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nicola Grayson Alliancing Keeps Infrastructure Funding Flowing




Business Investment Continues to Anchor the Downturn


caroline ostrowski Will the 2009-10 Budget Help Produce More Engineering Graduates?


NEil Bassett Investment in Community Infrastructure



Contents Spring 2009




BUSINESS INVESTMENT CONTINUES TO ANCHOR THE DOWNTURN Business investment in Australia has plummeted since the onset of the global financial crisis in September 2008.... MATTHEW KING


WILL THE 2009-10 BUDGET HELP PRODUCE MORE ENGINEERING GRADUATES? The Rudd Government has announced a $5.7 billion package over four years to deliver reforms across the higher education and innovation sectors in response to the Bradley Review of Australian Higher Education and the Cutler Review of the National Innovation System.... cAROLINE OSTROWSKI


INVESTMENT IN COMMUNITY INFRASTRUCTURE The Government is heavily investing in community infrastructure as part of their $42 billion Nation Building – Economic Stimulus Plan.... NEIL BASSETT



From the President


From the CEO


Industry News


State News


Practice & Procurement


Contracts & Liability








Economics & Taxation


Skills & Resources






Ask a Lawyer


SPRING 09 National Outlook



from the president Paul Reed is the President of the Association of Consulting Engineers Australia and WA Regional Director for consulting engineering firm, Parsons Brinckerhoff Australia

SEPTEMBER 2009 At the time the Constitution of ACEA was changed some 10 years ago, the Board recognised a number of trends in the industry that were likely to impact on the organisation and its membership. It was clear that consolidation of the industry was going to continually erode the membership over time and that this would create a financial challenge for the ACEA. It was also apparent that the larger businesses within the membership would continue to increase the breadth of professional services offered to the market. This would, over time, mean that the principals of those businesses may not always be engineers. In the interests of creating a strong and relevant Association it was felt by that Board that the criteria for membership of the Association should be broadened to recognise the reality of the market in which our member firms operate and to reflect the demands of the clients they were providing services to. The result was that businesses with principals having professional qualifications from recognised institutions beyond engineering and that provided those professional services to the built and natural environment were permitted to apply for membership of ACEA.

Today, the envisioned trends in the industry have materialised and, in fact, the market has over recent years moved very strongly towards a far more multi-disciplinary environment. The demands of the development industry and the expectations of the community and its political leaders generally are very much focused on sustainable solutions. This invariably demands more complex solutions developed through the integration of a wide range of professional services. The industry has responded to this growing focus on sustainability through the ongoing broadening of the services provided by our larger member firms. There is also the need for our smaller member firms to work on projects of all sizes in a more collaborative manner with other professional services firms. When I consider the expectations of our clients, all levels of Government, and the community and the emphasis that is put on achieving more sustainable outcomes from investments, I believe that as well as needing to deal with the complexity of integrated solutions, our industry has to provide clear leadership if we are, as a society, to meet these challenges.

Government and the community. We can only do that effectively if we recognise the multidisciplinary nature of the industry and are prepared to fully embrace the business interests of all the professionals that are needed to deliver the outcomes that the community and our clients now demand. To be fully effective it is essential for the organisation to align its branding with the direction of the industry that it seeks to represent. That is why your current Board is considering a new identity for the ACEA that is aligned with the multi-disciplinary environment that we all aspire to service. This change will make the organisation attractive to a wider suite of firms thus strengthening our representation and increasing the sustainability of the Association.

Paul Reed ACEA President

I am therefore very strongly of the opinion that ACEA has to provide a vehicle to foster, encourage and represent that leadership to

National Outlook Editor Julia Lemercier Sub-editor Nicole Brown Advertising Enquiries Showcase Publications (02) 9211 7422

National Outlook is produced by the Association of Consulting Engineers Australia (ACEA). Phone: (02) 9922 4711. Website:

President Paul Reed Chief Executive Megan Motto National Operations Manager Julia Lemercier National Policy Manager Nicola Grayson Policy Officer Matthew King Policy Officer Caroline Ostrowski Policy Officer Neil Bassett Education & Training Officer Anjela Currie Education & Training Assistant Daniel Condon Events Manager Nicole Brown Designer Hugh Peinke Business Relationship Manager Benjamin Jung Finance & Membership Coordinator Sylvia Suen Executive Assistant (CEO & Policy) Kerri Clifford Executive Assistant (Operations) Leena Moorjani Immigration Officer Svetlana McNeil Editorial Submissions GPO Box 56, Sydney NSW 2001 National Outlook Š 2009. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, internet or otherwise, without the prior written permission of the publishers. While every effort has been made to ensure the accuracy of the information in this publication, the publishers accept no responsibility or liability for any errors, omissions or resultant consequences including any loss or damage arising from reliance on information in this publication.

This Magazine has been printed with Vegetable Based Inks using Certified Environmental Management System ISO 14001, on Mega Recycled FSC Silk made up of 50 per cent recycled post consumer waste and 50 per cent FSC certified fibre.


National Outlook SPRING 09

Are you getting the benefits? Business Reporting Economic Reports Performance Benchmarking Salary Survey Benchmarking

Events & Networking ACEA Awards for Excellence Member Meetings University/student interaction State Annual Dinners State Branches Liability & Contracts Roundtable Skills Roundtable OH&S Roundtable Sustainability Roundtable Economics & Tax Roundtable Infrastructure Roundtable Conferences FutureNet Local CPD Seminars

Government Lobbying Contracting, Liability and Risk Occupational Health and Safety Skills Shortages, Education and Migration Procurement, Project Delivery and Registration Sustainability Taxation

Partnership Advertising Sponsorship at all levels Event/CPD Sponsorship

Workplace Relations Industrial Relations Advice Award Negotiation

Business Development Tools Practice Notes Business Tips ACEA Contract ACEA Short Form Contract ACEA Guide to Contract Terms: Managing Unfavourable Terms HR Advance OH&S Checklist Safety in Design Pocket Guide

Education & Training Contract for Consultants Safety in Design Managing your Business for Economic Success HR for Non-HR Professionals Regular Division CPD Seminars and All Day Workshops

Promoting Your Business ACEA Awards for Excellence Advanced Reputation Success by Association Downloadable Logos ACEA Branded Contracts FIDIC Branded Contracts Graduate Guide Distributed to All Universities Member Referral Service

Website Members Only Area Member Downloads Latest News & Events Practical Advice & Assistance Online Store Events Calendar Contracts Online Download ACEA Member Logos ACEA Awards for Excellence

Communications National Outlook Magazine Annual Report Innovate Magazine Fortnightly CE Update E-newsletter International E-newsletter HR/IR E-newsletter State Newsletters & Event Updates

FIDIC Publications Contracts & Agreements Guide to Practice Quality & Integrity Management Risk Management Environment & Sustainability

ACEA Publications ACEA Risk Management Guidelines for Consulting Engineers Winning Government Business – A Guide for Consulting Engineers Outlook for Consulting Engineering – Annual Publication Outlook for Consulting Engineering – Quarterly Report

Insurance Broker Service PI Pathway Panel of Brokers

Visa & Immigration Issues In house Department of Immigration Advisor

Legal Advice Built Environment Legal (BEL) 25% Discount

“ACEA has a strong and well respected voice at all levels of government and works constantly to protect our interests. All consultants have benefited substantially over the years from the Tony Loveday | Opus International Consultants (PCA) Ltd ACEA’s influence - probably often without being aware of it”

If you would like more information or are interested in applying for membership, please contact ACEA Phone: 1800 800 528 Email: Website: Member Benefits CS4.indd 1

20/08/2009 3:56:03 PM

from the ceo Megan Motto is Chief Executive of the Association of Consulting Engineers Australia

SEPTEMBER 2009 As I write this article, Julia Lemercier (National Operations Manager) and I will be near to finalising conversations with every ACEA member firm regarding the proposed branding change for the Association. Whilst a momentous task, we felt that it was extremely important to ensure that all ACEA members felt that they have been adequately consulted regarding the future direction of your association and have had the opportunity to provide feedback to the Board as they make the decision whether or not to move ahead with a member vote on the proposed changes at the December AGM. The task has also been incredibly rewarding (and enjoyable). It has been great to speak to so many members and receive your feedback on not only the proposed branding changes but the general activities of the Association. I take great satisfaction in the overall level of member engagement in the Association’s activities and the high regard with which most members hold ACEA and our services and achievements. It is important as an association that we stay relevant to the industry that we service, but one of the challenges for us is that the industry

that we service is becoming increasingly more diverse. Since I began working for ACEA (in September 2000) we have changed quite dramatically. For example, whilst we also still service a large number of small firms and sole practitioners who provide only traditional engineering services, increasingly over the last nine years we are also servicing much larger organisations (our large firms group has grown over that time from five to eighteen) that offer far more multidisciplinary services. This trend is set to continue, particularly as the lines between accounting and engineering are blurred under the auditing of the Carbon Pollution Reduction Scheme (CPRS). One of the areas of feedback we have received regarding the proposed new name is that it would potentially not provide the same marketing value as the current name. This is a valid concern, particularly for our smaller, single disciplinary firms who find value in using the current ACEA brand with clients. To this end, the Board has agreed on an alternative strap line and member logo that could be used to satisfy this need.

140 tickets and (as I write this) it is only the beginning of August. It looks to be a great night celebrating some outstanding project success and I hope to catch up with many of you there. I suggest that members interested in attending register as soon as possible as I predict that the night will be a sell out and those that don’t register soon may miss out. Members who have more questions regarding the proposed changes are welcome to call me any time to discuss… I will not only be pleased to talk through any issues and convey them to the Board going forward but I will enjoy the opportunity to talk to members (many of whom are good friends after all these years!) about the future of your association.

Megan Motto Chief Executive

Speaking of marketing opportunities I’m very pleased to see that members are already registering to attend the ACEA Awards for Excellence in Brisbane on 4 December. Not only did we receive record numbers of entries this year, but we have already sold almost

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National Outlook SPRING 09

industry news

The ACEA together with the Property Council, the Green Building Council of Australia, the Planning Institute of australia and the Australian Institute of Architects, were proud to host BEMP 2009 at Parliament House in Canberra on 11 and 12 August 2009. BEMP is an annual conversation between parliamentarians and industry leaders that showcases the relationship between Australian communities and their built environment. BEMP offers an opportunity to explore the economic, social, environmental and governance issues that help shape national prosperity.

Principles for Sustainable Communities Now into its third year, BEMP 2009 explored the principles for planning sustainable communities. To stimulate and drive debate, a consultation draft of Principles for planning sustainable communities prepared by the Allen Consulting Group was released during BEMP. Identifying ten guiding principles that should typify Australia’s strategic planning framework the paper seeks to inform the newly created COAG Taskforce charged with improving strategic planning in Australia’s major and capital cities. Attended by business leaders in: consulting engineering; architecture; building and construction; property investment, ownership, and development; planning; and project management; the BEMP Summit was structured around four key discussion points:

Prosperity Chaired by the ACEA Chief Executive, Megan Motto, this session explored ways in which Australia can unlock credit; maintain and create jobs. The key note address was given by The Hon Lindsay Tanner, who spoke about the challenges facing Australia’s productivity and competitiveness today. In a lively panel debate, which included The Hon Bruce Billson MP, Mr Bernie Ripoll MP, John Tabart, Barangaroo Delivery Authority, Chris Murphy, KPMG Econtech and Sue Holliday, Chair of the Built Environment Industry Innovation Council, speakers and audience debated meeting Australia’s skills needs, modernising property

investment taxation arrangements, and attracting investment in infrastructure.

Sustainability The Hon Peter Garrett, MP, opened this session, chaired by Romilly Madew, Chief Executive of the Green Building Council of Australia. In a panel discussion with Senator The Hon Christine Milne MP; The Hon Greg Hunt MP; Don Henry, Australian Conservation Foundation; John Connor, The Climate Institute; and David Atkin, Cbus, delegates discussed the significant contribution that the building sector can make to reducing Australia’s greenhouse gas emissions through employing energy efficiency measures. The issues of water efficiency; environmental awareness and education; and future city design were also explored. Liveability The Hon Tanya Plibersek MP, gave the key note address setting out the role of the built environment in improving health, housing and transport across our communities. The Panel included The Hon Bill Shorten MP; The Hon Scott Morrison MP, and Brendan Gleeson, Griffith University and Kerry Barwise. Chaired by Stephen Johnston from the Planning Institute of Australia, the issues debated were pathways to creating healthy and affordable places and spaces, including the use of transport oriented development, integrated land use and infrastructure planning.

Partnerships and Actions Senator The Hon Kim Carr MP, delivered the key note address discussing the steps that the Government is taking to reduce regulatory barriers to innovation and to improve Australia’s planning, taxation and procurement practices. Chaired by David Parken, CEO of the Australian Institute of Architects, the panel included, The Hon Bruce Billson MP; Senator The Hon Scott Ludlam; The Hon Mark Dreyfus, QC, MP; Sharan Burrow, Australian Council of Trade Unions; Brendan Lyon, Infrastructure Partnerships Australia, and Kerry Barwise. The Panel discussed partnering arrangements to enhance Australia’s productive capacity. Apart from the broader issues explored above, each session explored different aspects of the report into Planning Principles, in particular debate centered around the metrics which could potentially be used to measure successful outcomes in planning under the principles framework. This collaborative forum will be used by the BEMP partners to inform their research, which will ultimately be submitted for consideration by COAG. BEMP is growing in strength from year to year and is a great example of how collaboration between industry partners can achieve real value on behalf of industry. Importantly, it provides a significant opportunity to raise the issues of the built environment in both the public and political domain. ACEA thanks all members who participated and encourages more to attend BEMP 2010. Megan Motto

BEMP is growing in strength from year to year and is a great example of how collaboration between industry partners can achieve real value on behalf of industry.

SPRING 09 National Outlook


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0 E2

THE 2010 ACEA CONFERENCE ACEA is pleased to announce that after the success of this year’s Conference the ACEA has confirmed it will host another conference in 2010. The 2 day conference will be held on Thursday 18 March - Friday 19 March 2010 at the Amora Hotel Sydney. More information will be revealed in the coming months, so be sure to keep a look out, and don’t forget to save the date!

