maintenance?

• What happens next?

• Will the bank foreclose?

• Who will want to rent or buy my property?

• Why, just across the border, is the ACT taking a different approach?

The Taskforce recognised that the practicalities of living in premises affected by LFAI are likely to be onerous into the future (eg the ongoing maintenance required to ensure that all exposure pathways remain sealed, the notification requirements to visitors, tradespeople and emergency service workers, etc.). The Taskforce also recognised the negative market response to prospective purchasers and renters (ie affected premises become unsellable and unable to be rented out once it is established that premises are affected by LFAI). Consideration was also given to the impact of social isolation (real or self-imposed) upon individuals and families residing in affected premises. Individuals expressed concern about the health of their families, friends, visitors and care workers, along with the stigma associated with owning or living in a LFAI affected premises. The majority of Taskforce members agreed, due to the complexities involved, that any solution needs to remove the underlying problem in its entirety rather than simply delay or manage the issue.

Purchase/demolition options

In assessing the purchase/demolition options, the Taskforce considered that:

• A long term solution should aim to meet a number of guiding principles, which would then be assessed against each purchase/demolition option and

• Any purchase/demolition program should be voluntary.

The options considered were:

Option

1 NSW Government purchase of house and land, demolition, remediation of soil and resale of the land.

2 NSW Government purchase of house only, demolition, remediation of soil and owner retains land.

3 Ex gratia payment (50 per cent valuation of house), NSW Government demolition, remediation and owner retains land

4 Ex gratia payment (initial cost of Make Safe Assistance Package, 10 x annual technical inspections + reasonable indicative costs into the future) NSW Government demolition, remediation of soil and owner retains land.


All four models include a strict mandatory notification regime at the point of sale that was considered by the Taskforce. The Taskforce undertook an analysis, weighing up the advantages, disadvantages, costs and risks associated with each model. The Taskforce recommends a combination of Options 1 and 2 as the most cost effective voluntary purchase/demolition program.

Program costs

Total costs for the four options considered for a voluntary purchase/demolition program are outlined in Chapter 4. Summary costs are provided below by option. The table below summarises the overall costs (without discounting to present value) as estimated by the Taskforce for each of the four options considered. Importantly, figures presented for the each of the options have been calculated on an assumed 511 affected properties with 100 per cent owner participation rates.

Option 1 Option 2 Option 3 Option 4

Total costing ($m) for 511 properties $278,644,577 $277,144,826 $208,141,883 $133,855,468

Implementation

If a voluntary purchase/demolition program is supported by the NSW Government, it is recommended that an Implementation Taskforce be established to have oversight of voluntary purchase/demolition program deliverables, ensuring efficient and effective governance and risk management processes.

It is recommended that the Implementation Taskforce should sit within NSW Fair Trading as they have an existing regional presence, as well as regulatory powers and experience in the issuing of enforcement notices. NSW Fair Trading also currently oversees a similar register in boarding houses and is the regulator of residential tenancies, home building and real estate agents, which provides some natural synergies.

Proposed eligibility, along with terms and conditions for entry into a voluntary purchase/demolition program has been developed. The program would have a 12 month registration period from the date of any announcement (or at a different date that is publicised by the Minister with not less than three months’ notice).

In ensuring that Options 1 and 2 were the most cost effective voluntary purchase/demolition programs for the NSW Government, a number of innovative and cost effective strategies were introduced. The Early Tender Involvement (ETI) procurement process, where five companies were invited to two workshops to identify innovative cost effective demolition solutions that resulted in a reduction of demolition timeframes through new technology. Cost effective strategies identified include ‘bundling’ demolition sites together to reduce overheads and travel costs; seeking EPA agreement on cost effective transport procedures for waste; waiving of the asbestos levy for landfill; and, consideration of the use of the ACT tipping facilities. The Taskforce also undertook a Preliminary Environmental Planning (PEP) overview in 26 LGAs to ensure early compliance, thus reducing costs.

Eligible homeowners who transfer an affected premise to the NSW Government under the voluntary purchase/demolition program would be entitled to a stamp duty concession on the purchase of a residential property in NSW.

The identification of affected properties in the future is essential to manage the risks posed by LFAI. In order to identify these properties into the future, the Taskforce has made 13 recommendations that address the following:

• The establishment of a LFAI Register to be maintained by NSW Fair Trading

• The ‘tagging’ of known LFAI affected premises with a warning label in the electrical meter box

• Amendments to section 149 planning certificates

• Mandatory disclosures involving property transactions and tenancy.

The Taskforce wishes to extend its thanks to all persons, councils, industry representatives and agencies that assisted in formulating the recommendations below. As Chair, I would like to extend my thanks to the other Taskforce members who through their active engagement ensured that all areas were canvassed, along with special thanks to the Taskforce Project Team who assisted in formulating this Final Report and the proposed Project Plan.


Taskforce recommendationsThe following recommendations have been made by the Taskforce in line with Item 2 under the Terms of Reference:

To assess and consider the cost and benefits of a Government purchase/demolition scheme and make recommendations on the most cost effective options for Government.

These Terms of Reference do not provide scope for the Taskforce to consider an option for a recommendation that would include neither purchase nor demolition, such as continuing the current Make Safe Assistance Package.

The Taskforce considered four voluntary purchase/demolition options, noting that the costs of all options significantly outweigh the quantifiable financial benefits.

Recommendation 1

The Taskforce recommends that, if the NSW Government decides to proceed with a purchase/demolition program in respect of identified premises confirmed to be affected by LFAI, then a combined voluntary purchase/demolition program is the most cost effective response, comprised of two options:

• Option 1 – NSW Government purchase of premises and land or

• Option 2 – NSW Government purchase of the premises only.

Refer to Chapter 4

Recommendation 2

The Taskforce recommends the NSW Government establish an Implementation Taskforce to oversee and implement a voluntary purchase/demolition program. The Implementation Taskforce should sit within the structure of NSW Fair Trading, if supported by the NSW Government.

Refer to Chapter 4

Recommendation 3

The Taskforce recommends that owners who participate in a voluntary purchase/demolition program be extended the following:

• Stamp duty concession on the purchase of any future property in NSW

• $1,000 for the provision of independent legal advice

• Relocation assistance allowance to a maximum of $10,000 per household plus an additional $2,000 per dependent child (to a maximum of two children) for owner/occupiers, or $1,000 per tenant(s) named on the lease of an affected property

• $1,000 for the replacement of soft furnishings and/or porous materials

• $850 for counselling services and mental health support.

Refer to Chapter 5

Recommendation 4

The Taskforce recommends extending the current free sample testing program in the 26 LGAs for an additional 12 months, to commence after the date of any announcement of a voluntary purchase/demolition program.

Refer to Chapter 5

Recommendation 5

The Taskforce recommends the NSW Government enact legislation to establish a publically available LFAI Register, to be administered and maintained by NSW Fair Trading. The LFAI Register is intended to be a ‘single source of truth’ to identify and record:

• NSW premises where the presence of LFAI has been confirmed

• NSW premises that have undergone testing and confirmed to be unaffected by LFAI

• NSW property and/or premises, previously identified as affected by LFAI, which have been remediated and confirmed by way of a ‘clearance certificate’.

Refer to Chapter 6

Recommendation 6

The Taskforce recommends that a Memorandum of Understanding be developed to provide the details of LFAI affected premises (as recorded on the LFAI Register) to emergency services providers.

Refer to Chapter 6


Recommendation 7

The Taskforce recommends the NSW Government enact legislation to establish mandatory hazard labelling (or ‘tagging’) of confirmed LFAI affected premises to ensure the health and safety of tradespeople, maintenance workers, service providers and emergency service workers. NSW Fair Trading would have administrative responsibility for implementing hazard labelling, if supported by the NSW Government.

Refer to Chapter 6

Recommendation 8

The Taskforce recommends legislative amendments to the Environmental Planning and Assessment Regulation 2000 to insert LFAI as a matter to be listed on a section 149(2) planning certificate. The Department of Planning and Environment would have responsibility for implementing this legislative change, if supported by the NSW Government.

Refer to Chapter 6

Recommendation 9

The Taskforce recommends that the Department of Planning and Environment and the Office of Local Government work with local government to develop generic wording that can be used regarding the possibility of LFAI in pre-1980 homes in identified LGAs, for inclusion in a section 149(5) planning certificate.

Refer to Chapter 6

Recommendation 10

The Taskforce recommends that the NSW Government consider making legislative amendments to the Conveyancing Act 1919 and the Conveyancing (Sale of Land) Regulation 2010 to:

• Introduce a standard LFAI warning notice, as a Prescribed Document in a Contract for Sale, to alert purchasers of the risks associated with LFAI in pre-1980s premises in areas known to have LFAI affected premises

• Require a vendor to warrant, at the time of sale of the property, that no premises on the land contain LFAI, unless it is specifically disclosed in the contract.

Land and Property Information would have responsibility for implementing these legislative changes, in consultation with the Implementation Taskforce and relevant stakeholders, if supported by the NSW Government.

Refer to Chapter 6

Recommendation 11

The Taskforce recommends further amendments to the following instruments to protect current/future tenants living in premises affected by LFAI:

• Amend the ‘new tenant checklist’ under the Residential Tenancies Act 2010 to specifically include LFAI

• Amend clause 7 of the Residential Tenancies Regulation 2010 to add an additional subclause, which specifically notes LFAI as a material fact

• Amend the standard residential tenancy agreement (Residential Tenancies Regulation 2010) to require disclosure during a tenancy if LFAI is discovered.

NSW Fair Trading would have responsibility for implementing these legislative changes, if supported by the NSW Government.

Refer to Chapter 6

Recommendation 12

The Taskforce recommends amending the Misrepresentation Guidelines to note LFAI as a material fact for the purposes of section 52 of the Property, Stock and Business Agents Act 2002 to ensure disclosure of LFAI in affected properties by real estate agents.


Refer to Chapter 6

Recommendation 13

The Taskforce recommends additional matters raised as part of investigation inquiries (training issues, community education and waste disposal), which exceed the scope of the Taskforce, be referred to the HACA3 for further attention.

Refer to Chapter 7

3 http://www.workcover.nsw.gov.au/health-and-safety/safety-topics-a-z/asbestos/heads-of-asbestos-coordination-authorities-haca

http://www.workcover.nsw.gov.au/health-and-safety/safety-topics-a-z/asbestos/heads-of-asbestos-coordination-authorities-haca


AbbreviationsABS Australian Bureau of Statistics

ACM Asbestos Containing Material

ACT Australian Capital Territory

ATO Australian Taxation Office

BCR Benefit – Cost Ratio

CBA Cost benefit analysis

CGT Capital Gains Tax

CHO Chief Health Officer

DPE Department of Planning and Environment

EAC Expert Advisory Committee

EP&A Environment Planning and Assessment

EPA Environment Protection Authority

ETI Early Tender Involvement

HACA Heads of Asbestos Co-ordination Authorities

HEPA High Efficiency Particulate Arrestance

ICT Information Communication Technology

JSC Joint Select Committee

LAA Licensed Asbestos Assessor

LAR Licensed Asbestos Removalist

LFAI Loose-Fill Asbestos Insulation

LFAI SC Loose-Fill Asbestos Insulation Steering Committee

LGA Local Government Area

LPI Land and Property Information

NATA National Association of Testing Authorities

NPV Net present value

NOHSC National Occupational Health and Safety Commission

NSW New South Wales

PEP Preliminary Environmental Planning

PCBU Person conducting a business or undertaking

PV Present Value

PwC PricewaterhouseCoopers

QCC Queanbeyan City Council

WHS Work Health and Safety


Chapter 1: Background

Summary

The Taskforce was established by the NSW Government with specific Terms of Reference to assess and consider the cost and benefits of a Government purchase/demolition scheme and make recommendations on the most cost effective options for Government.4 The NSW Parliament Joint Select Committee (JSC) released their report into LFAI on 17 December 2014, which was considered by the Taskforce.

The Taskforce sought to understand what differentiates LFAI from other asbestos products as well as the impacts on affected property owners, tenants and the community generally. The Taskforce examined the ACT response and the views of owners of LFAI affected premises as well as other stakeholders. The different legislative frameworks in the ACT to regulate asbestos were also considered by the Taskforce.

Establishment of the Taskforce

On 19 December 2014, the NSW Government established the Taskforce to:

(2) To assess and consider the cost and benefits of a Government purchase/demolition scheme and make recommendations on the most cost effective option for Government.

The full Terms of Reference for the Taskforce are provided at Appendix 1.

Mr Dave Owens, a former Deputy Commissioner of the NSW Police Force was appointed as the Chair of the Taskforce and members of the Taskforce were to include representatives of the Department of Planning and Environment, Department of Premier and Cabinet, the Environment Protection Authority, the NSW Ministry of Health, NSW Treasury, Office of Local Government, Local Government NSW and WorkCover NSW. The Chair extended an invitation to NSW Fair Trading and Land and Property Information to join the Taskforce.

Parliamentary Joint Select Committee

On 18 September 2014, both Houses of the NSW Parliament established a JSC5 to inquire into LFAI in premises in NSW. The JSC comprised five members of the Legislative Council and two members of the Legislative Assembly. The inquiry terms of reference required the committee to consider a number of issues pertaining to LFAI including:

• The number and location of LFAI (‘Mr Fluffy’) affected premises

• Actions taken by governments to deal with LFAI in residential premises in other jurisdictions

• The role of state and local governments to advise and assist owners and occupiers of LFAI affected premises

• The requirements for owners of affected premises to notify people that may be affected by the presence of LFAI in their premises (tradespeople, tenants, etc).

The JSC called for and received 36 submissions, held two public hearings, one in NSW Parliament House and the second in Queanbeyan. Members of the JSC also undertook a visit to Robson Environmental (a company providing LAA services) to better understand the process of air monitoring and property remediation.

The JSC released their final report on 17 December 2014, which included 10 recommendations for consideration by the NSW Government (provided in Appendix 2).

What is asbestos?

Asbestos is a naturally occurring material mined extensively in the twentieth century for its heat resistant and insulating properties. It was used extensively in building materials and other products such as brake pads, gaskets and pipe insulation. The use of asbestos was eventually banned in 2003 due to the health risks associated with exposure to asbestos fibres. While exposure to asbestos does not always lead to an asbestos-related disease, it is important that this risk be properly managed.

Asbestos fibres that are breathed in pose a risk to health. However, breathing in asbestos fibres does not necessarily mean you will develop health problems. The risk of developing an asbestos-related disease varies from person to person and depends on how many fibres have been breathed in, for how long, the type of fibre and the age of first exposure.

There are very low levels of asbestos in the air we breathe, usually between 10 and 200 asbestos fibres in every 1000 litres of air.6 Advice from the NSW Ministry of Health indicates that very few people experience ill effects from this type of exposure.7

4 Item 2 in the Taskforce Terms of Reference, provided in Appendix 1

5 http://www.parliament.nsw.gov.au/prod/parlment/committee.nsf/0/45EE00489998BD3FCA257DB100018531

6 Australian Government, February 2013

7 EAC Interim Report

http://www.parliament.nsw.gov.au/prod/parlment/committee.nsf/0/45EE00489998BD3FCA257DB100018531


Most people who develop asbestos-related diseases in Australia have had exposure to much higher levels of asbestos fibres through working directly with asbestos or asbestos products. Family members of these workers have also been known to develop asbestos-related diseases because the workers carried asbestos fibres home on their clothing, skin and hair.

Asbestos-related disease is characterised by its latency, in some cases, taking years to develop. Asbestos fibres are small and can be breathed deep into the lungs remaining there for life. They can cause inflammation, scarring and serious diseases. The main health conditions caused by asbestos include:

• Pleural plaques: areas of smooth raised scar tissue on the outer lining of the lung, internal chest wall and diaphragm are often the earliest sign of exposure to asbestos. They may occur after relatively light occupational level exposure to asbestos. People with pleural plaques often have no symptoms

• Asbestosis: a chronic condition caused by inflammation or scarring in the lung tissue, causing shortness of breath, coughing and permanent lung damage. Asbestosis only occurs in people who have had heavy and/or prolonged exposure to asbestos, usually in a workplace

• Lung cancer: people who are exposed to asbestos have an increased risk of lung cancer, which is much greater if they smoke or also have asbestosis

• Mesothelioma: is a cancer of the tissue that lines body cavities, particularly the chest and abdominal cavities. This cancer is almost always caused by exposure to asbestos. So far, most, but not all, people who have developed mesothelioma in Australia are known to have been occupationally exposed to asbestos.

Examples of non-friable asbestos commonly referred to as bonded asbestos

Houses built prior to 1980 in Australia are likely to have asbestos containing materials, for example, asbestos cement products such as cement fibro sheeting. These asbestos products are classed as non-friable, meaning they are solid and rigid – the fibres having been tightly bound in a mixing compound such as cement. While it is accepted that there is no known safe level of exposure to asbestos fibres, the health risk of undisturbed non-friable asbestos products in residential premises is considered to be very low.8

The three types of asbestos used in Australia in the past are often categorised by their colour:

• Brown or amosite: Amosite asbestos was primarily used as insulation in factories and buildings, as well as both a sound proofing and anti-condensation material. It has been banned in Australia for the last 30 years.

• Blue or crocidolite: Crocidolite is harder and more brittle than other types of asbestos and can break easily, releasing dangerous needle-like fibres that are easily inhaled. Crocidolite is considered a more lethal form of asbestos. It was often used in making yarns and rope lagging, and as a reinforcement material for plastics. It also has been banned in Australia for the last 30 years.

• White or chrysotile: Chrysotile was most often used in fireproofing and in insulation products Chrysotile was also an ingredient in cement and was used in the manufacture of friction products because of its heat-resistant properties. These included brake shoes, clutches, and disc pads. Chrysotile asbestos was banned in Australia in 2003.9

8 Australian Government, February 2013

9 http://www.mesothelioma.com/asbestos-cancer/asbestos-types/

http://www.mesothelioma.com/asbestos-cancer/asbestos-types/


Examples of LFAI. Significantly, other friable asbestos can resemble LFAI. Sample testing by a competent person is required confirm the presence of LFAI

What is different about Loose-Fill Asbestos Insulation?

LFAI is made from raw amosite or crocidolite asbestos. The amosite or crocidolite was crushed and then pumped with air into roof spaces as ceiling insulation. LFAI is classed as a ‘friable’ form of asbestos and is characterised by its soft clumpy appearance.

What differentiates LFAI from other asbestos products is that it is very pure (often 100 per cent amosite or crocidolite asbestos) and the fibres easily become airborne if disturbed. If not managed correctly, asbestos fibres can become airborne and may be inhaled, which could increase health risks. Over time, LFAI can migrate out of roof cavities and into habitable areas. It is important that tradespeople and any other visitors be warned of the presence of LFAI in the property, especially in the roof, walls or sub floors.

How to confirm the presence of LFAI

LFAI cannot be confirmed by a visual inspection only as there are other types of insulation products that resemble LFAI, such as rockwool. For this reason, sample testing by a competent person, such as a LAA, is the only way to confirm the presence of LFAI.

Who was ‘Mr Fluffy’?

‘Mr Fluffy’ is the commercial name of an insulation business based in Canberra. ‘Mr Fluffy’ installed LFAI into the ceiling of at least 1000 residential premises in the ACT between the late 1960’s and 1979. While some individuals had raised concerns about this practice, the risks associated with LFAI were not widely understood at the time.10

What does having LFAI mean for homeowners?

The presence of LFAI presents a number of risks for affected owners. Exposure pathways from the ceiling space to habitable areas can present health risks to residents, tradespeople, visitors and service providers. Owners must remain vigilant about maintaining their home to keep their living areas ‘sealed’ to prevent exposure pathways. This means homeowners are faced with ongoing, expensive maintenance costs. The social implications are also significant. Affected homeowners in the ACT report social isolation – friends, family and service providers are reluctant to enter affected premises, including home care workers. The real estate industry have reported to the Taskforce that affected properties are near impossible to rent or sell, adversely affecting a home owners financial situation.



