News

Can we fit one solar system in Australia… please?

15.02.2013

Moulis Legal, based in Canberra, acts for a number of international solar PV industry manufacturers and distributors, and national installers, in importation, business establishment, regulatory affairs, consumer protection, commercial contracting and licensing.

In this article Lisa Eldridge, an Associate with Moulis Legal, outlines the slow progress towards licensing uniformity for Australian installers, and asks whether current proposals go far enough.

Will we ever have one “solar system” in Australia?

Solar photovoltaic (“solar PV”) system installation by national operators across multiple Australian jurisdictions has been a nightmare of red tape and of differences. The Council of Australian Governments (“COAG”) has announced that there has been progress on the national occupational licensing system. The word is that the system will commence from 2013. You think “great, soon I can work anywhere in the country without worrying about paying more money or filling in more paper work” – right? Not quite.

Currently, each state and territory has its own occupational licensing system. What this means is, for example, if you install solar PV systems in Western Australia you need to hold a Western Australian electrical contractors licence, and if you also undertake the plumbing work for the installation of a solar hot water system you also need to hold a plumbing licence. If you then want to also install solar PV systems in South Australia, you need to apply for a South Australian electrical contractors’ licence and a building work contractor licence. If you also want to install solar hot water systems in South Australia you also need to hold a plumbers contractors’ licence. This brings the total number of licences that need to be maintained to five – just to install solar PV systems and solar hot water systems in two states! And on top of that:

  • Where the relevant qualifications have been attained in one jurisdiction but a licence has not been obtained, some of the states do not have a requirement to recognise a qualification (as opposed to a licence) obtained in a different jurisdiction.
  • Not all licences have an equivalent in each state and territory. Where this is the case, the local licensing authority needs to make a determination as to whether there is an equivalent licence and, if so, what the equivalent licence is.

It’s not just a question of getting the same thing in two different places.

Over the years, governments have attempted to fix the situation, however it still appears to be a work in progress.

First attempt – mutual recognition

In an attempt to facilitate individuals to work in any state or territory of their choosing, about 20 years ago the Commonwealth and the various states and territories introduced legislation providing for mutual recognition of licences and qualifications. This mutual recognition legislation provided for the recognition by all states and territories of qualifications obtained or licences held in one state or territory as being “equivalent” to qualifications that could be obtained or licences that could be held in another state or territory.

One of the intentions of the mutual recognition legislation was to remove inefficiencies and to ensure:

…the goal of freedom of movement of… labour in the national market.

Additionally, it was intended that a scheme would be established to:

…provide for mutual recognition… of qualifications for entry into occupations.

The mutual recognition legislation provided that where an individual was licenced in one jurisdiction, the individual could apply for a licence in another jurisdiction on the basis that he/she already held a licence in the first jurisdiction. For example, it allowed those who hold a plumbers contractors’ licence in Western Australia to apply for and, in theory, be qualified for the grant of a plumbers’ licence in South Australia.

However this created more paperwork for licence holders and required payment of additional fees simply because there happened to be a border separating one work area from another work area. The additional paperwork and fees were also not a one-time only affair – the additional paperwork and fees would need to be completed and paid every time the additional licences expired.

Additionally, a key requirement that underlies the mutual recognition scheme is that the licence that is sought is equivalent to the licence currently held. Where it is determined by the second jurisdiction that the licence applied for is not an equivalent licence and equivalence cannot be achieve through the imposition of conditions on the licence, the application for recognition can be refused.

While the benefit of the mutual recognition legislation is clear in that it reduced the barriers for working in multiple states and territories, it did not quite hit the mark in ensuring freedom of movement of labour throughout Australia.

Second attempt – a national occupational licensing system?

As recent announcements indicate, there is currently some cause for hope that a proper, single national licensing system will be introduced. In July 2008 COAG agreed to the introduction of a national occupational licensing system which would:

…cover licensing requirements for selected occupations, amongst other things. The National Occupational Licensing System (NOLS) will remove inconsistencies across State borders and allow for a much more mobile workforce. Once a licence is issued the licence holder will be able to use the licence to work anywhere in Australia without additional paperwork or cost.

Legislation having this goal was subsequently introduced in Victoria on 28 September 2010 and it was intended that the other states and territories would introduce similar legislation shortly thereafter.

For those who haven’t heard, the national occupation licensing system is intended to consolidate the various state and territory licensing systems into one nation-wide system. That is, rather than having to hold, for example, a Victorian electrical contractors’ licence and a New South Wales electrical contractors’ licence to undertake wiring work for solar systems in either state, only a national electrical contractors’ licence will need to be held. Similarly to the current individual state and territory systems, licences will still need to be maintained in multiple trades where licences in multiple trades are required in a particular state.

The national occupation licensing system will be governed by the National Occupational Licensing Authority (“NOLA”), which will:

…set policy and maintain a national register, while the various states will issue licences, undertake complaint handling, compliance and enforcement monitoring, investigate disciplinary matters, and be responsible for conduct requirements.

It is also intended that NOLA will delegate some of the day-to-day functions, such as processing licence applications, to the licensing authorities currently operating in the states and territories.

The national occupation licensing system was originally intended to commence in July 2012. However July 2012 has come and gone and the system has not commenced. COAG subsequently announced, on 13 April 2012, that the national occupational licensing system would commence from 2013. However with some governments still yet to pass the necessary legislation to institute the system, this commencement date still seems optimistic.

