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Crisis Case Study: Lessons from the Opal Tower Crisis

By Alex Liddington-Cox, Michelle Wang and James Fitzpatrick


As residents of Sydney’s now infamous Opal Tower were hoping to return to their apartments on Boxing Day, the building’s developer was getting a little ahead of himself.

Bassam Aflak, director of the building’s developer Ecove, declared the tower was “high-quality” and launched an attack on the “sensational” media. The only reason for the coverage, according to Aflak, was because “it happened over the Christmas break”.

What’s followed is an escalating saga that’s dragged the developer, builder, residents, owners and state government into a battle that’ll probably still be going next Christmas.

What Happened

By now, everyone in Australia is familiar with Opal Tower. It’s a brand-new, 36-floor apartment complex in Sydney’s inner-city Homebush suburb developed by Ecove and built by Icon Construction.

On Christmas Eve, residents were alarmed to hear the sound of their homes cracking around them. Up to 3000 residents from multiple sites and public transport services were cancelled as an exclusion zone was set up that covered neighbouring buildings and a train station.

Two days later Aflak made his now infamous statement, adding that all units were safe to live in but “a small number” were still being looked at.

The next day, December 27, residents were asked to evacuate again, this time for up to 10 days (a deadline that has since blown out indefinitely) following the discovery of more damage.

A community meeting was set up by the developers to discuss the abrupt evacuation with residents at 2:45pm that afternoon. Residents were only notified by email at 2:19pm.

Meanwhile, the press got their hands on fresh pictures of the extent of the damage to the building. Frustrated residents, who felt adrift in an information vacuum, were only too happy to lend a quote.

“I don’t think the communication is good at all,” one frustrated owner told The Daily Telegraph. “We can only get the latest news from the media.”

The NSW government launched an investigation. Premier Gladys Berejiklian said she’s “wholeheartedly” encouraging residents to explore their legal options to uncover who is responsible.

Concerns about shoddy building practises were also taking off thanks in large part to comments from former Lend Lease chairman David Crawford. Crawford expressed concern that there could be more incidents like Opal Tower thanks to a building and construction boom that attracted new players and may have produced questionable projects.

Ecove took the extraordinary step of revealing confidential details to the Australian Financial Review of its contract with ICON that indicate liability falls with the builder. ICON hit back with a spokesperson saying, “Our priorities remain the safety and welfare of the residents and rectifying the issue, not on attempting to cover our backsides”.

Not long afterwards, details emerged in the same newspaper of a court dispute between Ecove and ICON over a $2.5 million payment. This further undermined any sense of unity between the two companies, drew more focus away from frustrated residents and owners, and reinforced concerns about the culture of the building industry.

On January 4 it emerged some residents who couldn’t return to their apartments were still being charged rent. This was picked up by Luke Grant on 2GB, who was filling in for Ben Fordham.

“It’s not how your treat people,” said an indignant Grant. “And going back to the first day or two of this story, when the developers were talking about ‘sensational reporting’. I mean far dinkum.”

Lessons

Was Ecove saying the Opal Tower story wouldn’t have got this level of coverage because media is short-staffed over Christmas and needs one story to focus on? Or was it that evacuations for building hiccups are commonplace and the timing just made it a human story?

Whatever the case, minimising the story can be a good message if there’s little chance of it escalating. But if the story does escalate, as this did on many fronts, your stakeholders will think you’re not on top of the issue, insensitive, or both.

This problem was compounded when Ecove decided to release confidential contract details absolving it of liability. Doing anything but focussing on your key stakeholders gives a window that the press or other third parties can exploit, which ICON did in this instance.

Meanwhile, residents are reportedly being communicated with once a day. That’s not often enough in this scenario. Details of the crisis are reaching the media before they’re reaching residents, which feeds disquiet that also ends up in the media.

According to The Australian, close to 200 of Opal Tower’s owners are Chinese and are sharing updates on further damage in a WeChat group. Email alone isn’t the way to get through to this stakeholder group.

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