(By Jon Davies, CEO, Australian Constructors Association – as published in the August 2021 edition of Infrastructure Magazine)
When it comes to sustainability, Government and industry all largely agree on the problems that need to be addressed and we even agree on what needs to be done to fix them. We just need to find a way to fast track their implementation.
Everyone wants to see a more sustainable construction industry. That is the key message I have found having engaged extensively with industry stakeholders while in the role of CEO of the Australian Constructors Association these past 12 months.
Developing and sharing best practice is one way this can be achieved and there are many positive examples from collaborations such as Construction Industry Leadership Forum and Construction Industry Culture Taskforce.
The greatest challenge is achieving consistent and widespread adoption of best practice across all the states, territories and delivery agencies.
This can only be achieved through Federal Government leadership and, dare I say it, a carrot and stick approach.
The three pillars of sustainability
The Australian Constructors Association believes that a sustainable construction industry is built on the three key pillars of equitable and aligned commercial frameworks, a positive industry culture, and sufficient capability, capacity and skills to execute the projects it is called upon to deliver.
Each pillar is interlinked. Improvement in industry sustainability requires improvement in all three pillars. While there is no silver bullet, the way in which projects are procured is a major contributor to the sustainability problem and it can be readily addressed if all parties agree on the need for reform.
The current system favours lowest price over best value. It works to political deadlines rather than construction schedules. It assumes risk can be transferred with no comeback and it promotes a focus on winning short term commercial battles rather than developing long-term partnerships that foster innovation and improved outcomes.
Capability and capacity constraints are unlikely to be addressable through skilled migration for the foreseeable future, and given it takes over six years to train an engineer, large-scale training initiatives are not an option either.
The main options to address skills shortages are to use procurement to drive changes in industry culture and attract back those that have left the industry in recent years, particularly women.
We can also use procurement to reduce waste and improve project productivity. Just a halving of the productivity gap between construction and other industries would enable an extra $15 billion of infrastructure to be built every year for the same budget.
Walking the walk
Since joining the Australian Constructors Association, I have been advocating for the Federal Government to step up. The Federal Government is uniquely placed to coordinate reform and has many reasons to do so, not least of which is the desire, as noted in the updated Intergenerational Report, to see greatly improved productivity in our industry and the wider economy.
With Infrastructure Australia soon to release its updated Infrastructure Plan, we again run the risk of the nation’s independent infrastructure advisor providing great recommendations that remain just that – recommendations.
The real challenge is ensuring these recommendations are actioned. With Infrastructure Australia also working on a deliverability report to address how the recommendations should be implemented, many signs again point back to the Federal Government.
While calling out the Federal Government, I am mindful that all stakeholders have a role to play and in working collaboratively we will be far more successful.
One of the Australian Constructors Association’s most significant and strategic collaborations is the Construction Industry Leadership Forum – a joint collaboration with the governments of NSW and Victoria.
The Construction Industry Leadership Forum is targeting initiatives that will seek to redefine value for money, improve collaborative framework selection of appropriate commercial models, and enhance capability, capacity and attractiveness of the industry.
Wellbeing and culture improvements
While the momentum for procurement reform gains pace, improving the culture of the industry also needs to become more of a priority.
In an international first for the construction industry, a draft Culture Standard will soon be released for public consultation. Based on academic research, the Culture Standard will seek to build the foundations for an improved culture, such as by defining actions that will improve the wellbeing of people employed in the construction industry.
With many construction sites operating six to seven days per week to meet delivery timeframes, the Culture Standard recognises the challenges of long work hours and the need for people working in our industry to have adequate time to rest and pursue life activities outside of work.
We not only need to support the physical health of our workforce but also its mental health. The Culture Standard is an initiative of the Construction Industry Culture Taskforce – another Australian Constructors Association partnership with the governments of NSW and Victoria.
It has the potential to have a significant impact on the entire industry, and I encourage everyone to provide feedback when the draft is published.
Unite for reform
If we are successful in our reform efforts, we would see procurement frameworks selected based on project specifics rather than market cycles, projects awarded based on best value rather than lowest cost and compliance with an industry culture standard being a mandatory requirement of any procurement process.
These changes would not only benefit the players in the construction industry, but also the wider community, because ultimately, we could build more infrastructure with less money, with a productive and healthy workforce.
A feature of 2021 has been the way the whole of industry has come together to respond to COVID and unite for reform. There is a broad coalition of individuals, associations and organisations all seeking to leverage the opportunity COVID presents to create a more sustainable industry.
I am extremely proud to be part of this coalition with the support of the Australian Constructors Association. The window of opportunity created by COVID will not stay open indefinitely – the time for action is now!