SOPA Authorised Nominating Authority Draft Code of Practice Released
On 21 October 2019 reforms are commencing to the Building and Construction Industry Security of Payment Act 1999 (the Act) which will allow the Minister for Better Regulation and Innovation to make a code of practice to be observed by Authorised Nominating Authorities (ANAs) in relation to their activities under the Act.
ANAs are responsible for receiving adjudication applications and appointing adjudicators for payment claim disputes under the Act.
Draft code of practice
Public consultation has now opened, seeking comments on the draft code of practice on the NSW Fair trading web site.¹
The following two draft documents have been made available for consultation from the public by 11 October 2019:
1) Draft Authorised Nominating Authority Code of Practice;² and
2) Annexure A to ANA Code of Practice – Quarterly Data Template Jan 2019.³
The proposed Code will replace the existing arrangement whereby an ANA provides the Minister with an undertaking to abide by a Code when applying for an authority under the Act.
Replacing this arrangement with a Code that is established under the Act will remove ambiguity as to whether the existing Code is enforceable.
Failure to comply with the Code will attract a maximum penalty of 50 penalty units.
The Minister may also exercise the power to withdraw the authority of the ANA to nominate adjudicators.
Amendments to the act re the code
The Building and Construction Industry Security of Payment Amendment Act 2018 was assented to on 28 November 2018 and will commence on 21 October 2019. The delay in the commencement of the Act was intended to allow time for the industry to prepare for the reforms.
The following are the relevant reforms relating to ANAs.
Section 28 Nominating authorities
Insert after section 28 (1A):
(1B) An authority under this section may be given unconditionally or subject to conditions.
 Section 28 (2)
Insert “or is given subject to conditions” after “withdrawn” in section 28 (2) (b).
 Section 28A
Insert after section 28:
28A Code of practice for authorised nominating authorities
1) The Minister may, by order published on the NSW legislation website, make a code of practice to be observed by an authorised nominating authority in relation to its activities under this Act. The order is to set out the code of practice.
2) The code of practice takes effect on the day on which the order is published or, if the order specifies a later date for commencement, on the later date.
3) The Minister may, by order published on the NSW legislation website, amend or repeal the code of practice.
4) An authorised nominating authority that contravenes a provision of the code of practice that is identified in the code as an “offence provision” is guilty of an offence under this section.
Maximum penalty: 50 penalty units.
5) The Minister may withdraw a person’s authority to nominate adjudicators for the purposes of this Act if the Minister is satisfied that the person has contravened a provision of the code of practice. Nothing in this subsection limits:
a)the grounds on which the Minister may withdraw any such authority under section 28, or
b)the right of a person under that section to apply to the Civil and Administrative Tribunal for an administrative review under the Administrative Decisions Review Act 1997 of the Minister’s decision to withdraw the authority.
Key elements to the draft code of practice
The main changes included in the proposed code of practice include:
- clarifying minimum expected standards of behaviour
- improved requirements for complaint handling
- clarifying minimum expectations for disclosing fees
- offences for contraventions of specified provisions
- requirements for managing adjudicator panels
- clarifying professional management standards
Consultation on the draft Code will be open until 5:00pm on 11 October 2019.
The draft Code of Practice states that it anticipates that it will commence on 21 October 2019 at the same time as the amending Act also commences. This draft code is one of the final pieces of the puzzle that needs to be completed in order for the reform process to be completed.
The changes to the Act are significant for all members of the building and construction industry and all participants should be aware of the imminent commencement and its impact on their rights and obligations for payment.
If you need any information about the amendments or the contents of this article please contact us.
For more information, please contact our lawyers David Glinatsis, Matthew Singh or Catherine Lucas at firstname.lastname@example.org or on 02 8239 6500.
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