NEW EXECUTIVE OFFICER FOR QLD we welcome Stacey Rawlings, who started with the ACEA on Monday 27 July. With Stacey comes new contact details for the ACEA Queensland Division, please update your records with the ones below: Level 2 143 Coronation Drive PO Box 1843 Milton QLD 4064 Phone: 07 3020 3403 Fax: 07 3020 3523 Email:

NEW ACEA MEMBER SERVICE Discounted health care for overseas business visitor employees. The ACEA have teamed with Bupa Australia to provide the ACEA’s members and their overseas visitor employees a range of private health care products at a discounted rate. Bupa Australia currently provides around three million Australians with health care, through the brands - HBA, MBF and Mutual Community. To be eligible for the discount, you must be employed with one of the ACEA’s member firms, be the holder of a work visa, join the ACEA Corporate Healthplan and pay via direct debit or payroll deduction. The ACEA’s member firms and their employees will be provided a group discount off the standard premium for seven products. The more individual members that join the ACEA Corporate Healthplan, the larger the discount. These discounts are applicable to the following products: Essential Visitors Cover: Hospital cover for in-patient services in any public hospital in Australia. Classic Visitors Cover: Hospital cover for in-patient services in any public hospital in Australia and Medical cover outside of hospital, whilst in Australia. Gold Visitors Cover: Comprehensive hospital cover for in-patient services at Members First, Participating private and public hospitals in Australia. Medical cover outside of hospital, whilst in Australia. Executive Corporate Visitors Cover: Comprehensive hospital cover for in-patient services at Members First, Participating private and public hospitals in Australia. Medical cover outside of hospital, whilst in Australia. Extras cover for dental, physiotherapy optical etc. Platinum Corporate Visitors Cover: Comprehensive hospital cover for in-patient services at Members First, participating private and public hospitals in Australia. Medical cover outside of hospital, whilst in Australia, plus extras cover for dental, physiotherapy optical and more.

The ACEA’s members can access the details and further information through the ACEA website member’s section. Caroline Ostrowski 6

National Outlook SPRING 09

HEGGIES PTY LTD (HEGGIES) IS PROUD TO ANNOUNCE THE RECENT COMPLETION OF THE MERGER OF RSA ACOUSTICS TO ITS SYDNEY OPERATIONS. RSA Acoustics commenced operating in 1989 and has been providing acoustic consultancy services to industrial, commercial and residential clients for 20 years. RSA Acoustics’ founder, Rodney Stevens, has been an acoustic practitioner for over 30 years, commencing the early part of his career with the NSW State Pollution Control Commission (now NSW DECC). Rodney is a member of the Australian Acoustical Society (AAS) and is the Treasurer for the NSW Divisional Committee. Rodney and his team moved into Heggies’ Sydney Office immediately post-acquisition, working closely with all three of Heggies Sydney based Noise and Vibration Division Managers. This is the third such business integration that Heggies has completed in recent years having acquired Eric Taylor Acoustics in Canberra in 2005 and Graeme E. Harding & Associates in Melbourne in 2006. Heggies

Rodney Stevens

A range of selected Extras covers are available to take in conjunction with the Gold, Classic or Essential Corporate Overseas Hospital covers.


industry news

BRUCE SINCLAIR ON THE FULBRIGHT SCHOLARSHIP, SKM AND CONSULTING ENGINEERING: AN INTERVIEW Why I chose consulting? After leaving school in 1942 I was a Public Works Department (PWD) engineering trainee, which was an outstanding grounding in both construction and other practical engineering. But I was a too impatient and wanted to see the world outside the public service. So I applied for and took a short-term Fulbright Scholarship to the USA in 1951, which was a great eye-opener for a 24 year old from a narrow background from Oz. This had several effects, one of which was to confirm that a life in the public service was not for me. So I applied for, and got, a junior position with WD Scott and Co (WDS), Management Consultants, which was a very concentrated introduction to the private sector in Australia. But my real love and background was civil engineering, so I joined Rankine and Hill in 1960. John Rankine and John Hill were outstanding engineers with a strong practice in structural and building engineering, but I never felt part of the inner circle. In 1963 I had the extraordinary good fortune to meet Jack Knight, a young and very competent engineer just returned from Canada, and we decided to have a go on our own. Thus was born Sinclair and Knight, then Sinclair Knight and Partners, now Sinclair Knight Merz. Soon after starting S & K we were joined by John Winton, a brilliant young engineer from the NSW Water Conservation and Irrigation Commission. John, Jack and I made a quite an exceptional partnership with a wide range of complementary skills, and we were willing to try anything within our skills. It all developed from there.

What significant training or experiences impacted on my career? There were a series of steps or door openings, each of which complemented the previous experience and led to the subsequent. These have included: The engineering traineeship with the PWD Joining IEAust as a student and later as an active member (now a member 63 years) The experience as a Fulbright scholar The episodes with WD Scott and Rankine and Hill Being joined by Jack Knight and John Winton Joining a NSW Government Trade Mission to Malaysia, Korea and Japan in 1970.

Take every opportunity to enlarge your basis of experience and vision.

All through this time and subsequently I had the support of Marjorie, a very competent and long-suffering wife and mother. One particular trait from my parents, reinforced by the particular experience with WDS, was a sense of fairness to, and participation by, all staff in the enterprise. We established a culture and set of values in the firm which instilled a sense of ownership and participation. This is seen in the shareholding structure. All shareholders must be full-time employees, and about 10% of the staff are shareholders and there is no group of dominant or controlling shareholders. This provides a very robust base, and the group likes to describe itself as ‘fiercely independent’.

What have been my career highlights? There have been a few, including: Being nominated by the Malaysian Government to participate in a major ADAB (now AusAID) project in Malaysia in the 1970s. This put SKP in the position of junior partner to SMEC, then the consultant of choice for ADAB before privatisation. This allowed us to gain an international track record both for the firm and some of our key employees Opening an office in Melbourne with Paul Dougas as manager. The Melbourne office subsequently became, and remains, the engine room of SKM Being a Councellor and subsequently National President of IEAust, followed by the award of AM for Service to Engineering in 1981 Deciding in 1980 to step aside from active involvement with the management of SKP and accept company assignments in Thailand, The Philippines and India The merger with Merz Australia in 1984 (in which I played no active part), which completed the ‘branding’ of the group as a leading multi-disciplined engineering group. This also set the scene for mergers with leading firms in NZ, Chile, UK and elsewhere.

What am I doing now? I am living in the ACT (a great place for ageing people) and have been retired from active practice for nealy 20 years. I deliberately avoid any participation or involvement in SKM, although we remain good friends. I have been active in building relationships between the ACT and East Timor communities, am involved in Rotary Club activities, and spend quite a lot of time caring for my beloved wife. What do you consider is the biggest challenge facing the industry now? This is not an easy question for someone retired for some 20 years to respond to. However, the main change, and challenge as I see it, is due to globalisation. As many client industries go global and long-recognised brands disappear, the service industries, legal, accounting, advertising, and engineering, have to go global to retain their relationship with global clients. Jack Knight and I ran what would now be called a boutique firm in the 1970s, serving Australian clients, often only on a state or regional basis. It now seems essential that firms grow to previously unimaginable size world-wide to maintain their particular client bases. This all incurs significant costs, funding work in progress and expansion, management and, in SKM’s case, the much-valued cultural and values base, and staff loyalty. SKM has some 6,000 staff world-wide. The recently formed AECOM has some 45,000, as do some of the largest US firms. The challenge is to survive. If I can give any advice to members of the current generation it would be: Take every opportunity to enlarge your basis of experience and vision. In this regard I would place the Fulbright Scholarship and the period with WD Scott as my most significant career changers. Edited by Hugh Peinke

SPRING 09 National Outlook


industry news

HEGGIES WINS QUALITY ASSURANCE AWARD At a recent gala event held at the Rydges Hotel in Brisbane, SAI Global announced Heggies Pty Ltd (Heggies) as the joint winner of the 2009 National Quality Assurance Excellence Award for companies with 50 to 500 staff. Managing Director, Richard Heggie said that the company was delighted to receive such high recognition, which demonstrates the robustness and maturity of its Quality Assurance system, processes and procedures.

Heggies consultants provide specialist engineering and scientific solutions for improving and sustaining the environment. The company has been operating since 1978 and its paper-less ISO9001 QA System was first accredited by SAI Global in 1990. The system is closely integrated with all facets of the business. With 130 staff members and nine offices across Australia and Southeast Asia, Heggies chose to develop a fast, reliable and accessible system, using its own Intranet as the document/records management and process delivery vehicle.

Over the last 30 years, Heggies specialist environmental services have expanded to embrace acoustics, vibration, air quality, noise and vibration control, blast design and monitoring, modal analysis, structural dynamics, wind engineering, solar and energy/ ESD studies. Heggies undertakes projects in all states of Australia, as well as in New Zealand, South East Asia and the Middle East. In recent times, general environmental assessments, land contamination, water quality, hazardous materials and OHS/Occupational Hygiene have been added to its service range. For more information, please visit Heggies

HYDER CONSULTING’S TRANSPORT STUDY FINDS IN FAVOUR OF F3 TO BRANXTON LINK PROCEEDING THE EAGERLY-AWAITED LOWER HUNTER TRANSPORT NEEDS STUDY, UNDERTAKEN BY INTERNATIONAL DESIGN AND ADVISORY FIRM HYDER CONSULTING, SUPPORTED THE NEED FOR THE F3 TO BRANXTON LINK IN THE LOWER HUNTER REGION. Commissioned jointly by the Australian and NSW Governments, the study undertook an in-depth look at the region’s long-term passenger and freight land transport needs. In particular, it looked at the connection of Maitland, Cessnock and Singleton with Newcastle and the F3 Freeway, having regard for the state’s Department of Planning (DOP) Lower Hunter Regional Strategy. Relevant National, State and Local Council goals were established following the review of published planning documents. Hyder’s study team engaged with key stakeholders, including all councils in the Hunter region, the DoP, representatives of the freight industry, public transport, rail and road and special interest groups. The RTA’s Lower Hunter Strategic Traffic Model (TransCAD) helped to identify and analyse current and predicted road network performance. A long list of alternative responses to the needs (incorporating road, rail and public transport) was tested using this model and preliminary engineering, environmental and economic investigations carried out. The list of options was refined and shortened, and then assessed by applying Infrastructure Australia’s Appraisal Criteria, leading to the findings. 8

National Outlook SPRING 09

Chief among these was the need for a new or upgraded east-west road corridor, particularly between the F3 Freeway and the New England Highway at Branxton. As it stands, the study found that key sections of the New England Highway linking Newcastle and the Lower Hunter were already at, or approaching capacity. The situation would undoubtedly worsen as annual traffic growth (expected to be 3.4 to 4.1 per cent) climbs alongside population numbers, expected to grow by 30 per cent in response to state-driven urban development efforts. With planning approvals already in place, the study confirmed that the RTA’s cost estimate for the F3 to Branxton Link was sound.

contributing $200 million on top of that. The new link has been renamed the Hunter Expressway. “The link will be a major part of the solution, but it’s not the full picture,” says Naylor. The study recommends a mix of transport initiatives deliverable over the short term (within five years) and the longer term of six to 25 years. These include a Maitland rail interchange interfaced with increased regional bus services arriving from Scone, Singleton, Cessnock and Dungog, boosting the passenger capacity of trains between Maitland and Newcastle, and creating more park-and-ride facilities at key transport nodes across the area.

Report author and Hyder Transport Director, James Naylor notes, “the best approach is to implement the link as a single construction project but it can also be delivered in stages depending on available funding, and balancing this with potentially higher capital costs and greater traffic disruption.”

Longer term initiatives range from eliminating peak-period kerbside parking on parts of the New England Highway, to peak period transit or bus-priority lanes at junctions leading to Maitland Rail Interchange and a proposal to widen parts of the Pacific Highway along the Hexham Straight north of Newcastle to support three lanes in each direction.

The Federal Government announced in its May budget $1.45 billion committed to building the new link with the NSW State Government

More information is available at The Lower Transport Needs Study website: Hyder Consulting

COMPETENCE CAN TAKE THE GRAVITY OUT OF OHS IN FALL PROTECTION DEFINITIONS: Gravity – (grav’ate’) – the natural force that causes objects to move or tend to move towards the centre of the earth. Gravity causes objects to have weight. Fall – (f^) – to drop or come down from a higher place – to come down suddenly. Protection – (protek’shen) – the act or condition of being kept from harm – defending. NO ONE SHOULD BE PERMITTED TO WORK AT A HEIGHT WITHOUT DIRECT SUPERVISION UNLESS THEY HAVE BEEN ASSESSSED FOR COMPETENCE. Site Controllers and employers have a duty of care to ensure the provision of adequate instruction, training, information and supervision to ensure that their employees (and others) at a place of work are safe and without risk to health.

In relation to protection from falls this includes the provision of safe access to all parts of a place of work to which a person may require access and from which the person may fall. It also includes training in the selection, assembly and use of any provided Personal Protective Equipment and Fall Arrest Devices. CARE SHOULD BE TAKEN WHEN SELECTING FALL ARREST EQUIPMENT. It should be noted that there is many and varied equipment on the market today for use in Fall protection. It should also be noted that whilst some equipment has many uses, they will also have misuses. Equipment used on one application may not necessarily be the correct equipment to use in an alternative application. In this regard, extreme care must be taken when selecting and assembling any fall arrest equipment. All equipment used to rig a system must be compatible and fit for its intended purpose.

ALL FALL ARREST EQUIPMENT MUST BE REGULARLY INSPECTED TO ENSURE ONGOING SAFETY. Comprehensive training in Height Safety will ensure an operator is well equipped with the knowledge required to: a) Identify a fall classification/situation b) Calculate fall clearances required for various combinations of fall arrest equipment. c) Correct/incorrect use combination of Fall Arrest Equipment d) Elimination of Pendulum Effect e) Rescue techniques & reduction of Suspension Trauma f) Etc. etc. etc. For further information on Working At Heights training, or assistance in meeting your legislative obligations to control falls from a height, visit or contact Height Safety Engineers on 1300 884 978.

THE ROLE OF THE SUPERINTENDENT The Superintendent’s role is a complex one. It requires a sound understanding of the law of contract, substantial engineering skills, and in particular, an understanding of the provisions of the particular project documents. This intensive training program which teach you how to confidently manage the various Superintendent duties, the dual roles of the Superintendent, and how to avoid common legal traps.

About the Course This one day in-house program addresses the legal principles which underpin the role of the Superintendent in administering construction and engineering contracts. The course begins with a thorough breakdown of the requirements, role and authority of a contract Superintendent and the key functions under this role including issuing directions, assessing claims and entitlements, and dealing with disputes. It is crucial for Superintendents to understand their dual role as both an assessor and the client’s agent and give proper effect to both roles. Strategies to manage these often conflicting positions will be investigated as participants gain a greater understanding of the contractual and legal issues involved in carrying out the role. Whilst the first part of the day is conducted as an interactive information session, the second half of the day is workshop based focusing on various “What if…?” scenarios. These will be primarily based on previous Court cases involving the role of the Superintendent. Using real examples from the consulting industry, you will become aware of tips and traps to help you manage your role as a Superintendent with greater confidence and ease.

