6 Dec 2016

Labour slams govt over steel mesh charges

6:27 am on 6 December 2016

The Labour Party says criminal charges to be laid against a leading steel company are a wake-up call for the government to take building controls seriously.

Steel mesh, concrete

A worker pours concrete over steel mesh. Photo: 123RF

Steel & Tube is one of three companies the Commerce Commission will prosecute after a nine-month investigation into substandard steel mesh, of the kind used to help quake-proof slab floors in New Zealand houses since 2012.

The listed steel supplier's share price closed 5.5 percent down last night after the market regulator said it would file criminal charges under the Fair Trading Act early next year.

The commission said investigations were continuing into several other companies.

It did not identify the other two companies to be charged. However, Euro Corporation, which had its mesh forced off the market in March, was not one of them.

Labour's economic development spokesperson David Clark said the fact the mesh standards were raised in 2012 but not enforced showed the government had been "plain negligent".

"The questions I've been asking of the minister show that the government has done little to keep records of the steel it's used in a variety of building products and in major infrastructure, and that has got to be of deep concern to all New Zealanders."

Labour MP Dr David Clark (left) and Labour MP Jacinda Ardern (right) in question time.

Labour MP Dr David Clark (left) and Labour MP Jacinda Ardern (right) in question time. Photo: RNZ / Alexander Robertson

Dr Clark put a series of questions to ministers and the responses showed no records about steel quality had been kept since at least 2009.

Transport Minister Simon Bridges said his ministry did not hold such records for roading as that was up to the New Zealand Transport Agency (NZTA). The agency has in the past said steel was the responsibility of the contractors it used.

Dr Clark said that was a worry, especially given highways that needed rebuilding after the Kaikōura earthquake.

"Ordinary Kiwis think that they ought to be able to rely on their roads to be as safe as they can be. They would like to think that the standards the government sets are being met [but] they don't seem to be on top of it. And four years of not checking whether their own standards were being met I think is just plain negligent."

Minister Responsible for Housing New Zealand Bill English said the agency did not keep records about steel, and said that was the contractor's responsibility, as specified by engineers.

Bill English at a social housing announcement in Northcote

Bill English Photo: RNZ / Claire Eastham-Farrelly

A lawyer mounting class action against Steel & Tube over the mesh, Adina Thorn, said the prosecution helped their case. "It says that there is a big problem and the problem is such a high level that the Commerce Commission's bringing these criminal proceedings."

The commission said it would be alleging that the companies misrepresented the mesh as complying with the standard and being of seismic grade (500E).

Steel & Tube chief executive Dave Taylor told NZX his company's seismic mesh "is and has been produced consistently with the performance characteristics in the Standard and ensures building safety".

"Clearly, we're disappointed by the Commerce Commission's decision," he told RNZ later.

"I think the key point that you need to appreciate is that the decision relates to the testing methodology and not the performance characteristics of the mesh that we supply."

Mr Taylor declined comment about tests that showed some of his company's mesh was substandard, or about how Steel & Tube had represented its in-house testing as if it had been done by an independent laboratory.

On the wider issue of product quality, the Ministry of Business, Innovation and Employment said it was not responsible for individual buildings, and any tests on structural steel in Wellington buildings that were damaged in the earthquake would fall to the city council.

The government has announced a technical investigation focusing on one of the failed buildings - the near-new Statistics New Zealand building - to help improve regulations and seismic design standards.

A similar investigation was done after the 2011 Canterbury quake. Not all the recommendations from that were followed up.

As for the mesh market, the complete overhaul of the testing regime ordered by the government after RNZ crucial failings is expected to be completed by May.

Meanwhile, Euro Corporation has recently begun selling seismic mesh again, but made locally from steel rod from Pacific Steel rather than overseas.

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