The ACT experienceRemediation efforts

Between 1989 and 1993, the Australian and ACT Governments undertook a program to remove visible and accessible LFAI from affected premises in the ACT. The identification and remediation program cost approximately $100m, but failed to completely rid the affected premises of LFAI. At the conclusion of the remediation program clearance certificates indicated this was the case. LFAI continued to be present in the wall cavities, sub-floors, ceiling spaces, behind cornices. It subsequently emerged during testing conducted in remediated houses in 2014 that it was also present in heating and cooling ducts and in the living areas of affected premises.

Further attempts to identify affected premises

In 1988, the Commonwealth Government commenced a program that surveyed all ACT homes built before 1979. Approximately 65,000 homes were inspected and from this process around 1100 homes were identified as containing LFAI. The ACT Government, therefore, has the benefit of substantial historical records to confirm that the number of affected private premises exceeds 1000 in their jurisdiction.

These earlier programs failed to identify all affected premises. For example, in 2012 a residential property in the suburb of Downer was discovered to have significant amounts of LFAI and was considered uninhabitable. The ACT Asbestos Response Taskforce has acknowledged that the exact number of all affected premises in the ACT may be “unknowable”11. It is likely that more affected residential properties will be discovered in the future, however the number is anticipated to be small, with only six affected properties found to date since the 1988 survey.

The ACT Government has not introduced a program of mandatory testing of all pre-1980s premises at this stage but has agreed in principle to do so based on the ACT Asbestos Taskforce’s recommendations.

The ACT Asbestos Response Taskforce

The ACT Government established the Asbestos Response Taskforce (The ACT Response Taskforce) in June 2014 to determine the most effective way to manage the issue of LFAI in ACT residential premises in the long term. After significant consultation with national experts who unanimously concluded that the demolition of affected houses was the only enduring solution to remove this issue from the community, the ACT Asbestos Response Taskforce did not pursue further attempts at costly remediation, citing that there was no effective, practical and affordable method to render a house containing LFAI safe to occupy in the long term.12 Instead, the ACT Response Taskforce recommended the demolition of all affected premises to eradicate the continuing health risks posed by the presence of LFAI.13 This recommendation was accepted by the ACT Government.

The ACT Buyback Program

In October 2014, the Commonwealth Government agreed to provide the ACT Government with a $1 billion concessional loan to purchase and demolish LFAI affected properties in the ACT, with the aim of eradicating the ongoing exposure risks from the presence of LFAI. It also reflected the significant social and community impact this issue was having. This included social isolation of homeowners as visitors were reluctant to attend affected houses, restricted access to services as tradespeople, care nurses and other community workers would not work on or in houses and there were reports of banks and insurance companies becoming anxious around their services on these houses.

Property owners who choose to participate in the Buyback Program enter into a deed with the ACT Government to surrender their property in exchange for the market value of their property as at 28 October 2014, as determined by independent valuers from the Australian Property Institute, ACT Division ignoring the presence of loose LFAI and maintenance issues of houses. Participants are given a right of first refusal to repurchase (‘buy back’) their block after the house had been demolished and soil remediated. They also receive additional assistance to aid in their relocation and a stamp duty concession to use towards the repurchase of the block, or purchase of another property in the ACT.14

The ACT Government is in the process of purchasing all identified affected Canberra premises to enable government facilitated demolition and site remediation. Remediated blocks will be offered for sale eventually to assist in defraying overall costs to eradicate the LFAI. In some instances, remediated blocks of land may be subject to ‘uplifting’ (ie re-zoning the remediated land to allow for multiple dwellings on what was previously a single block of land).




14 http://www.asbestostaskforce.act.gov.au/buyback

The ACT “Enduring Solution”

The [ACT] Taskforce has concluded, having listened to experts, asbestos assessors, and homeowners that the demolition of affected homes is the only enduring solution to the health risks posed by the presence of Loose-Fill asbestos insulation in homes, and their attendant social, financial and practical consequences.

The ACT Asbestos Response Taskforce, 2014

http://www.asbestostaskforce.act.gov.au/buyback


As at 2 May 2015, 980 of 1021 owners of LFAI affected premises had ‘opted in’ to the voluntary Buyback Program, with 923 offers made to purchase, 828 accepted and 521 houses owned. The average offer price was $710,000 but ranged from $400,000 to $3 million.

The approach taken by the ACT Response Taskforce is not without criticism, however has been broadly accepted as a fair way to provide affected owners with an option to move from contaminated premises to safer accommodation. Some academics have described the plan to pull down the LFAI affected premises as “drastic and heavy handed,” suggesting the ACT Government would be better informed by a cost-benefit analysis as to what they see as the ongoing risk.15 Criticism has also been levelled at the ACT Government about the potential to amend planning permissions of surrendered blocks through the Buyback Program, which will cause some price uplift on the resale of remediated blocks with some owners suggesting the ACT Government is profiting from their misfortune. Some owners have also voiced their concerns in the media that they may not be able to afford to purchase and re-build on their remediated land and will have to start over elsewhere. However it is important to note the ACT Government estimates that even after the resale of blocks, there is expected to be a deficit to the ACT community of at least $400 million for its response to this issue.

Approximately 1021 ACT premises have been identified as being affected by LFAI. Approximately 90% of affected property owners have agreed to participate in the Buyback Program, which closes on 30 June 2015. The ACT Government has urged all affected residents to register by the deadline as any buyback offer in the future would be significantly less than what is currently being offered.

The social realities

The social realities of living in LFAI affected premises are considerable in the ACT. The ACT Government has enacted legislation to compel affected owners to tag the meter boxes and switch boards of LFAI affected premises with warning stickers to ensure tradespeople are informed and for the Minister to maintain a LFAI register of all known affected premises. The tagging of premises and the establishment of the register are intended to safeguard the health and safety of workers and to ensure potential tenants or property purchasers are made aware of the presence of LFAI. Notices will also be placed on the title and Building Files of properties. The ACT Government has given a commitment to make this register public; however, privacy concerns from affected residents have thus far delayed its publication. The need to balance the privacy of affected property owners against those people who could be potentially at risk (eg tradespeople, tenants, potential buyers and service providers) is an ongoing challenge.

In the interim, a free search function was established of Building Files to allow those with evidence of a connection to a property (ie utilities bill, statutory declaration) to determine if the property was part of the original removal program.

Some owners of LFAI affected premises, particularly elderly Canberra residents, have indicated a reluctance to relocate from their properties, some having lived in the same house for decades. The Taskforce has been working intensively with these homeowners through one-on-one support and providing linkages and support to existing service providers. Any homeowner can seek to have an extended settlement of up to 30 June 2020. The ACT Government has advised it will be a purchaser of last resort for LFAI premises outside of the Buyback Program. This will mean if affected premises fail to sell privately with full disclosure in the market, then the ACT Government will purchase it taking into consideration its contaminated status.

Obligations for non-participants in ACT Buyback Program

The ACT Government has advised owners of LFAI affected premises, who do not intend to surrender their property to the Territory, or are participating in the Buyback Program and surrendering after 1 July 2016, that they will still be required to comply with new legislation, intended to control the risks of LFAI in their homes. Amendments to the Dangerous Substances (General) Regulation 2004 will commence on 1 February 2016. The amendments will require those affected homeowners to have an asbestos contamination report, including a management plan, prepared for their property. Owners of affected premises will need to comply with any cleaning, sealing, locking or labelling requirements of the contamination report and to notify WorkSafe ACT of any proposed building or maintenance work that may disturb LFAI.

Policy challenges

The Head of ACT Response Taskforce has noted the difficulties of balancing a program response which is designed to allow people to move from contaminated houses quickly for safety, with broader community affordability and meeting the needs of residents. There is understandably emotional distress and social dislocation issues associated with having to move from an affected property and ongoing concerns about asbestos exposure. The ACT Response Taskforce has over 50 staff employed to administer the Buyback and Demolition Programs. This includes a team of nine highly skilled case managers to provide information, assistance and practical support as they move through the Buyback Program.

15 http://www.abc.net.au/news/2015-02-08/mr-fluffy-demolition-plan-not-based-on-evidence-expert-says/6075036

http://www.abc.net.au/news/2015-02-08/mr-fluffy-demolition-plan-not-based-on-evidence-expert-says/60


Different legislative frameworks to regulate asbestos in the ACTThe ACT legislative framework to manage asbestos differs significantly from NSW. Both jurisdictions adopted harmonised work health and safety (WHS) legislation in 2011. However, the ACT did not adopt Chapter 7 of the model WHS Regulation 2011 relating to hazardous chemicals, or Chapter 8 of the Regulation which relates to asbestos. Instead, the ACT Government retained their jurisdiction specific Dangerous Substances Act 2004, which applies to private premises and not just to workplaces. NSW does not have an equivalent legislative instrument to the dangerous substances legislation. For example, the NSW WHS legislation applies to residential premises where paid work is occurring (by trades people, service providers, etc.); or, where certain quantities of prescribed ‘dangerous goods’ are stored. Chapter 8 of the WHS Regulation 2011 has now been largely adopted in the ACT and the provisions in the dangerous substances legislation relating to asbestos now apply to non-commercial (ie domestic) handling only.

In 2004, the ACT Government also introduced a conveyancing system where a vendor is required to provide pre-purchase reports at the point where the property is marketed for sale, including building and pest reports and any asbestos assessment report or advice. This coincided with the enactment of the Dangerous Substances Act 2004.

Recent amendments to the Dangerous Substances Act 2004 and the corresponding Regulation mandates disclosure obligations of property owners of LFAI affected properties, including ‘tagging’ – the placement of an approved notice sticker in the electricity meter box. Considerable penalties can apply if property owners fail to comply; however, the ACT Response Taskforce has worked with WorkSafe ACT around an educative rather than punitive approach.16 The ACT Response Taskforce advises that their tagging program has been strongly influenced by various worker groups that may have to enter premises to undertake maintenance/repairs, deliver services or as a result of an emergency (eg fire). Workers delivering home care services were particularly vocal about the need for tagging affected premises to increase their awareness of an affected property.

Additionally, the ACT Government enacted further legislation to facilitate the implementation of their Buyback Program. Amendments to the Dangerous Substances Act 2004 made in 2015 imposed a specific requirement on the Minister administering the Dangerous Substances Act 2004 to maintain a register of residential premises that contain or have contained LFAI.

The register provides a legislative basis to achieve a number of public purposes:

• All residential premises purchased by the ACT will be identified on the register

• All identified properties affected by LFAI will be noted as an ‘administrative interest’ on the land titles register

• Administrative interests are records of a decision or notification made under territory legislation that affects a parcel of leased land

• The administrative interests register operates in parallel with proprietary interests recorded on the Torrens title register, creating a central repository for information relating to the land

• Notably, all land in the ACT is Crown Land and is subject to leasehold for a period of up to 99 years

• The register is intended to provide information to a tenant or lessor to terminate a residential tenancy agreement without penalty

• Personal information in prescribed Land and Property Information registers is exempt from privacy legislation requirements.

16 http://www.legislation.act.gov.au/sl/2004-56/current/pdf/2004-56.pdf

The Social Realities

There is nowhere else in Australia experiencing the wide-spread impact of loose-fill asbestos in such a large number of homes as is the case in the ACT…it is not dissimilar to many natural disasters that strike communities across Australia.

We have families, households and small businesses, all impacted by something outside their control…people are understandably worried, confused, nervous about the future and looking for support and guidance on the best next steps.

Andrew Kefford, Head of the ACT Asbestos Response Taskforce

http://www.legislation.act.gov.au/sl/2004-56/current/pdf/2004-56.pdf


Chapter 2: Loose-Fill Asbestos Insulation in NSW

Summary

Taskforce inquiries and the PwC independent investigation identified various NSW Government records from 1984 to 2005 that articulated a consistent approach to LFAI in NSW premises. The risks associated with living in LFAI affected premises has historically been managed by property owners.

PwC was asked to conduct an independent investigation to help qualify the scope and quantify the number of properties affected by LFAI in NSW, which included reviewing historical records and the actions taken by relevant authorities in response to the identification of affected premises in NSW.

PwC used three models, identifying that the Proximity Model was the most reliable of their estimations with a medium estimate of 511 affected properties in NSW.

There were a number of requests for Commonwealth assistance between 1998 and 2014, similar to that provided to the ACT Government, which have not been successful.

Historical approach to LFAI in NSW

Taskforce inquiries and the PwC independent investigation identified various NSW Government records from 1984 to 2005 that articulate a consistent approach to the management of LFAI in private residential premises in NSW, as summarised below:

• The cost of removing LFAI from the ceiling spaces of private premises was to be borne by property owners, not government

• The risk to occupants living in a house with LFAI was considered to be minimal if the asbestos is properly isolated in the roof cavity. It was acknowledged that this required property owners to be diligent with maintaining their premises to eliminate exposure pathways

• There remained a potential risk to persons who need to enter the roof cavity of affected premises to undertake repairs or maintenance work. Guidelines and education was considered necessary for persons entering the roof space of affected premises

• Emergency services agencies needed to be aware of LFAI affected premises to safeguard the health and safety of workers and the community

• In 1989, 1991 and 1996, attempts were made by NSW Ministry of Health and local councils to alert residents in areas known to be affected by LFAI that there was a possibility of LFAI in their premises, in an effort to encourage the uptake of testing services. Participation in the testing program, however, was minimal

• A policy of containment of LFAI was implemented between 1989 and 2005, comprised of voluntary testing and advisory services to identify affected premises and assist property owners to best manage affected premises

• It was acknowledged that attempts to remove LFAI from the ceiling spaces of affected premises was not without considerable risk and should only be done by competent people with the necessary technical skills.

Requests for Commonwealth assistance

Between 1998 and 2014, there were representations to seek funding from the Commonwealth Government to assist with the identification and management of LFAI properties in NSW (similar to that provided to the ACT Government). These representations were not successful.

Departmental records provided as part of the independent investigation by PwC confirm that the Commonwealth Government previously indicated that the removal of asbestos from private premises was not a Commonwealth responsibility. Additionally, that the Commonwealth Government’s provision of funding to remove LFAI from ACT properties in the past arose through ‘unique’ circumstances: namely, that the Commonwealth was directly responsible for governing the ACT at the time the LFAI was being installed in Canberra properties. 17

Similar requests were made by Queanbeyan City Council (QCC) to the NSW Department of Health. The last request in 2000 was declined on the basis that the removal of LFAI was a cost normally borne by a property owner and not government.

17 PricewaterhouseCoopers, April, 2015


Identifying affected premises in NSW

In the late 1980s, the then NSW Department of Health initiated an asbestos identification service for the public and local councils in south eastern NSW. The program lasted at least eight years according to documents provided to the Taskforce. This was a voluntary testing program and advisory service to assist property owners to maintain their premises to prevent exposure pathways in habitable areas. Property owners were advised that if renovations were to be undertaken, it was recommended that the asbestos be removed by a licensed asbestos removal contractor. Local councils arranged for the collection of samples and conveyed information to property owners. They also undertook to notify the local fire brigade of those residential properties found to contain LFAI at the time.

The Queanbeyan Study

In 1993, the South Eastern Public Health Unit undertook a study of premises in Queanbeyan to measure the level of asbestos fibres present in dust and air in the living areas where the roof space was insulated with LFAI. The Study concluded that the risk to the occupants was ‘insignificant’, however, a risk remained to any person entering the roof space and it was noted that this issue required further investigation.18

Approximately 373 samples were submitted to Southern Area (formerly South Eastern Region) Public Health Unit. Nine were identified as containing LFAI. Departmental records from 1992 indicated approximately two samples per month were being received for testing. The offer of free testing then did not successfully identify all the premises affected by LFAI in the south eastern region.

Analysis of historical records

As of 1 May 2015, 64 properties were included in a list of properties containing LFAI following a search of historical records, primarily from QCC. It should be noted, however, that changes to the boundaries of LGAs over the years have resulted in some of the identified affected properties now being included in different LGAs. The evidence provided in the historical records varied and did not always include evidence of sample testing. Further examination of the 64 historical records resulted in the number being reduced to 58 confirmed premises affected by LFAI for the following reasons:

• Three houses have been demolished in the Orange, Queanbeyan and Bankstown LGAs (it is confirmed that two of these properties have clearance certificates and one property has a new residence built on the land)

• One house in QCC was removed from the historical records list after testing did not find LFAI on the property

• One owner has failed to respond to all correspondence offering a free sample test, so the status of the property is unconfirmed

• The test results from one property identified as part of the PwC investigation remains outstanding.

The Taskforce is of the view that historical records need to be regarded with caution until such time as sample testing can confirm the presence of LFAI. As noted above, one identified property was included on the basis that it was built by the same builder as an affected property within close proximity. Further testing confirmed the property was not affected by LFAI.

Despite the offer of a free sampling service, not all owners of properties identified by historical records as containing LFAI have agreed to participate in the free sample testing program. Some have expressed concern in relation to the negative consequences of their property being identified as affected by ‘Mr Fluffy’. Anecdotally, there is evidence that some owners, who know their premises are affected, are waiting on the NSW Government’s response to the Taskforce’s Final Report before coming forward. One owner has ignored all attempts at contact regarding this issue.

Why there is a need for a clear definition of LFAI?

Another property identified from historical records was recorded as containing LFAI. However, testing and investigations conducted by the Taskforce identified the friable amosite had been mixed with an adhesive additive and sprayed onto steel beams in the roof; this type of asbestos is referred to as limpet asbestos. This example serves to illustrate the dangers of relying on historical records alone.

The Taskforce is of the view that it is important to communicate what is meant by LFAI and to apply a clear definition for the purposes of progressing its Terms of Reference, ie, that LFAI is made from raw amosite or crocidolite asbestos, crushed and pumped with air into roof spaces as ceiling insulation.

Should the NSW Government support a voluntary purchase/demolition program, it would be essential to consult with relevant stakeholders to develop eligibility requirements that clearly outline what is, and what is not, LFAI.

18 Queanbeyan Study, 1993


PricewaterhouseCoopers estimates

In October 2014, the HACA commissioned PwC to conduct an independent investigation to help quantify the scope and number of affected residential premises with LFAI in NSW.

The investigation was to review and assess relevant records (from local government, government agencies and the ACT Response Taskforce), entity searches, historical records, media searches and conduct relevant interviews with key stakeholders. PwC provided an interim report on 18 November 2014 and a final report on 13 April 2015 (the Final PwC Report).

PwC anticipated using three modelling approaches, each of which was to focus on different input data. The primary model was the proximity or distance model to ‘Mr Fluffy’s’ operations and other potential locations. It was then proposed to use two models for cross checking:

• Capacity model (capacity of ‘Mr Fluffy’s’ business to complete installations)

• Financial model (revenue to indicate extent of operations).

The Final PwC Report concluded that PwC had to rely on the estimates obtained from the proximity model as outlined over.

Proximity Model

Although this model has significant issues, PwC believe it is the most reliable estimate. This model estimates the number of residential premises affected by analysing each of the 26 LGAs separately, and then calculating a potential exposure (based on a combination of the geographical distance between the ACT and the LGA and other evidence identified during the PwC investigation).

The methodology was used to estimate the number of properties built prior to 1984; estimating the proportion of properties that remain today and then estimating the number of affected premises. The year 1984 was chosen as it was when amosite and crocidolite was banned in Australia. This is likely to be an overestimation as records of ‘Mr Fluffy’ indicate his operations ceased by 1980.

However, as there is no dataset available to calculate the number of premises constructed before 1984, 1981 census data was used to develop a proxy. PwC then applied an exposure rate that reflected the proportion of housing stock likely to contain LFAI. The estimates of affected residential premises (within the 26 LGAs) in the interim and final report are shown below:

High Medium Low

Interim Report 1,100 590 372

Final Report 927 511 272

Difference -100 -79 -100

Appendix 3 provides a breakdown of these estimates by LGAs.

There are a number of limitations with the proximity model:

• The periods of analysis do not exactly align (1981 census data being used as a proxy for 1984 housing)

• The change in LGA boundaries

• The dataset has not been validated by local councils or any other external source (eg Geoscience Australia).

Capacity Model

This model considers the capacity of ‘Mr Fluffy’ as a primary supplier over a number of years. The model makes assumptions on the number of installations per day, days of the week and the life cycle of the product. The model did not distinguish between residential and commercial premises, other activities carried out by ‘Mr Fluffy’ and the product life cycle.