Customised Training This one day program is designed to be run in-house, at a time and location convenient to you. To create greater value it can be tailored to meet the specific needs of your company. On-site training requires a minimum of ten participants. For more information on organising a training session and to receive a proposal, please contact Anjela Currie at ACEA Phone: (02) 9922 4711 Email:

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industry news

PILLAR OF THE PROFESSION PASSES AWAY We must utilise all aspects of our theoretical training, backed up by our own initiative, research and progressive experience, to provide infrastructure of higher quality and constructability with much lower operating costs but at greatly reduced capital requirement. Our objective is the use of our skills to provide the greatest number of outer-urban and country homes with best practical quality infrastructure available within the constraints of sector funding.

BENJAMIN (BEN) NEWMAN FINK CONSULTING ENGINEER 7 AUGUST 1924 TO 2 JUNE 2009 Ben Fink, who passed away in early June this year after a long illness, could safely be described as one of the founding fathers of the profession of consulting engineering in Australia. Yet Ben came from relatively humble origins, arriving with his family as a migrant from Poland in strife-torn Europe as a nine-yearold boy in 1933. He was the first in his family to learn to speak English on arrival and interpreted for his parents during regular family outings such as shopping. Educated at University High School, at that time one of only three state high schools in Victoria teaching to Year 12, Ben graduated in civil engineering at the University of Melbourne and worked briefly with the MMBW (now Melbourne Water) and the CRB (now VicRoads). In 1948, Ben joined the consulting engineering firm of Gutteridge Haskins & Davey (GHD) and remained with the firm until his retirement in 1990, a period of 42 years. Today, much of the growth of GHD as an international firm with more than 6000 staff derives from the foundations laid by Ben. GHD had scaled down its operations during the 1939-45 World War as many of its staff entered military service. Bernard Callinan (later Sir Bernard) – himself a distinguished army officer and engineer – recruited Ben to assist him in the challenge of re-building the southern operations of the firm. Ben rose rapidly within the Melbourne Office becoming Office Manager in 1960 at the age of 35. He served as a GHD Partner/Director from 1965, 12

National Outlook SPRING 09

was Managing Director from 1978 to 1986 and Chairman from 1986 until his retirement in 1990. During his long career with GHD, Ben was responsible for numerous innovations in water and wastewater engineering throughout Victoria and, via his role as consultant and adviser to numerous local authorities, the delivery of healthy water supplies and sewerage systems to many hundreds of thousands of Victorians - spanning some 45 cities and towns. His innovations extended to inverted syphons, prestressed concrete bridge design, wet-well pumping stations using submersible pumps, lagoon treatment plants and numerous construction advancements to achieve affordable cost-effective infrastructure delivery. Engineers are traditionally a very conservative group, often content to adopt the practices of those who went before them, including an acceptance of the limitations imposed by scarce resources. But from graduation, Ben was determined to create, by his own example, a major technical and ethical change in engineering attitudes: firstly towards building infrastructure for rapidly expanding post-war urban communities and country centres in urgent need of these services, and then later towards innovative engineering practice as a whole. In addition to major contributions to the health and amenity of many Australian communities through development of lowcost water and wastewater technologies, and new bridge and tower construction techniques, he also rationalised and optimised numerous industrial building projects especially in the food industry.

His credo, throughout his professional career, and imbued in the many engineers he trained and mentored, was: “We must utilise all aspects of our theoretical training, backed up by our own initiative, research and progressive experience, to provide infrastructure of higher quality and constructability with much lower operating costs but at greatly reduced capital requirement. Our objective is the use of our skills to provide the greatest number of outer-urban and country homes with best practical quality infrastructure available within the constraints of sector funding.” During some 30 years which Ben managed the Victorian GHD practice, he was mentor by example and guidance, to the many young engineers who joined GHD over that period. His influence on the way those engineers practised their profession and on influencing others whether or not with GHD, has left a legacy of a very far-reaching and profound effect on the status of the profession of engineering. Ben frequently espoused the virtues of private practice as crucial to the development of the independent professional engineer and he was awarded the Consulting Engineers Advancement Society Medal in 1982, for his outstanding contribution to Australian engineering. Ben is survived by Gertie - his wife of more than 60 years – Helen, Vivienne, two grandchildren and one great grandchild. His passing is a sad loss to the Consulting Engineering profession. By Tom Fricke and Alan Longstaff, both served alongside Ben Fink for many decades at GHD.


RedR Australia, established in 1993 with ACEA as one its parents, is a conduit through which the United Nations disaster and emergency organisations obtain the skills and experience needed to deliver humanitarian relief after crises. After destructive natural disasters, infrastructure needs reconstruction, and possibly re-design and re-location. Roads, bridges, water supply and waste disposal need attention. Schools, hospitals, public buildings and jetties may be on the list. When camps are created to provide protection for people displaced by conflict and insecurity, sites need to be planned, shelter has to be created, water needs to be supplied, shower blocks and latrines made to order, roads constructed for access and egress.

RedR Australia then requires contenders to complete two core courses, to a total of 10 days, at Dookie, in central Victoria. One course presents the issues in delivering humanitarian aid, and the role played by the international response network. The second course addresses personal safety and communications theory and practice, highlighting the difference between working environments found in Australia and those which may apply elsewhere. RedR Australia is on permanent standby to respond, and continues to need good people.

My question to the engineers of Australia is, “Have you got what it takes?” To find out more, visit Alan McLean, Chief Executive Officer


ce † experien al skills † technic help people † desire to in need to work in † ability ltural team a cross-cu † passport


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ust † RedR A

t almos You are ready to go on humanitarian assignment!


United Nations relief agencies request people with particular skills and RedR Australia submits names from its Register of suitable people. People may be placed with the United Nations High Commission for Refugees, United Nations Children's Fund, World Food Programme or the Office for the Coordination of Humanitarian Affairs. Assignments may be for a few weeks up to about six months.

Practical specialist experience is needed, as well as ability to cope with unfamiliar situations, to work in difficult and often dangerous environments, and to work in either culturally diverse teams or independently. These elements are explored in an initial interview.

The tasks do not suit a desk-based engineer. With this in mind, RedR Australia provides serious and highly-regarded preparation for experienced practitioners hoping to join the Register and interested in making a real humanitarian difference. RedR Australia — helping to rebuild lives in times of disaster.

Engineers play a crucial role in the restoration of infrastructure following a natural disaster or humanitarian crisis.

Graphic design provided by:


SPRING 09 National Outlook Timor Leste


state news


In the wake of the widespread devastation of the Victorian bushfires in February, the Victorian Division, in conjunction with Engineers Australia, continues to work with the Victorian Bushfire Reconstruction and Recovery Authority (VBBRA). Four firms, URS, GHD, Parsons Brinckheroff and AECOM have provided pro bono services to several of the fire affected communities. These firms, together with Arup and Beauchamp Hogg and Spano have been supporting VBRRA’s planning stage of the recovery effort particularly with respect to disaster relief, applications for government funding support, town planning, water management, energy, communications and community facilities in the fire affected areas. Current pro bono work being undertaken includes a high level review and advice on a strategy for implementation for sewerage and water treatment in the Flowerdale/Long Gully area. Currently, VBRRA is considering an ACEA/ EA proposal that an infrastructure audit of the Flowerdale community also take place followed up with an evaluation and the development of recommendations as to the way forward. There has also been ongoing activity regarding onerous contractual terms and conditions. Whilst the outcome of last year’s meeting with VicUrban was disappointing, VicUrban have agreed to further discussion in August. In addition, Victorian Divisional chairman, Jeff Mayo and Cathryn Ellis met the Victorian Minister for Planning, Mr Justin Madden MP in May. The Minister is enthusiastic to establish an ongoing relationship with ACEA and encouraged a senior officer within the Department of Planning and Community Development to meet with ACEA for further discussions regarding contractual issues. Following a further meeting, the Department is considering reviewing the Treasury Procurement Guidelines, in consultation with the Department of Treasury, with a view to determining what changes might be made to address ACEA’s concerns. Meetings have also taken place with Minister Madden and Mr Richard Wynne MP, Minister for Housing, Local Government and Aboriginal Affairs in the context of the Commonwealth Stimulus Package. On the OH&S harmonisation front, former ACEA divisional chairperson, Dermot Small and Cathryn Ellis met in July with a senior advisor to Mr Tim Holding MP, the minister responsible for WorkCover. Unfortunately, we were informed that Victoria would not advocate for designers on this issue. We were also advised that the obligation of a designer would involve having regard to how the building might be constructed during the construction process. Further, the obligation would be discharged if what has been designed can be ‘reasonably erected safely’. However, this information was based on the advisor’s current understanding of the proposed law which of course may change. It would be prudent to seek your own legal advice on this matter. In April a joint meeting with the Australian Drilling Industry Association took place to initiate the development of a minimum safety standard which can be adopted nationally. Three committee meetings have since taken place where the issues identified include guarding, manual handling, mobilisation, demobilisation, PPE, rod breaking, interlocking switches, maintenance and risk hierarchy.


National Outlook SPRING 09

There were two recent events. The first was Bushfires – Damage Control (predicting bushfires and the new building regulations) which took place on 12 August. The Deputy Building Commissioner updated FutureNet on the interim Bushfire Construction Regulations and the recovery program. Ken Mival, former ACEA divisional chair who lost his home on Black Saturday, also spoke about predicting severe bushfires and the engineering and planning background to enable those in bushfire prone areas to better prepare themselves and their homes for the onslaught of fire. The second event was VicUrban – Current and Future Projects which took place on 19 August. Michael Hynes, General Manager, Economic Centres and Regions provided an overview of VicUrban’s role in the delivery of Government policy including Melbourne @ 5 Million, the State Government’s update to Melbourne 2030. Michael also provided an update on VicUrban’s current and future projects including their delivery as well as innovation and sustainability initiatives which are important facets of VicUrban’s projects.


Mr Graeme Sturges MP, Minister for Infrastructure, joined ACEA members to discuss upcoming projects and potential opportunities for consulting engineers in Tasmania in June. This was an opportune meeting as the State Government had just announced that agreement had been reached on the federal investment in the state’s road and rail infrastructure totaling $800 million as part of the Commonwealth’s Nation Building Program. The meeting was positive with members requesting that the Government provide a schedule of a whole of government capital works schedule on a regular basis so that engineers can better plan for the future. Minister Sturges also invited ACEA to provide further information as to other issues raised associated with onerous contractual terms, OH&S harmonisation and the status of development of the new water authorities strategic plan. Earlier this year, the Australian Government announced plans to invest up to $43 billion to build and operate a next generation National Broadband Network (NBN). Tasmania is to be the first state to commence construction of the new network. Jim Wyatt, Tasmanian Government’s NBN industry liaison, met with ACEA members to explore the complexity and methodology for rolling out the NBN in Tasmania including the major build project and ancillary business opportunities. With a strong governance model in place, Mr Wyatt advised that the State electricity distribution and retail company, Aurora, will provide access to its poles during its refurbishment process so that the aerial deployment of the optical

state news

NSW DIVISION NSW Division has been focusing on lobbying the NSW Building Professionals Board (BPB), Roads & Traffic Authority (RTA) and the Construction Coordination Committee (CCC). Numerous events have been held recently including divisional CPD seminars, the FutureNet Newcastle Annual Dinner and the ACSE Annual Seminar. NSW is focusing on developing a course similar to FutureNet Business Leaders focusing on industry professionals in the built environment aged within the 35-45 year age bracket.

UPCOMING EVENTS ACSE Annual General Meeting Thursday 24 September at the VIBE Hotel, Milsons Point 2009 FutureNet Business Leaders Awards Dinner Thursday 26 November

recent EVENTS Minister Graeme Sturges MP (left) and Rob Casimaty, Tasmanian divisional chair

fiber can take place. However, there will be a number of engineering problems posed by some areas where there will be difficulty fitting fiber optics into the existing infrastructure, requiring innovative engineering solutions. The potential of this technology is extraordinary as it allows for rich data transfer as well as representing a paradigm shift from the mere delivery of telecommunications to payment for services such as personalised television programming and security services. This technology also has the potential to deliver services to those more remote regions and communities that urban areas take for granted in the form of virtual schools, hospitals and meetings. The harmonisation of the OH&S laws has also been raised with the Tasmanian Government. ACEA Tasmania Divisional chair, Rob Casimaty and Cathryn Ellis met with the General Manager of the Department of Justice as well as the head of office of Ms Lisa Singh MP, Minister for Workplace Relations, Corrections and Consumer Protection. Whilst there was support for ACEA’s position in opposing the extension of liability to the construction phase, it was felt that the issue may be more appropriately dealt with in the regulations. Cathryn Ellis attended the Department of Infrastructure, Energy and Resources (DIER) briefing regarding the proposed new professional services contract model. Cathryn raised two issues during the briefing and in a subsequent email, the first relating to the proposed fee increase being locked in at the same rate as CPI. Whilst in the short-term and in the context of the current economic climate, wage increases would not rise much more than CPI, it was put to DIER that these circumstances will change by 2011 with wages significantly exceeding the proposed rate. Secondly, it was submitted, inter alia, that onerous contractual terms create uncertainty for the consultant as well as a level of risk not aligned with the fundamental risk on the project with some of the risk not even being insurable. Importantly, onerous contract terms such as uncapped liability provide little in the way of incentive for engineers to remain or settle in the state when their career and reputation can be so easily damaged by being made liable for something which in reality did not arise as a result of their common law negligence.

On Thursday 20 August the ACEA NSW Division Annual General Meeting took place at the Grace Hotel in Sydney. ACEA CPD Seminar – Taxation took place on 20 August at the Grace Hotel in Sydney. University Bridge Building Challenge was held on 7 August at Customs House Square. The NSW Division Mechanical & Electrical Branch held their second CPD seminar to date on 9 July and the title was Climate Change Risk Assessment & Biomass Energy Generation. Newcastle FutureNet held their Annual Dinner on the 3 July. Over 100 people attended and guests were entertained by well known comedian, Clint Paddison. The ACSE held their Annual Seminar on the 2 July and the 2009 topic was New Directions in Tall Buildings. Speakers included Jim Forbes and John Merrick from Hyder Consulting, Kenny Kwok from the University of Western Sydney, Frank Cerra and Vince Betro from BG&E Pty Ltd, Frances Badelow from Coffey Geotechnics, Jeff Walker from Johnson Pilton Walker and Ryan Campbell from Bonacci Group. WHK Horwath presented Managing Your Business in Tough Times to NSW members on 16 June. The Civil and Environmental Branch ran a successful site visit to the Sydney Desalination Plant on 27 May. Over 40 members attended the free members-only event. On the 14th May, the 2009 Outlook for Consulting Engineering report was launched in Sydney. Over 60 members attended to hear ACEA Economist, Geoffrey Bills, present the report and outline his predictions. Sydney FutureNet held a fantastic event sponsored by Clayton Utz on the Global Economic Crisis. The event contained four panelists who were; Brendan Lyon – Infrastructure Partnerships Australia, Rob Aldis – Evans & Peck, Chris Swann – Macquarie Capital Advisors and Owen Hayford – Clayton Utz. FutureNet Business Leaders continues to run steadily with participants recently meeting the NSW Roads & Traffic Authority Executive. The course will conclude with an Awards Dinner on Thursday 26 November 2009.

