Insulation industry news from Global Insulation

Australia: Boral CEO Mike Kane has said that Australia's brick industry will pay the price if the competition regulator sticks to its ‘narrow view’ of the brick market. He warned that plant closures and land sales were likely if the merger of Boral and CSR's brick businesses was blocked.

Boral announced plans to merge its east coast brick business with rival CSR in April 2014 in a bid to boost profitability. In its statement of issues in October 2014, the Australian Competition and Consumer Commission (ACCC) rejected Boral and CSR's definition of bricks as part of a broader cladding market and gave the preliminary conclusion that the deal would increase the price of bricks and reduce consumer choice.

Kane said that the ACCC's issues paper was ‘concerning.’ "We are in the fortunate position where the high price of land in Australian eastern metropolitan markets means that value will eventually be delivered for Boral shareholders if an ultimate exit over time is the only remaining option," said Kane. About 550 people work in Boral's brick business. Boral has cut more than 1000 jobs in the last two years. "Sadly for Australia, a narrow view by regulators will see the brick industry on the same trajectory as the auto, oil, refining, steel, aluminium and cement industries," said Kane.

ACCC chairman Rod Sims stressed that the issues paper was a preliminary view and the regulator was seeking more information. "Every time we assess a merger, the merger parties argue that our view is too narrow. Our preliminary view is that most residential houses use bricks, as distinct from other cladding,” he said. The ACCC plans to make its final decision on 18 December 2014.

Australia: Fletcher Building's subsidiary Tasman Insulation, which makes Pink Batts insulation, is appealing against a High Court decision that a rival using the word 'batts' was not in breach of trademarks.

The High Court in Auckland in May 2014 handed down a multi-pronged decision on a long-running dispute between Tasman Insulation and Knauf Insulation, which makes the rival Earthwool products. Justice Brendan Brown ruled that Tasman's claim largely succeeded. However, claims that Tasman's trademarks were infringed by Knauf using the word 'batt' and 'batts' in packaging were not upheld.

The Court of Appeal has confirmed that Tasman has lodged an appeal against the ruling and a hearing date has yet to be set. The dispute canvassed a range of claims, including false advertising and intellectual property breaches. The case has run since 2011.

Australia: An insulation industry representative was told 'not to rock the boat' when he warned government planners about safety risks in the Home Insulation Program. The comments have arisen in a royal commission into the Home Insulation Program that is investigating whether the deaths of four installers could have been avoided.

Peter Ruz, who worked for Fletcher Insulation and who was the director of the Insulation Council of Australia and New Zealand, raised safety issues with installing foil insulation when he was consulted about the scheme in 2009. According to Australian Broadcasting Corporation transcripts from the commission, Ruz said he told government planners that three installers in New Zealand had been electrocuted and that he recommended the use of other insulation materials. However, Ruz felt that planners at the meeting dismissed his comments as 'squabbling' between different insulation type producers. Ruz also alleges that he sent an Environment Department manager, Beth Brunoro, news cuttings of the deaths in New Zealand.

Brunoro previously told the inquiry earlier that concerns would have been taken into consideration when the guidelines were being created for the scheme. It is unclear exactly what happened with that information because Brunoro stopped overseeing the project in April 2009 and the insulation scheme started in full in July 2009.

rThe Home Insulation Program ran until February 2010. The royal commission, overseen by Richard Hanger, will submit its report by 30 June 2014.

Australia: A company that was engaged under the federal government's former home insulation programme will be prosecuted for allegedly underpaying five Somali teenagers an estimated USD25,700, following a national audit of the scheme. It is understood that the teenagers told federal workplace inspectors they were asked only for their names and mobile phone numbers when employed in 2010 by Louay Soliman and his company, K & L Insulation Pty Ltd. The workers, all Somali immigrants aged 18 and 19 at the time, alleged they were not given training or any protective equipment, apart from masks.

The Fair Work Ombudsman alleges that Mr Soliman and his company, based in the north Melbourne suburb of Campbellfield, underpaid the five employees a total of USD25,700 over several weeks in March and April 2010. Court documents filed by the Fair Work Ombudsman allege the employees worked up to 10 hours a day, six days a week and in some cases were paid flat rates equating to as little as USD10.10/hr.

Under the modern award that applied to their positions, the workers were entitled to hourly rates of USD16.30 for normal hours worked, up to USD31.8/hr for overtime and weekend work and up to USD40.1/hr on public holidays. It is alleged that the employees were underpaid with respect to other entitlements, including accrued annual leave and wages in lieu of notice after their employment was terminated without notice.

The government's insulation scheme came in for heavy criticism in 2009-2010 following a number of worker deaths attributed to electrified foil insulation inside roof cavities and heat-exhaustion. Many were critical of the speed with which the government attempted to implement the plans in order to create jobs at a time of recession, claiming that there were insufficient checks to stop malpractice, unfair treatment of workers and violations of health and safety. The company cited in this case was established in December 2009.