Risk management and allocation

The way risks are identified and managed has a major impact on the way people behave during the building process and the quality of their work. The government is working to find ways to use regulation to incentivise parties to better manage risks. The regulations must work to make people responsible for the risks they are able to manage.

Building system legislative reform programme

The legislative reform programme has a focus on risk allocation in the building process. It will raise quality throughout the building sector to make sure fewer things go wrong, and provide fairer outcomes when things do go wrong. These include proposals to:

  • increase the uptake of guarantee and insurance products for new residential builds and significant alterations
  • strengthen regulations for some occupations to ensure those who are licensed to undertake restricted work have the right level of competence, and are held account for substandard work or poor conduct.

Consenting — the overall legislative reform programme will lead to greater efficiency in the consenting process. Building consent authorities will have greater confidence in the quality of building work and reduced exposure to risks that they have limited ability to manage. This will reduce the tendency for excessive risk aversion, and therefore speed up the consenting process and open up opportunities for new ways of doing things.

Procurement Guidelines

The government Construction Procurement Guidelines(external link) will be updated to provide government agencies with more detail on identifying, quantifying and managing risk in construction projects.