SPRING 09 National Outlook


state news

SA DIVISION UPCOMING events CPD Workshop Contracts for Consultants October 2009 date TBA An engaging and interactive course which provides concrete training on how to establish, administer, and manage contracts Managing your Business for Economic Success

Recent events Two boardroom lunches were held with senior management of Department of Transport Energy & Infrastructure, and Local Government Built Environment Legal (BEL) held a short introductory seminar on issues relating to contracts, and how to avoid some of the pitfalls associated with them People Management, August 2009 Practical skills to manage & develop your team A meeting was held with the Minister for Industrial Relations to discuss the draft of the proposed new OH& S legislation.

FUTURENET Recent events

Over 125 people attended each of the May, July and August breakfast events held in Adelaide. The May breakfast event focused on the Contractor and Engineering perspectives of the South Road - Anzac Highway upgrade known as the Gallipoli Underpass. This project was put out to tender under an Early Contractor Involvement (ECI) model by the South Australian Department of Transport, Energy and Infrastructure (DTEI) with the aim of improving traffic flow and reducing congestion. David Cruickshanks-Boyd, South Australian Regional Director of PB, and George Constantinides, Project Manager with Leed Engineering, discussed the design and construction challenges which the AdelaideConnect group (consisting of Leed, Thiess, Parsons Brinckerhoff (PB), Hassells and DTEI) overcame to make the project the winner of the 2008 Malcolm Kinnaird South Australian Engineering Excellence Award. The July event focused on situational leadership in the workplace and was presented by Peter Karounos and Craig Chatterton, Senior Consultants with EDN. Peter highlighted the difficulties of developing into a leader in a dynamic and fast moving industry – the leaders of tomorrow will be working in jobs which don’t exist today. A successful leader has to be able to read the behavioural signs of their employees and then be able to change the way they lead to suit the individual. Craig discussed the model which EDN uses to identify and categorise people based on their behaviour. He used two simple examples, with the help of some audience participation, to demonstrate the effectiveness of the model. In August, David Homburg, Senior Associate, HASSELL Architects and Peter Ward, Head of People and Change, SA Water, discussed the 6 Star Green Rating achieved for SA Water’s new building and the cultural change that took place. The building is the first in South Australia and largest commercially developed building in Australia to be awarded.


National Outlook SPRING 09

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AceCad Introducing a superior Software Intergraph collaboration solution Sponsors Asia Pacific 2009 Model Manager from AceCad Software AceCad’s latest software innovation makes global collaboration a reality with a truly practical multi-user and advanced issuing system integrated within StruCad. The StruCad Model Manager, in combination with AceCad’s

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The Intergraph Asia Pacific conferences were held across the region in Kuala Lumpur, Beijing, Perth, Yokohama and Seoul during the last few months. The Asia Pacific region is a strong and dynamic customer base for AceCad Software in the AEC, Process, Plant and Power sectors. The regions role in the global economy is set to grow in importance and AceCad’s expertise and established presence in the region will result in further successful business enterprise.


AceCad’s representatives enjoyed meeting with clients, industry


leaders, senior management and technical professionals throughout these conferences. During Intergraph Asia Pacific 2009, Mr Paul Daynes, Head of AceCad’s


EPC Division, was presenting StruPlant, a solution suite that uniquely


supports the entire structural supply chain from plant design through fabrication and into construction. Where fully deployed StruPlant solutions deliver:

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PRACTICE & PROCUREMENT Nicola Grayson heads the policy team at the Association of Consulting Engineers Australia’s National office in Sydney. Her portfolios include Procurement & Practice and Contracts & Liabilities. Nicola can be contacted at

ALLIANCING KEEPS INFRASTRUCTURE FUNDING FLOWING PUBLIC SECTOR INFRASTRUCTURE PROJECT DELIVERY USING THE ALLIANCE CONTRACTING METHOD FOR COMPLEX PROJECTS KEEPS INFRASTRUCTURE DOLLARS FLOWING WHEN THE ECONOMY MOST NEEDS STIMULUS. Alliance projects start-up quickly, despite their complexity, providing a valuable flowon effect to the general economy during tough times. They play an important part in getting projects underway which are difficult to fully scope. They deliver infrastructure, particularly ‘brownfield’ projects (existing assets being upgraded) to the community in a timely manner. The alliance tender period is relatively short and projects usually start construction quickly, because industry resources work with the public sector client in an alliance to document scope, resolve issues and agree risk allocation and cost. This means they can get on with construction where the biggest resource profile is and create more jobs, sooner. This view is shared by New Zealand Transport Agency’s (NZTA) Group Manager Highways and Network Operations Colin Crampton, who has been involved in alliancing since NZTA’s first alliance project, the Grafton Gully Motorway Extension (Freeflow Alliance), in 2001. “Funding for the state highway network in New Zealand over the next three years has increased significantly as part of a focus by the New Zealand Government on increasing economic productivity and growth,” Mr Crampton said. “With the increased funding, we have reviewed our overall procurement approach and introduced a further alliance. This will enable the work on a complex project to enter the construction phase quicker, with resources available more quickly than would have previously been possible,” he said. “Alliancing also allows us to focus on starting some areas of the project earlier than the main works, potentially releasing benefits to users earlier.”

However nothing has changed in terms of when we use alliancing. We wouldn’t change the risk allocation just because there is more competition, we choose the method to suit the project.

Mr Crampton also noted that the alliance selection process was faster and ensured greater alignment between participants during the start up phase. Other public sector infrastructure owners point out that while the market has changed significantly, the reasons and resource requirements for alliancing remain unchanged. Main Roads Western Australia’s Executive Director Infrastructure Delivery Phil Ladner sees more industry competition in his state in a tighter economy, resulting in more responses to tenders. “However nothing has changed in terms of when we use alliancing. We wouldn’t change the risk allocation just because there is more competition, we choose the method to suit the project,” Mr Ladner said. “We also still invite contractor input early through a general industry consultation process to test where we are headed,” he said. Industry consultant and Director of Alchimie, Mr Andrew Hutchinson, said the lack of resourcing to deliver the high volume of work during the boom was hampering delivery. “There is probably still a skill shortage in project management and leadership, however the boom saw public sector client staff being upskilled through alliancing, which in turn provides job satisfaction and job retention,” Mr Hutchinson said.


National Outlook SPRING 09

Bankable cost estimates Data collected by RMIT University in a survey commissioned by the Alliancing Association of Australia (AAA) demonstrates that alliance projects and programs offer significant time, cost and non-cost benefits. Australian public sector infrastructure owners and clients were surveyed on 30 projects undertaken from 2000 – 2007, capturing the recent infrastructure boom years of 2006 and 2007 when more than 45 alliances started in Australia. The AAA’s Alliance Performance Survey shows 80% of the projects surveyed were completed on or under the planned duration, and more than 80% came in under the estimated cost (Target Outturn Cost). Those that exceeded their planned durations did so by an average of only 2.5 months and of those over the Target Outturn Cost (TOC), the mean was below 5%. Generally, alliances perform within plus or minus 5% of the TOC, which means alliance TOCs are more bankable, as they consistently perform within a given range. Survey respondents noted that alliance projects provided value for money and avoided the delays and costly contract disputes experienced in more adversarial contracting methods.



Future trends Alliancing has widened from delivery to long-term service, maintenance and operation of public infrastructure, with new sectors emerging in defence, power generation and gas. John Cunningham, VicRoad’s Acting Executive Director for Major Projects, said VicRoads is starting more alliances to upgrade existing assets and boost their lifespan. “Within a couple of months we will have six alliances underway for this kind of infrastructure upgrade, including three currently going through the selection process plus the Westgate Freeway Alliance, Westgate Bridge Strengthening Alliance and the Monash Alliance,” he said. “Several years ago we had two alliances (TCI and Middleborough Road/Rail Separation), and quickly saw that alliancing offered better risk control in these more complex projects through shared risk management. We are also starting to think about how these benefits might apply to the long term through long term maintenance contracts.” Andrew Hutchinson said there has been a trend towards program alliances over the past 18 months, especially in the water industry, which will likely continue.

Ongoing industry collaboration The AAA works with members to identify, understand and share emerging trends through the association’s ongoing industry forums and research. The AAA held its inaugural Public Infrastructure Agency Forum (PIAF) in Sydney where capital works divisional general managers from around the country shared learnings and best practice around selection processes and value for money, within the setting of the current economic situation. The next PIAF will take place in Melbourne on 21 October, just before the start of the AAA’s third annual National Convention. This year’s annual AAA Excellence Awards program to recognise organisations, teams and individuals for their outstanding contribution to successful alliancing, with submissions due by Friday 3 July 2009. Visit for more information. Alain Mignot, Executive Director, Alliancing Association of Australasia (AAA).

“There will probably be less project packaging of multiple projects under one program, as clients will want to spread work around and offer multiple smaller packages,” Mr Hutchinson said. “Clients will want to keep multiple designers and constructors in the market, even if this means an increase in transactional costs by offering more, smaller projects,” he said.

The AAA provides members with best practices resources, conducts 20 regional events annually, undertakes benchmarking and research and promotes industry excellence.

The ACEA Procurement and Practice Roundtable has been disbanded, following a review by the ACEA Board and Chairman of the Roundtable, Les Millist (GHD). The ACEA seeks to ensure that the valuable volunteer time of members is spent as productively as possible and rather than maintain quarterly Roundtable meetings, any further work in procurement policy will be developed by other ACEA Roundtables or by discrete working groups as and when appropriate. The most significant achievement of the Roundtable was development of the ACEA’s paper entitled Successful Procurement and Project Delivery, which has been well received by Government’s across the country. The ACEA warmly thanks the Roundtable members for their excellent contribution to this work. The review of ACEA’s Practice Notes will now be conducted by the ACEA Division Chairpersons, with sign-off remaining with the ACEA National Board. Nicola Grayson

MANAGING CONFLICTS OF INTEREST The ACEA has brought together three of its Practice Notes on Professional Ethics into one. The new Practice Note (1.01) provides guidance on potential conflicts of interest that might arise between consulting firms. It replaces former Practice Notes 1.1, 1.2 and 1.3. Specifically the Practice Note also provides further guidance on the provisions contained in section 4.4, headed ‘Colleagues’ of the Code of Ethics. It expands on what might be expected when: Reviewing the work of another consultant Accepting a commission that overlaps or impinges on the work of another consultant Replacing a terminated commission. Practice Note 1.01 can be downloaded by members from the ACEA website, see Members Only/Publications/Practice Notes. Nicola Grayson SPRING 09 National Outlook



APPLYING FOR PREQUALIFICATION OPENS THE DOOR TO A RANGE OF NSW GOVERNMENT TENDERS NSW Procurement (a division of the NSW Department of Commerce) aims to be a centre of expertise for procurement across government agencies, leading the way in government procurement initiatives and solutions designed to deliver efficiencies and cost savings for the whole of government. A key initiative of NSW Procurement has been to establish Prequalification Schemes. These include Prequalification Scheme for Consultants based on a proven record of satisfactory performance. One scheme that is focused on construction related services requires Consultants to demonstrate a sound business structure, effective management systems, appropriate qualifications and expertise, relevant experience and a commitment to long term continuous improvement. Consultants may submit applications for prequalification in the following categories: Project Director Services Project Management Economic Appraisal – Health Value Management Facilitators Engineering Services Architectural Services Electronic Security Quantity Surveying Environmental Studies Quality Assurance Auditors Site Safety Auditors Dispute Managers.

Its purpose is to provide firms with an opportunity to become a prequalified consultant, on a select panel in each category for which they obtain approval having met the strict quality, safety and viability standards of the NSW Government. NSW Procurement encourages government agencies to use the prequalified panel members when seeking competitive bids for individual projects and commissions. This is intended to deliver a range of benefits including: Rapid access to facilitate shortlisting of expert resources who can submit competitive bids on specific projects Streamlining of the competitive tendering process by prequalified consultants with a demonstrated track record Meeting probity standards through third party assessment and selection of consultants. The prequalification scheme has been developed for non-accredited NSW government agencies meaning those agencies that do not have the appropriate resources or competencies to manage their own procurement systems. They are required to have external support and use the approved procurement delivery system developed by the Department of Commerce.

However, NSW Procurement is encouraging the accredited agencies: 1. to use the existing panels rather than establish their own panels 2. to register their existing panels with NSW Procurement so that other agencies can access them. This will reduce the number of panel bids that consultants need to submit. For more information on the Prequalification Scheme for Consultants please visit: Construction related prequalification scheme has been so successful that a new scheme for Performance and Management Services has been developed and implemented by Commerce with the NSW Department of Premier & Cabinet. This scheme covers five service areas including Performance Review, Infrastructure & Major Projects, Service Delivery Improvement, Organisational Capacity, and General Technical Expertise. More information is available on this scheme from the NSW Procurement website at: Consultants/Performance. Nicola Grayson

WA GOVERNMENT RELEASES DISCUSSION PAPER ON A REGISTRATION SYSTEM FOR ENGINEERS The WA Government has released a discussion paper proposing a registration system for the regulation of engineers in Western Australia. The paper discusses, the potential need to regulate engineers through a registration system; the models that could be applied to regulate the profession; the elements of a registration system; and the possible regulation model.


National Outlook SPRING 09

Importantly, mutual recognition arrangements with other states and territories are seen as an integral part of any system introduced in WA. The ACEA, along with the National Engineering Registration Board, Engineers Australia and APESMA, were involved in the development of the paper and are in support of a registration system. Submissions are due by 30 September 2009. The ACEA encourages ACEA members and others with an interest in a registration system for engineers to make a submission. Nicola Grayson


HONEST MARKETING? UNDERSTANDING CODEMARK CAN YOU TRUST THE TECHNICAL-MARKETING ‘BLURB’ OF ‘NEW AND INNOVATIVE’ BUILDING PRODUCTS? GIVEN THAT CONSULTING ENGINEERS MUST ACCEPT RESPONSIBILITY FOR THE SPECIFICATION OF BUILDING PRODUCTS, HOW COULD THEY EVER CONSIDER THOSE PRODUCTS THAT ARE NOT CLEARLY DESIGNATED IN THE ‘DEEMED TO SATISFY’ PROVISIONS OF THE BUILDING CODE OF AUSTRALIA (BCA)? The CodeMark Scheme has been introduced by Australian Building Codes Board to provide such confidence. It involves the JAS-ANZ (Joint Accreditation System of Australia and New Zealand) accreditation of third party certifiers to issue Certificates of Conformity, for the suitability of building products in specified applications. Assessment is against specific clauses of the BCA, either by deemed-to-satisfy provisions, or as alternative solutions. It is important to understand that CodeMark can only deal with compliance with the clauses of the BCA; and cannot deal with issues that are outside the scope of the BCA. For example, it can deal with issues of energy minimisation via BCA Volume 1 Part J and BCA Volume 2 Part 3.12, but it cannot deal with issues related to recycling rain water, which is not covered by the BCA. CodeMark certification requires the holder to have effective control over the manufacture, testing, packaging, branding, delivery, installation and commissioning of the particular products. Whilst most of these may be often achieved by well-managed companies, operating with effective quality assurance systems, the installation and commissioning aspects offer a particular challenge to manufacturers and suppliers. The most effective method of demonstrating such control is the diligent operation of a quality management system complying with ISO 9001.