The Taskforce agreed that little or no reliance could be placed on the estimates obtained using this model.

Financial records model

This model was based on a review of the financial records identified against the commercial business of ‘Mr Fluffy’. PwC’s investigation did not yield sufficient information to determine approximate revenue for ‘Mr Fluffy’. The Taskforce approached the ATO for assistance in obtaining the financial records associated with ‘Mr Fluffy’. No additional information was obtained as ‘Mr Fluffy’ conducted a number of businesses within the one company and as such only combined revenue would have been submitted. PwC did not consider this model to be viable and the Taskforce agrees.


Summary of results

Since completing the interim report in November 2014, PwC was unable to identify further evidence that would have allowed further refinement of these two cross-check models in their final report. There still remains significant uncertainty about the estimated number of LFAI affected premises in NSW. The PwC investigation was unable to substantiate much of the anecdotal information provided in relation to ‘Mr Fluffy’s’ operations outside of the ACT. Little reliance can be placed in two of the models, and the proxy used to determine pre-1981 home estimates used for the proximity model is questionable. Additionally, the PwC investigation estimates are for single premises. Two unit blocks (38 units and two units) have been identified to date and they are counted as two premises under the PwC estimates.

How best to determine the number of premises built before 1980

Estimating the number of pre-1980s homes in any given LGA is difficult because:

• The records are usually manually kept and are not easy to access

• Rural dwellings did not require development consent until much later so it is possible that other homes have been built without a building application

• There could be additional dwellings that have been converted from shearers cottages and farmhand cottages into dwellings on properties and there are also illegal dwellings

• Council boundaries have changed over time and have different record keeping systems (numbering systems).

To illustrate this point, QCC estimates there are 4300 pre-1980s premises in their LGA; the estimate provided by PwC is 6,795 based on the 1981 Census data – a difference of 37per cent. While this is not a criticism of the data used by PwC; it nevertheless serves to highlight the uncertainty of the estimates PwC provided. These variances would greatly affect the final estimates and projected costs.

PwC rightly highlighted the fact that the extent of exposure in the ACT was based on a visual inspection of the vast majority of potentially impacted premises. No such exercise has been conducted in NSW. Therefore the approaches adopted in the PwC report were based on uncorroborated evidence. As such, their estimates contain a significant degree of uncertainty. As noted earlier, the ACT Response Taskforce is aware that there may still be a number of affected premises that have yet to be identified in Canberra.

Property transactions

The Taskforce is equally mindful of the significant implications for purchasers of properties where the vendor is aware their property has been identified by historical records as being affected by LFAI but does not disclose this.

At common law, a purchaser is required to make his or her own investigations of a property for sale. The vendor is under no legal obligation to disclose any matters as to the condition of the property or the condition of the title. The purchaser assumes all the risk except where there has been fraudulent concealment by the vendor. In any case, settlement and completion of the contract extinguishes any rights a purchaser may have in relation to the condition of the property.

There are some disclosure requirements when the sale of a property is conducted through a real estate agent, with significant penalties for non-compliance. An agent that is a person conducting a business or undertaking (PCBU) under the Work Health and Safety Act 2011 may also be required, so far as is reasonably practicable, to identify and manage the risks from LFAI in relation to properties they lease and/or manage or are engaged to sell (including, if there are workers entering the property). Further, the Property, Stock and Business Agents Act 2002 specifically require agents to disclose all ‘material facts’ related to a property that could influence whether a person buys, sells or leases a property.

Even allowing for limited protections, the Taskforce is concerned that the existing system may create an incentive for a vendor to avoid testing their property if the vendor suspects LFAI may be present. The presence of LFAI is not required to be disclosed in a planning certificate by councils even if it is known that the premises is affected by LFAI. Planning certificates are issued by councils under section 149 of the Environmental Planning and Assessment Act 1979. The presence of LFAI in a property is currently not a mandatory inclusion on a section 149(2) Planning Certificate. The Taskforce supports efforts to address this gap in legislation.


New guidance material

In early 2015, the Taskforce worked with NSW Fair Trading and industry stakeholders to create new guidance material to help agents better understand their disclosure obligations in relation to LFAI. This fact sheet has been positively received by NSW agents.

The Taskforce remains concerned, however, that home purchasers are not fully aware of their due diligence responsibilities when purchasing residential properties, particularly a reported lack of understanding in relation to pre-purchase building inspection reports. For example, it appears that some purchasers may wrongly assume that these reports will always identify all asbestos in a property, including inside ceilings, walls and sub-floors.

Additionally, it appears that some purchasers have been provided with advice that their property contains LFAI and they have not understood what LFAI is and the implications of owning a home with LFAI. It is important that prospective purchasers understand what LFAI is, including that LFAI is more hazardous than other forms of bonded asbestos. The Taskforce has worked to improve community awareness and help relevant parties understand how to test for LFAI (ie LFAI can only be confirmed by sample testing by a LAA). Chapter 8 provides an outline of community engagement activities undertaken and communications materials developed by the Taskforce.

2010 Review of vendor disclosures

In 2010, a review of vendor disclosure obligations was undertaken on behalf of the NSW Government (the Review).19 The purpose of the Review was to investigate whether or not then vendor disclosure requirements in NSW were sufficient, or should they be expanded to reflect the ACT conveyancing regime where pre-purchase reports are required in residential property transactions. The Review refers to a peak industry body that estimated up to 30 per cent of residential properties in NSW are likely to have significant building defects which will go undetected by purchasers. Further, the Review indicates that these kinds of defects often require substantial repair costs into the future. The lack of awareness by purchases was attributed to a number of factors such as purchasers not understanding the limitations of a pre-purchase building inspection reports and the variation between individual building inspectors’ technical expertise.

The Review did not recommend adopting a similar conveyancing system to that operating in the ACT. However, it is worth noting that LFAI was not considered as part of the Review in 2010.

LFAI presents a unique challenge as it is more difficult to test for (requiring a LAA to sample), very costly to remove and more difficult to effectively manage than other asbestos products.

The Taskforce considers that there is a need for increased community education surrounding LFAI, and has recommended that the HACA consider developing appropriate communication and education strategies to highlight the particular hazards of LFAI as part of broader messaging about asbestos.

19 Brown, December, 2010


Chapter 3: The NSW Make Safe Assistance Package

Summary

In August 2014, the NSW Government announced free ceiling insulation testing for property owners in 26 LGAs. These LGAs were selected through analysis of archival government records and on their location in respect to known or affected LGAs. Subsequently, the NSW Government announced increased support and assistance for affected residents through the Make Safe Assistance Package in December 2014.

NSW Ministry of Health provided an Interim Report (the Interim Report) summarising the results of technical assessments undertaken as part of the Make Safe Assistance Package. As at 20 March 2015, the Interim Report concluded that occupants residing in premises containing LFAI are generally at low risk of developing asbestos-related diseases due to this type of potential exposure.

On 19 December 2014, the NSW Government increased support and assistance for affected residents in addition to the free sample testing service for eligible houses that was announced on 15 August 2014. The NSW Make Safe Assistance Package includes:

• Free technical assessments for properties testing positive

• Sealing of exposure pathways and environmental cleaning (building works)

• Reimbursement options – soft furnishings and/or porous materials, (up to $1,000)

• Short term and emergency accommodation assistance up to $10,000 per family and $2,000 per dependent child (to a maximum of two children)

• Counselling services (up to $850).

A comprehensive Project Plan for delivery of the Make Safe Assistance Package was developed by the Taskforce Project Team covering the following areas:

• Objectives and outcomes

• Key deliverables

• Business systems

• Program evaluation

• Communication/Media strategy

• Resources

• Budget

• Identified risks and mitigation of those risks.

Key deliverables of the Make Safe Assistance Package are noted below.

Sample testing service

From 15 August 2014, free sample testing of private residential premises was offered to eligible property owners for a 12 month period and, if necessary, independent technical assessments and risk control advice for all LFAI affected premises. Emergency services are notified of known affected properties to ensure the health and safety of emergency workers.

The sample testing service is undertaken by contracted LAAs who take a representative sample of ceiling insulation. This is tested in a laboratory accredited by the National Association of Testing Authorities (NATA) to determine if the insulation contains LFAI. Negative reports are provided directly to owners and to the HACA. Positive reports are notified directly to Taskforce and then forwarded to the owner. Councils are advised of positive results in their LGA. The sample testing service is currently available until 15 August 2015.

As of 1 May 2015 the results of the Make Safe Assistance Package are as follows:

• 2,580 premises in the 26 LGAs registered for the free sampling service

• 1,735 premises have been tested with 1,728 samples determined to not contain asbestos

• The seven positive results came from properties in Berrigan Shire, Yass Valley, Queanbeyan City and Greater Hume LGAs

• The total number of LFAI affected premises is 63, comprised of 56 confirmed historical records and seven as a result of the free sample testing. (Note: two premises identified by way of historical records remain unconfirmed).


A review of the sample testing database indicated that, as at 1 May 2015, approximately 3 per cent (or 57 out of 1735) of registrants for the sample testing service chose not to proceed. A survey of LAAs undertaking the testing have reported that some property owners indicated that they were not prepared to sign the consent form that requires a homeowner to tag their property if it tests positive for LFAI. Some indicated that this was due to potential social stigma or financial impact on the value of the house if it were identified as affected by LFAI. Others indicated that they were awaiting the announcement of the NSW Government’s response to the Taskforce Report. Some provided no reason.

Sample test result

Property description

The property is a single storey weatherboard home with an iron roof.

Inspection results

A visual inspection of the safely accessible and visible areas of the ceiling cavity revealed the following:

• The manhole was located in the laundry of the property – it was covered with a panel into the ceiling cavity above – the panel was secured with staple and hasp bolts at the time of inspection

• The floor under the manhole was tiled

• There was no sarking below the iron roof

• Grey Loose-Fill asbestos (‘Mr Fluffy’) insulation material was observed throughout the ceiling cavity

• A representative sample of the loose-fill insulation material was taken at the time of inspection

• Minor amounts of what appeared to be loose amosite asbestos insulation material was observed within the wall cavity of the laundry with a missing wall panel.

Sample results

During the site assessment, one (1) sample of representative insulation material was collected from the ceiling cavity of the residence and analysed for the presence of asbestos.

Sample Number Sample Location Asbestos Detected Sample Description

A1234567 Ceiling Cavity 1.2gms Amosite Asbestos Detected

Technical assessment protocols

Technical assessments were undertaken by LAAs independent to those contracted to undertake the sample testing. Technical assessments include a physical assessment of the property, dust sampling and seven day/24 hour air monitoring. Dust samples were taken where an LAA determines there is potential for asbestos fibres to migrate into habitable areas of the property (eg cracks in cornices, walls, ceilings, floor skirtings, lower level wall cavities etc.). Photographs were also taken as evidence of potential exposure pathways. The technical assessment provided the locations of where dust samples were taken from. All dust samples were analysed at NATA accredited laboratories.

NSW Ministry of Health and WorkCover NSW used the following reference materials to determine the reoccupation of residential properties:

• How to Safely Remove Asbestos – Code of Practice, Safe Work Australia 2011

• Guidance note on the membrane filter method for estimating airborne asbestos fibres, NOHSC 2005

• EnHealth, Management of asbestos in the occupational environment (Static air sampling) Commonwealth Department of Health 2005

• Australian Standard 4964-2004 – Method for the qualitative identification of asbestos in bulk samples (Dust sampling).

It is noted that the owners of four houses and two units in Queanbeyan LGA identified from historical records elected not to proceed with a technical assessment. Testing by an LAA with samples analysed at NATA accredited laboratories would need to confirm the presence of LFAI before the properties could enter any assistance program.


Exposure pathway sealing and environmental cleaning (building works)

Building works are offered to owners of residential properties that have tested positive for the presence of LFAI. Building works involve the sealing of exposure pathways (as identified in technical assessment reports) and the environmental cleaning of the habitable area. LFAI will remain in the ceiling space and possibly the wall cavities and sub floor area, so property owners are advised that these areas must remain sealed.

Hazard labelling (or ‘tagging’) is installed to alert tradespeople or others who may want to access areas affected by LFAI (roof/ceiling cavities, sub floors, etc.). Property owners are advised that any maintenance or work to be undertaken in affected areas must be restricted to a licensed asbestos removalist (LAR) only. Affected property owners agree to a scope of works as part of the building works. They are also provided with information on how to maintain their property to minimise risk of exposure into the future.

The habitable area requires regular inspections and maintenance to ensure exposure pathways remain sealed. At this stage, the Make Safe Assistance Package includes annual inspections by a LAA.

The technical assessment report and the visual inspection as part of the building works have identified the following pathways within LFAI affected premises to date:

Cornices and ceiling cracks Light fittings – down lights Access to sub floor area by pets/animals

Speakers in ceilings Ducted heating/air conditioning Light switches

Door and window frames Cavity sliding doors Light fitting fans

External/internal vents and grills (Bathrooms and kitchens)

Decks and steps that lead to subfloor area

Gaps in floorboards

Four owners of LFAI affected premises in the Queanbeyan and Yass LGAs have elected not to proceed with building works. Reasons provided include fears that the money spent on the building works would be deducted from any subsequent amount they may be offered at a later stage (should the NSW Government agree to fund a voluntary purchase/demolition program) and/or because the building works would not eliminate the presence of LFAI within their premises. Four other owners have yet to decide about proceeding with building works.

Building works protocols

Building works are provided through a Class A LAR engaged by NSW Public Works. A comprehensive risk management workshop informed all parties to identify and mitigate risks. Sealing works and environmental cleaning is only undertaken by a Class A LAR and involves vacuuming areas using an approved asbestos industrial vacuum cleaner fitted with an H Class HEPA filter and the use of damp cloths to wet wipe solid surfaces.

Building works conducted to date have been required to meet professional standards within the industry, overseen by NSW Public Works through contractual arrangements. Part of the risk communication strategy includes the fitting of hazard labelling (‘tagging’) on the meter box at the time of the building works being undertaken. While currently there is no legislative requirement for this to occur, property owners consented to the hazard labelling as part of the conditions of the Make Safe Assistance Package.

Replacement of soft furnishings and/or porous materials (clothing) to the value of $1,000

Where a technical assessment and/or scope of works has identified the need for disposal of porous materials or soft furnishing that cannot be cleaned as part of the environmental cleaning of habitable areas, then an ex gratia payment of $1,000 is available to contribute to replacement costs. Appropriate disposal of the affected materials is the responsibility of the applicant, except where the disposal is included in the building works for the property.

Short term accommodation

Short term accommodation assistance is made available to owners or tenants if they are required to vacate their property for the duration of the building works. Financial support is available for emergency accommodation costs where ‘meaningful exposure pathway’ for LFAI fibres is identified in a premises. Up to $10,000 per household with an extra $2,000 for each dependent child is available.


Counselling services

Some residents may experience stress and anxiety as a result of residing in a house with LFAI. Financial support is available for up to five sessions of counselling per household. The applicant must be the owner or tenant of premises affected by LFAI. Payment is for fees incurred (ie, fees not covered by Medicare and personal health insurance claims).

NSW Ministry of Health has confirmed that individuals requiring counselling support are advised to discuss this with their local general practitioner in the first instance, who can recommend the most appropriate support for them.

Options available from General Practitioners:

• Referral to a Mental Health Practitioner under a Mental Health Treatment Plan, which covers 10 sessions in a year under Medicare, to be reimbursed up to $850 (out of pocket expenses)

• Referral for private counselling/psychological assessment, to be reimbursed up to $850 (out of pocket expenses).

Other community services available to affected residents include:

Free telephone services

• LifeLine: 13 11 14. This is a 24-hour counselling, information and referral service. Local call cost from a landline; free from mobiles

• Mental Health Line: 1800 011 511. This is a 24-hour telephone service operating seven days a week across NSW

• beyondblue: 1300 22 46 36. Beyondblue is a national, independent not for profit organisation. It has information on depression, anxiety and related disorders, available treatments and where to get help

• Kids Helpline: 1800 551 800. Kids Helpline provides telephone counselling for children aged between 5 and 25 years

• Eheadspace: 1800 650 980. Eheadspace provides online and telephone support and counselling to young people 12–25 years of age.

(Note, in some cases, callers may have to pay for phone calls and seek reimbursement that is available as part of the assistance package).

Online services or programs

• Mindhealthconnect at www.mindhealthconnect.org.au/online-self-help-programs

• beyondblue at www.beyondblue.org.au. beyondblue offers an online chat service and help service

• eheadspace at www.eheadspace.org.au. eheadspace provides online and telephone support and counselling to young people 12–25 years of age

• Kids Helpline at www.kidshelp.com.au/kids/. Counselling is provided online or via email.

http://www.mindhealthconnect.org.au/online-self-help-programs

http://www.beyondblue.org.au

http://www.eheadspace.org.au

http://www.kidshelp.com.au/kids/


NSW Ministry of Health Interim Report The NSW Chief Health Officer’s Expert Advisory Committee (the EAC) provided advice to the Chief Health Officer regarding the potential health risks for those living in NSW properties containing LFAI. This was done by reviewing properties identified in NSW as containing LFAI as part of the Make Safe Assistance Package. The EAC is comprised of experts in public health, with specialities in environmental and cancer epidemiology, respiratory medicine, toxicology and exposure science.

The NSW Ministry of Health provided an Interim Report summarising the results of technical assessments undertaken as part of the Make Safe Assistance Package as at 20 March 2015. The results of more technical assessments will eventually inform a final report.

Analysis of technical assessment

To determine the potential health risk of living in a house in NSW that had LFAI installed, technical assessments were undertaken to identify whether there is:

• Current exposure in the house to airborne asbestos fibres above the level recommended by Safe Work Australia in determining if a property is suitable to occupy (below 0.01 fibres/millilitre (f/ml)) (air sampling)

• Any structural issues that may allow or may have allowed fibres from LFAI to enter living areas (dust sampling and structural integrity).

This technical assessment involved measurement of asbestos fibres in air to provide an estimate of risk to the house occupant; sampling of dust and a visual inspection to identify structural issues that could allow, or may already have allowed, fibres to enter the living areas.

As per the technical assessment protocol, static air sampling was undertaken in a typical living area of the house. Parts of the house that were commonly occupied and/or that were observed to be sites of potential contamination were preferentially sampled. Twenty four 24 hour samples were collected each day for seven days. In most cases only one location within the house was sampled. However, in houses where the assessors were concerned about possible contamination at several sites, devices were placed in multiple locations concurrently.

Dust was sampled at locations within the property that were considered possibly contaminated with LFAI derived from the roof space. This non-random selection of sampling locations was designed to increase the likelihood that LFAI (amosite) fibres would be detected and the results cannot be considered representative of all sources and types of asbestos that might be found within houses.

Communication of results

There were three possible outcomes of the technical assessments. These outcomes, and the corresponding risk mitigation advice, are summarised in below. The homeowners received the risk assessment outcome and risk mitigation advice by letter, with a copy of their technical assessment report and an information sheet providing advice on living in a house containing LFAI. All homeowners were given the opportunity to meet with representatives of the Taskforce and NSW Ministry of Health to discuss their results and to outline what support would be available to them.

Outcome 1 AIR: average of air samples at the sampling location/s below 0.01 f/ml

DUST: no asbestos detected in Dust

STRUCTURAL: either no structural issues (Template 1a) or structural issues (Template 1b)

Low level of risk, may or may not require attention to housing structure

(Homeowner receives either letter template 1a and 1b)

Outcome 2 AIR: average air samples at the sampling location/s below 0.01 f/ml

DUST: asbestos detected in dust

STRUCTURAL: dust results indicate work needed

Low level of risk, requires attention to housing structure

(Homeowner receives letter template 2)

Outcome 3 AIR: average air samples at the sampling location/s above 0.01 f/ml but below 0.1 f/ml

DUST: with or without asbestos detected in dust

STRUCTURAL: air results indicate work needed

No imminent risk to health, however property requires work to be suitable to occupy

(Homeowner receives letter template 3)


While an outcome of 0.1 f/ml or more is possible, it is unlikely and has, therefore, not been provided for in the table above. If it does occur, the homeowner would be advised that the house was considered unsafe to occupy and that any residents should leave the house until action had been taken to make it safe to occupy.

