QLD's Chain of Responsibility Law: A 2026 Guide for the Construction Supply Chain

In Queensland's complex construction landscape, the era of isolated blame is over. Since the introduction of the Chain of Responsibility (CoR) laws for non-conforming building products (NCBPs), liability is no longer a single point of failure but a shared burden that extends across the entire supply chain.

From the international manufacturer to the local installer on a Brisbane high-rise, every participant has a legal duty to ensure the products they handle are safe, compliant, and fit for purpose.

This guide provides a clear overview of your obligations under these critical laws, the significant powers of the QBCC, and the practical steps you must take to build a defensible position in 2026 and beyond.

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Key Takeaways

• Shared Responsibility: Under the QBCC Act 1991, liability for a non-conforming building product (NCBP) is not isolated; it extends to every participant in the supply chain, from the manufacturer to the installer.

• The "Reasonably Practicable" Standard: You have a legal duty to take all "reasonably practicable" steps to ensure the products you handle are conforming and fit for their intended use. This requires proactive verification, not just passive acceptance.

• QBCC's Broad Powers: The QBCC has significant authority to investigate, issue stop-work notices, mandate public warnings, and enforce product recalls, making compliance a critical business function.

• Documentation is Your Defence: Maintaining clear, thorough records of product specifications, certifications, and communications is your primary defence in demonstrating you have met your legal obligations.

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The Unbreakable Chain: What is Queensland's NCBP Law?

The concept of a "Chain of Responsibility" is a fundamental shift in how Queensland's construction law addresses the critical issue of non-conforming building products.

This legal framework ensures that every person who has influence over the safety and compliance of a building product can be held accountable. It moves away from a system where liability could be conveniently passed down the line, often leaving the final installer or property owner to bear the consequences.

Understanding this legislation is not just a matter of compliance; it's a core component of risk management for any business involved in the state's building industry.

The 2017 Legislative Shift That Changed Everything

The core legislation governing this area is the Queensland Building and Construction Commission Act 1991 (QBCC Act). A pivotal moment in construction law occurred with the passing of the Building and Construction Legislation (Non-conforming Building Products—Chain of Responsibility and Other Matters) Amendment Act 2017. This amendment introduced Part 6AA into the QBCC Act, fundamentally changing the landscape of liability.

It established a statutory chain of responsibility that spreads legal duties across the entire supply chain. This move was a direct response to growing concerns over dangerous building materials, most notably flammable cladding, and it replaced an outdated model where blame could be isolated to a single, often insolvent, party.

Why This Law Matters for Every Industry Player in 2026

Ignorance of these laws is no longer a viable defence. The QBCC is actively enforcing these provisions, as evidenced by its ongoing audit programs and investigations into product safety. The financial and reputational risks of being found liable for an NCBP can be catastrophic for any business, regardless of its size.

A single non-compliant product can trigger stop-work notices, costly rectification orders, and significant fines, not to mention the potential for protracted and expensive legal disputes. For every industry player, from a small supplier on the Gold Coast to a major developer in Brisbane, understanding and adhering to the Chain of Responsibility is a critical business imperative.

Are You Part of the Chain? Identifying Your Role

The Chain of Responsibility legislation casts a wide net, intentionally designed to capture every entity that influences a building product's journey from creation to installation. If you design, manufacture, import, supply, or install building products in Queensland, you are a link in this chain and have specific legal duties. Recognising your precise role and the obligations that come with it is the first step toward ensuring compliance and mitigating your legal risk.

From Manufacturer to Installer: A Broad Net of Liability

The concept of the "chain of responsibility" should be viewed as a literal chain of people and companies, each contributing to the final built outcome. The QBCC Act explicitly identifies the key participants, ensuring no gaps in accountability.

These key links include:

• Manufacturers: Those who produce the building product.

• Importers: Those who bring a building product into Australia.

• Suppliers: Wholesalers, distributors, and retailers who provide the product to others in the chain.

• Installers/Builders: The individuals or companies who physically incorporate the product into a building.

It is crucial to understand that each link in this chain has a distinct legal duty to ensure the product is conforming for its intended use. Liability is not diluted as it passes down the chain; it is shared.

The Specific Duties of Designers and Architects

The process for a designer or architect specifying a product for a project is a critical point in the supply chain. When a professional specifies a particular material—be it a type of structural steel, a cladding system, or a waterproofing membrane—that act of specification places them firmly within the chain of responsibility. Their duty is to ensure the product is appropriate and conforming for its intended use as detailed in their plans. This obligation extends beyond simply naming a product; they must also provide sufficient information to the builder and installer about the product's correct application and any limitations on its use to ensure it performs as designed.

What About Company Directors and Executives?