Consulting Engineers are well aware of the risks associated with approving faulty construction and inappropriate product selection. The gradual acceptance of the CodeMark scheme will further add confidence in the performance of reputable products. Rod Johnston

Rod Johnston is the ACEA representative on the Australian Building Codes Board (ABCB)

BENCHMARKING BUILDING PRODUCT SUSTAINABILITY SUSTAINABILITY ISSUES HAVE ASSUMED A MAJOR FOCUS IN BUILDING DESIGN, REINFORCED BY THE ENERGY EFFICIENCY PROVISIONS OF BCA VOLUME 1 PART J AND BCA VOLUME 2 PART 3.12. COAG HAS RECENTLY ANNOUNCED ITS INTENTION TO INCREASE THE STRINGENCY OF THE BCA ENERGY PROVISIONS. To date, the Building Code of Australia (BCA) approach has been to concentrate on the in-service performance of buildings, making provision for both ‘deemed-to-satisfy’ solutions and ‘alternative solutions’ (based on computer simulation and the published verification methods). This is a soundly-based approach, given that, in many cases, in-service energy use far outweighs the embodied energy expenditure associated with building products. However, there is now a strong push to consider embodied characteristics (the energy, water, resource-depletion and toxicity) involved in winning the raw materials, manufacture, transport, construction and demolition of building products. When considering ecolabels purporting to represent the sustainability of building products, Consulting Engineers should ensure that the data is complete and is quantified in the context of total building performance. This can only be achieved by: Complete Life-Cycle Analyses embodied and operational characteristics Environmental Benchmarking the comparison of a product’s life-cycle analysis to that of the most common acceptable alternative permitted under the BCA.

There are current projects for the collection of embodied data for the creation of a Life Cycle Inventory. This will be used for the population of design software and to provide building product ecolabels. However, there is a real danger that the ecolabels may fail to provide enough precise data on the in-service performance for each product, under a range of applications and climates. If unchecked, this could lead to poor decision-making and the selection of products, which appear to be environmentally friendly, but are in fact inappropriate for the actual application. Consulting Engineers and other designers should be wary. Rod Johnston

SPRING 09 National Outlook


WRSF EVOLUTION: THE NEXT STEP WILL BE INTERESTING. I have just returned from the Transport Research Board Summer Conference in the USA. This time it was in San Antonio in southern Texas. This time it was one year after the adoption of the MASH (Manual for Assessing Highway Safety Features) specification. Those researchers present reported on the initial test results for product development to the new standard. These days it is the USA standards that are forcing the pace for safety barrier development, the Europeans are seemingly bogged down at the moment. More and more is being demanded of the wire rope safety fence and the criteria for design has changed significantly in the past 20 years. The tension wire rope systems were born and developed in England some 40 years ago, but it is the demand to meet the American standards of today that is currently driving the development of the product. This demand is for generally safer product and a more versatile product and one that meets the more probable impact situations occurring on our highways. Consider the following stages in the development of the wire rope safety barrier standards.

Brifen TL4 fence tested with a 10,000kg truck (European standard)

It is not a matter that the earlier WRSF did not handle the heavier impacts than what they were tested to – far more often than not, they do. Our Brifen TD32 fences built in Australia since 1991 has had many impacts, one was a truck of 41 tonnes travelling at 100kph, but there have been many others. But there has never been truck testing and verification of the old Brifen TD32 fence for truck impacts... and there was no claim by manufacturers that WRSF could stop trucks. Even in the 1990’s the worst impact condition for consideration was the NCHRP350 TL3 test with the 2000kg pick up truck. The TL3 Pick up truck impact condition was considered worse that the 8000kg TL4 truck impact.

However by the turn of the century in both Europe and the USA the demand was for WRSF to be capable of doing more. The 8,000kg TL4 impact was increasingly called for in the specifications. However the NCHRP350 TL4 test was only based a 8,000kg truck travelling at 80kph. The European EN1317 standard test TB41 requires a 10,000kg truck and now the new MASH standard has increased the impact severity in the USA for the truck test from 132kJ to 209kJ requiring a 10,000kg truck travelling at 90kph. We are now required to design and manufacture fences for this wider range of vehicles. It is this next step – the challenge to meet the MASH standard to handle impact severity impacts to 209kJ that is proving interesting. WRSF design is all about getting the impact energy into the fence and out of the vehicle. The rope-post interaction is all important in this process: too much friction in this process and the ropes will break, too little friction and the fence will deflect too far (unless the fence is very short in length). Getting a WRSF fence with low deflection is not impossible just that the tolerances are smaller at this level of impact severity. The next five years are going to be very interesting. For more information on the Brifen WRSF systems contact Paul Hansen at: Brifen Australia Phone: (02) 9631 8833 Email:

Table No.1: Range of Test Vehicles Country Year


Min Weight

Max Weight


UK 1989


820 kg

1500 kg

680 kg

USA 1992


820 kg

2000 kg

1180 kg

USA 2009


1100 kg

10000 kg

8900 kg

Table No.2: Range of Impact Severity Country Year


Impact Severity

Impact Severity


UK 1989


45.0 kJ

91.9 kJ

46.9 kJ

USA 1992


45.0 kJ

137.8 kJ

92.8 kJ

USA 2009


75.0 kJ

209.3 kJ

134.3 kJ

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air2energy-Engineers-Adv.indd 1

11/05/09 7:02 AM


AUSTRALIAN GOVERNMENT PROCUREMENT COORDINATOR ANNOUNCED The Australian Government has announced the appointment of a Procurement Coordinator, who will have oversight of Commonwealth procurement practices and policies. The Procurement Coordinator will: provide external parties with an understanding of the Commonwealth framework review and advise on procurement practices across government on an ongoing basis handle complaints from suppliers and interested external parties review complaints regarding contract administration aggregate information about Commonwealth procurement across all procurement categories submit an annual report on procurement matters to the Minister for Finance and Deregulation.

The announcement also states that the Government will appoint supplier advocates with specialist industry knowledge in infrastructure, the built environment, and engineering, within the Department of Innovation, Industry, Science & Research. The supplier advocates will be “eminent industry people”, to provide leadership to industry sectors to champion improved competitiveness and effective tendering for Government business.

Interestingly, the announcement also includes a statement that that Government has enhanced its accountability measures including, “limiting a contractor’s liability to the Commonwealth, revised to clearly state a balanced approach to risk allocation in contracts”. The ACEA will be following with interest the extent to which limitation of liability clauses are introduced into Commonwealth contracts for the engagement of consultants. Nicola Grayson

The ACEA welcomes this appointment provided the role of the Coordinator will also promote best practice in contracting. The ACEA believes that there is a clear role for the Coordinator to encourage greater standardisation of contractual terms and conditions used across the Commonwealth for the engagement of consultants.

QUT’s masters degrees are designed for bcm:qube 146 CRICOS No.00213J Courtesy of Llewelyn Davies Yeang: QUT Adjunct Professor Ken Yeang

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National Outlook SPRING 09

7/8/09 9:34:29 AM

WE HOPE YOU ENJOY YOUR COPY OF NATIONAL OUTLOOK MAGAZINE National Outlook is ACEA’s quarterly print publication. Subject areas covered in National Outlook include a broad spectrum of industry issues relevant to the Consulting Engineering and related service industries and ACEA activities and services






SPRING 09 National Outlook


CONTRACTS AND LIABILITY Nicola Grayson heads the policy team at the Association of Consulting Engineers Australia’s National office in Sydney. Her portfolios include Procurement & Practice and Contracts & Liabilities. Nicola can be contacted at

CONSUMERS WILL GET THE BENEFIT OF PROTECTION FROM UNFAIR CONTRACT TERMS, BUT WHAT ABOUT BUSINESSES? The Australian Government has shied away from applying new unfair contract protections to business to business transactions. In May 2009 the Federal Treasury released an Exposure Draft of the Trade Practices Amendment (Australian Consumer Law) Bill 2009 (the Bill), which proposed prohibiting the use of unfair contract terms in all standard (i.e. non-negotiable) contracts. This would have the effect of giving consultants that receive non-negotiable contracts from their clients the right to argue that certain clauses are ‘unfair’ and should therefore be ‘void’ (subject to certain tests). The ACEA believed that the proposed Bill was a major step forward in the campaign against onerous contractual terms and conditions in consultancy agreements, which are presented in the manner of ‘take it or leave it’ without any room for meaningful negotiation. On 28 May 2009 the ACEA met with the Adviser to the Federal Minister for Competition, and Assistant Treasurer, the Hon Chris Bowen MP, who was at that time the Minister responsible for the Bill, to reinforce the need for businesses to have protection from unfair contract terms. The ACEA also stressed that to give proper effect to the Bill it would need to apply to all levels of government (Australian, state, territory and local). The rationale being that the contractual behaviour of government significantly influences the contracting behaviour of the private sector.

However, at that time it became apparent that a number of ‘big business’ organisations were not supportive of the Bill’s application to business to business contracts. All the same the Government remained supportive of its application to lower value contracts and ensuring that protection was given to small business.

Government is currently reviewing both the unconscionable conduct provisions of the Trade Practices Act and the Franchising Code of Conduct. Since these reviews relate to businessto-business contracts, the Government will consider the issue of business-to-business standard form contracts when these reviews are complete.

Subsequently on 5 June 2009 Minister Bowen announced that the Bill would only apply to consumer and business to business standardform contracts where the upfront price payable for the services (including financial services), goods or land supplied under the contract did not exceed $2 million.

The ACEA continues to press for a review of government contractual terms and conditions. Prior to the Federal Budget announcement, the ACEA and KPMG jointly briefed the Federal Leader of the Opposition’s Economic Adviser to put forward the case for simplification of government procurement contracting.

Then came a Cabinet reshuffle and The Hon Dr Craig Emerson became Minister for Consumer Affairs and Competition Policy and took over responsibility for the Bill. Without any further consultation the Bill then went into Parliament for its first reading. The text of the Bill did not reflect Minister Bowen’s announcement. Instead, the Bill now only applies to standard form business-to-consumer contracts and (arguably) sole traders. Defeat was snatched from the jaws of victory.

In the Coalition’s formal response to the Budget, Mr Turnbull, Leader of the Opposition, said; “Now the most consistent complaint we have heard from small businesses is excessive regulation and compliance. The Coalition would reduce this burden to the lowest in the OECD, and join state and local governments to deliver a one-stop online portal for all necessary filings. Many small businesses find the paperwork for Government tendering overly complex and inconsistent between departments and governments. Part of our reform will be to standardise and streamline procurement contracts and similar processes.”

Minister Emerson, in a media release issued 24 June 2009, stated that in relation to business-to-business contracts, the

The ACEA also stressed that to give proper effect to the Bill it would need to apply to all levels of government (Australian, state, territory and local). The rationale being that the contractual behaviour of government significantly influences the contracting behaviour of the private sector.


National Outlook SPRING 09

The ACEA will be meeting with Shadow Ministers to follow up on the Coalition’s support. The ACEA has also put forward two recommendations to Minister Emerson and the Senate Inquiry into the Bill, which are that: 1. The Bill is applied to all business-tobusiness transactions 2. The Bill is applied to all levels of government (Australian, state, territory and local) when purchasing the services of the private sector. Discussions also continue with Minister Emerson. Nicola Grayson



THE LATEST PATHWAY TESTIMONIAL Heggies’ range of environmental engineering and scientific services has broadened considerably over the past several years. As we continue to grow, new services are being introduced, new offices open and other consulting practices are being acquired. Our overseas work on significant international projects has also increase markedly. As a consequence, greater focus on managing the technical and commercial risks of our multi-disciplinary service delivery was required. Significant changes to our Professional Indemnity (PI) Insurance cover became necessary. We realised that professional risk management advice well beyond that

provided by a normal PI broker was required – we needed an insurance advisory service with considerable consulting industry experience. Heggies selected a broker associated with the ACEA PI Pathway, as the services provided seemed an ideal match. The broker was able to ensure continuity of cover, broadening the scope of cover and negotiating a reduced premium. Their contract review service and ongoing staff risk management training have proven invaluable to our business, enhancing the professional standard of our client contractual relations and improving the quality of our service delivery.



Heggies Pty Ltd


To get a quote please visit:

ACEA’s PI Insurance Pathway gives ACEA members access to the PI market through a Panel of Brokers selected by ACEA. ACEA is providing a referral service only and is not providing any form of financial advice or offering a financial product. ACEA does not guarantee the value, price and terms of cover that may be received from any member of the Panel of Brokers. Any agreement entered into through use of the PI Insurance Pathway will be expressly between the Panel Broker and the ACEA member firm.


MY CLIENT WANTS A CONTRACTUAL INDEMNITY, WHAT SHOULD I DO? Many client terms and conditions of contract require the consultant to provide an indemnity to cover the risk of loss and damage. Indemnities should be treated with care before signing on the dotted line. What is an indemnity? It’s a binding promise to accept the risk of loss or damage that another party might suffer. A straightforward example is an insurance policy; an insurer provides you with an indemnity from the loss that you suffer (e.g. to your car, your home etc.). Put another way you are ‘held harmless’ from suffering loss or damage. From the client’s perspective an indemnity from the consultant is very attractive because it provides them with certainty that the consultant will be liable for certain risks. If the contract does not specify how liability is to be allocated between the parties it will be left to the courts to determine at law who is responsible based on the facts of the case. The most common forms of indemnity clauses in consultant contracts will allocate liability for the following types of loss or damage: Tangible loss, e.g. death, injury, damage to property Intangible loss, e.g. breaches of intellectual property rights, breaches of confidentiality Economic loss, e.g. payment of fines, penalties, loss of opportunity for ongoing work.