Summary of results

As of 20 March 2015 the study protocol has been carried out in a total of 13 identified houses and 32 identified apartment units with the following results:

• One house was found to contain a level of risk where intervention was required (average concentration of asbestos fibres in the air estimated at 0.01 f/ml) (as outlined in Outcome 3 above)

• Nine houses and 10 apartment units were classified as a low risk (ie all air samples below 0.01 f/ml) but had asbestos fibres detected in dust in the living space and thus required attention to the structure (as outlined in Outcome 2 above)

• Three houses and 19 apartment units were classified as low risk (ie: all air samples below 0.01 f/ml) and did not have asbestos fibres detected in dust in the living space (as outlined in Outcome 1 above)

• Three apartment units did not undergo air sampling as daily access to the property was not provided; therefore these properties cannot be classified under the risk assessment (undetermined).

Interim conclusion from NSW Ministry of Health

Air sampling helps assess the current risk of asbestos in the living environment. However to avoid future risks of exposure, it is paramount to control potential exposure pathways into the living environment and avoid any entry into the ceiling, wall and under-floor spaces. If there is no asbestos in dust in the living spaces, no pathways for the asbestos to enter the living spaces and there is no entry by individuals into the ceiling space, LFAI in the ceiling space presents no risk to people in the living areas. Therefore it is important that residents are well informed of safety measures they should take and that premises are well maintained to prevent the development of exposure pathways.

Asbestos fibre types other than LFAI amosite were also detected in some air and dust samples. This was expected and indicates the presence of asbestos fibres in the environment from sources other than LFAI.

The study outlined in the Interim Report shows that occupants residing in premises containing LFAI are generally at low risk of developing asbestos-related diseases due to this type of potential exposure. However, it is important that homes are well maintained with all potential exposure pathways sealed to ensure asbestos fibres do not reach habitable areas of the premises. Occupants should not enter or disturb the roof, wall or floor cavities and be mindful that access to these areas may increase their exposure to asbestos fibres by allowing asbestos fibres to enter the habitable areas of the house.

This is consistent with the earlier advice provided to the Chair of the HACA by the CHO in October 2014.


Chapter 4: Voluntary purchase/demolition options

Summary:

The Taskforce Terms of Reference were to consider the costs and benefits of a government purchase/demolition program. In assessing the options, the Taskforce considered that a long term solution should aim to meet a number of guiding principles that each voluntary purchase/demolition option could be assessed against. The Taskforce also considered advice from the ATO, legal counsel, stakeholders and a CBA provided by PwC.

The Taskforce considered and assessed four voluntary purchase/demolition options and recommends that a combination of Option 1 (purchase house and Land) and Option 2 (purchase house only) is the most cost effective option for government under a voluntary purchase/demolition program. The Taskforce noted that the costs of all options significantly outweigh the quantifiable financial benefits.

Considerations

The Taskforce received expert technical advice and considered the ACT experience in relation to the:

• Difficulties of removing LFAI from affected premises

• Practicalities of living in and maintaining a LFAI property

• Significant increase in maintenance costs associated with any repairs

• Negative market response by renters/purchasers towards affected premises

• Potential risks to residents of both physical and mental health issues.

Living in an identified LFAI affected home can present a range of community dislocation issues. Social isolation was also a consideration of the Taskforce as a number of owners of affected properties reported that family and friends would no longer visit.

The Taskforce considered that a long term solution would be achieved through consideration of a number of guiding principles that the Taskforce used these to assess the voluntary purchase/demolition options. These guiding principles were based on the need to identify where LFAI affected properties are, mitigate risks (eg health – physical and mental health/stress – and unforeseen significant financial hardship), provide incentives to test, avoid unintended precedents and consider liability issues.

The Taskforce also considered advice from the ATO, the ACT Response Taskforce, legal advice and stakeholder views on the impacts of any voluntary purchase/demolition program.

Guiding Principles

Identification of the risks

The solution needs to ensure, as far as is reasonably practicable, that homes subject to LFAI are identified as soon as possible after the date of any NSW Government announcement

Mitigation of the risks

The solution effectively mitigates the risks to human health arising from LFAI in residential homes

Incentives Care needs to be taken to ensure that there are appropriate incentives or mechanisms for these homes to be identified and to note any potential disincentives arising from any proposed solution

Avoid unintended precedents

The solution is consistent with existing approaches to the identification and mitigation of other health risks in NSW or does not redefine the role of the government for other similar issues.

Financial sustainability

The solution is able to be implemented by all responsible parties

The Taskforce agreed any solution needs to be informed by known allocation of legal liabilities so that responsibilities for implementation align to these liabilities.

Australian Tax Office enquiries

The Taskforce approached the Australian Tax Office (ATO) for advice on taxation implications that any potential program may have on owners of affected premises. The ATO provided the following information:

Homeowners could have capital gains tax (CGT) and other tax implications under any of the options. We are happy to continue to work with the Taskforce and the NSW Government to identify the implications for the affected homeowners.

The tax outcomes for each homeowner will depend on their specific circumstances and the choices they make following remediation. Factors such as whether they own the property as their main residence or as an investor, the date the property was purchased and the ownership period will all impact the tax position.


It is recommended that homeowners approach the ATO directly when deciding whether to enter into the scheme ultimately adopted by the NSW Government. They will be able to provide ongoing support and advice to homeowners to resolve any concerns they may have about their tax issues.

Legal liability issues

The Terms of Reference required the Taskforce to consider any duty of care or legal liabilities of other parties including the Commonwealth. The Taskforce has been unable to establish any basis on which any expenditure by the NSW Government in implementing the sample testing program, or in any other steps that might be taken to establish and implement an enduring solution to the on-going risks of LFAI in NSW residences, can be recovered from any third party, including the Commonwealth.

The Taskforce notes that the NSW Government has sought a concessional loan facility from the Commonwealth similar to the arrangement that was provided to the ACT Government and may again approach the Commonwealth following consideration of the Taskforce recommendations.

Stakeholder views

The Taskforce sought advice from the Canterbury Earthquake Recovery Authority, the NSW Chief Health Officer, the ACT Response Taskforce and the ATO to ensure that any solution was workable and did not have unforeseen consequences for owners and government. The Taskforce also considered the recommendations of the Home Insulation Royal Commission into the Home Insulation Program.

The Taskforce has become aware of a number of premises, affected by LFAI that have come onto the housing market and have been unable to be sold. One property has sold at a price significantly lower than similar properties not affected by LFAI. Taskforce representatives spoke with a number of real estate agents who reported that there was little to no prospect of renting out premises affected by LFAI and that a number of tenants had abandoned their leases when they became aware that they were renting premises affected by LFAI.

While The Taskforce Terms of Reference were confined to consideration of a purchase/demolition program only, the Taskforce also considered the HACA Interim Report on LFAI (November 2014). This report identified a number of options for consideration by the Taskforce:

• Remediation works (asbestos removal) and

• Make safe habitable areas and hazard disclosure

• Complete removal (purchase and demolish).

Remediation works (asbestos removal)

This option offered the removal of LFAI and contaminated soil, waiver of tipping fees, decontamination and poly vinyl adhesive spraying of any surfaces that may contain residue fibres. Risk communication, including hazard labelling, and disclosure to potential home purchasers, renters, tradespeople and emergency services on a need to know basis was also considered as part of this option.

The Taskforce received expert advice that a remediation program would not provide a 100 per cent guarantee that all LFAI had been removed from the affected property. The building works required in such a program would involve an almost complete demolition of the internal structure of the home, removal of the LFAI and an internal rebuild of the premises. This is a costly process (almost equal to the cost of demolition), which does not provide a long term solution. The ACT experience (1987 – 1992) has shown that even after such a process is completed, LFAI is still likely to be present within affected premises.

The Taskforce also established that there was a risk that after remediation works had occurred, the owner would have a false sense of security that the premises was now ‘free’ of LFAI. In one example in 2006, the owner of an affected property undertook remediation work at their own expense. The certified asbestos removalist removed all internal walls and ceiling linings and cleaning occurred. The owner was informed that removal of LFAI insulation had occurred from the roof space, internal wall cavities and sub floor area. The owner had gone to great lengths and expense to remove the LFAI and subsequently undertaken extensive renovations, on the belief that their premises were now free of LFAI. This property was on the historical list supplied to the Taskforce and subsequently underwent sampling testing by a LAA. Positive samples were received from composite samples taken from the ceiling space and the sub floor area.

Both the ACT and NSW experience has shown that even after such extensive remediation efforts are undertaken, LFAI can still remain.


Exposure pathway sealing and environmental cleaning (building works)

The building works component of the Make Safe Assistance Package involved the identification and sealing of exposure pathways where LFAI can migrate into the living areas of premises. While this option was considered by the Taskforce, it was viewed as a short to medium term risk management program and not an option falling under its Terms of Reference.

The Taskforce has determined that, the NSW Government would have an ongoing obligation to ensure properties were maintained appropriately in the future by continuing the Make Safe Assistance Package as an alternative to any purchase/demolition program. This assessment was based primarily on the ongoing nature of the obligations under the option, namely, the potential liabilities in the event of mistakes or omissions occurring in the course of delivering the assistance package into the future.

The sealing of identified exposure pathways requires regular and ongoing maintenance while placing an additional burden on the owners/tenants of affected premises in conducting their daily business. This option does not adequately address the risk that is posed by the deliberate or accidental disturbance of LFAI that remains within the ceiling, sub floor and wall cavities.

The risk from LFAI remains when:

• Tradespeople and others work on the premises (eg electricians, building and maintenance workers, pest inspections, emergency service workers, home care services)

• Exposure occurs following damage by animals (eg access to the sub floor area)

• There is accidental damage by residents including children (eg accidental damage to wall cavities)

• There are emergencies such as a storm or fire.

The identified risks of the sealed pathways reopening over time due to the age of a building, earth movements and expansion and contraction due to varying climactic conditions were also considered. Tagging and annual inspections may overcome some of these risks; however, there is a possibility of future exposure pathways opening up, exposing residents and others to LFAI.

Additionally, the Taskforce received expert advice that through the sealing of identified pathways (in particular the sub floor and wall cavities) there was an inherent risk of causing mould, rising damp and other health issues. Many of the properties inspected by the Taskforce under the current Make Safe Assistance Package had central heating/air conditioning units and hot water services positioned within the ceiling area. The heating/cooling units were shut off and alternative short term management arrangements implemented. This would not be a satisfactory solution in the longer term.

It was also noted that any work or renovations undertaken on LFAI affected premises would require that work to be done by or in conjunction with an LAR. This would significantly increase the cost of any maintenance work and, therefore, the financial costs to affected owners in maintaining their properties.

It is the view of the Taskforce that there is little (if any) incentive for owners of affected properties to register their premises for testing under the current Make Safe Assistance Package. The Taskforce considered the costs associated with the ongoing inspection and sealing of pathways along with any future legal requirement to continue to communicate the risk to potential purchasers, tradespeople and visitors to the affected premises into the future. The current Make Safe Assistance Package does not address the stigma already associated with affected LFAI properties.

A further significant issue considered was that LFAI affected premises are valued in real-estate terms at considerably less than market value for the area. This could result in financial institutions foreclosing on mortgages where the equity of the property is below the loan amount.

Complete remediation (purchase, demolition and remediation)

The Taskforce was asked to assess and consider the cost and benefits of a NSW Government purchase/demolition program and to make recommendations on the most cost effective options to the NSW Government. The four options considered by the Taskforce for a voluntary purchase/demolition programs were:

• Option 1 – Purchase of house and land, demolition, remediation of soil and resale of the land

• Option 2 – Purchase of house only, demolition, remediation of soil and owner retains land

• Option 3 – Ex gratia payment (@50 per cent valuation of house), demolition, remediation and owner retains land

• Option 4 – Ex gratia payment (initial cost of Make Safe Assistance Package, 10 x annual technical inspections + reasonable indicative cost into the future) demolition, remediation and owner retains land.


Option 1 – Purchase of house and land

This option would require the NSW Government to:

• Purchase the property from the owner (house and land) as the owner has indicated that they wish to ‘walk away’ from property

• Demolish the house

• Remediate the land

• Sell the remediated land.

Under this option, the owner would have the option to buy back the land at market price through a normal sale process.

Option 2 – Purchase of house only


• Purchase the premises at 100 per cent market value (full property value minus land value), with the owner retaining ownership of the land

• Demolish the premises

• Remediate the land.

The property owner would retain ownership of the land to do with as they wished. This option would be the only available option to the owners of larger parcels of land (eg rural properties – Land Zoned R5 or RU1-4 more than 2ha).

Option 3 – Exgratia Payment (@50 per cent valuation of house)


• Provide a payment to the owner that is the equivalent to 50 per cent of the value of the house



The property owner would retain ownership of the land to do with as they wished.

Option 4 – Exgratia payment (Make Safe Assistance Package, 10 x annual technical inspections + reasonable indicative costs into the future)


• Pay for initial costs associated with building works under the current Make Safe Assistance Package (current average cost is $21,745)

• 10 years of the annual technical inspections @ $1500 each year (averaging $15,000 over 10 years)

• Reasonable indicative costs into the future (ie 24 hour hotline, on call contractor from private industry to undertake repairs, sensory monitors placed into premises, etc.)



The property owner would retain ownership of the land to do with as they wished.

A summary of the options is provided below.


NSW Government purchases the house and land from the owner ✔

NSW Government purchases the house (100 per cent value) ✔ ✔

NSW Government pays home owner for the value of the house (50 per cent value) ✔

NSW Government pays home owner for Make Safe Assistance Package, 10 years of technical inspection costs + reasonable indicative costs into the future

✔

NSW Government demolishes the house ✔ ✔ ✔ ✔

NSW Government remediates the land ✔ ✔ ✔ ✔

NSW Government sells the land ✔

Home owner retains ownership of the land ✔ ✔ ✔


Analysis of options

Option 1 – Purchase of house and land

The NSW Government would purchase the house and land at market value after receiving two independent valuations and allow an owner to ‘walk away’ from the property. The NSW Government would demolish the house and remediate the land. The original owner could re-purchase (buy back) the land from the NSW Government at market value at the end of the process or, the property would be sold through normal market processes.

The Taskforce considered a proposal for the NSW Government to purchase property through Housing NSW and redevelop the property for public housing. The State Environmental Planning Policy (Affordable Rental Housing) 2009 permits medium density housing to be developed by a public authority or social housing provider in specified towns on sites that meet certain locational criteria.20 Sites that are not within the specified towns or do not meet the location criteria would need to be rezoned to allow for subdivision or intensified development. Local Government NSW has advised that this approach is not likely to be supported by local councils, on the basis that spot zoning is not the basis on which zoning decisions should be made. This form of re-zoning is at odds with having a strategic approach, and would likely be contested by communities neighbouring such sites. This option would be the only option for unit title holders as the land is collectively owned.

ADVANTAGES DISADVANTAGES

• Permanent removal of all risks in the future

• Addresses issue of residents who wish to leave their property

• Cost of building works are not incurred by the NSW Government – owners could take steps to make the property safe for the short time in the lead up to demolition

• Home owners would be strongly incentivised to be tested, leading to high levels of identification

• Permanent mitigation avoids a costly future contamination clean up following a natural disaster

• Owners will not face financial hardship as a result of the presence of LFAI in their home

• Equitable treatment of NSW and ACT residents.

• Voluntary basis – not all properties may be identified

• May create unintended precedent regarding identification and mitigation of health risks in NSW

• Heritage listed properties may be demolished

• High cost to the NSW Government to implement program.

RISKS

The Taskforce received advice that any work undertaken under this option would need to accord with widespread professional standards applying to such work. The ongoing need to communicate the risk would need to be accurately expressed, and could give rise to a risk if not accurately conveyed, or not conveyed in a way that continues to provide notice to incoming purchasers, workers or contractors engaged by the owner to work on the property.

If consideration is given to redeveloping the site, then care would need to be taken to ensure that the removal is completely effective, and that there is some notice of the previous history of the site available to future developers and consent authorisations. Approval of sites for development that are subsequently found to be contaminated can present a risk of liability for developers.

A comprehensive protocol along with good governance in relation to the removal of LFAI and demolition work would be required. These processes are fully explained in the following chapter and in the project management plan. Work would only be conducted by a competent WorkCover LAR contractor and licensed demolition contractor. Initially the work would be under the project management of NSW Public Works, acknowledging the outcomes of the demolition risk management workshop.

These were all considered to be low risk.


The NSW Government would only purchase the house, at 100 per cent of market value (valued as if were free of LFAI), after receiving two independent valuations. A number of affected premises have been in a rural setting, involving in excess of 100 acres of land, farming equipment, animals etc. The Taskforce considered that the NSW Government would not want to purchase house, land, equipment etc., so the option was developed where only the house would be purchased by the NSW Government. The property owner would retain ownership of the land. The NSW Government would be responsible for demolition and remediation and the owner would able to rebuild on the same block of land.

The Taskforce has spoken with those affected owners on rural land that have been identified to date. They have indicated that this option would suit their needs and would allow them to retain their land.

20 Part 2, Division 5 State Environmental Planning Policy (Affordable Rental Housing) 2009



• Permanent mitigation of the risks

• The NSW Government does not become land owner and does not need to be involved in the resale of the land

• Less up front cost for the NSW Government

• Some owners have expressed desire to reside in premises whilst rebuild is occurring, saving the NSW Government relocation costs (potential)

• Cost of building works are not incurred by the NSW Government - owners could take steps to make the property habitable for the short time in the lead up to demolition

• Provides incentive through the program to identify homes subjected to LFAI


• Owners will not face financial hardship as a result of the presence of LFAI in their home

• The ATO advised that this model is the best to mitigate tax implications

• Equitable treatment of NSW and ACT residents.




• High cost to the NSW Government to implement program.

RISKS

The risks associated with this model are the same as for Option 1.

Option 3 – Ex gratia payment (@ 50 per cent valuation of house)

This option is similar to option 2, however the affected owner would be given an ex gratia payment by the NSW Government which is equal to 50 per cent of the valuation of the house. The owners would agree to the NSW Government demolishing the house and remediating the land. The NSW Government would not become a land owner under this option and would not have to be involved in the resale of the remediated land.

There were a number of drawbacks with this option, associated with those owners who are at the lower end of the socio-economic scale. Many affected owners advised that the 50 per cent ex gratia payment would not allow them to rebuild on the land as they were already having difficulties meeting repayments and would not be in a position to refinance with lending institutions. It was also viewed as not providing sufficient incentive for owners to participate in the program.



• NSW Government does not become land owner

• Lower up front cost for the NSW Government


• Costs of building works are not incurred by the NSW Government - owners could take steps to make the property habitable for the short time in the lead up to demolition.

• The ATO has indicated the ex gratia payment would likely incur income tax payments to the Commonwealth

• Does not address impact on owners at lower end of socio economic scale

• Does not provide a strong incentive through the program to identify homes subjected to LFAI




• Would not provide the same benefits as ACT residents.

RISKS:

The risks associated with this model are the same as for Options 1 and 2.


Option 4 – Ex gratia payment (Make Safe + annual inspections indicative costs)

This option is similar to option 3. The affected owner would be given an ex gratia payment by the NSW Government, which would be equal to the following:

• Initial costs associated with the Make Safe Assistance Package, including building works (exposure pathway sealing and environmental cleaning) – current average cost is $21,745

• Costs for 10 years of annual technical inspections – (@ $1500 each year) averaging $15,000 over 10 years

• Reasonable indicative costs into the future (eg 24 hour hotline, on call contractor from private industry to undertake repairs, sensory or monitors placed into premises).

The owners would agree to the NSW Government demolishing the house and remediating the land. The NSW Government would not become a land owner under this option and would not have to be involved in the resale of the remediated land.

The main drawback with this option is that for those owners who are at the low end of the socio economic scale, the ex gratia payment would not allow them to rebuild on the land. Many owners informed the Taskforce that they were already having difficulties meeting repayments and would not be in a position to refinance with a lending institution.



