FNQROC Update - December 2016

By: Darlene Irvine, Executive Officer...

MacDonnells Update

Unfair Contract Conditions

extends to where one party is a small business (under 20 employees at time of contract - persons not FTE)
Does not exceed $300,000 or if over 12months $1mil

Q&A

Yes it does include construction contracts.
Was just consumer from 2010 new provisions apply from 12 November.
Example of unfair contract terms can be found in section 25 of the ACL with listed examples.
Arbitrary penalty i.e. Liquidated damages - need to have a link to actual loss or damage as a result.

Native Title and Conservation

Timber Ck Case - August 2016. Compensation payable to Native Title owners
State governments responsible for compensation - in this case NT govt.
Native title can be exclusive (to the exclusion of all others) and non exclusive (i.e. Hunting, fishing, access to land etc)
Loss or impairments of Native Title rights. Could be the granting on freehold, public infrastructure etc. Same as freehold and reclamations etc.

56 activities occurred on lands causing:

Economic Loss - market valuation of lands where 56 activities occurred.
Non-Economic or intangible (Pain and suffering) - disruption to traditional customs/rights
Interest on around they were due.

Court agreed:

- $3.3mil for 23sq km (valuation was 100% of valuation for exclusive and 80% of non-exclusive)

- $1.4mil non-economic or intangible

- $0.5 mil interest.

All payable by State - not others like mining and LG
Has been appealed by both
State may push to LG for things like LG Acquisition of land.
State could change legislation on compensation.
ILUA's would solve this issue.

Agri Round up

Water amendment Bill 2016 (Qld) -

Channel irrigation schemes currently run by SunWater - a GOC

8 schemes being transferred to local management. Mareeba is one of these.

Asset and liabilities to be transferred to entities:

pipes
Channels
Pump stations
Leases, easements, Licences etc

Public Health (Medicinal Cannabis) Act 2016

Prescriptive guidelines
Not a lot of external commentary on this as yet. It's still all in its infancy.
New federal legislation to allow the application and cultivation of medicinal cannabis. Quite an arduous process - $5,000 application fee before they open and not refundable. Extremely tight controls. Need to show you have a contract with a manufacturer at the time of application.

Tendering

Secure Parking v Woollahra Municipal Council

- council resolved to accept tender and notified Secure on 15 March 2011.

Council says a contract existed on and from 15 March 2011
Some period of negotiation and the final terms of the contract were unresolved.
Emails were changes, some of which Secure did not respond to (Council treated non-response as acceptance)
In March 2012 council sought to terminate the contract.

Court found there was no contract

Key points:

There needed to be consensus between parties
Silence does not constitute acceptance
Also lack of certainly - no commencement date

Good reminder of contract fundamentals.

Offer
Acceptance
Certainty of terms
Intention of parties to be legally bound.

Remember though - emails can be found to be a legal contract and Post-tender negotiations need to be handled delicately - need to ensure no prejudice to unsuccessful tenderers, and changes aren't so significant that there's a need to re-tender.

IPWEAQ Conference

Stefan Hajkowicz - CSIRO- Global Megatrends (Data 61)

A copy of this presentation can be found here, but as a summary:

Implications for built infrastructure and city designs (Strategy and foresight)
More from less - energy demand will sky rocket Renewable overtake coast for electricity by 2030. The world will spend US$68 trillion on energy infrastructure by 2040.
Energy Storage is the key direction.
Energy grid as population can transition to battery storage from solar.
Mining above the ground - i.e. Gold from waste product (computer parts)
Planetary pushback i.e. Climate change, super bugs and patterns of change
The Silk Highway - change of world economy (west to east - breaks USA 140 year hold but puts this in Australia's back yard). Expect another shock to china debt too, GDP is high.
Making cities in 20 years – same cities took Europe 400years.
Asia - Service sector increasing and, Agriculture decreasing, Industry plateau. Australia can't feed Asia but we can be their delicatessen.
Pandemic of physical inactivity. Need city designs that get people moving. Get people fitter and healthier to save money.
Forever Young - ageing population and high poverty rate in aged. Health care. Need to make people move more
Digital Immersion - Why had 20 years of digital growth not equated to productivity growth - it's flat lined and in some cases decreased.
Uber and Airbnb - fintech is next for banking world. You don't have to go to a shop or go to work (all can be done online)
Quantum computing sits around the corner which is able to crack financial and security.
The internet of things - 200 billion connected devices by 2020. In 2006 there were 2 billion. 2015, 15 billion
Automated vehicles - currently happening in US and Singapore.
Bitcoin currently $950 AUD - when brexit occurred bitcoin and gold increased. Bitcoin is self-managing. Block chain and distributed ledger technology is behind bitcoin - no one owns it. Doesn't need a central government. Many believe this is the same as when internet was first introduced - many didn't understand it. Biggest project for CSIRO at the moment is this for the treasurer around this.
Automated process to replace jobs - don't need human hands. I.e. Photographer verses developers/printers - need the photographer as a person but developing the print can be automated.
Rethinking the Theory of the Firm. I.e. Black and White taxi vs. Uber. Or Alibaba who can put you in touch with a supplier at a much cheaper price.
Porous Boundaries
Great Expectations - You're not selling coffee - you're selling an experience i.e. The ambiance, where the coffee is from, did the barista smile? Even in a digital world; people still like people. People still like the physical world - museums libraries, cinemas i.e. Despite netflix people still go to the movies.
The innovation Imperative - Now is the time to rattle the cage, experiment with new business models, invest in ideas & rethink organisations structures. You need to be able to keep up. Need to identify, expand and rebuild - don't kill off ideas to quickly (it's in our nature to kill off those things we don't understand. Traditional hierarchy structures do this).

email/Stefan.hajkowicz)(csiro.au - http://www.data61.csiro.au/

Darren Crombie - Deputy DG DILGP

Infrastructure Reform Program overview.