What should you look out for? It is in a lawyer’s nature to protect their client, therefore the wording of the indemnity needs to be considered carefully. Broadly drafted indemnities can significantly increase a consultant’s risk exposure. Here’s an example: The Contractor shall be liable for and indemnifies and shall keep indemnified the Government against any liability, loss, expense, damages, claims, suits, actions, demands or proceedings, whether arising out of any statute or at common law, in respect of personal injury (including illness) to or death of any person arising out of or in connection with or caused by the performance of the services. This wording was the subject matter of legal action that went to the New South Wales Court of Appeal, which concluded that the costs incurred by the State clearly arose out of or in connection with the work specified in the contract and, as such, questions of fault and who was responsible or to blame for the incident did not arise for consideration, it was merely a matter of contractual interpretation (State of New South Wales v Tempo Services Limited [2004] NSWCA4). 28

National Outlook SPRING 09

This illustrates that for the consultant who provides an indemnity as broadly worded as this it has the following onerous effects: The consultant need not be at fault or have acted negligently for the indemnity to trigger The client may not have to show that the consultant’s action actually caused the loss claimed The client does not have to take steps to mitigate the loss The loss does not have to be reasonably foreseeable, and hence can extend the consultant’s liability to include consequential losses The Consultant cannot claim that there was any contributory negligence by the client without an express provision in the indemnity that allows it.

Impact on insurance cover The ACEA has sought advice from specialist Professional Indemnity (PI) insurance brokers regarding the impact of indemnity clauses on standard PI policies; the advice received has been consistent. An indemnity is an agreement to assume someone else’s liability in the event of a loss. It is a means of shifting risk from one party to another. When a design professional indemnifies a client, he or she is agreeing to assume some of the client’s potential or actual legal liabilities and thereby to act as an insurer, of sorts, for that client. Indemnities which are broadly drafted may amount to contractual assumptions of liability in excess of that which would apply at common law. As such, these types of clauses may give rise to claims with respect to which you have no cover under your policy. We strongly suggest that you seek the deletion of this indemnity from the agreement. Interestingly the Australian Government has also received advice in terms of its own insurance cover in the event that the Government gives an indemnity to another party. Advice provided to the Department of Finance and Administration (now the

Department of Finance and Deregulation) in November 2004 states, As from 1 July 2004, Comcover’s standard terms of cover altered. The policy no longer allows for the automatic coverage of indemnities that are included in a contract. It is important that agencies take note of the following clauses and how they will impact on managing indemnity exposure: General Exclusion 2.9.12 2.9.12. liability arising out of any indemnity unless the liability would have arisen in the absence of such indemnity. This exclusion does not apply to indemnities contained in a contract where the contract was entered into prior to 1 July 2004. Commonwealth policy on the issuing and managing of indemnities is detailed in Financial Management Guidance No. 6 – Guidelines for Issuing and Managing Indemnities, Guarantees, Warranties and Letters of Comfort, September 2003. See also Part 3. General Information – section 3.6 Contracts with Outside Organisations. This exclusion excludes liability arising from an indemnity unless the liability also arises at common law. Therefore, if an agency agrees to the issuing of an indemnity (that is, extends the agency’s liability beyond common law) and does not obtain Comcover’s agreement to cover the indemnity under the policy, there is no cover in the event of a claim. There is no need to refer indemnities to Comcover for consideration if the indemnity does not extend the agency’s liability beyond common law, as the policy will automatically provide cover (subject to the standard terms and conditions of the policy).

What to do now The ACEA recommends that indemnity clauses in consultancy agreements that require the consultant to bear the risk for liabilities where they are not at fault and other the fault of others should be avoided. There may be other commercial or financial reasons why a consultant might still choose to accept the indemnity. It should be remembered that it is a requirement of the ACEA’s Code of Ethics that members hold insurance or make their clients aware if insurance is not maintained. This requirement is so that clients are aware of their own potential exposure when they enter into an arrangement with a consultant. If the indemnity limits the extent to which a


ACEA REVIEWS ITS PI PATHWAY SERVICE FOR MEMBERS In June 2007 the ACEA established a new service for its membership, known as the PI Pathway, a referral service to a Panel of three experienced PI insurance brokers. Expressions of interest were invited from the PI broking market, six were received and three brokers were successfully appointed.

consultant’s insurance can respond then the client should be made aware. The ACEA has a number of services available to members through the ACEA website to provide more assistance with concerns you may have about contractual indemnities that you have entered into or are considering. Attend the ACEA’s Master Class Certificate in Contracts for Consultants This 2.5 day intensive education course, for those who are regularly confronted with client contracts, looks at the legal framework of professional services contracts and considers how consultants can negotiate agreements which reflect their proper professional role as acknowledged by the courts. The course addresses not only how the law treats the contract itself, but also the process of negotiating that contract, and how that process can help minimise the likelihood of dispute. Read the ACEA Guide to Contract Terms (Practice Note 4.05) This Practice Note provides guidance on how to manage some common unfavourable contract terms. Seek legal advice from Built Environment Legal Built Environment Legal (BEL) is a wholly owned subsidiary of the Association of Consulting Engineers Australia (ACEA). BEL has been set up by ACEA to provide specific advice to consultancy firms practicing in the built and natural environment. Get connected through the PI Insurance Pathway ACEA members can access the PI market through a Panel of experienced and highly professional brokers. The PI Pathway Partners are Planned Professional Risk Services, Marsh, and BRIC. Nicola Grayson

The ACEA’s PI Pathway Partners are Bovill Risk and Insurance Consultants (BRIC), Marsh, and Planned Professional Risk Services.

The ACEA is extremely grateful to BRIC, Marsh and Planned Professional Risk Services for their ongoing support.

The ACEA committed to conducting an operational review of the PI Pathway not less than every two years. The ACEA PI Pathway Steering Group met on Wednesday 20th May 2009 to conduct that Review.

The ACEA has written to the Insurance Council of Australia and the National Insurance Brokers Association to confirm the ongoing partnership between the ACEA and BRIC, Marsh and Planned Professional Risk Services. This is because the ACEA believes that the insurance industry should also recognise the good work that the ACEA PI Pathway Partners are doing to demystify insurance and recognise the assistance that they provide businesses in order to source good quality coverage in times of need. Nicola Grayson

The ACEA is pleased to confirm that the Review concluded that the ACEA PI Pathway referral service, with a Panel of three brokers with expertise in the PI insurance market, should continue to operate in partnership with Bovill Risk and Insurance Consultants, Marsh, and Planned Professional Risk Services.

THE UNPREDICTABILITY OF THE PI MARKET HIGHLIGHTS THE BENEFITS OF SUBMITTING PROPOSALS EARLY The PI Pathway Partners, BRIC, Marsh, and Planned Professional Risk Services, have indicated to the ACEA that for the present the Professional Indemnity (PI) insurance market remains ‘soft’. A soft market is characterised by an increased number of participants, more accessible insurance, reduced premiums and the availability of broader cover. These conditions remain evident in the market. There are currently in excess of forty insurers and underwriting agencies in the Australian PI insurance market, representing a peak for this market cycle. This high number of participants means that there is fierce competition; therefore it is unlikely that the soft cycle will come to an end until the number of participants begins to decline. This makes it difficult to predict when the ‘hardening’ of the market might occur. The PI Pathway Partners have undertaken a review of some of the factors that influence the market cycle and the indicators point to a potential change. These factors include: Declining or negative investment income on reserves held by insurers Depletion of reserves that have been released by insurers in recent years to ‘prop up’ financial results Increased litigation and therefore claims activity due to depressed financial market conditions A period of significant weather related losses Increased reports of lower profits and even losses by international re-insurers Reduced profitability of the insurance industry generally. Whilst overall the PI insurance market remains relatively stable, there is some anecdotal

evidence that the insurance market has started to increase rates and premiums across various commercial and professional lines of business to ensure profitable returns for insurers. The anticipated hardening of the market may not take the traditional form of past cycles where a correction is achieved through timely and significant premium increases, retraction of capacity and reduction in policy coverage. Given the current economic challenges insurers may implement a more gradual approach to premium increases with a view to retaining quality risks, weeding out undesirable risks and retaining market share.

Implications for members Given the unpredictability of the PI insurance market, it is recommended that ACEA members remain diligent in submitting proposal forms promptly to their brokers in order to maximise the time to allow for any changes to the insurers underwriting parameters. Members are advised to started thinking about insurance renewals early (2-3 months out from the renewal date depending on your circumstances) to optimise your chances of renewing on favourable terms. If any members are unsure if they are getting the appropriate insurance or advice, the ACEA recommends that you contact one of the ACEA PI Pathway Partners for advice and assistance. Nicola Grayson SPRING 09 National Outlook



REPORT THAT CIRCUMSTANCE... OR ELSE! Notifying you insurer of circumstances that may give rise to a claim against you is essential to preserving your entitlement to indemnity under your professional indemnity (PI) insurance policy. Darren Pavic of Bovill Risk and Insurance Consultants (BRIC) explains the mechanisms that may serve to protect or deny you this entitlement and provides guidance to assist you in determining what is a ‘circumstance’. PI belongs to an exclusive class of insurances that operate on the ‘claims made’ basis which means that the policy responds to claims made against you (and notified to the insurer) during the period of insurance. This generally means is that it is the policy that is current when a claim is made that responds to that claim rather than the policy that you had when you actually did the work. The two mechanisms that support this ‘claims made’ policy operation are detailed in the insurer’s policy wording and Section 40 of the Insurance Contracts Act 1984 (ICA). A ‘claim’ is always defined in the wording and therefore it is usually relatively straight forward to assess documents, other correspondence or a situation to determine whether or not it falls within the definition of claim. The following is a typical insuring clause which outlines the basic policy operation: We will cover You for any Claim, first made against You and reported to Us during the Insurance Period, for breach of professional duty by You in the conduct of the Business by You.


National Outlook SPRING 09

With a typical definition of claim: Claim means: any writ, statement of claim, summons, application or other originating legal or arbitral process, cross-claim, counter-claim or third or similar party notice served upon You. In addition to the above, a PI policy also responds to claims that arise out of circumstances that the insured became aware of and notified to the insurer during the period of insurance even though the actual claim may be made at a later date. Following FAI General Insurance Co Ltd v Australian Hospital Care Pty Ltd in 2001 clauses referring to ‘circumstances’ were removed from insuring clauses in policies in the Australian market with this policy benefit now solely being provided by Section 40(3) of the ICA which reads as follows: Where the insured gave notice in writing to the insurer of facts that might give rise to a claim against the insured as soon as was reasonably practicable after the insured became aware of those facts but before the insurance cover provided by the contract expired, the insurer is not relieved of liability under the contract in respect of the claim, when made, by reason only that it was made after the expiration of the period of the insurance cover provided by the contract.

In addition to understanding of how the policy operates to provide cover on the ‘claims made’ basis we must also consider the mechanism by which insurers can deny claims where the Insured has failed to notify a claim or circumstance at the appropriate time. This is the ‘known circumstance’ exclusion with a typical example as follows: We will not cover You for any Claim: made, threatened or intimated against You prior to the Period of Insurance; arising out of any fact(s) or circumstance that might give rise to a claim against You which You were aware of, or ought reasonably to have been aware of, prior to the inception of this Policy, whether notified under any other insurance or not; arising out of any matter the subject of any claim(s) or fact(s) that might give rise to a claim against You referred to in the Your proposal form, declaration or underwriting information being the basis of this policy. The above exclusion is the most common grounds for professional indemnity insurers to deny claims on the basis that the Insured had knowledge of a potential claim prior to the commencement of the policy.


What is a circumstance? Some policy wordings avoid defining what is a ‘known circumstance’, this may well be for a reason! Other insurers outline the meaning of a circumstance in their policy exclusion as above with the key words being circumstance that might give rise to a claim and were aware of, or ought to reasonably been aware of. Some insurers define a know circumstance as: any circumstance(s) of which You were aware at the Inception Date of the Policy and which You knew or ought reasonably to have known might give rise to a Claim under the Policy. Based upon this definition the tests you can apply to identify if you need to report a circumstance are: 1. Do you know about any situation or fact 2. Based upon your knowledge and experience or that which a similar person in your situation would have 3. Would a reasonable person in your situation realise: that such situation or fact could lead to claim against you at some time in the future? It is critical to remember that neither the definition of claim or circumstance mention fault on your part but rather refer to actions or potential actions against you. The most dangerous circumstance is one you fail to report to an insurer because you believed it was not worthy of reporting as you didn’t do anything wrong! Unfortunately the courts have issued hundreds of judgements awarding damages against engineers who believed they didn’t do anything wrong!

In addition to protecting your entitlement under the policy there are other reasons why you MUST advise insurers of any about any potential matter that could give rise to a claim against you: You allow the insurer to make the judgement call as to whether or not the matter requires their immediate involvement. Liability insurers are professional litigants and are in the best position to deal with claims and circumstances. A less obvious reason to report circumstances is to satisfy your duty of disclosure. Even if you are confident that a circumstance is going to ‘go away’ and you fail to report it the insurer may attempt to use your failure to disclose such circumstance to reduce their liability for any subsequent claim when you do need the insurance. Whilst it may be difficult for an insurer to argue non disclosure where a single minor matter has not been reported it is much easier to deny liability where you demonstrate a history of failing to report such circumstances. The insurer can then legitimately argue that if they had known that you had suffered several circumstances, and despite none of these ever developing into a claim they would never have contemplated insuring you.

is extremely dangerous because when you need the insurance it may well not be there. If you wish to manage a circumstance yourself this is possible – but you must secure the agreement of the insurer. They will either let you handle the matter or wish to take over conduct; or if you are particularly confident then you can agree not to seek indemnity under the policy and ‘go bare’ in respect of this matter. You still protect your future rights under your PI and manage the circumstance as you see fit. If you are aware of a claim requiring notification or are unsure whether something is a ‘circumstance’ the best option is to talk the matter through with your insurance broker – they are in the best position to advise and assist you in determining the most appropriate course of action. Involving your broker at this early stage can also assist in determining whether there is potential for the insurer to apply their known circumstance exclusion and to assist you with strategic advice in this regard. Don’t try to handle the matter yourself. To the extent that any of the above content constitutes advice, it is general advice without reference to your needs or objectives and therefore cannot be relied upon. Before acting on the above information you should obtain advice specific to your needs.