• NSW Government does not become land owner

• Lower up front cost for the NSW Government


• Costs of building works are not incurred by the NSW Government - owners could take steps to make the property habitable for the short time in the lead up to demolition.

• The ATO has indicated the ex gratia payment would likely incur income tax payments to the Commonwealth

• Does not address impact on owners at lower end of socio-economic scale

• Does not provide incentive through the program to identify homes subjected to LFAI




• Would not provide the same benefits as received by ACT residents.

RISKS:

The risks associated for this option are consistent with Options 1–3.

The Taskforce also considered the option of the NSW Government paying the property owner an ex gratia payment in exchange for the owner undertaking the demolition and remediation work. This option has the benefit of the financial uncertainty of the works remaining with the property owner, thus providing increased cost certainty for the NSW Government. However, the ex gratia payment would be subject to a potentially high rate of income tax. There is a risk that the property owner would abandon the property without carrying out the demolition and remediation work to a satisfactory standard. This option was not considered further.


Estimated cost for each option (per premises)

Option Cost

Option 1 – Purchase house and land

Technical Assessment $1,500

Valuation per property $1,200

Approximate cost of demolition** (demolition $36,000*; asbestos removal $80,000*; and soil remediation $63,000*)

$180,000

Relocation assistance support*** $14,000

Financial support soft furnishings and/or porous materials $1,000

Financial support counselling sessions (5) $850

Legal advice of up to $1,000 per property $1,000

Property purchase (Refer to Appendix 4 for median house price) $617,172

Project management cost Q&A**** $2,000

Sub total $818,722

Resale of land (Refer to Appendix 5 for average land values) $308,434

Total $510,288


Valuation, demolition, remediation, relocation assistance, soft furnishings and/or porous materials, counselling, legal advice and project management costs, technical assessment

$200,950

House only cost $308,738

Total $509,688

Option 3 – Ex gratia payment


$200,950

House only cost at 50 per cent $154,369

Total $355,319

Option 4 – Ex gratia payment


$200,950

Payment for annual technical assessments for 10 years $15,000

Payment for environmental seal and clean $21,745

Reasonable indicative costs into the future $29,255

Total $265,450

* Costs associated with demolition varied greatly. The Taskforce undertook an early tender evaluation program to be more informed about the processes and costing. Results will be available end of May 2015.

** Based on the estimates providing in the HACA interim report.

*** Matched to the ACT Buyback Program (The average property occupied by two adults and two children. This money is for short term accommodation whilst demolition, remediation and rebuild occurs. Reimbursement requires presentation of evidence of expenditure).

**** This is comprised of four quality assurance pre and post intervention asbestos reports and two site visits - $2,000 per house and 1.5 per cent of the cost of procured services (excluding home purchase cost).

Estimated cost for each option (total per option)

The cost estimates (current) for Option 1, 2, 3 and 4 are set out in the tables below. The Taskforce has only included the costs for the medium modelling (511) approach by PwC as the Taskforce believes that these models more accurately represent the likely number of properties.

Total per option

The table below summarises the overall costs (without discounting to present value) as estimated by the Taskforce for each of the four options considered. Importantly, figures presented for the each of the options have been calculated on an assumed 511 affected properties with 100 per cent owner participation rates.


Total costing ($m) for 511 properties* $278,644,577 $277,144,826 $208,141,883 $133,855,468


Guiding principles table

The Taskforce members wanted to demonstrate how each of the options would address the six guiding principles. In order to achieve this, a traffic light system was used: green achieves the guiding principle; orange is partially or works towards achieving the guiding principle and red does not achieve the principles.

Guiding Principles Option 1 – House/Land

Option 2 – House only

Option 3 – Ex gratia 50 per cent

Option 4 – Ex gratia Make Safe + 10 years costs

Identification of the risks Green Green Orange Red

Incentives Green Green Orange Red

Mitigation of the risks Green Green Green Orange

Avoid unintended precedents Red Red Red Red

Financial sustainability Orange Orange Orange Orange

Cost benefit analysisThe Taskforce engaged PwC to prepare a cost benefit analysis (CBA) of the four options in relation to LFAI in residential premises in NSW. An initial report was provided in April 2015; however, the Taskforce requested additional work be conducted in respect to a revised base case, the assessment of an additional option and the inclusion of a mandatory notification mechanism being applied across all four options.

The options were assessed against a ‘base case’ (or status quo situation) that incorporates the current Make Safe Assistance Package (which expires in August 2015). The four options provided are those as set out in this report, with the exception that Option 4 included an ongoing new ‘Make Safe Assistance Package’. All options were assessed assuming a 12 month assessment in this report through an extension of the free testing program, as recommended.

PwC identified that there were two main types of benefits that are expected to result from permanently removing LFAI in residential properties. These are:

• Health benefits from reduced risk of exposure to LFAI

• Avoided costs of making the affected properties safe under the base case – that is, the situation that would exist going forward in the absence of implementing any of the options (annual testing, costs of maintenance, replacing roofs, sealing pathways and tagging).

PwC estimated that there could be in the order of 7600 people who will live in properties with LFAI for any period in the future, using the medium estimate of 511 properties (PwC proximity model). Difficulty arose in the estimation of the incidence rate of mesothelioma in people exposed to asbestos through home renovation work, as the NSW Ministry of Health and PwC both noted there have been no specific studies in relation to renovations on LFAI homes. Based on a net incidence rate of developing mesothelioma or lung cancer of 3.6 in 100,000 people per annum, around 14 incidents of mesothelioma or lung cancer relating to LFAI homes in NSW could potentially occur over the next 80 years as a result of future exposure (in the absence of any intervention by the NSW Government). It is important to note that this figure was provided for illustrative purposes only as there is no incidence rate data currently available that relates specifically to LFAI exposure.

The avoidance of these incidences of mesothelioma would result in:

• Avoided deaths (estimated at the value of a statistical life)

• Improved quality of life (by delaying likely end of life disability)

• Reduced hospital and carer costs (by delaying the need for these services until a later end of life scenario).

The costs were divided into five broad categories: property purchase costs; demolition costs; sale of land/re building costs; program administration costs and other costs (including temporary accommodation, counselling and soft furnishings and/or porous materials).

The following table summarises in present value terms the outcome of PwC’s CBA analysis of the four options considered. Importantly, figures presented for the each of the options have been calculated on an assumed 511 affected properties, with varying levels of expected owner participation rates. For Options 1 and 2, it is assumed that owners of 75 per cent of the affected properties will opt into the program in the twelve months to August 2016. For Option 3, 50 per cent of affected properties are assumed to opt into the program. The reduced incentives in Option 4 mean that that around 35 per cent of affected properties are expected to join the program (either a new Make Safe program or voluntary purchase/demolition program).



Benefits (PV $m) $8.68 $8.68 $4.47 $2.65

Costs (PV $m) $246.05 $237.57 $164.72 $61.63

Net Benefits (NPV $m) -$237.36 -$228.89 -$160.26 -$58.97

BCR 0.035 0.037 0.027 0.043

The costs and health benefits of each option would change in a broadly linear manner with the estimated number of affected properties in the option.

Option 4 results in the lowest net costs, however it is unlikely to provide a long term solution as it is expected to result in significantly fewer affected houses being identified and demolished due to the reduced financial incentives (relative to other options). An owner that chooses demolition under this option would be significantly out of pocket as the NSW Government would provide a payment equivalent to around 25 per cent of house value. PwC estimated that home owners under this option would be, on average, ‘out of pocket’ by $236,000 if they rebuilt a similar house.

Options 1 and 2 have the highest costs, with Option 2 slightly lower because it avoids the increased uncertainty and costs to the NSW Government from holding land during the period of demolition and remediation.

The PwC analysis above considered only the more tangible health benefits and avoided costs under the options. PwC also identified non quantified benefits such as:

• Mental health benefits: residents may experience fear and stress relating to potential health issues from living in a LFAI house, including additional stress from the financial implications of owning a LFAI house

• Social isolation due to family and friends choosing not to visit due to perceived health risks

• Asbestos fibres from LFAI posing a risk to the broader community in the event of fire or natural disaster.

PwC identified that removing LFAI would not only bring about a ‘sense of relief’ to home owners and owners of neighbouring properties, but would also benefit tradespeople, emergency workers, other service providers and council workers (and their families). They would feel less concerned in the future that they may inadvertently enter a property that contains LFAI. PwC noted that these effects were difficult to estimate and had not been quantified in the report.

Conclusion

The Taskforce considered the CBA in its deliberations, and was informed by LAAs, technical experts, real estate agents, homeowners and other stakeholders before making a recommendation on the most cost effective voluntary purchase/demolition program. The Taskforce recognised the impact that LFAI had on residents/property owners: financial, social, as well as the practical consequences of living in or owning premises affected by LFAI.

The Taskforce also took into account other benefits and costs that cannot be quantified, in making its recommendations. For example, the Taskforce recognised the negative market response to prospective purchasers and renters, where affected premises become unsellable and unable to be rented once it was established that a premises contained LFAI. The onerous ongoing maintenance required to ensure that all pathways remain sealed, along with notification to visitors, tradespeople and emergency service workers, was also a consideration.

The Taskforce considered the potential impact of social isolation (real or self-imposed) upon individuals and families residing in affected premises. Individuals expressed concern about the health of their families, friends, visitors and care workers, along with the stigma associated with owning or living in affected premises as well as the potential for social dislocation as a result of moving premises.

The Taskforce acknowledges that a voluntary purchase/demolition program is not cost beneficial, but if the government wishes to proceed with a voluntary purchase/demolition option, combination of Options 1 and 2 is recommended.

RECOMMENDATION 1

The Taskforce recommends that, if the NSW Government decides to proceed with a purchase/demolition program in respect of identified premises confirmed to be affected by LFAI, then a combined voluntary purchase/demolition program is the most cost effective response, comprised of two options:

• Option 1 – NSW Government purchase of premises and land or

• Option 2 – NSW Government purchase of the premises only.


Chapter 5: Taskforce and program implementation

Summary

In recommending a combination of Option 1 (purchasing house and land) or Option 2 (only the house) in a voluntary purchase/demolition program, the Taskforce developed an evidence based approach to implementation, which would be achieved through the establishment of an Implementation Taskforce. The Implementation Taskforce would have oversight of the program deliverables, ensuring efficient and effective governance and risk management processes are established.

The voluntary purchase/demolition program is divided into the following four phases: Assistance, Purchase, Demolition and Sales. The processes and procedures associated with each of these phases is described below. A comprehensive Taskforce Implementation Project Plan has been developed.

Establishing an Implementation Taskforce

It is recommended that an Implementation Taskforce be established to oversee and implement any NSW Government voluntary purchase/demolition program. The Implementation Taskforce would, for the purposes of governance, be located within NSW Fair Trading.

Although the Taskforce noted that NSW Fair Trading does not carry out similar programs, NSW Fair Trading is considered the most suitable agency to oversee the Implementation Taskforce. They have an existing regional presence, as well as existing regulatory powers and experience in the issuing of enforcement notices. NSW Fair Trading also currently oversees a similar register in boarding houses and is the regulator of residential tenancies, home building and real estate agents, which provides some natural synergies.

The Taskforce has worked with NSW Fair Trading to develop estimated costs associated with implementation over a five year period (if required). The costs have been broken down as follows:

• NSW Fair Trading labour costs

• Corporate overheads (including communications, travel and accommodation)

• ICT recurring costs

• Service NSW assumed costs

• Capital cost of ICT (initial costs associated with establishment of a LFAI register).

NSW Fair Trading has made use of existing resources where available (accommodation at Parramatta), however it would be necessary to establish an office at Queanbeyan for a small number of staff that would be community contact officers.

RECOMMENDATION 2

The Taskforce recommends the NSW Government establish an Implementation Taskforce to oversee and implement a voluntary purchase/demolition program. The Implementation Taskforce should sit within the structure of NSW Fair Trading.

Implementation Taskforce governance

Governance arrangements for any voluntary purchase/demolition program will be critical to its success. Strong governance assists in managing risks to effective project implementation and delivery of desired outcomes. Community expectations for transparent, quality assured and effective program delivery would be supported by the governance framework.

The Royal Commission into the Home Insulation Program21 provided relevant and timely feedback to government on how a broad community socio-economic program should be established and implemented. The Commission identified several crucial factors where organisational and governance issues adversely affected the outcomes of the Home Insulation Program. These have been considered when recommending the design of this program.

The governance structure clearly establishes that overall accountability and control of the voluntary purchase/demolition program should sit with the Head of the Implementation Taskforce. To assist the Head of the Implementation Taskforce in these responsibilities, a governance structure would be established along with roles and responsibilities that are outlined in (Appendix 6).

21 Hangar, 2014


A LFAI Steering Committee (LFAI SC) would be established and chaired by the Head of the Implementation Taskforce. The LFAI SC would include representatives from Department of Premier & Cabinet, Treasury, NSW Fair Trading and members nominated by the Implementation Taskforce. The LFAI SC would:

1. Provide a forum for the Head of Implementation Taskforce to manage the voluntary purchase/demolition program through approvals and funding release across the phases of activities

2. Monitor effectiveness of risk controls, key milestone progress, value for money, community and stakeholder satisfaction and performance through reports prepared and provided by each of the proposed directors

3. Request and receive recommendations from responsible directors.

A detailed Project Plan has been developed which clearly articulates a range of key milestones that represent critical performance and reporting indicators. In addition to these key milestones, which relate to each of the phases, there are performance requirements that encompass all phases. These are the ‘Purchase Demolition Program’ performance measures that deal with the top tier risks and include client and community management, safety, reputation, confidence in the program and value for money. It is the Implementation Taskforce that owns the program performance responsibilities.

Risk management

At the program level, management of risk has been addressed in the Project Plan developed for the Implementation Taskforce. Political, economic and social risks have been identified and risk mitigation options identified. Once established, the Implementation Taskforce would deliver the recommended options and risk treatment plans for the overall voluntary purchase/demolition program risks, as well as those specifically associated with each phase of the voluntary purchase/demolition program.

The majority of the overall voluntary purchase/demolition program risks relate to funding, community engagement and participation, program implementation and oversight of policy considerations in the long term. High level risks and mitigation strategies have been developed to address these issues.

The risk management of individual phases of the voluntary purchase/demolition program (ie Assistance, Purchase, Demolish and Sales) have been discussed at a number of risk management workshops. The outcomes of the workshops have been documented and specifics such as who would take ownership of risks and their mitigation have been included in the voluntary purchase/demolition program’s overall project plan.

The four phases of the voluntary purchase/demolition program Phase 1 Phase 2 Phase 3 Phase 4

Assistance Purchase SalesDemolish

Assistance

The Assistance Phase of the voluntary purchase/demolition program consists of the initial sample testing and technical assessment for identification of affected premises and assessment of risk of remaining in the property for a 12 month period from the date of any announcement by the NSW Government. Once identified as an affected premises, the owner would be able to enter the voluntary purchase/demolition program to either have their premises (house or house and land) purchased by the Implementation Taskforce on behalf of the NSW Government. To be eligible for the voluntary purchase/demolition program, applicants would need to register for the free testing services within 12 month after the date of any announcement by the NSW Government (or at a different date that is publicised by the Minister with not less than three months’ notice).

Priority would be given to owners where a technical assessment has identified an unacceptable risk by remaining in the property. Owners who wish to stay in the property would be advised to undertake building works to make the property safe at their own cost.

Purchase

Residential premises that are identified as affected by LFAI would be the subject of an offer by the NSW Government to purchase that premises. This would be achieved through a voluntary program. The affected premises must be in NSW, have been identified through the LFAI sample testing service, which would require testing by a LAA and verification through a technical assessment. Historical properties identified in previous sample testing programs would also need to be verified to be included as a property affected by LFAI.


The voluntary purchase/demolition program has been designed to accommodate individual circumstances, understanding that every situation is different. The Taskforce has been informed by identified affected owners, that the majority will seek an early resolution through the sale of affected premises through either Option 1 or 2.

Based on consultation to date, the Taskforce expects that the take up rate by all applicants will be approximately 70 per cent (Option 1) and 30 per cent (Option 2). There may be some owners of units who do not want to sell (approximately 75 per cent of owners have indicated that they wish to sell). It is recommended that where owners agree to sell, these units are purchased as they become available.

The Implementation Taskforce would continue to provide advice to the NSW Government on regulatory options for intervention where eligible homeowners choose not to participate in the voluntary purchase/demolition program. Ultimately, however, the management of eligible homeowners who choose not to participate in the voluntary purchase/demolition program would be a policy matter for the NSW Government.

Acceptance of a voluntary purchase offer would be conditional on eligible owners granting a release to the NSW Government from any future legal action (with the exception of personal injury claims) in relation to the property.

Proposed eligibility/terms and conditions

• Applicants must be the owners of premises that, as at the closure of the program, have registered their property for testing

• A condition of accepting a voluntary purchase offer would be eligible owners granting a release to the NSW Government from any future legal action (with the exception of personal injury claims) in relation to the property

• Applications to participate in the voluntary purchase/demolition program would close 12 months after the date of any announcement by the NSW Government (or at a different date that is publicised by the Minister with not less than three months’ notice)

• All affected premises would be valued as at the date of the announcement of the voluntary purchase/demolition program regardless of when the purchase actually occurs

• The Taskforce considered the issue of ‘missed premises’ being identified after the closure of the program (12 months from the date of any announcement or a different date as published by the Minister). The Taskforce divided these premises into different categories to ensure that they would be dealt with appropriately:

The Taskforce would write to all owners of premises in the 26 LGAs, which are believed to have been built before 1980 to advise them of the voluntary purchase/demolition program. Owners in this group would have 12 months to register for testing. Eligible owners whose premises are positively identified as containing LFAI would be invited to take part in the voluntary purchase/demolition program.

After the 12 months of the testing, owners who do not register for testing shall be responsible for all asbestos removal, demolition and remediation costs. If they are privately tested at a later date by a LAA and test positive, then these premises would remain on the Register and have an identifying tag placed in the electrical meter box

Owners of premises outside of the identified 26 LGAs are not eligible for government testing. However, if these owners have their property privately tested by a LAA during the 12 month period and it is positively identified as containing LFAI, then these premises would be eligible to participate in the voluntary purchase/demolition program and the cost of the test would be refunded

In addition, those owners outside the 26 LGAs who have their premises identified as containing LFAI after the closure of the program, would be treated as an eligible owner under the voluntary purchase/demolition program

• Where an affected property has been sold between 19 December 2014 and the date of the voluntary purchase/demolition program announcement, the purchase offer under this program would be at the price that the property was purchased at as set out in the signed sales contracts. No valuation process would occur on these premises. Should it be required, the affected owner would be expected to provide the implementation Taskforce with a statutory declaration that the contract for sale has been rescinded, prior to any payments being made

• The NSW Government would not be responsible for the reimbursement of any asbestos removal or demolition costs relating to an affected premises prior to 19 December 2014

• Blocks of land that had homes on them previously affected by LFAI, which have been completely demolished prior to 19 December 2014, are not considered to be an affected premises for the purposes of the proposed voluntary purchase/demolition program


• Affected premises that have been renovated or extended but retain some element of the original building are, for the purpose of the voluntary purchase/demolition program, to be considered as an affected premises

• In the event eligible owners, who have already taken part in the Make Safe Assistance Package, decide to remain in their affected premises in the short to medium term pending demolition, they would continue to be eligible for annual technical inspections, however the cost of any repairs or additional sealing of pathways would be at their own expense

• In the event that, eligible owners identified after the date of any NSW Government announcement, decide to remain in their affected premises in the short to medium term pending demolition, would be required to be responsible for the costs of any repairs or sealing of exposure pathways

• Eligible owners whose premises have been positively identified (through historical records or the current testing program) would be prioritised in the voluntary purchase/demolition program. However, if owners in this category elect not to participate in the voluntary purchase/demolition program they would be responsible for all asbestos removal, demolition and remediation costs, would remain on the LFAI Register and have an identifying tag placed in the electrical meter box

• Premises privately demolished between 19 December 2014 and the date of the announcement of the voluntary purchase/demolition program would be entitled to a reimbursement for the LFAI removal, remediation and demolition costs. The reimbursement would include the market valuation of the demolished premises, not including the land

• If the owner elects to relocate immediately, the negotiations for the purchase of the property commence, and they would be eligible for up to $10,000 plus $2,000 per child relocation assistance funding (to a maximum of two children).