A crucial warning for business leaders: executive officers of a company can be held personally liable if their company commits an offence under the NCBP laws. The legislation includes provisions for "executive liability," which means directors and executives must demonstrate they took all reasonable steps to ensure the company complied with the law.

This effectively pierces the corporate veil, preventing directors from simply claiming ignorance of their company's day-to-day procurement or installation practices. A hands-off approach is no longer a shield from personal accountability.

The executive liability provisions in the QBCC Act mean that a 'hands-off' approach is a significant personal risk. Directors must be able to prove they implemented and monitored compliance systems within their organisation.

Understanding Your Primary Legal Obligations

Being a link in the supply chain comes with a set of non-negotiable legal duties. These obligations are not passive; they demand active participation, rigorous due diligence, and meticulous record-keeping.

The legislation is built on the principle that every participant must take proactive steps to ensure the integrity of the building products they handle. Understanding these primary legal obligations is fundamental to compliance and protecting your business from significant liability.

The Core Duty to Ensure Product Conformity

The central pillar of the Chain of Responsibility law is the primary duty imposed on every participant. This duty is to ensure, so far as is reasonably practicable, that a building product is not non-conforming for its intended use.

This is an ongoing, proactive responsibility that applies every time you design with, manufacture, import, supply, or install a product. It means you cannot simply accept a product at face value or rely on assumptions. You must actively take steps to satisfy yourself that the product is what it claims to be and is suitable for the specific application in which it will be used.

This duty is a cornerstone of Queensland's building and construction law and forms the basis of the QBCC's enforcement actions.

What Does "Reasonably Practicable" Actually Mean?

The term "reasonably practicable" is a legal standard that requires a balanced assessment of risk and action. It is not a loophole for avoiding responsibility. The process of determining what is reasonably practicable involves a careful evaluation of several factors.

First, you must consider the likelihood of a product being non-conforming and the degree of harm that could result if it were. A product with a high risk of failure that could lead to injury or death (like structural components or fire safety systems) demands a much higher level of scrutiny than a low-risk, decorative product.

From there, you must consider the available methods for eliminating or minimising that risk. This could involve asking for independent test reports, verifying certifications with the issuing body, conducting your own inspections, or seeking expert advice.

Finally, the cost of taking these measures can be considered, but only after the risk has been properly assessed and weighed. Cost can never be used as an excuse for ignoring a known or foreseeable risk, especially where safety is concerned.

Performing this due diligence is the essence of meeting the "reasonably practicable" standard.

The Critical Importance of Information and Documentation

A failure to pass on critical product information is a direct breach of your duties. The law explicitly requires each person in the chain to give the next person all necessary information about the product's suitability, limitations, and compliance. This creates a mandatory paper trail that follows the product from the factory to the building site.

Without this clear, unbroken chain of information and documentation, it becomes nearly impossible to prove you undertook the necessary due diligence. In the event of an audit or dispute, a lack of records makes you an easy target for liability, as it creates the presumption that you failed to take the required steps.

Warning: A lack of documentation is a red flag for the QBCC. If you cannot produce records showing how you verified a product's compliance, you may be presumed to have failed in your duties. This can be a difficult position to defend in proceedings in QCAT.

What Exactly is a Non-Conforming Building Product?

To comply with the law, you must first understand what it is you are trying to avoid. The term "non-conforming building product" (NCBP) has a specific legal definition under the QBCC Act. It is not a vague or subjective term; it covers distinct categories of product failure that relate to safety, regulatory compliance, and performance. Identifying a potential NCBP early is a critical risk management skill for everyone in the construction supply chain.

The Three Official Categories of NCBPs

A product can be classified as "non-conforming" under the QBCC Act in three distinct ways, creating a comprehensive safety net.

A product is an NCBP if:

1. It is not safe: This is the most serious category. A product is considered unsafe if its use could cause or contribute to death or serious injury to a person.

2. It does not comply with a relevant regulatory provision: This includes any product that fails to meet the standards set out in legislation like the Building Act 1975, the National Construction Code (NCC), or a relevant Australian Standard.

3. It does not perform to the standard represented: This covers issues of misrepresentation. If a product is advertised or claimed to have certain characteristics (e.g., a specific fire-resistance level, acoustic rating, or structural capacity) and it fails to meet that performance standard, it is deemed non-conforming.

An Illustrative Scenario: The Case of Faulty Cladding

Imagine a property developer in the Sunshine Coast who receives a shipment of Aluminium Composite Panel (ACP) cladding for a new apartment building. The supplier provides documentation, but it is vague about the product's specific fire-resistance rating and its compliance with Australian Standards for use on high-rise buildings. The developer, under pressure to keep the project on schedule, accepts the documentation without further verification and instructs the builder to proceed with installation.