Unfortunately some professionals believe that through handling minor matters ‘in-house’ they better manage their risk and avoid potential premium increases for their PI insurance. This

Darren Pavic is the Broking Manager of Bovill Risk & Insurance Consultants Pty Ltd (BRIC). BRIC are specialist Engineers professional indemnity Insurance Brokers and an ACEA PI Pathway member. For further information contact Darren at or phone 1800 077 933

SPRING 09 National Outlook


sustainability Caroline Ostrowski is a Policy Officer for the Association of Consulting Engineers Australia. Caroline represents the needs and interests of ACEA member firms across the Skills and Sustainability business portfolios. Caroline can be reached at

ASBEC 2ND PLANK REPORT UPDATE The Australian Sustainable Built Environment Council (ASBEC) Climate Change Task Group (CCTG), which the ACEA is a part of, is set to release an update to The Second Plank Report. The original report The Second plank – Building a low carbon economy with energy efficient buildings (the Second Plank) was released in August 2008. The original report discussed the role that energy efficient buildings could play in achieving deep Green House Gases (GHG) abatement in Australia, alongside identifying the barriers to energy efficiency investments and proposing a range of policy responses to address these barriers. The original Report highlights that the building sector’s abatement potential is feasible and cost effective. It can be achieved through the adoption of known, mature technologies. However, in the presence of market and nonmarket barriers, stimulating energy efficiency in the building sector requires further polices and incentives that will not be adequately addressed by the Carbon Pollution Reduction Scheme (CPRS) alone. The purpose of the updated report will be to factor in additional information relating to Australia’s carbon emissions and the building sector’s complementary role in abatement. Details from the CPRS White Paper and Australia’s Low Pollution Future which details Treasury’s modelling of the CPRS will be included in the update. These two documents substantially update estimates of how the CPRS is likely to take shape and impact on the economy at large. In addition, the Australian Bureau of Agriculture and Resource Economics (ABARE) released new projections of residential and commercial building energy use and the Australian National Greenhouse Accounts updated greenhouse emission factors. On addition, the updated Report will consider key methodological data updates from a broad range of sources. Caroline Ostrowski


National Outlook SPRING 09

ADAPTATION, MITIGATION OR ENERGY EFFICIENCY? The Governments three pillar approach to addressing harmful climate change is in full swing. Reducing Australia’s greenhouse gas emissions through the Carbon Pollution Reduction Scheme (CPRS) adapting to climate change we cannot avoid through research; and helping to shape a global solution are primary to achieving the desired results. Are we investing our energy in the right strategies? The ACEA is of the view that there is a strong need for an incentive and education program to encourage and support Australian businesses to invest in new and more sustainable ways to operate. This will be the catalyst that mobilises the investment community to make long-term investments in low or zero carbon energy technology and sustainable infrastructure design with confidence. Australia will only reach abatement targets if incentives for energy efficiency are implemented and embraced. Public awareness and active participation should play a key role in the Government’s strategy for mitigating climate change. The public require confidence and information to make the transition to a carbon constrained reality and share the vision of a sustainable Australia. Adaptation is potentially one of the most significant aspects of climate change for Australia and will involve very significant public and private investment and considerable time if we are to be successful in adapting to the climate change that it is already built into the system. The impact of extreme weather conditions (e.g. high temperatures, floods, drought etc) for prolonged periods on

our roads, our railways, our bridges and tunnels, our airports, our ports and coastal infrastructure is potentially very significant. If we do not move to adapt our buildings and our infrastructure to accommodate these impacts, the cost to society and the ability of our society to respond quickly to these events will be significantly diminished. We must also as a nation consider the impacts of rising sea levels on our neighbours and the potential impact on Australia in offering assistance. If we act now to postulate future climate scenarios, to model potential outcomes, to assess risk and identify critical issues, we will be able to carry out the required research, technology development and testing so as to mitigate climate change with least cost to environmental, social and economic welfare. This three-pillar framework accepts that climate change is occurring and that we need to both manage the transition to a low carbon future and adapt to a changing world. Achieving sustainable economic, social, and environmental outcomes should be at the heart of any Australian and international climate change framework. Early action to place our economy and society on a low carbon pathway can ensure that new growth opportunities arise and are sustainable for future generations. Caroline Ostrowski


BUSINESS INVESTMENT CONTINUES TO ANCHOR THE DOWNTURN Business investment in Australia has plummeted since the onset of the global financial crisis in September 2008. With aggregate demand at levels not seen since 2001, business activity and revenue has taken a substantial hit.

Contributions to GDP growth* Percentage points

Percentage points


3 2

Household consumption

Business investment









Dwelling investment

Public expenditure









2008-09 (estimate)

2009-10 (forecast)

2010-11 (forecast)


*Adjusted for second‑hand asset sales from the public sector to the private sector. Source: ABS cat. no. 5206.0 and Treasury.

Reflecting the deteriorating outlook, business sentiment has weakened further in recent months and business surveys consistently show sharply weaker investment intentions. Business borrowing in Australia has been declining, as companies postpone investment plans and seek to reduce leverage in an environment of tighter lending standards. The substantive impact of declining business investment on GDP growth can be witnessed in the chart above: Total new business investment is expected to fall by 18.5 per cent in 2009/10, before stabilising in 2010/11 with growth of 3.5 per cent. Recent data from the Australian Bureau of Statistics (ABS) Survey of Private New Capital Expenditure and Expected Expenditure indicate particular weakness in investment intentions for 2009/10 in the manufacturing, construction and property and business services sector. Fortunately, in recent months, conditions in global financial markets are showing signs of improvement. Action to strengthen balance sheets of key financial institutions is under way. One example has been the prominent capital raising that has been undertaken in recent months. Nonetheless, credit conditions remain tight.

The Federal Government is doing its part to restore business investment to at least precommodity boom levels. It has now extended the investment allowance and expanded its return to 50 per cent. Historically, investment allowances have been an important feature of efforts to facilitate economic recovery. The extension of the investment is timely, and it will provide an important incentive to new investment at a time when capital expenditure intentions are being carefully reviewed given the global recession. The allowance will lead to a higher level of capital formation in the private sector but also significantly influence the timing of investment given its temporary nature. The small business tax break will also go a long way toward offsetting some of the decline in business investment. Small business (with less than $2 million turnover) will be able to claim a bonus tax deduction of 50 per cent for new tangible depreciating assets purchased before 31 December 2009. Further counter-cyclical policy has come in the form of an easing of monetary policy since September 2008. This has cultivated a more lenient lending environment, which would have otherwise been catastrophic for forward-looking businesses with expansion plans. Business loan rates are now at below average levels.

Business expansion plans will certainly be given some impetus by the present downward pressure on labour costs. With the unemployment rate steadily rising to 5.8 per cent for June 2009, wages are not going anywhere anytime soon. In addition to this, the decision by the Fair Pay Commission on 7 July 2009 to temporarily freeze the minimum wage is one in the interests of Australia businesses. To impose any further cost on already-struggling firms operating in a demand-poor economic climate would be unwise. Additionally, the offset in business costs will be beneficial to firms looking at capital expenditure. Interestingly, Treasury forecasts that engineering construction will lead the business investment recovery in 201011, with a number of high-value resource projects scheduled to commence work in that year. Treasury acknowledges that there are considerable risks around the engineering investment outlook given the possibility of delays or cancellations in light of reduced demand and significantly lower commodity prices. However, the ACEA’s own economic analysis and forecasting sees good news to come, with an upturn in engineering construction activity expected from around July next year (see ACEA Outlook for Consulting Engineering 2009). Matthew King

SPRING 09 National Outlook



LOOKING AHEAD: NEW DECISION SUPPORT SYSTEM HELPS ORGANISATIONS PLAN INVESTMENTS IN CARBON-CONSTRAINED ECONOMIES INNOVATION DOES NOT NECESSARILY HAVE TO BE A MASSIVE LEAP INTO THE UNKNOWN OR A RADICAL DEPARTURE FROM ANYTHING THAT HAS BEEN ATTEMPTED PREVIOUSLY. THE APPLICATION OF STANDARD TOOLS OR TECHNIQUES FROM OTHER FIELDS OR DISCIPLINES INTO A NEW ARENA CAN RESULT IN ANYTHING FROM INCREMENTAL IMPROVEMENTS THROUGH TO STUNNING BREAKTHROUGHS. Governments around the world are responding to scientific and community pressure to manage the risks posed by climate change. In particular, they are exploring options to reduce future emissions and transition away from carbon-based energy sources. As a result, governments in Europe, the United States and Australia have chosen to manage emissions through ‘cap-and-trade’ schemes, which involve setting a cap on total permitted emissions. With businesses facing a cost for carbon emissions, current and future emissions must be considered in operational and strategic planning. While there are many tools available to calculate the embedded and operational emissions at a particular point in time or for a particular project, there are only a few systems and tools suitable for strategic planning, where rapid comparisons of options and scenarios are required. For developers and others involved in the planning, design and construction of infrastructure, strategic planning in a carbonconstrained economy is vital – decisions made today can ‘lock in’ carbon emissions over many decades. A new decision support system was recently used for a mixed-use development in Dubai to incorporate carbon emissions into the strategic planning process. The development is a series of sand islands that, when complete in 2015, will be home to

more than 1.1 million people. The developer required a sustainable, self-contained solid waste strategy that would maximise reuse with a minimal carbon footprint. This set of requirements lent itself to using well known and accepted decision-making approaches such as multi-criteria analysis. During the analysis, the project team needed to consider many alternatives, comparing factors such as: capital costs operating and maintenance costs carbon footprint land use social impacts environmental impacts. The challenge was to bring all of the economic and carbon emissions aspects together into a decision support framework that could efficiently and consistently compare 90 different waste management scenarios, encompassing different source separation, primary and secondary transportation options, and solid waste treatment plant locations and degrees of integration. The team used a proprietary tool developed by MWH to undertake the analysis. The tool, which allows clients to critically assess the carbon and cost implications of future business investments, is unique in that it rapidly and transparently compares the data, making it

an ideal companion for scenario planning, multi-criteria analysis and business investment decision making. A database of embedded and operational emissions from consumable items and assets was used to develop an emissions forecast for a range of business activities, including administration, construction, maintenance and operations. The tool was then used to quantify emissions for each option, and the inbuilt economic analysis framework in the tool provided an analysis of costs and benefits. Forty of the 90 options passed the multicriteria analysis viability tests. Of these, the analysis showed the preferred option had higher capital (US$9 million) and lifecycle costs (US$5 million) than some of the other options, however, the carbon emission savings over the 30 year analysis period were significant. By saving approximately 450,000 tonnes of CO2-e, the preferred option had an overall cost for emissions savings of approximately US$11 per tonne of CO2-e. This effort provides an example of how powerful gains in sustainability can be made when familiar business, strategic planning and scientific approaches are combined in a new way. Paul Lamble, Senior Consultant, Sustainability Services, MWH

With businesses facing a cost for carbon emissions, current and future emissions must be considered in operational and strategic planning. While there are many tools available to calculate the embedded and operational emissions at a particular point in time or for a particular project, there are only a few systems and tools suitable for strategic planning, where rapid comparisons of options and scenarios are required.


National Outlook SPRING 09


PROCUREMENT INNOVATION The Built Environment Industry Innovation Council CONDUCTS research into impediments to procurement innovation and opportunities for change. Investment in infrastructure is an important nation building task, however many industry participants believe that a major impediment to high quality infrastructure project delivery is procurement practices in the construction industry. The application of innovative solutions to address Australia’s infrastructure challenges, and investment in innovation, is highly desirable. This is why the Built Environment Industry Innovation Council (BEIIC) formed in September 2008 by Senator Kim Carr, Minister for Innovation, Industry, Science and Research, has identified in its 2009-2014 Strategic Plan, “Innovative Procurement Policy and Processes Developed” as the first area for action. BEIIC has commissioned research from the Curtin University of Technology, funded by the Department of Innovation, Industry, Science and Research, to inform the Council of some of the key impediments to procurement innovation. The report reviews a broad range of international and local reports, including some of those featured previously in ACEA’s National Outlook, e.g. the 2006 and 2008 Blake Dawson Waldron Scope for Improvement reports. In addition selected experts were surveyed to obtain their views from a broad sector of the Australian construction industry (including government organisations). The key findings of the report, published in May 2009, identify the following themes as having, a high impact on innovation in procurement: the skills and abilities of the industry as a whole (with particular emphasis on the skills and abilities of clients in particular) design risk management regulation. It is interesting to compare this to the ACEA’s submission to the Australian Government review of Australia’s innovation system conducted last year by Dr Terry Cutler, in which the ACEA stated: “The effectiveness of the national research priorities is influenced by the legislation and policies of governments as well as cultural issues. There are some clear areas where these influences have hampered the ability of the private sector to be innovative or at worst have stifled innovation. It is ACEA’s contention that these barriers include: The current shortage of engineering skills (and related technologists); A lack of emphasis on innovation, and processes to foster innovation, in the education system and support for the enabling skills, science and mathematics;

Governments’ attitude to accepting innovation risk, as demonstrated in many of the Government’s procurement practices and contracts; Lack of harmonisation of regulation across Australia; and Lack of appropriate promotion and incentives for innovation.” Curtin University of Technology, in its report to the BEIIC, puts forward the following recommendations for consideration: A common language: providing certainty and clarity by standardising definitions and terms relating to the main areas of procurement. Effectiveness of procurement methods: further research is required to establish the type and effectiveness of different procurement methodologies. Procurement selection framework: development of a pragmatic framework to guide procurement selection. Regulation: further research is required into the impact and effect of regulation on innovation in procurement. Government’s role in developing innovation in sustainable procurement: it is recognised that the Government, in its role as client, significantly influence the outcomes of procurement by addressing the impediments to innovation. Governments should offer incentives to firms to innovate and encourage collaboration and enhance its role as a champion of innovation. Foster collaboration: collaborative approaches to procurement should be fostered including a move away from procurement models that encourage litigation. Ethical procurement: a database should be developed to assist industry to make informed decisions regarding ethical procurement. Inappropriate risk allocation: methods should be developed to encourage all participants that wholesale transfer of all risk to another party does not necessarily lead to the delivery of a successful project. There is an attitudinal change to the preparation of contract documents. These recommendations are under consideration by the BEIIC, which is looking to develop a series of focused and practical outcomes to foster innovation in the construction industry and reduce the impediments created by some procurement processes.

