Businesses manufacturing and supplying products are concerned at increasing competition from products that do not conform to standards and regulatory requirements.
One recent example is an electrical safety product that badly failed the relevant standard. Competitors highlighted the product to electrical safety regulators with multiple reports over three years before it was eventually recalled.
However, despite the clear dangers involved, the regulatory burden is falling increasingly on importers and producers who do the right thing. And despite government efforts on regulatory reform in recent years, the burden associated with business regulation is rising, not falling.
This regulatory burden is being exacerbated because non-compliant products are unfairly affecting the market for legitimate product suppliers.
Concerns are heightened in circumstances where governments move to impose cost-recovery enforcement models on industry, under which businesses feel they are effectively forced to pay twice: once to cover the cost of their own compliance; and secondly to fund Government enforcement on non-compliant competitors. There is clearly a problem with the system when a growing number of companies believe the benefits of non-compliance outweigh the risk of being penalised. This is putting those who are adhering to the growing regulatory burden at a huge competitive disadvantage.
The electrical equipment industry is working with regulators to redesign the current state-based electrical safety regulations. The aim is to achieve harmonisation across jurisdictions; visibility of equipment suppliers to regulators and consumers; and increased surveillance and compliance activity. Ai Group's own electrical industry awareness campaign, highlighting to electrical contractors the dangers and regulatory risks of purchasing non-conforming products, has also been endorsed by all electrical regulators.
The entire electrical equipment supply chain, including manufacturers, suppliers and contractor installers, have serious obligations under Australian law to ensure that equipment supplied or installed meets our compliance and regulatory standards.
Possible solutions in the electrical equipment sector include the use of a common compliance mark and a suggestion that electrical contractors ask equipment suppliers for proof of compliance.
The regulations in this industry sector require suppliers to be able to prove compliance to product standards.
The wider issue of non-compliant products across all industry sectors needs to be addressed by industry and governments at all levels.
With different regulations, standards and compliance mechanisms applying in different sectors, there will not be a single solution across all sectors or product issues. Identifying the failure points in each sector will provide direction as to the solution for that sector. Focus will need to be maintained on areas that are regulated – product safety and claims of compliance with standards.
If governments do not prioritise this issue, legitimate businesses will continue to underperform and may resort to non-compliant business models in order to compete.