Two years later, a QBCC audit identifies the building as having potentially non-conforming cladding. An investigation reveals the ACP has a highly combustible polyethylene core, making it entirely unsuitable for its intended use. Liability is traced back not just to the overseas manufacturer and the local supplier, but also directly to the developer for failing to reasonably verify the product's claims before allowing its installation.

The government's estimate that as many as 12,000 buildings in Queensland may have non-conforming ACP cladding highlights the immense scale and financial consequence of this exact issue.

Example: A supplier imports panels advertised as "fire-retardant." A builder purchases and installs them on a multi-residential project. A fire occurs, and the panels are found to have a non-compliant polyethylene core.

Under the Chain of Responsibility, the QBCC can investigate the importer for misleading representations, the supplier for failing to verify the product's claims, and the builder for installing a product not fit for its purpose under the Building Code.

Navigating the QBCC's Enforcement Powers

The Queensland Building and Construction Commission (QBCC) is the primary regulator responsible for enforcing the Chain of Responsibility laws. It is equipped with a broad and powerful suite of tools to investigate non-compliance, compel action, and penalise offenders. Understanding these powers is essential for appreciating the serious nature of your legal duties and the potential consequences of a breach. The QBCC's approach is not passive; it actively monitors the industry to ensure building product safety and compliance.

How the QBCC Investigates and Audits the Supply Chain

A QBCC investigation into a non-conforming building product can be triggered in several ways: by a complaint from a homeowner or another industry participant, following a building incident like a fire or structural failure, or as part of a proactive, intelligence-led audit program.

Once an investigation begins, QBCC officers have significant powers. They can enter building sites and business premises, take samples of products for testing, seize materials, and issue notices requiring you to produce documents and answer questions. The QBCC's NCBP team is particularly active in this space.

In the 2024-25 financial year, the team conducted 300 visits to building product suppliers in Brisbane and surrounding regions as part of an education program on NCBP laws. The primary objective of these visits is to educate suppliers about their obligations and ensure they understand how to verify compliance, demonstrating the QBCC's commitment to building industry capability throughout the supply chain.

Understanding Recall Orders and Public Warnings

If the QBCC has a reasonable suspicion that a building product is non-conforming, it can take swift and decisive action. One of its most significant powers is the ability to order a product recall. This legally binding order can require a person in the chain of responsibility to stop supplying the product and take steps to recall any product already in the marketplace or installed in buildings. The person who is the subject of the recall notice is responsible for all associated costs, which can be substantial.

Furthermore, the QBCC can issue public warnings to alert the industry and consumers about a potentially hazardous or non-compliant product. Such a warning can cause immediate and severe reputational damage to manufacturers, suppliers, and installers associated with the product, impacting their business long before any formal legal proceedings are concluded.

The High Cost of Getting It Wrong

Failing to meet your obligations under the Chain of Responsibility laws is not a minor compliance issue; it carries severe and multi-faceted consequences. The costs extend far beyond a simple fine, potentially leading to financial ruin, loss of professional licences, and intractable legal disputes. The financial penalties, rectification costs, and potential for litigation create a high-stakes environment where diligence is not just best practice—it's essential for survival.

Financial Penalties and Disciplinary Action

The QBCC Act prescribes significant financial penalties for individuals and corporations that breach their duties. These fines can run into the hundreds of thousands of dollars and are applied in addition to any other legal consequences, such as the cost of rectification or damages awarded in a civil lawsuit. Beyond monetary penalties, the QBCC also has the power to take disciplinary action against licensees. This can range from issuing demerit points to suspending or even cancelling a builder's or contractor's licence, effectively putting them out of business.

Who Carries the Cost of Rectification?

The financial penalties imposed by the regulator are often only the beginning of the financial pain. The costs of removing and replacing a non-conforming building product, especially after a project is complete, can be astronomical. Imagine the expense of stripping cladding from a 20-storey apartment building or replacing faulty structural steel in a completed commercial complex.

These immense costs inevitably lead to complex and costly legal disputes between the parties in the supply chain, as each seeks to attribute blame and financial liability to another. Resolving these matters frequently requires the intervention of a specialist construction dispute lawyer to navigate the web of contracts and statutory duties to determine who ultimately carries the cost.

Building a Defensible Position in the Supply Chain

Given the shared nature of liability and the severe consequences of a breach, a passive approach to compliance is untenable. The only effective strategy is to build a robust, proactive, and defensible position. This involves implementing rigorous internal processes, strengthening your contractual protections, and knowing when to seek expert legal advice. These measures are your best defence against being held liable for the failures of others in the supply chain.

Implementing Robust Vetting and Verification Processes

The first step is to create a formal compliance checklist for sourcing and accepting any new building product. This process should begin with a mandatory request for all technical data sheets, test reports, and certifications from the supplier. However, you cannot stop there.