The rogue governments are the Australian Capital Territory and Western Australia. Neither the Australian Capital Territory nor Western Australia have passed any laws so that they can join the national licensing system – despite having entered into the Intergovernmental Agreement for a National Licensing System for Specified Occupations on 30 April 2009. Western Australia introduced legislation into its parliament to give effect to the national licensing system, but it was defeated. The Australian Capital Territory has not introduced any legislation at all, stating that it has “reserved the right not to implement the reform”,apparently to allow the Australian Capital Territory to further analyse the “economic significance” of the national licensing system.

NOLA claims that from 2013

[t]he majority of licensees who don’t have any restrictions or conditions on their current licence will simply be transitioned to an equivalent national licence

However, this claim does not seem to take into account the fact that not all states and territories have confirmed their participation by enacting the necessary legislation to recognise the new licensing system.

Additionally, for those states that have confirmed their participation in the scheme, the legislation currently in place only provides for the establishment of NOLA and a ministerial council which can make regulations to give practical effect to the Occupational Licensing National Law. As yet, no ministerial council has been formed and no regulations have been implemented. There are no start dates for the parts of the legislation which provide for the actual licensing system.

Need for one truly national solar licensing system

But the delays caused by the Australian Capital Territory and Western Australia are not the only problem for the uniformity that the solar PV industry wants. States and territories still have different requirements as to the licences that are required to be held to operate in the industry. It is not simply a matter of having “the” licence required to install a solar PV system in one state, and therefore having the relevant licence to install in another state. In South Australia, for example, in addition to holding an electrical contractors’ licence, to install solar PV systems an individual (or company) must also hold a building work contractors’ licence. This additional licence is not required by any other state in relation to solar PV systems. Accordingly even with the national occupational licencing scheme, those who currently install solar PV systems outside of South Australia will still need to obtain an additional licence in order to install solar PV systems (and solar hot water systems) in South Australia.

This illustrates one key issue with the national licensing system – different states and territories can have different licensing requirements for activities which involve tasks which traditionally may have been undertaken by different occupations. For example, in the case of installing a solar hot water system in South Australia, an installer needs:

  • a building work contractor licence to install the solar PV panels;
  • an electrical contractors’ licence to undertake the wiring of the system; and
  • a plumbers contractors’ licence to install the hot water tank and/or connect the pipes for the water.

In Western Australia, the situation is slightly different –an electrical contractors’ licence needs to be held, and an individual employee must hold a plumbing and drainage licence.

Queensland is again slightly different:

  • any electrical work must be carried out by an individual holding an electrical contractors’ licence;
  • a plumbing and drainage licence must be held for the installation and connection of the hot water system;
  • the solar panels for the hot water system can be installed by a person who holds a builder open contractor licence, builder medium rise contractor licence, builder low rise contractor licence or a plumbing and drainage contractor licence.

Each of the remaining states and territories also have their own licence variations for the separate tasks required for the installation of solar PV systems and solar hot water systems.

Hence in an industry such as solar installations, where a government could require the involvement of multiple trades for the actual solar PV system or solar hot water system installation, a single national licensing system will not solve everything. This is particularly so given that it is up to the states and territories to determine the tasks that can be undertaken in respect of each type of licence.

Interestingly, NOLA claims that

[i]n working out the equivalent national licence for individual licence holders the jurisdictional regulators are working on a “no disadvantage” principle. This means that if you are licensed to perform a particular scope of work, your new national licence/s will entitle you to carry out this work anywhere in Australia without needing to satisfy any further licence eligibility or training requirements.

However under the draft amendments to the Occupational Licensing National Law currently available on NOLA’s website, the mounting, positioning or securing of any electrical equipment (such as solar panels or hot water tanks) does not fall within “electrical work”. This indicates that in order to install, for example, any solar panels, an installer also needs to hold a builder’s licence. A concern with this is that while all of the “marketing material” (including the “Consultation Regulation Impact Statement – Proposal for national licensing for property occupations”, which can be found on NOLA’s website) about the new national licensing system states that building and building-related licences are included in the national licensing scheme, there is nothing in the current national law or the proposed amendments to the national law to include building and building-related licences in the scheme.

Where from here?

So where does this leave us? Can there ever be true uniformity between the states and territories to create one system of licensing requirements to govern the solar industry? Arguably yes – but to achieve one truly national licensing system requires more negotiations and concessions between the states and territories in terms of the actual issuing of licenses and in the determination of what licences can undertake the specific tasks for installing a solar PV system and solar hot water system. As can be seen from the time it is taking for all states and territories to endorse the Occupational Licensing National Law – a concept that was agreed to back in 2008 – this is no easy task particularly when issues such as consumer safety and the well-being of workers have such high political sensitivity at the State level.

For more information, please contact Lisa Eldridge on +61 2 6163 1000 or email lisa.eldridge@moulislegal.com.

___________________________________________________

(1) Legislative Assembly for the Australian Capital Territory, Mutual Recognition (Australian Capital Territory) Bill 1992 Explanatory Memorandum, page 2. See also Parliament of the Commonwealth of Australia, House of Representatives Mutual Recognition Bill 1992 Explanatory Memorandum, pages 2 and 5.

(2) Ibid.

(3) Mutual Recognition Act 1992 (ACT), Section 23.

(4) South Australian Government – Consumer and Business Services, http://www.cbs.sa.gov.au/nols.html

(5) Ibid.

(6) COAG Reform Council Seamless National Economy: Report on performance 2011-2012, page 31.

(7) National Occupational Licensing Authority, Frequently asked questions – National Occupational Licensing Reform,http://nola.gov.au/resources/faqs/

(8) Ibid.

This memo presents an overview and commentary of the subject matter. It is not provided in the context of a solicitor-client relationship and no duty of care is assumed or accepted. It does not constitute legal advice.