Staged approach

Priority under the voluntary purchase/demolition program should be extended to applications from owners whose premises have been identified either through historical records or through the initial round of free sample testing that was offered by the NSW Government (ie those registered between 15 August 2014 and date of announcement of a voluntary purchase/demolition program).

Priority should also extend to eligible owners where there is a specific urgency associated with the settlement (ie medical condition or illness or incomplete conveyance processes).

The decision as to when the eligible owner chooses to apply to participate under the voluntary purchase/demolition program is a decision for the eligible owner, bearing in mind the cut-off date for the applications to be lodged. Applications, where practicable, would be processed in the order that they are received by the Taskforce Implementation Team, except in relation to those applications that would receive priority under the above principles.

A comprehensive breakdown of the processes and procedures associated with each step/process will be available prior to the commencement of the voluntary purchase/demolition program. These steps/processes are summarised below.

Valuation process

The NSW Government would offer to purchase LFAI affected premises at market price as at the date of the announcement of the program. The affected premises would be valued as if it were free of LFAI. Where renovations/repairs have not been completed by the date of the announcement of the voluntary purchase/demolition program, any voluntary purchase offer would be determined by the independent valuation(s), having regard to the amount of money already spent on these renovations/repairs. Only one valuation process can be undertaken for each affected premises in an attempt to establish the market value. This would attempt to limit any opportunities for speculation occurring on potential future property movements.

Two valuations would be sought from a panel of independent valuers, nominated by the Australian Property Institute (API). The average of the two valuations would be the voluntary purchase offer. The cost of the valuations would be borne by the Implementation Taskforce. The voluntary purchase offer would remain open for acceptance for three months after the draft surrender deed is received by the eligible owner.

Disputed valuations

Where the eligible owner chooses to dispute an average valuation, they would have the option to seek a review, at their own cost through an independent adjudicator appointed by the API. The NSW Government would also have the right to request such a review, should the valuations vary by more than 10 per cent. If this process is undertaken, both parties agree to accept and be bound by the outcome.


Legal advice ($1,000)

It is recommended that eligible owners obtain independent legal advice in respect to the valuations and sale of the affected premises. The NSW Government would provide $1,000 (including GST) separate to the purchase amount to allow the eligible owner to obtain legal advice with regard to the sale of the premises. Normal conveyancing processes and considerations would apply to all transactions (rates/utilities).

Stamp Duty – Office of State Revenue inquiries

The Office of State Revenue has been consulted about Stamp Duty implications of a voluntary purchase/demolition proposal of properties affected by LFAI by the NSW Government.

Eligible homeowners who transfer an affected premises to the NSW Government under the voluntary purchase/demolition program would be entitled to a stamp duty concession on the purchase of a residential property in NSW.

The concession would be capped at the amount of the stamp duty that would have been payable on the repurchase of the affected home under the voluntary purchase/demolition program. The amount of the duty on the property purchased by the eligible homeowner would be reduced by the repurchase duty concession amount. No refund is to be available if the duty amount for the purchased property is less than what would have been payable on the affected home.

The proposed restrictions are:

1. The concession would only be available where both the affected property and the purchased property are residential properties in NSW

2. Eligible persons must be the owners of affected homes prior to the announcement of the voluntary purchase/demolition program, or since that date, became the owner as a beneficiary of a deceased estate or under an order or agreement under the Family Law Act 1975 (Commonwealth)

3. Only one concession would be available per affected home. A person applying for the concession would require consent of all other owners to use the concession.

Relocation assistance

The Taskforce recommends that the NSW Government provides relocation financial assistance for affected owner-occupiers and tenants under a voluntary purchase/demolition program.

The financial assistance would be provided to owner-occupier and tenants named on the residential lease and residing in the affected premises as at the date of the announcement of any voluntary purchase/demolition program. The relocation assistance would be provided as follows:

• Owner/occupier: To a maximum amount of $10,000 plus an additional $2,000 per dependent child living in an affected premises (to a maximum of two children)

• Tenant/s: To a maximum of $1,000 per tenant named on the residential lease.

The relocation assistance should be paid only after the affected premise is sold to The Implementation Taskforce or vacated by a tenant and only one payment should be available per affected premises.

Financial assistance would be available while the voluntary purchase/demolition program is open. The relocation financial assistance would not be available to owners not residing in the premises at the date of the announcement of any voluntary purchase/demolition program.

The relocation assistance amount would be less any amounts already paid as part of the temporary or emergency accommodation assistance.

Home contents

The Taskforce has resolved that there is no practical way to certify that household contents are not contaminated. The Taskforce encourages a measured and sensible approach to the management of contents and household goods from affected premises by owners. It is considered that most household contents can be removed from affected premises, provided the contents are not taken from known contaminated areas. NSW Ministry of Health is coordinating guidance material to assist affected residents to make decisions about house hold contents.

The NSW Government should not be financially responsible for the replacement of home contents from affected premises. The Implementation Taskforce would need to develop a decision making approach in respect to home contents into the future.


Additional assistance

The Taskforce has already approached the ATO to seek their assistance on behalf of affected owners. This includes the seeking of a private ruling in relation to the application of Capital Gains Tax to properties surrendered under a voluntary purchase/demolition program.

The Taskforce has approached utility providers seeking their assistance for affected owners. An additional request should be made for fee waivers for disconnection or reconnection of services for eligible owners under the voluntary purchase/demolition program.

The Taskforce has approached financial institutions on behalf of affected owners seeking their assistance in a similar package to that offered to ACT affected owners. Most of the major banks and some credit unions have indicated a willingness to extend the arrangements afforded to affected ACT residents to affected NSW residents. An additional request should be made to waive early repayment fees on fixed mortgages and other bank charges. The NSW Government should not refund these fees or charges.

Demolition and block remediation

(Early Tender Involvement procurement approach and Preliminary Environmental Planning overview)

The Taskforce’s proposed approach to the removal of LFAI, demolition and remediation of affected premises has been designed to minimise the costs to the NSW Government whilst ensuring compliance with legislation, regulations and policies. Unlike the ACT demolition process, there is a need to firstly remove the LFAI from the ceiling area prior to demolition. Expert advice has been provided to the Taskforce that the capacity of the asbestos removal and demolition industries currently exists in NSW to participate in such a program.

The timing of completion of the demolition process is dependent on the number of identified affected premises as well as when they become known. It is desirable that affected premises be demolished as expeditiously and as safely as possible. Any timeline development is dependent on the tender process and response by affected owners on taking up the purchase offer.

The Taskforce undertook two processes to ensure an understanding of the methodologies and processes involved with containment of projected associated costs. The processes were the ETI and PEP overview.

The ETI procurement approach continues a progressive shift in NSW Government contracting from the traditional environment to a more collaborative approach with improved management of project uncertainty.

ETI promotes the participation of tenderers in finalising tender documents and allocating project risk. The process benefits from the joint expertise brought to the discussion of the project during the allocation of risk and finalisation of tender documents. The contractor has a better understanding of the project from inception and the collaborative relationship established during the ETI process is maintained through the ongoing, open communication required under the NSW Government General Conditions of Contract (GC21) guidelines.

The Taskforce, through NSW Public Works, has engaged in the ETI process for the demolition of affected premises, with their report available in early June 2015. The ETI process has identified a number of innovative and cost effective strategies already. Five companies were invited to two workshops to identify innovative cost effective demolition solutions that resulted in a reduction of demolition timeframes through the introduction of innovative technology. Cost effective strategies identified include ‘bundling’ demolition sites together to reduce overheads and travel costs, as well as consideration of the use of the ACT tipping facilities. The EPA confirmed that the waste levy ($120/tonne in Metropolitan areas) would be waived by the EPA for LFAI waste resulting from any voluntary purchase/demolition program, reducing the overall charge by landfill operators. EPA also gave agreement on cost effective transport procedures for waste disposal and confirmed that residential LFAI properties managed by the Taskforce will not be considered as contaminated sites, thereby reducing costs to the clean-up of asbestos only.

The Taskforce also engaged the Environmental Planning and Assessment section within NSW Public Works to conduct a PEP overview. This process involved identifying and reviewing environmental planning instruments that would apply to a voluntary purchase/demolition program, including the Local Environmental Plan, State Environmental Planning Policies, Development Control Plans, and relevant policies and guidelines. Identifying the planning approval pathway for the project included an assessment as to whether the works are likely to be assessed under Part 4, 5 or 5.1 of the Environmental Planning and Assessment Act 1979. Additionally, it involved a desktop review of potential environmental issues associated with the demolition and remediation works based on the site characteristics and the nature (scale and scope) of a voluntary purchase/demolition program. Their report was provided to the Taskforce to enable informed decisions to be made as follows:


• The removal of LFAI from the affected premises would be conducted by a Class A LAR. An asbestos removal control plan, safe work method statements and oversight by a LAA would be developed for each of the affected premises. Once this has occurred, the remaining structure would be demolished in a controlled sequence using appropriate dust suppression to ensure that any remaining fibres not bonded to the structure of the premises are not released into the air. An independent LAA would then undertake air monitoring during the asbestos removal works and demolition works to ensure the control measures implemented are effective.

• The ETI process will enable the NSW Government to establish effective approaches to demolition of affected premises. The Taskforce will utilise the learnings from the ACT pilot demolition program (scheduled to occur mid-2015) and its own pilot demolition program to ensure cost efficient methodologies are adopted.

• Once affected premises have been demolished, the contaminated soil from under the property and an area surrounding it would be removed. At this stage it is proposed to remove approximately 100mm in depth of soil; however, this would be based on testing for contamination. The block would then be remediated with clean fill to the natural ground level. Independent validation by an LAA would be undertaken to ensure soil at the site is not contaminated with asbestos and a clearance certificate would be issued by an LAA independent of the demolition company.

• WorkCover NSW is required to be notified of licensed asbestos removal work and have agreed to waive the five day waiting period before work commences. Persons in the immediate vicinity of the asbestos removal and demolition would be notified prior to the asbestos removal and demolition occurring, as required by legislation.

• Councils will be informed prior to the demolition so that they are prepared in the event of any complaints or enquiries to council about the demolition occurring.

Waste disposal

Friable asbestos and contaminated waste would be properly disposed of by a Class A LAR. Demolition waste would be disposed of in an appropriately equipped and licensed vehicle as asbestos contaminated waste at a facility permitted to accept asbestos waste. This work would be done in accordance with established industry standards.

Gate prices for asbestos (or any other waste) are a commercial matter determined by the landfill operator. The NSW Government does not own any landfills, so the price charged is beyond the NSW Government’s direct control. Asbestos disposal can be expensive. However, the waste levy ($120/tonne in Metro areas) can and would be waived by the EPA for LFAI, and this would reduce the overall charge by landfill operators. EPA also gave agreement on cost effective transport procedures for waste disposal and agreement that sites will not be treated as contaminated sites, reducing costs to clean up asbestos only.

Initial discussions with the ACT have included the opportunity for NSW to use the waste facilities at Belconnen (ACT). This option would need to be further explored by the Implementation Taskforce, however could result in significant cost savings for the disposal of LFAI from the affected premises.

Owners requesting to stay in affected premises (short to medium term)

The Taskforce recognises and understands that some owners (and families) may choose to remain in affected premises in the short to medium term pending demolition for a number of reasons (ie if they are elderly, children’s schooling or work arrangements). Detailed advice, based on a the technical assessment would be provided in relation to the scope of works necessary to minimise the risk of entry of LFAI fibres into the habitable areas of the premises. In short, this would involve the sealing of known pathways and environmental cleaning along with significant ongoing vigilance, testing, register and tagging. The Taskforce is of the view that the obligations listed above should be a mandatory component of participating in the voluntary purchase/demolition program for any properties with meaningful exposure pathways.

As these premises are to be demolished, the Taskforce agrees that public monies should not be spent on costly building works on these homes (eg exposure pathway sealing and/or environmental cleaning) prior to demolition. Should the owner choose to remain in their home in the short to medium term, they would bear the costs associated with any building or remediation works associated with staying.

To address liquidity issues for the property owner, the NSW Government may consider meeting initial costs of any building and remediation works associated with staying and deduct this amount from the final sale price.

Any decision to allow owners to remain until the settlement date of the voluntary purchase/demolition program would be informed by advice from a LAA (testing results) and NSW Ministry of Health. It would also be subject to completion and certification of any further remediation measures.


Resale of remediated blocks

The resale of remediated blocks would only occur under Option 1. That is where the eligible owner has sold their house and land under the voluntary purchase/demolition program. At the time of sale, the owner would have indicated that they do not wish to repurchase the remediated block. Post remediation, if an affected owner wishes to repurchase the land, they would have that option through the normal purchase process at market price.

In the majority of known affected premises, the opportunity to rezone the land does not currently exist, unlike in the ACT. In a small number of cases, opportunities for medium density social housing may be available or consideration may be given to subdivision or consolidation of remediated blocks in consultation with council.

Units

The voluntary purchase/demolition program extends to units. There is currently one unit complex of 38 units, with individual owners, and one complex of four units with at least two affected units owned by the same person. The Implementation Taskforce would need to deal individually with each affected owner, but is likely to pursue a normal conveyancing process.

Note: Option 2 would not be available to unit owners of the complex of 38 units as these are owned by individual owners. Option 2 would be available to the one complex of two units as they are owned by the same persons.

The Taskforce recommends that units be purchased as they become available. There is currently the ability to terminate strata schemes by application to the Register General, Land and Property Information. The application must have the unanimous support and be signed by each lot owner and registered mortgagee. Notably, the PwC report only counted unit blocks as one premises and the actual number of affected unit blocks is unknown.

Implementation timeframe (indicative):

The implementation timeframe is set out below along with variables that will affect timings:

2015 Date Activity

July Government announcement

July Voluntary purchase/demolition program announcement.

September Purchase/demolition offer opens

September Valuations and properties acquired

September Tender process demolition phase

September Demolition contractor appointed

October Pilot demolition program commences

November Ongoing demolition and property resale program

12 months from announcement date Voluntary purchase/demolition program closes

There are a number of variables (other than the number of properties participating in the program) that may impact the time needed to complete all demolitions including:

• The capacity of the LAAs, LARs and licensed demolition companies to undertake the works

• The impact that the ACT Response Taskforce program may have on the capacity of industry to undertake demolition work

• Locations of licensed waste disposal facilities to dispose of contaminated asbestos waste

• The uptake of the purchase program for affected premises, and

• Finalisation of procurement processes and methodological approaches.

The Taskforce has attempted to minimise this impact through the ETI process as outlined above.


The expert advice received by the Taskforce is that the NSW industry currently has the capacity to adequately perform these tasks within the required legislation. Should the NSW Government support a voluntary purchase/demolition program, it is anticipated that there would be an initial ‘ramp-up’ period by those already identified as owners of affected premises, who have indicated to the Taskforce that they wish to dispose of their properties quickly.

RECOMMENDATION 3

The Taskforce recommends that owners who participate in a voluntary purchase/demolition program be extended the following considerations:

• Stamp duty concession on the purchase of any future property in NSW

• $1,000 for the provision of independent legal advice

• Relocation assistance allowance to a maximum of $10,000 per household plus an additional $2,000 per dependent child (to a maximum of two children) for owner/occupiers, or $1,000 for tenants named on the lease of an affected property

• $1,000 for the replacement of soft furnishings and/or porous materials

• $850 for counselling services and mental health support.

RECOMMENDATION 4

The Taskforce recommends extending the current free sample testing program in the 26 LGAs for an additional 12 months (or at a different date that is publicised by the Minister with not less than three months’ notice) to commence after the date of any announcement of a voluntary purchase/demolition program.


Chapter 6: Identifying affected properties in the future

Summary

The implementation of any voluntary purchase/demolition program will require additional considerations to ensure that it achieves its objectives. The Taskforce recommends the establishment of a LFAI Register, the tagging of known affected properties, amendments to section 149 planning certificates, along with mandatory disclosures involving property transactions and tenancy. It is recommended that such an approach continue to be taken and remain a priority as part of the Government’s broader approach to community engagement about asbestos.

Having considered background documentation and following consultation with the ACT Response Taskforce, the identification of affected properties in the future appears to be essential to managing the risks posed by LFAI in the long term. The Taskforce undertook a number of workshops to consider:

• The most effective means of identifying affected residential properties, as far as reasonably practicable

• How to safeguard the health and safety of occupants, trades persons and emergency personnel in relation to LFAI affected properties

• How to improve the likelihood of meaningful disclosure of LFAI in residential properties for potential purchasers or tenants (current tenants as well as tenants entering new agreements in the future).

Establishment of a public LFAI Register

The Taskforce recommends the establishment of a central repository, or a ‘Loose-Fill Asbestos Insulation Register’ (the LFAI Register), to provide a publically accessible ‘single source of truth’ in relation to establishing whether or not a property is affected by LFAI. The creation of a LFAI Register would serve to facilitate the implementation of proactive disclosures to protect purchasers, tenants, trades people and emergency services workers. The creation of a LFAI Register, which can be made available to emergency services, would also provide added protection when responding to emergencies such as fires, where access to a tag in an electrical box is not possible.

There are a number of existing registers administered by various agencies that provide examples of administrative arrangements, including:

• Swimming pool register – the Swimming Pools Act 1992 requires the Director General of the Office of Local Government to keep and administer a Register of Swimming Pools, including information such as the address, the type of property, date of construction and if there has been substantial modification or rebuilding.

• Contaminated land register – the Contaminated Land Management Act 1997 requires the Environment Protection Authority to maintain a publicly available register of significantly contaminated sites and to notify local authorities of certain matters relating to land contaminated for inclusion on section 149 certificates.

• Various registers administered by Work Cover NSW in relation to WHS requirements, including a register of Asbestos Removal and Assessor Training organisations.

It is noted that none of these existing registers appear to be suitable in their current form for the purposes of the proposed LFAI Register.

The Taskforce recommends the establishment of a LFAI Register, through legislation, where properties affected by LFAI are able to be recorded and accessed by emergency service providers, tradespeople and tenants. The Taskforce also recommends that the LFAI Register be utilised for the recording of premises where ‘clearance certificates’ have been provided confirming that, at that point in time, the premises were tested by a LAA and the presence of LFAI was not detected. The Taskforce envisages that the LFAI Register would be available online similar to the swimming pools register. The LFAI Register would also only contain the address of the premises, not owner details.

The Taskforce recommends that the LFAI Register be maintained by NSW Fair Trading, as they have previously implemented similar registers and they also have enforcement provisions already in existence. Issues around privacy versus safety would need to be fully explored. Additionally, specific criteria for the inclusion on or the removal of properties off the LFAI Register would also need to be developed.

RECOMMENDATION 5

The Taskforce recommends the NSW Government enact legislation to establish a publically available LFAI Register, to be administered and maintained by NSW Fair Trading. The LFAI Register is intended to be a ‘single source of truth’ to identify and record:

• NSW premises where the presence of LFAI has been confirmed

• NSW premises that have undergone testing and confirmed to be unaffected by LFAI

• NSW property and/or premises, previously identified as affected by LFAI, which have been remediated and confirmed by way of a ‘clearance certificate’.


Emergency services

The Taskforce met with all emergency services to evaluate the present system of communicating an affected premises and ensuring the introduction of robust systems into the future for the management of this information. The Taskforce worked with NSW Ambulance to ensure that any system of notification of a LFAI premises to Ambulance officers did not delay response times.

The emergency services consulted were:

• NSW Police

• NSW State Emergency Service

• NSW Rural Fire Service

• NSW Ambulance

• Fire and Rescue NSW.

The Taskforce considers that in the event of emergencies such as fires, it is advisable for attending emergency services personnel to have knowledge in advance of whether or not premises are affected by LFAI. Such advanced knowledge will influence how the emergency is managed and what resources are required.

RECOMMENDATION 6

The Taskforce recommends that a Memorandum of Understanding be developed to provide the details of LFAI affected premises to emergency services providers, as recorded on the LFAI Register.