Program includes:

State Infrastructure Plan
Building Queensland
Infrastructure Portfolio Office
Market-led proposals
Innovative funding and financing models
Better use of existing assets

Priority order (using example of getting 30,000 people from Ipswich to Brisbane each day)

Reform - can we reform how we use the asset? I.e. Reduce how much we charge
Better use - can we put 3 instead of 2 people in a car (demand management)
Improve existing - can we add a lane
New - new highway

State is painting picture of problem and putting it out there to get ideas on how to fix them.

Engineering versus Law

Matt Bradbury, Ren Neimann, Michael Rochester - McCullough Robertson.

Weasel words commonly encountered in construction contractors:

Force Majeure: chance occurrence, unavoidable accident (often called act of god). Has no legal meaning was so ever, it's what you define it to be. Your contract needs to define what this is.
Liquidated damages and penalties: i.e. Practical completion - liquidated damages for performance issues. The law looks at it favourably just needs to be realistic in terms of the estimated loss as a liquidated damage. I.e. If estimated loss is $1000 per day and you charge $10,000 the law may not look favourably at this. You can't levy a penalty - only the courts can do this - can only have liquidated damage.
Superintendent: Dual and conflicting role, perhaps best called 'the referee' between contractor and principle. Quite often employee of the principle (this creates the conflict). Most difficult is to determine the definition of ‘give directions’:
AS4000-1997 Clause 20
AS2124-1994 Clause 23
What does a direction constitute - could be a nod and a wink, handshake, email.
Know the difference between 'may' (discretionary term) and 'shall' (mandatory term).
Good Faith (and the Superintendent): AS2124-1990 Clause 23, AS4000-1997 Clause 20, AS11000 (still waiting for it to come out). No clear definition.
Conditions and Warranties: Warranty is a simple promise, can sue for damage/loss. Condition if breached can terminate contract and sue for damages/loss.
Fit for purpose warranties - many will not make standard to terminate the contract but can seek damage/loss.
Waiver and estoppel - favourite arguments for constructor. AS 4000-1997 Clause 43. Conduct - time bars, standards expected. Deeds - needs to be cautious. If you are going to vary the terms of a contract be careful in respect to time bars. Be careful with deeds especially recitals.
Entire agreement clause: Any statement, representation or promise made in an negotiation has no effect unless expressly incorporated in this contract. Tenders Order of Precedence.
Indemnity: just a right for one party to be reimbursed by the other party but need to be careful about your wording.
Reasonable endeavours and best endeavours: no difference.

Procurement - top 5 procurement mistakes.

Joseph Jones

$28billion in project overruns in last 15 years (Australian government transport projects).

Scoping (used out of date requirements or requirements to match a grant which is not the right fit, failed to do due diligence).
Budgeting (need experts in the area you are looking at procuring as part of the process to get realistic input/assessment i.e. My Ki no IT or ticketing expert - ended up costing 3 times.
Outcomes
Selection
Processes

Law-Geneering

Lee Wilson, Wilson Partners Law

TMR - Autonomous vehicle modelling and next steps. (Get presentation)

3 scenarios modelled - Conservative and Moderate and Aggressive. Results:

Conservative 100% adoption ~ 2060, 50% ~ 2050
Moderate 100% adoption ~ 2055, 50% ~ 2043
Aggressive 100% adoption ~ 2046, 50% ~ 2035

Looked a consequence in a policy sense.
Have done a model of Australia but this was focussed on SEQ. Will result in an increase in distance travelled per person and will see a reduction in use of public transport and active travel. Over time will lead to increased congestion.
Looked at change form up front model to a pay-as-you-go model i.e. Car share. Transport as a service - this will mean people will travel less.
Safety implications - interesting results.
Effect on land use - people who live further away will get the most benefit.
List of policy implications and recommendations.

- Minimise transition period

- Infrastructure Planning - uncertainty, risky benefit streams.

- Land use planning May not need carport anymore - freed up land.

- Consider pricing i.e. Congestion pricing

- Network operations

- Cultural changes i.e. Licensing

- Rethink PT - i.e. On demand PT

- Market flexibility

- More planning and modelling - get ahead of changes.

Sustainable Program delivery - Miles Vass

Planning

Single integrated planning team.

State Infrastructure Plan
Transport Coordination Plan
Regional Transport Plan(s) - this is key for us to get right. Very important
Area and Corridor Planning (trying to minimise corridor footprint)
Infrastructure Investment Planning.

Objectives

Customer experience and Affordability
Community Connectivity
Efficiency and productivity
Safety and security
Environment and Sustainability

(Identified rural and remote and agriculture and tourism underpinning the economy)

Developing the Pipeline:

sustainable financial management
Leadership reviews and challenges
Fit-for-purpose (now have low volume standard)
Value for money
Innovative solutions
Industry and customer input
Effective Governance
Maximising value to deliver more in the same period of time
Sustaining jobs (economic and social outcomes as much as just infrastructure)
Bundling
Acceleration of projects

Market led proposals have had positive results (comment from BCC)