The next step is to independently verify these claims where possible, for instance, by checking a product's CodeMark certification online or cross-referencing its specifications against the requirements of the National Construction Code or relevant Australian Standards.

Finally, it is crucial to train your procurement and on-site staff to spot red flags—such as incomplete documentation, vague performance claims, or unusually low pricing—and empower them to escalate these concerns before a product is purchased or installed.

Are Your Contracts Protecting You?

Your contracts are your first line of defence. The importance of well-drafted supply agreements, subcontractor agreements, and consultancy agreements cannot be overstated. Specific clauses should be included to allocate risk and enforce compliance contractually. These include strong warranties from suppliers that their products conform to all relevant laws and standards, indemnities that hold you harmless from losses arising from their NCBPs, and clear requirements for the provision of all necessary compliance documentation as a precondition for payment.

Proactively managing these terms is a key strategy for protecting your business before a problem escalates into a dispute over your legal payment rights or becomes a reason for terminating construction contracts.

Your contracts are your first line of defence. Relying on standard templates is risky. A bespoke contract that explicitly addresses NCBP liability, warranties, and information-sharing obligations is a crucial risk mitigation tool in the current regulatory environment.

When to Seek Specialist Legal Guidance

Proactive legal advice should be viewed as an investment in risk management, not a reactive expense. The Chain of Responsibility legislation is complex, and its application can be nuanced depending on your specific role and the products you handle. Engaging an expert building and construction lawyer or a specialist QBCC lawyer early in your processes can be invaluable.

They can help you establish compliant vetting systems, review and draft robust contracts that protect your interests, and provide urgent representation and strategic advice if you find yourself the subject of a QBCC investigation. Seeking this guidance can prevent a small compliance issue from escalating into a major, business-threatening liability.

Conclusion

Queensland's Chain of Responsibility laws represent a permanent shift in the construction industry's approach to liability. The principle of shared responsibility is now firmly embedded in the legal framework, meaning no participant in the supply chain can afford to be complacent. From designers and manufacturers to suppliers and installers, everyone has a proactive duty to ensure the building products they handle are safe, compliant, and fit for their intended purpose.

Navigating this complex regulatory environment requires more than just good intentions; it demands robust internal processes, meticulous documentation, and strong contractual protections. The powers of the QBCC are significant, and the financial and reputational costs of non-compliance can be devastating.

By understanding your specific role in the chain, embracing the "reasonably practicable" standard of due diligence, and seeking expert legal advice when needed, you can build a defensible position that not only ensures compliance but also contributes to a safer and more accountable construction industry for all.

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FAQs

Does the Chain of Responsibility law apply to products sourced from overseas?

Yes, absolutely. The law applies to any building product used in Queensland, regardless of its origin. The person or company that imports the product into Australia becomes a primary link in the chain and carries a duty to ensure it is not a non-conforming building product for its intended use. They are responsible for verifying its compliance with Australian standards.

What is the difference between a "non-conforming" and a "non-complying" building product?

While often used interchangeably, they have distinct meanings. A "non-complying" product is one that does not meet a specific regulatory requirement, such as the Building Code of Australia or an Australian Standard. A "non-conforming" product is a broader term defined in the QBCC Act. It includes non-complying products, but also covers products that are unsafe or do not perform to the standards represented by the manufacturer or supplier. All non-complying products are non-conforming, but not all non-conforming products are necessarily non-complying (e.g., a product could be unsafe even if it technically meets a minimum standard).

Can I be held liable if I relied on information from my supplier that turned out to be false?

Potentially, yes. The law requires you to take "reasonably practicable" steps. Simply accepting a supplier's claims without any verification may not be considered sufficient due diligence, especially for high-risk products. You may need to show that you asked for supporting evidence (like test certificates) and that it was reasonable for you to rely on that information. If you had reason to doubt the information, you had a duty to investigate further.

How can a small subcontractor protect themselves in the supply chain?

Small subcontractors can protect themselves by being diligent with documentation. Always request product information and technical data sheets for the materials you are asked to install. If the information is not provided, document your request in writing (e.g., via email). Ensure your subcontract clearly states that you are relying on the products supplied by the head contractor being compliant and fit for purpose. If you have any concerns about a product, raise them in writing immediately.

What should I do if I receive a notice from the QBCC about a non-conforming building product?

If you receive any formal notice from the QBCC, you should treat it with the utmost seriousness. Do not ignore it. The first step is to seek immediate legal advice from a lawyer who specialises in QBCC matters and construction law. An experienced lawyer can help you understand the notice, formulate a strategic response, and represent you in any dealings with the QBCC to ensure your rights are protected.

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This guide is for informational purposes only and does not constitute legal advice. For advice tailored to your specific circumstances, please contact Merlo Law

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