Mandatory tagging

The NSW Government has announced in principle support for the ‘tagging’ or labelling of residential properties that are known to be affected by LFAI. The ‘tagging’ of properties is seen as essential to ensure the health and safety of tradespeople, maintenance workers, service providers and emergency services that may have reason to access the roof cavity or other high risk areas (eg sub floors) of affected premises. It is accepted that these workers are likely to be at higher risk of exposure to LFAI because of their occupations.

Tagging requires the placement of a government-approved label on or inside the electrical meter box. Current participants in the Make Safe Assistance Package sign a consent form agreeing to tag their properties. However, some participants have advised that they do not intend to comply. Presently there is no enforcement mechanism, other than withdrawal from the program.

Mandated tagging is achieved in the ACT through their Dangerous Substances (General) Regulation 2004, with considerable fines for failing to comply. NSW does not have an equivalent and there does not appear to be any ‘natural’ fit in existing NSW legislation. As noted previously, WHS legislation in NSW applies only to workplaces, except in the narrowest of circumstances. Any extension of WHS legislation to private premises would need national agreement through the national model work health and safety framework.

The Taskforce considered that strict guidelines are necessary to identify under what circumstances a property should be tagged and likewise, protocols for removing the requirement to tag. There are potentially negative outcomes from tagging properties (eg financial loss, social isolation, etc.).

The Taskforce recommends that tagging should only be undertaken if the property in question has been identified, as a material fact, as being affected by LFAI and meets the criteria for inclusion on the LFAI Register. The tagging of affected properties would still be required if an affected owner chose not to participate in the voluntary purchase/demolition program.

RECOMMENDATION 7

The Taskforce recommends the NSW Government enact legislation to establish mandatory hazard labelling (or ‘tagging’) of confirmed LFAI affected premises to ensure the health and safety of tradespeople, maintenance workers, service providers and emergency service workers. NSW Fair Trading would have administrative responsibility for implementing hazard labelling, if supported by the NSW Government.


Proactive disclosure

Amendment to section 149(2) certificates

A section 149(2) certificate is required by the provisions of the Conveyancing Act 1919 to be attached to a contract of sale. The information listed on a 149(2) certificate is prescribed by Schedule 4 to the Environmental Planning and Assessment Regulation 2000 and discloses factual matters, such as the applicable environmental planning instruments, zoning, whether the land is affected by natural hazards that may restrict development such as land subsidence, flooding, bushfire, or whether the land is subject to a road widening order.

The Taskforce recommends that amendments be made to section 149(2) Certificates that, where it is confirmed that LFAI is present in a premises, this fact should be included in the prescribed matters to be disclosed. The premises being known to contain LFAI would be facilitated through the implementation of the LFAI Register, as noted previously.

RECOMMENDATION 8

The Taskforce recommends legislative amendments to the Environmental Planning and Assessment Regulation 2000 to insert LFAI as a matter to be listed on a section 149(2) planning certificate. The Department of Planning and Environment would have responsibility for implementing this legislative change, if supported by the NSW Government.

Section 149(5) Planning Certificates

A section 149(5) certificate is not a mandatory document to be attached to the contract of sale, but is provided by councils and available with an additional fee (up to $80) to an applicant. The information to be listed on a section 149(5) certificate is not prescribed, and the Environmental Planning and Assessment Act 1979 provides that a council may provide advice on other relevant matters affecting the land of which it may be aware.

Currently, a council may include information regarding LFAI in a home (where known) when issuing a certificate for that property, or may choose to include a generic statement regarding the possibility of LFAI in pre-1980s homes on all section 149(5) certificates issued. A consideration for a council to provide such information would be the reliability of the source of their information.

RECOMMENDATION 9

The Taskforce recommends that the Department of Planning and Environment and the Office of Local Government work with local government to develop generic wording that can be used regarding the possibility of LFAI in pre-1980 homes in identified LGAs, for inclusion in a section 149(5) planning certificate.

Property transactions and tenancy

The Taskforce is concerned that affected premises can presently be offered for sale or rent without any disclosure the premises are affected by LFAI. A number of workshops were undertaken involving various agencies to determine the best avenues to achieve pro-active disclosure by property owners.

The establishment of a LFAI Register would serve to facilitate proactive disclosures in known LFAI affected premises. A key challenge is how to identify currently unknown properties into the future. The Taskforce agreed other mechanisms were needed to ensure that potential purchasers or tenants could make informed decisions in relation to LFAI affected properties. It was also considered that mandatory notifications, at the point of sale and to tenants, may provide homeowners with the additional incentive to have their premises tested.

Mandatory notification (at point-of-sale)

One of the priorities of the Taskforce was to consider options for identifying and preventing the sale of premises that contain LFAI into the future. The recommended changes to the section 149 planning certificates would assist in identifying those premises where LFAI has already been confirmed; however, it provides no incentive for property owners to register for testing. The Taskforce was seeking a form of mandatory notification mechanism/s that would act as an incentive for a home owner to undertake testing at the point-of-sale, in line with the NSW Government’s support for disclosure of hazard information.22

The Taskforce considered mechanisms that may be available in the conveyancing process and the requirements for vendor disclosure under the Conveyancing Act 1919 to:

• Prevent people unknowingly purchasing currently unidentified LFAI affected properties

• Identify affected properties in the future.

22 http://loosefillasbestos.nsw.gov.au/resources/hot-topics/make-safe-assistance-package/

http://www.loosefillasbestos.nsw.gov.au/resources/hot-topics/make-safe-assistance-package/


Once mandatory, purchasers would have this information available to them to assist in making an informed decision in relation to the purchase. The Taskforce discussed whether or not such mechanism/s could be implemented in the identified ‘hotspots’; however, there was not consensus reached on this point and expert advice was sought.

To assist the Taskforce, representatives from Land and Property Information provided detailed advice in respect of five possible options to improve achieve mandatory notification under the conveyancing system. Land and Property Information administers the Conveyancing Act 1919 and its associated Regulations. Land and Property Information regularly consults with representatives from the property industry, including the Law Society of NSW, Real Estate Institute of NSW, The Australian Institute of Conveyancers and NSW Fair Trading to ensure the conveyancing process operates in harmony with the objectives of the legislation.

The primary objective of vendor disclosure is to balance the rights of both the vendor and purchaser by setting the foundation for a fair transaction. To date, feedback from the industry suggests that the conveyancing process has been working well for over 25 years, is well known by the industry and results in relatively little litigation.

LPI presented five possible methods to bring awareness to the both the vendor and purchaser of the possible presence of LFAI during the conveyancing process (refer to Appendix 7 for a summary of the five options proposed by LPI).

LPI emphasised that any of the proposed changes to the conveyancing system would require extensive stakeholder engagement because what is proposed will apply to all Contracts for Sale (in excess of 200,000 per annum). Any legislative changes would be subject to the required regulatory impact assessments and stakeholders may consider these options to be a disproportionate regulatory response.

Conclusion

A consensus decision could not be reached by the Taskforce in relation to mandatory notification at the point-of-sale; however, the majority of members supported two of the five options outlined by LPI:

• Option 1: a standard LFAI warning notice as a prescribed document; and

• Option 5: a warranty as part of the Contract of Sale.

The Taskforce remains concerned, however, that there has been insufficient stakeholder engagement in relation to all of the proposed options. Additionally, the Taskforce noted that, if a voluntary purchase/demolition program is supported by the NSW Government, it may prove to be the most effective incentive to identify LFAI affected premises into the future. Amending the Conveyancing Act 1919, may be premature at this time. The Taskforce therefore recommends the NSW Government consider amending the Conveyancing Act 1919 as outlined above after further consultation with the Implementation Taskforce and Land and Property Information.

The Taskforce was unanimous in their support for improving disclosure mechanisms for current and future tenants. A number of documents, outlined below, were identified by NSW Fair Trading that could be amended to require the disclosure of LFAI in rental premises and increase the protections for current and potential tenants:

• An amended ‘new tenant checklist’

• The inclusion of LFAI as a material fact under the Residential Tenancies Regulation 2010

• Disclosure of LFAI information in standard residential tenancy agreement.

It is considered that these options, in combination with recommended changes to the section 149 planning certificate may create a market incentive for property owners to have their premises tested for LFAI, and for purchasers to look for confirmation that a pre-1980s home is not affected by LFAI. Additionally, it will create greater awareness of due diligence obligations for property purchasers and disclosure obligations for vendors, their agents and advisors.


RECOMMENDATION 10

The Taskforce recommends that the NSW Government consider making legislative amendments to the Conveyancing Act 1919 and the Conveyancing (Sale of Land) Regulation 2010 to:

• Introduce a standard LFAI warning notice, as a Prescribed Document on a Contract for Sale, to alert purchasers of the risks associated with LFAI in pre-1980s premises in areas known to have LFAI affected premises

• Require a vendor to warrant, at the time of sale of the property, that no premises on the land contain LFAI, unless it is specifically disclosed in the contract.

Land and Property Information would have responsibility for implementing these legislative changes, in consultation with the Implementation Taskforce and relevant stakeholders, if supported by the NSW Government.

RECOMMENDATION 11

The Taskforce recommends further amendments to the following instruments to protect current/future tenants living in premises affected by LFAI:

• Amend the ‘new tenant checklist’ under the Residential Tenancies Act 2010 to specifically include LFAI

• Amend clause 7 of the Residential Tenancies Regulation 2010 to add an additional subclause, which specifically notes LFAI as a material fact

• Amend the standard residential tenancy agreement (Residential Tenancies Regulation 2010 ) to require disclosure during a tenancy if LFAI is discovered.


RECOMMENDATION 12

The Taskforce recommends amending the Misrepresentation Guidelines to note LFAI as a material fact for the purposes of section 52 of the Property, Stock and Business Agents Act 2002 to ensure disclosure of LFAI in affected properties by real estate agents.


Mandatory reporting by Licensed Asbestos Assessors

The Taskforce recognised the need to capture the results of positive tests for LFAI for the purposes of maintaining an accurate LFAI register. It is noted that property owners participating in the current Make Safe Assistance Package consent to their test results being communicated to relevant government departments for health and safety reasons (eg WorkCover and emergency services). It is recommended that similar consent arrangements be implemented under the terms and conditions of a voluntary purchase/demolition program.

However, there remains a significant gap in capturing the test results if home owners undertake testing privately, outside of any government program. Home owners can engage LAAs or occupational hygienists to undertake such testing and there is no obligation to report the result. Potentially, there could be positive LFAI tests that are not captured in the proposed LFAI Register. There are also no guidelines to ensure robust testing protocols if home owners seek to undertake testing privately (eg must be tested at a NATA accredited lab).

The Taskforce considers that amending the conditions of LAA licenses may provide an avenue to address this gap. It is recognised that this would be a complex consultation process with LAAs and occupational hygienists. The WHS legislation is nationally harmonised and any change may require consideration by Safe Work Australia and other jurisdictions. The review of the WHS regulation is due to commence in 2015 and WorkCover NSW has undertaken to raise this issue in the review.


Chapter 7: Additional Taskforce considerations

Summary

The Taskforce considered at length the implementation and impact of mandatory testing for properties built before 1980 in areas known to have LFAI affected premises.

The Taskforce considered the impact of such a requirement, enforcement and penalties, and incentives to owners. The Taskforce does not support mandatory testing at this time. It is seen as extremely costly, with little return in terms of identifying LFAI affected properties. Extending the current voluntary testing program is likely to identify further properties and provide additional information to enable the Government to reconsider this proposal in the future.

Other areas of inquiry appeared to exceed the scope of the Taskforce, specifically the broader issues relating to asbestos training, community awareness and disposal of asbestos. The Taskforce is of the view that the HACA is well placed to progress these matters.

Mandatory testing

A mandatory testing program for premises built before 1980 in areas which are known or likely to be affected by LFAI was a recommendation of the Parliamentary JSC. Currently, there is no known legislative mechanism to mandate such testing and therefore, it would require new legislation or amendment to existing legislation to implement. The Taskforce is concerned about a number of implications associated with mandatory testing.

Targeting selected areas

Restricting the mandated testing to certain geographic areas (ie those areas where the presence for LFAI has been confirmed) could be seen by property owners in those areas as grossly inequitable, given the potential adverse effect on the value of their property and associated social disruption that may be associated with a property being identified as affected by LFAI.

Enforcement and penalties

The offer of free sample testing and the Make Safe Assistance Package since 15 August 2014 has not provided sufficient incentives to motivate property owners of private residences built prior to 1980 to volunteer to have their properties tested. It is considered that a mandated program, with the required costly enforcement and penalty provisions, may prove to have unintended consequences as part of enforcing compliance. It has been demonstrated from the ACT experience to date that there will be a number of affected residents who will refuse to cooperate with any testing or notification regime.

Incentives

Information collected as part of a survey of LAAs currently undertaking the testing confirms that many property owners participating in the sample testing service are aware that their home is not affected by LFAI, but wanted some form of documentation to prove their home is free of LFAI. The Taskforce also has evidence of property owners withdrawing from participation in the Make Safe Assistance Package, fearing a reduction in property values and/or social disruption. If the goal is to identify affected properties in the future, other mechanisms should be considered, such as changes to the conveyancing system outlined in Chapter 6.

Costs

Estimating costs for mandatory testing is difficult as there is no dataset readily available to ascertain the number of premises built prior to 1980 with any accuracy. As noted earlier, there is significant variation in the estimates of pre-1980s premises councils provided and PwC estimates.

The following table provides an indication of costs for the testing component only, based on the estimates of pre-1980 homes provided by both PwC and five LGAs where LFAI has been confirmed to be present. An average cost for testing was determined to be $348.14, comprised of $343 per test (the average cost per test after 1194 tests were completed) and a 1.5 per cent project management fee ($5.14). The 1.5 per cent project management fee is considered a very modest estimate of the administration of a mandated program, as it does not include enforcement cost or penalty administration, which would be considerable, when factored in.


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All 26 LGAs eligible for testing 332,157* $115,637,138 m 1735 845 330,422 $115,033,115 m

Queanbeyan LGA 4300** $1,497,002 m 799 392 3,501 $1,218,838 m

Combined 5 LGAs: Yass Valley, Berrigan, Greater Hume, Palerang, and Queanbeyan estimates

12,658** $4,406,756 m 943 478 11,715 $ 4,078,460 m

Combined 5 LGAs above using PwC estimates

19,303* $6,720,146 m 943 478 17,535 $ 6,104,634 m

* PwC data (97 per cent estimate, allowing for 3 per cent of premises demolished or re-developed)

** Council reported estimates

The Taskforce has been informed by various sources that many residents are aware that their premises contain LFAI and are waiting for the NSW Government to make an announcement as to what action they are going to take in respect of affected premises. This is also supported by some residents already identified as owning affected premises, many of whom advised that they were aware their premises contained LFAI for a considerable period of time (note: this is not the case with all residents).

The Taskforce is of the view that extending the sample testing service for a further 12 months after releasing the NSW Government response to this report may capture these property owners that are currently reluctant to have their properties tested. QCC has the largest recorded number of affected premises at this stage and as such is used for the purpose of this modelling. QCC estimates that they have approximately 4,300 homes built before 1980. As of 14 May 2015, the Taskforce has received 1299 registrations from the Queanbeyan LGA; 818 premises have undergone testing, with 814 negative results and four positive results. It is envisaged that by 31 May 2015, approximately one quarter of the estimated pre-1980 premises within Queanbeyan LGA will have been tested. By extending the sample testing service an additional 12 months, with a targeted communications campaign following the NSW Government announcement, the Taskforce is confident that the majority of pre-1980s premises in the Queanbeyan LGA will have been tested and should allow for a more informed decision about mandatory testing.

Projected number of tests within 12 months of Government announcement in Queanbeyan LGA

Total number of pre-1980 premises in Queanbeyan LGA 4,300

1299 premises registered for testing at 1/5/15

Announcement made by the NSW Government. At least another 1290 additional premises register within 12 months of announcement

Potentially, more than half of the remaining pre-1980 premises in the Queanbeyan LGA could be tested


Training, education and waste disposal

A number of matters relating to the management of asbestos issues were raised for consideration by the Taskforce. The Taskforce is of the view that any response to these matters with broader impacts should be referred to the HACA, which has oversight of the State-wide Asbestos Plan. The matters were:

• Development of a mandatory training awareness program for relevant industries and trades

• Reducing the costs levied for the disposal of asbestos waste

• Community education associated with the risks of all asbestos.

Mandatory asbestos training awareness program

WHS legislation currently makes provision for mandatory asbestos training. Section 19(3)(f) of the Act provides that a PCBU (eg an employer) must ensure, so far as is reasonably practicable, that they provide any information, training, instruction or supervision that is necessary to protect all persons from risks to their health and safety arising from their work. Clause 445 of the Work Health and Safety Regulation 2011 specifically provides that a PCBU must ensure that all of their workers who they reasonably believe will work with asbestos or asbestos containing materials (ACMs) are trained.

In addressing the need to protect tradespeople and emergency services from being exposed to LFAI, WorkCover developed an awareness campaign that included the development of a fact sheet on current mandatory training requirements. However, any decision to mandate an asbestos awareness training program in NSW is a broader issue than that of LFAI and should be considered by the HACA for any attention they deem necessary.

Reducing the costs levied for the disposal of asbestos waste

The Taskforce only considered the removal of levied costs associated with LFAI disposal (rather than asbestos waste generally), which was agreed to by the EPA. The broader issue of waste levy fees in respect to asbestos generally was not a matter for the Taskforce to consider and the Taskforce understands that there is already a HACA Working Group looking at this issue. Therefore the issue was referred to the HACA.

Community awareness

The ‘Mr Fluffy’ issue will no doubt raise community concerns and actions to ensure homes are not affected by LFAI. The Taskforce is concerned that some people in the NSW community may be lulled into a false sense of security if they find that their home is free of LFAI, then they do not have to be concerned about other forms of asbestos. It is considered an opportune time for the HACA to consider additional community awareness campaigns about all forms of asbestos, LFAI included. It is important the NSW community does not become complacent about managing the ongoing legacy of asbestos in Australia. The increased focus on LFAI in the coming months must be matched by continued vigilance in relation to the management of all forms of asbestos.

RECOMMENDATION 13

The Taskforce recommends additional matters raised as part of investigation inquiries (training issues, community education and waste disposal), which exceed the scope of the Taskforce, be referred to the HACA for further attention.


Chapter 8: Connecting with the community

Summary

The Taskforce considered that it was important to listen to and communicate with those affected in some way by LFAI. Learning that you own or live in a property that contains LFAI can be an anxious time, given the uncertainties involved and the amount of misinformation about LFAI.

The Taskforce considered it important for affected residents/owners to be able to seek accurate information on the risks and how to manage the situation. The Taskforce aimed to address the needs of affected residents with an appropriate level of care and empathy. A comprehensive media and communication strategy was developed and implemented as outlined below. It is recommended that such an approach continue to be taken and remain a priority as part of the NSW Government’s broader approach to community engagement about asbestos.

Community engagementCommunity submissions were called for between 10 March and 7 April 2015. Many of those spoken to wanted the Taskforce to rely on their submission to the Parliamentary JSC. The Taskforce read all of the 36 JSC submissions. The Taskforce received an additional 11 submissions from the following areas:

• Three Local Government

• One Territorial Government

• One Australian Government Agency

• One Community group; and

• Five private individuals.

The Taskforce Chair and members travelled to a number of areas, meeting with owners/tenants, councils and real estate agents. Community and owner forums were conducted in Queanbeyan on 19 December 2014, 17 March and 27 April 2015 where Taskforce representatives gave presentations and answered questions from community members. Everyone had a story to tell and they wanted someone to listen. Telephone calls and emails were also exchanged, with some owners having over 30 contacts with the Taskforce, seeking reassurance or information about LFAI.

A large number of owners/investors had purchased properties as part of their future superannuation, so they wouldn’t have to rely on government assistance. Others advised that they could no longer rent out their property once it was confirmed to be affected by LFAI, as they were fearful of being sued by tenants in the future. This caused them significant financial, emotional and social stressors by being placed in this position.

One owner informed the Taskforce that:

There had been various articles in the local paper suggesting that the local council are calling for my home to be demolished. I live in a small town and my house is now known as ‘The asbestos house’. People are constantly asking why I still live in the house. I am not currently living in the house due to the stress that this is causing and am experiencing depression from the situation, along with weight loss and the stigma of being known as ‘the man from the asbestos house.’

The Taskforce also identified that there was a lot of misinformation circulating in the community. The information sessions, newsletters and website provided an accurate and reliable source of information. A community action group was also approached and consulted on a number of issues.

Stakeholder consultation

The Taskforce facilitated meetings with industry specialists, technical experts and other stakeholders that could potentially be affected by LFAI to understand its impact on their industry. The Taskforce worked with these specialists to develop industry specific information and fact sheets. Industry webpages were also hyperlinked to the Taskforce website to ensure consistent messaging.

The Taskforce met with the following industry groups:

• Master Builders Association

• Housing Industry Australia

• Electrical Trade Union

• Real Estate Institute of NSW

• Estate Agents Cooperative

• National Electrical and Communications Association

• National Broadband Network Co

• Australian Banking Association

• NZ Minister of Business Innovation and Employment (Christchurch)

• Construction Forestry Mining & Energy Unions

• Communications Electrical Plumbers Union

• Insurance Council of Australia

• Independent Pricing and Regulatory Tribunal

• NSW Land and Housing Corporation.


Emergency services

The Taskforce met with all emergency services to evaluate the present system of communicating details of affected premises and ensuring the introduction of robust systems into the future for the management of this information. The Taskforce worked with NSW Ambulance to ensure that any system of notification of a LFAI premises to ambulance officer did not delay response times.

The emergency services consulted were:

• NSW Police

• NSW State Emergency Service

• NSW Rural Fire Service

• NSW Ambulance

• Fire and Rescue NSW

Communications products To support the implementation of the Make Safe Assistance Package, The Taskforce developed and implemented a program of communications, media and engagement activities to inform and educate those affected, and potentially affected, by LFAI.

A range of communications products and guidance materials were developed as well as designated channels for stakeholder feedback.

The Taskforce’s website was launched in February 2015 and is the information hub for participants in the Make Safe Assistance Package. The site meets the information needs of those affected, and potentially affected, by LFAI and features historical information, frequently asked questions, guidance materials and Taskforce news. Since launch, the microsite has attracted more than 17,000 page views (as at 29 May 2015).

Standalone microsite


Fortnightly e-newsletter

A fortnightly e-newsletter has been developed keep stakeholders informed about Taskforce developments and activities. The newsletter is currently distributed to almost 1,000 customers each week. The average newsletter open rate is 48 per cent and the average ‘click rate’ 15 per cent, both well above the industry average.

Social media

In February 2015, the Taskforce launched its own Twitter account @LooseFillNSW. Twitter was deemed the most appropriate channel as it enables short, bursts of information on a regular basis.

The Taskforce tweets daily and averages more than 50 click throughs to the website per-tweet. The account currently has 110 followers with tweets often retweeted by followers with more than 10,000 followers of their own, greatly expanding the audience for and awareness of the Taskforce’s activities.


Living in premises with LFAI video

A video, featuring asbestos awareness ambassador John Jarratt, was developed as an education tool for affected property owners and their tenants. The purpose of the video is to provide practical advice and assistance to residents living in premises that contain LFAI.

In addition, the Taskforce also created a number of supporting publications to educate and inform our target audiences. These include:

• Working in a premises that may contain loose-fill fact sheet

• Loose-fill asbestos insulation in residential properties – guide for real estate agents

• Living in properties with loose-fill asbestos insulation fact sheet.

Mechanisms for contacting the Taskforce

During the initial phases of the program, the Taskforce provided a variety of mechanisms for the community to provide feedback. In addition to the establishment of a dedicated team of Customer Service Centre staff monitoring email and phone feedback, the Taskforce also ran a dedicated community submissions period which enabled interested parties and individuals, the opportunity to have their say on the issue of LFAI.

The community submission period ran from 10 March – 7 April 2015. A total of 11 submissions were received representing the views of individuals and organisations. These were in addition to the 37 community submissions provided during the JSC Inquiry. These submissions were reviewed and considered by the Taskforce.

Media

The Taskforce has also used traditional media to inform and educate stakeholders about the activities and initiatives of the Taskforce.

The Taskforce issues regular media releases on the status of the testing program, additional properties to test positive for LFAI and any new materials or initiatives of the Taskforce. These are all cross promoted on the Taskforce’s web page and Twitter account.


Appendix 1: Terms of Reference Loose Fill Asbestos Insulation TaskforceA Taskforce has been appointed by the NSW Government to provide advice and recommendations on an evidence- based, comprehensive action plan for a voluntary Government purchase/demolition scheme for homes affected by loose fill asbestos insulation by 31 May 2015.

The Taskforce shall have the following terms of reference

1. To consider the:

a. Heads of Asbestos Coordination Authorities Interim Report and Final Report.

b. Price Waterhouse Coopers Preliminary Report and Final Report:

c. Independent investigation into the use of loose-fill asbestos-containing ceiling insulation in residential properties:

d. Relevant legal advice:

e. Chief Health Officer`s and Expert Advisory Committee`s advice on the Greencap NAA technical assessments:

f. ACT Taskforce Reports and implementation learning’s:

g. ACT Health advice:

h. NSW Joint Select Committee on Loose Fill Asbestos Insulation recommendations and:

i. Other relevant information.

2. To assess and consider the cost and benefits of a Government purchase/demolition scheme and make recommendations on the most cost effective option for Government.

3. To develop and recommend an appropriate evidence-based strategic and practical implementation approach including any funding requirements, program set up and management cost, and governance and implementation arrangements, including risk management.

4. To consider any duty of care or legal liabilities of other parties including the Commonwealth.

5. To establish the criteria policies and methods for the expenditure of funding and management of the make safe options.


Appendix 2: JSC Recommendations



Appendix 3: Proximity Model results


Appendix 4: Median home prices in the 26 LGAsLocal Government area 2014 Medium house price Data sourced Based on

Albury City Council 365,000 RP Data 30/04/2015

Bankstown City Council 615,000 RP Data 30/04/2015

Bega Valley Shire Council 270,000 RP Data 30/04/2015

Berrigan Shire Council 179,000 RP Data 30/04/2015

Bombala Council 115,000 RP Data 30/04/2015

Boorowa Council 250,000 Real Estate.com.au 2 Bedroom Home

Cooma Monaro Shire Council 250,000 Real Estate.com.au 4 Bedroom Home

Eurobodalla Shire Council 341,500 Real Estate.com.au 4 Bedroom Home – Dalmeny

Goulburn Mulwaree Council 390,000 Real Estate.com.au 4 Bedroom Home

Greater Hume Shire Council 1,355,000 Real Estate.com.au Jindera

Ku-ring-gai Shire Council 1,242,500 Real Estate.com.au 4 Bedroom Home – Nth Turramurra

Lithgow City Council 297,475 Real Estate.com.au 4 Bedroom Home

Manly Council 2,100,000 Real Estate.com.au 4 Bedroom Home

North Sydney Council 1,565,000 Real Estate.com.au

Orange City Council 400,000 Real Estate.com.au 4 Bedroom Home

Palerang Council 628,000 Real Estate.com.au 4 Bedroom Home – Bungendore

Parramatta City Council 809,500 Real Estate.com.au 3 Bedroom Home

Queanbeyan City Council 417,500 Real Estate.com.au 3 Bedroom Home

Snowy River Shire Council 397,500 Real Estate.com.au

The Hills Shire Council 920,000 Real Estate.com.au 3 Bedroom Home

Tumbarumba Shire Council 170,500 RP Data 30/04/2015

Upper Lachlan Shire Council 262,500 Real Estate.com.au 3 Bedroom Home Crookwell

Wagga Wagga City Council 576,000 Real Estate.com.au 4 Bedroom Home

Warringah Council 1,260,000 Real Estate.com.au 4 Bedroom Home – Allambie Heights

Yass Valley Shire Council 527,500 Real Estate.com.au 4 Bedroom Home

Young Shire Council 342,000 Real Estate.com.au 4 Bedroom Home


Appendix 5: Average land values 2014District 2013 2014

Bega Valley 156,355 159,073

Bombala 49,441 48,196

Boorowa 62,643 64,218

Young 67,044 67,015

Cooma-Monaro 94,265 92,400

Albury 126,130 125,622

Berrigan 99,277 99,688

Tumbarumba 48,147 48,048

The Hills Shire 448,480 556,429

Ku-Ring-Gai 727,733 822,486

Manly 966,314 1,135,182

North Sydney 1,052,543 1,150,232

Parramatta 417,450 493,747

Warringah 670,966 793,684

Eurobodalla 187,392 190,379

Orange 127,812 129,032

Bankstown 406,028 519,925

Lithgow 86,626 94,750

Snowy River 176,895 177,163

Upper Lachlan 84,006 83,594

Yass Valley 221,590 226,522

Goulburn Mulwaree 111,980 112,160

Queanbeyan City 310,880 307,218

Palerang 315,607 236,434

Greater Hume 152,935 153,235

Wagga Wagga 136,618 132,925


Appendix 6: Structure, roles, responsibilities of proposed Implementation Taskforce

Roles and responsibilities

Minister

Fair Trading NSW

Head of NSW Loose Fill Asbestos Insulation Taskforce

LFAI Steering Committee (Chaired by Head of Taskforce)

DirectorOperations

DirectorGovernance, Risk,

Project Management & Finance

Appeals panel


Responsible for Authority to act

Minister Delivery of program to effectively address Loose-fill Asbestos issues in the community

Parliament

Fair Trading NSW Endorsement of decisions reached by LFAI Taskforce as they relate to:

• Implementation policy

• Project plans

• Budget requests

Minister

Head of Loose-fill Asbestos Insulation Taskforce

• Chair of Steering Committee

• Reports to Fair Trading and Minister

• Program administration oversight

• Community engagement and education strategies

Minister, Fair Trade Commissioner

LFAI Steering Committee (Chair – Head of Taskforce)

Will include representatives from Department of Premier & Cabinet, Treasury, Fair Trading and LFAIT nominated members

• Approvals and funding across phases of activities

• Monitor effectiveness of risk controls and mitigation strategies

• Monitor – value for money delivery of programs

• Community and stakeholder satisfaction

• Program performance overall (timeliness, budget, milestones, resources)

• Policy development and approval (program design and delivery)

• Communication and community engagement

Taskforce affiliated government agency(s) -

1. Delegations framework for financials from Fair Trading NSW

2. For all other matters, as per delegations of Head of Taskforce (established by Fair Trading NSW and Minister)

Director, Operations Phases 1 - 4

• Testing / sampling

• Identify properties

• Asbestos assessments

• Assistance packages

• Risk control

• Community communication

• Secure and maintain purchased properties

• Demolish and remediate properties

• Value for money – minimise costs of holding property and demolition costs

• Industry capability

Head of Taskforce (Risk owner)

Director (Risk control owner)

Director, Governance, Risk, Project management and Finance

• Risk management (program)

• Project management – staffing, resources, planning, evaluation, business systems

• Governance

• Financials – budgets, forecasts

• Property valuations

• Agreements to sell

• Uplift of purchased properties / rezoning

• Value for money sales

• Risk control

• Community communication

Head of Taskforce (Risk owner)

Director (Risk control owner)


Key Taskforce members – Staffing

Name Division/Organisation Role / Interest in project

Project Sponsor NSW Fair Trade Commissioner Guides and monitors the project in partnership with the Project Directors and Taskforce Chair. Key organisational advocate for the project.

Head of Taskforce To be announced Financial governance, Chair meetings and Forums, leads government consultation and liaison with the community, responsible to appropriate Minister for program implementation and outcomes

Taskforce Steering Committee

• Head of Taskforce

• NSW Fair Trading

• Department of Premier & Cabinet

• NSW Treasury

Reviews, approves and agrees on project deliverables related to the establishment of the criteria, policies and methods for the expenditure of funding and management of the Purchase/Demolish program.

Considers policy and program performance overall and reports to the appropriate Minister through Fair Trading NSW.

Project Director Director, Loose-fill Asbestos Insulation Taskforce - Operations

Leads project operations, ensure adequate consultation and engagement with all levels of government, communities and industry. Liaison with key stakeholders and service providers to ensure program delivery is efficient and effective.

Project Director Director, Loose-fill Asbestos Insulation Taskforce – Governance, Risk, Project Management and Finance

Plans program actions, tracks policy changes, documents, and reports project activities. Monitors governance and risk management.

Core Implementation Team

• Project Manager x 2

• Contractors Coordinator

• Technical Advisors (WHS Inspectorate)

• Case Manager(s)

• Communications Coordinator

• Media Services Officer

• Policy Development

• Business systems, governance and financial management

• Customer Service Consultants

Provides the skills, expertise and effort to perform the tasks defined for the project; assist with planning and estimating project tasks. Business systems, policy, reporting, evaluation development and support.

Communication with internal and external stakeholders – alerts, guidance materials, media, website.

Appeals panel • Fair Trading NSW

• Head of Taskforce

• Panel (3) members – community rep, government administrator (experience in assistance programs, asbestos experienced technical expert)

Consider appeals by program participants re policies and process


Appendix 7: Analysis of proposed options for mandatory notification

The five options for mandatory notification proposed by Land Property Information (LPI) involved one of two remedies: A Prescribed Document to be attached to all Contracts for Sale or by way of an Implied Warranty, as summarised below:

Option 1 – Prescribed document (allows purchaser to rescind up to 14 days)

The Prescribed Document would read as a standardised warning. It would be on all Contracts for Sale – not just the five targeted LGAs. However, it can specify within the warning the five targeted LGAs and/or all 26 LGAs currently available for testing. There was concern that this kind of generic warning may lose impact over time and would not be a targeted response to areas where LFAI affected properties are known to exist. LPI suggest that Option 1 could serve to ‘flush’ out premises because it will be at the front (page 2) of the Contract for Sale and difficult to ignore. It may also encourage more education about LFAI. This option may be used in combination with other options.


The Prescribed Document would require a vendor to obtain a LFAI report from a LAA and be attached to the Contract for Sale. LPI considered this as the most onerous and expensive option. Under the current legislative framework this option could not be limited to the five targeted LGAs. If such a mechanism could not reasonably be implemented in the five targeted LGAs, it would mean every Contract for Sale (in excess of 200,000 per annum) would need to attach an inspection, even where it is a new house or was built after 1980.


The Prescribed Document would depend on the establishment of a LFAI Register, and then require each Contract for Sale to include as a Prescribed Document a printed search of the LFAI Register, to show either (1) the premises are known to contain LFAI or (2) it is not known whether the premises contains LFAI. The Taskforce considered this option would provide the same outcome as can be achieved by the section 149 planning certificate changes. This option would only continue to identify properties already known and would not achieve the stated aims of mandatory notification (ie preventing the sale of unknown but affected homes and identifying affected homes into the future).

Option 4 – Warranty (allows purchaser to rescind contract up to completion – usually 42 days)

Like Option 3, this option is contingent on the establishment of a LFAI Register. It would require the vendor to disclose or warrant that the premises is not noted on the Register. The purchaser can “test the warranty” by undertaking their own search of the LFAI Register to confirm the status of the property. Taskforce members did not support this option for similar reasons to Option 3: It would only continue to identify properties already known and would not achieve the stated aims of mandatory notification (ie preventing the sale of unknown but affected homes and identifying affected homes into the future).

Option 5 – Warranty (allows purchaser to rescind up to completion – usually 42 days)

This option does not rely on the establishment of a LFAI Register. It places the onus on the vendor to specifically disclose if the premises contains LFAI; but it would be up to purchasers to test the warranty by arranging for their own testing of the property. It does not compel purchasers to do this. This Option would require specification as to who is a competent person to undertake such a test and how much LFAI must be present, etc.

The Taskforce considered a combination of:

• Options 1 and 5 or

• Option 2 (in targeted LGA’s) and Option 5 in other LGA’s.


The advantages and disadvantages of these three options are outlined below:

Option 1: Prescribed document /warning

Advantages Disadvantages

The notice becomes a permanent part of the contract, and applies to all land uses (residential commercial and industrial)

May not bring awareness to any of the parties, or the government of the presence of LFAI in specific homes

Allows the purchaser to rescind up to 14 days after exchange if it is missing from the contract

Adds to the bulk of notices in the contract and may become a ‘tick box’ component of the contract

Upon request and approval, can be inserted into the standard contract subject to cooperation from the Law Society NSW and Real Estate Institute of NSW

A blanket warning may diminish the weight of the dangers of LFAI

Brings awareness to the general dangers of LFAI to all property transactions

A purchaser wanting to obtain a quick exchange to secure the property may choose not to rely on the warning and ignore it.

No requirement to change Conveyancing Act.

Option 2: Prescribed document/asbestos report


Requires the vendor to enquire on the presence of LFAI in the premises and becomes a routine part of contract formation

Unless both the vendor and purchaser were able to be given a quick turnaround for the supply of a LFAI Inspection Report and support for the purchaser to satisfy themselves as to the claims made in the LFAI Inspection Report it may add unnecessary delay, cost and uncertainty to the contract

Allows the purchaser to rescind up to 14 days after exchange of contracts if it is missing from the contract

14 days may not be a sufficient timeframe to obtain an independent report from a LAA to verify the information, especially in the early stages when the profession is growing. If the timeframe is short, the inspector would be under time pressures and could raise the price for inspection.

14 day turnaround, councils would seek to protect themselves and only release information on the proviso that it cannot be legally relied on

Raises awareness to any of the parties, of the presence of LFAI

Adds to the bulk of the contract

There will have to be exceptions: The requirement should not apply to: Vacant Land; Land and strata lots sold off-the-plan; Commercial and industrial premises; Land, or suburbs where all buildings were erected after 1980 (where LFAI was pulled from manufacture); Land that is intended to be bought by the government buyback

An apathetic purchaser wanting to obtain a quick exchange to secure the property may choose not to rely on the LFAI inspection and ignore it

Any required to limit to specific LGA’s and exempt others may stigmatise areas, give purchasers a false sense of security where their home is not within these areas and add unnecessary complexities to the conveyancing process.

Vendor attaching required document merely informs potential purchasers that report the non-existence/existence of LFAI. Purchaser would then have to commission their own report as legally they cannot rely on the vendors report.

The Conveyancing Act would require change to specify the ‘high risk’ LGA’s.


Option 5: Warranty


Requires the purchaser to enquire on the presence of LFAI in the premises and becomes a routine part of contract inquiries particularly in affected suburbs

The purchaser would have to rely on their own enquiries or obtain a confirmation of LFAI by a competent person. May be difficult for the purchaser to rescind the contract unless it was made clear what LFAI consisted of, and the degree to allow a purchaser to rescind

A purchaser is afforded the time up until completion of the contract to rescind (normally 42 days)

In some cases, where there is a defect in quality, the purchaser may elect to not rescind, but the parties agree to lower the price for the property as compensation. The parties would go ahead and complete the sale

Purchaser commissions report that they can legally rely on May not bring awareness to any of the parties, or the government of the presence of LFAI in specific homes

Warranty is ‘safer’ option for both parties. Vendor discloses and then purchaser decides whether they wish to go ahead with the sale without having to commit to the contract first, or spend money to commission a report

Provides security to the vendor in they have satisfied their statutory obligation to disclose without having to provide a report which the purchaser cannot rely on

No requirement to change Conveyancing Act

In addition to considering the issues set out above, The Taskforce was advised that Option 2 would require significant consultation with industry bodies as it would be a major change and require a change to the Conveyancing Act 1919. There were also concerns about the workability of this approach and the potential for disproportionate impact on the conveyancing system.

It is considered that Options 1 and 5, in combination with recommended changes to the section 149 planning certificate may create a market incentive for property owners to have their premises tested for LFAI, and for purchasers to look for confirmation that a pre-1980s home is not affected by LFAI. Additionally, it will create greater awareness of due diligence obligations for property purchasers and disclosure obligations for vendors, their agents and advisors.


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