The ACEA’s recommendations to the Government on this issue are closely aligned to those proposed by the authors of the Curtin University report, Graham Miller, Craig Furneaux, Peter Davis, Peter Love, Angela O’Donnell. The ACEA recommends that the Australian Government needs to: Increase the number of engineering (and related) skills in Australia, this includes reform of the primary, secondary and tertiary education system. In the short term, to alleviate the significant skills shortage of engineering and related disciplines, reform the business visa program to fast track engineering (and related) skills into Australia. Reform the way in which governments procure the services of the private sector, with particular regard to risk management. ACEA acknowledges recent moves by some government departments to foster innovation through alliance projects, where there is risk sharing. Increase the R&D incentive to business to promote Australia as an international hub for R&D and promote a higher level of investment in R&D by Australian firms. In addition review and reform the associated compliance requirements. Increase government funding through the CRC’s for innovation projects linked to: water infrastructure; carbon reductions; climate change adaption; health (for the aging population); urban transport; exports into Asia and the Pacific. Introduce a Education and Training (E&T) tax concession at a rate of 125% to transform the knowledge and resources of business so that they are better placed to contribute to the innovation and the performance of the economy as a whole. Increase funding for initiatives that foster link between business; governments (at all levels) and research for agencies; and government initiatives such as Commercial Ready and Commercialising Emerging Technologies. Harmonise and reduce regulation of business in Australia and engender collaboration between all levels of government and industry. For a copy of the research conducted by Curtin University of Technology for the BEIIC and more information see: (go to the shortcuts menu and click ‘industry innovation councils’). Nicola Grayson SPRING 09 National Outlook



INVESTMENT IN EXISTING ENERGY INFRASTRUCTURE & PROVEN RENEWABLES In Australia, we don’t have to pick a winner when it comes to energy security, the array of resources underpinning our great southern land are exponential as is our access to renewable sources of energy. It appears though that investors need a little help and certainty when contemplating where to direct funds. With an apparent $26 trillion (global) investment in energy supply infrastructure needed by 2030 to meet growing demand, now is the perfect time to evaluate our nation’s energy security strategy. Domestic coal and gas industries have been providing Australian consumers with cheaper energy prices than most other developed nations for some years now. Australia’s energy future will contain a mixture of finite and renewable energy sources and there is a need to secure a consistent framework for investment in all types of energy infrastructure. It appears that investment in existing energy infrastructure is occurring, NSW distributors Transgrid, Country Energy, EnergyAustralia and Integral Energy have promised to spend more than $16.4 billion on network upgrades between 1 July 2009 and 30 June 2014. Australia should now seek to strike the right balance between finite and/or carbon intensive forms of energy and renewable energy sources to secure Australia’s energy supply. There is growing community concern over climate change issues and the need to provide diversity in supply. There should be more focus on investing in proven renewable energy technology and distribution infrastructure to assist in establishing supply convenience and developing economies of scale for renewable energy. A report by the Australian Academy of Technological Sciences and Engineering (ATSE) found that a commitment is needed by government and industry to invest around $6 billion by 2020 in research, development and deployment of new power generation technologies. Further, no single new technology for stationary energy production will be capable of achieving the projected reductions for CO21.

Proven renewable energy sources can provide a foundation for other renewable energy investment and creation in the future. The Government has announced that there are currently $3.9 billion worth of Commonwealth initiatives to support the development and deployment of low carbon and renewable sources of energy2. Information as to how this funding is distributed between the various players in the renewable energy sector is difficult to unearth. The ACEA views that Australia’s energy security strategy should entail a short term plan for focussed investment in proven renewable energy sources coupled with a long term plan for investment in other renewables and related research and development. A focussed investment initially in two or three proven renewable energy areas, the solar and wind sectors for example, would supply the means for further commercialisation and could provide real gains in terms of meeting the Renewable Energy Target (RET). Distributing incentives and funding in a prioritised and focussed way in concert with the release of a long term investment plan should underpin this process. Large scale investment now has the benefit of providing investor and community certainty, which in turn leads to additional investment in the future. The long term investment plan should consider all renewable energy sources, as it will be a wide mix of renewable energy sources that will help Australia to achieve its goal of moving to a low pollution future. The ACEA views that the Government’s $435 million Renewable Energy Demonstration Program (REDP) which has received applications covering a broad cross section of renewable technologies including biomass, solar thermal and photovoltaic technologies, geothermal, wave energy and ocean thermal, hydro systems, wind,

and combination technologies, should remain the vehicle through which new or ‘unproven’ energy technologies are explored. According to the Stern Review, the worldwide annual market for low carbon energy products is likely to be worth at least $500 billion by 20503. If correct, Australia should move to secure an early and large stake in this market. There is a clear need to distinguish between short term and long term investment strategies by Governments. Private investors have long called for governments to create ‘certainty’ through long term investment strategies which present a clear plan for current and future development. When considering certainty for investors, the Australian Government believes that the COAG endorsement (of the final design) of the expanded national RET will drive substantial investment and employment in the renewable energy sector4. The RET scheme will increase the renewable energy target by over four times, to reach 45,000 gigawatt-hours (GWh) in 2020. If the CPRS achieves its intended outcomes, in 2050 the renewable electricity sector, as a result of the CPRS, will represent almost half (48 per cent) of the electricity generation in Australia5. A strategic and clear energy security strategy will ensure that Australia’s capacity for future economic development is sustainable and efficient. The ACEA understands that the current energy environment is one that includes fossil and renewable energy resources. However we also recognise the strong links between renewable energy and energy security. This article is an extract from the ACEA’s submission to the Department of Resources Energy and Tourist (DRET) Energy Security Consultation Papers. The full Submission can be accessed at aspx?ID=185. Caroline Ostrowski

1 Energy Technology for Climate Change: Accelerating the Technology Response, Australian Academy of Technological Sciences and Engineering (ATSE). Web link: 2

Greg Combet AM MP, Media Statement, 29 April 2009, Weblink:

Stern, N., (2007), The Economics of Climate Change: The Stern Review, Cambridge University Press 2007, ISBN 978 0 521 700801. 3

4 Prime Minister of Australia, 30 April 2009, Media Release 0943 5 The Hon Greg Combet MP, Address to climate change @ work conference, Hilton Hotel Sydney 3 April 2009,


National Outlook SPRING 09


GOVERNMENT NOW TO SET ITS SIGHTS ON R&D In the modern day world, innovation policy is a central aspect of economic policy. Australia has for some time now, needed a significant recasting of its innovation policy to give priority to strengthening innovation at the point where business enterprises and workplaces engage with their markets. In accordance with this, as part of the 2009/10 Federal Budget, the Rudd Government introduced a number of initiatives designed to boost private sector investment in Research and Developmet (R&D). The most important aspect of the overall announcements on innovation was the Government’s decision to replace the R&D Tax Concession with a new Tax Credit scheme that will come into effect from July 2010. A 45 per cent refundable tax credit (equivalent to a 150 per cent concession) will be provided to small firms with a turnover of less than $20 million. A 40 per cent non-refundable tax credit (equivalent of a 133 per cent deduction) will be provided to foreign-owned firms, and firms with a turnover of more than $20 million. The second half of 2009 will see a consultation process with industry to implement this new measure. The process is designed to determine the eligibility criteria and specific legislation for the Tax Credit. It is expected to commence in August of this year, with the release of a discussion paper. Submissions will be received by the Department of Innovation, Industry, Science and Research up until the end of September 2009. Exposure draft legislation will then be released around the middle of November. The Government’s intention is to have the legislation passed through Parliament by February 2010. The Government proposes to review/consult on the definition of R&D, and therefore the eligibility criteria, within the Tax Credit consultation process. The ACEA has been advised that it is not their intention to exclude industry sectors, such as consulting engineering, from accessing the Tax Credit. It is clear however, that the Government is considering measures by which it can ‘tighten its belt’ and will be seeking to limit the Credit’s financial generosity for large firms. On a positive note, discussions with public servants have revealed that there will be a concerted effort to attract a greater number of SME’s to the scheme, and finally, there will be a broadening of the application of the Tax Credit across services industries.

The Minister for Innovation, Industry, Science and Research, Senator Carr, has informally advised the ACEA that the original intent of the R&D Tax Concession scheme was to incentivise firms operating in manufacturing. In response to the natural deviation away from the original intent, he will seek to address the concept of ‘at risk’ within the present definition of R&D. The Senator is conscious of ensuring that the definition doesn’t digress from incentivising genuine R&D. However, the Senator made it clear that he was very open to meetings with representatives from the consulting engineering industry to discuss this further, and the ACEA will most certainly be pursuing such meetings. Regardless of policy makers’ conversations and tweaking, the fact remains... an investment in R&D is an investment in future growth. The work of the OECD has conclusively demonstrated that technology-based firms are the major source of new jobs and increased productivity growth at both firm and economic level. The OECD stated in its report, Technology, Productivity and Job Creation (1996), that the combination of technological change, organisational change and up-skilling helps many firms achieve strong productivity growth and job gains. Evidence from firmlevel studies suggests that R&D-performing and/or technology-using firms have higher than average productivity and employment growth. Other factors, such as worker training, organisational structures and managerial ability; are critical however. According to Professor Steve Dowrick from the Australian National University, the rate of return for a firm’s investment in R&D is 20 per cent. What is startling to note, is that this is directly proportionate to the aggregate rate of return on capital investment. Regardless of what direction Canberra takes on R&D, the investment will pay off one way or another. Matthew King

SPRING 09 National Outlook


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The investment in infrastructure has never been so important following the global financial crisis and the resulting economic downturn. In Australia and the world, governments have started to invest in major economic and social infrastructure with the aim of lessening the impacts of the economic recession. Governments are also attempting to fill the investment holes that have appeared due to banks and equity investors pulling out of funding for infrastructure projects.

productivity and increase our standards of living. Investment in infrastructure is seen as the catalyst to drive national reform and economic growth. Most of the funds required to invest in infrastructure will come from the burgeoning federal and state revenues resulting from the resources boom and the past strong domestic property market.

In Australia there have been calls for a national infrastructure bank to be set up with the Government borrowing billions of dollars and then lending the money to the states to invest in infrastructure. This idea has already been announced in UK.

What is the future for investment in Infrastructure? As the global financial crisis continues, investment in planned infrastructure in Australia could be impacted by reduced federal and state revenues and budgetary constraints.

Other financial policies have been adopted elsewhere by governments eager to reverse the effects of the global financial crisis and stimulate their economies. In the US, Congress recently approved a US$787 billion stimulus package which included a bill for taxadvantaged bond programs to enhance liquidity and stimulate private investment in infrastructure.

Governments may be unwilling to borrow for more infrastructure investment in the future, especially if this means going into high debt. Governments will increasingly turn to the private sector to help fill the infrastructure investment void. However, the ability of the private sector to source credit remains uncertain in the global financial crisis.

Is Australia better placed than most? Yes. Compared with most other developed nations Australia’s federal and state governments are in relatively strong financial positions. These positions provide them with the financial capability needed to respond to the economic downturn.

The private sector will also have to more diligent in assessing the commercial viability of infrastructure investments, especially Public Private Partnerships (PPP). This is due to some PPP projects causing near financial ruin for investors and project sponsors. Governments are also being asked to share the commercial and financial risk associated with PPP’s.

The Australian banking system has provided stability and confidence to the economy by avoiding some of the financial problems felt in other economies. However, there is some worry about the capability of foreign banks that operate in Australia to continue to support local infrastructure investment in the short and long-term.

In short, the future prosperity and development of Australia’s economic productivity and standards of living depends on an ambitious, achievable and forward thinking infrastructure programme. The plan must provide Australia with a set of infrastructure assets that benefits all Australians for years to come. As suggested, investment in infrastructure has never been so important; however Australia is better placed than most to deal with the global financial crisis and the resulting economic downturn. Neil Bassett

Importantly, the Government has a strong mandate for national reform all of which is geared to improve our international competitiveness, drive national

For nearly 40 years, SMEC’s multi-ethnic workforce has defined who we are. Today, our staff of 3,600 people from more than 100 ethnic backgrounds works together, harmoniously and productively, throughout Australia and in over 50 project locations around the world. SMEC's diversity has its roots in Australia’s most iconic nation-building project, the Snowy Mountains Scheme, which attracted 100,000 migrants from over 30 countries to south-eastern Australia where they worked on the massive 25 year scheme that transformed Australia. Those early days heralded the emergence of multicultural Australia and SMEC’s trendsetting investment in a multiskilled, multicultural workforce has become one of our greatest assets. SMEC is now in the seventh year of a very successful Graduate Development Program that focuses on continuing professional development. The aim is to provide opportunity and encouragement to our young professional engineers to reach Chartered Professional Status or the equivalent in their chosen fields. In major offices, SMEC conducts regional graduate meetings with periodic training on Career Episode Reporting. In recent years, SMEC has actively attracted young professionals from around the world to work on a multitude of challenging projects. Through our active sponsorship of 457 visas, as well as comprehensive induction, mentoring and training programs, SMEC has assisted many of these people to integrate successfully into the workforce and the Australian community. One simple, highly appreciated activity is SMEC’s ‘English Classes’ where lunchtime students learn about pronunciation, comprehension and expression. The classes also have a strong mentoring component and are attracting a growing number of participants. SMEC’s investment in education is a guarantee of a better future for its staff. SMEC SPRING 09 National Outlook


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National Outlook SPRING 09

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This course has been designed with one purpose in mind – to keep your business safe. It is time to pull those contracts out of the bottom drawer and really have a look at what you’ve signed. Have you inadvertently agreed to unlimited liability? Are there clauses which your insurance won’t respond to? What are the risks to your business? Which terms leave you most vulnerable to litigation? Which terms leave you uninsured? How can you establish an effective business relationship with your client that is also legally sound? What are the lawyers really saying?

For more information or to register please contact Daniel Condon at the ACEA National Office, or visit

SPRING 09 National Outlook


ECONOMICS & TAXATION Matthew King is a Policy Officer for the Association of Consulting Engineers Australia. Matthew represents the members interests in the areas of International Trade, along with Economics and Taxation. Matthew can be contacted at

NEWSPAPERS AROUND THE COUNTRY REPORT ON THE ACEA’S WORK FOR AUSTRALIAN RESIDENTS WORKING ABROAD In June of this year, the ACEA was pleased to engage the Federal Government in its proposed changes to the Australian income tax exemption available to employees working abroad for more than 91 days (Section 23AG). Although the exemption was not retained by the Government, the ACEA’s input was a major feature of a Senate report and debate in Parliament, and a substantial amount of media coverage was obtained. The ACEA campaigned for the retention of Section 23AG to engineering firms. The ACEA’s initial submissions to the Treasury and Senate Economics Committee were reinforced by Nicola Grayson and Matthew King providing evidence at a Senate Committee hearing on June 10. A significant component of the Senate Committee’s final report detailed evidence provided by the ACEA at the Committee hearing, including an engineering firm case study. Pleasingly, on June 11, The Australian Financial Review, Sydney Morning Herald, The Age, and a number of other broadsheet newspapers; published an article detailing some of the strong advice promulgated by the ACEA on the Government’s proposed changes. The Association received further media coverage on 23 June with the Financial Review discussing the expected impact on the international competitiveness of Australian firms. This was pleasing given that a critical component of the ACEA’s argument was the potential ramifications for Australian exporters seeking to win price-competitive international tenders. Despite the fact that the Government elected to progress with its policy agenda, the ACEA is delighted to have publicly emphasised the critical importance of the consulting engineering industry and given a substantial boost to the public awareness of both the industry and its Association. A great deal of work now remains for Treasury and the Tax Office, as they seek to resolve the administrative complexities of the new legislation. The ACEA’s efforts will now turn to encouraging Treasury and the Tax Office to achieve simplicity and a minimal compliance burden in the roll out of the changes. Matthew King


National Outlook SPRING 09

THE ACEA RELEASES PRACTICE NOTE – HOW TO ACCESS THE R&D TAX CONCESSION The ACEA has now released its How to access the R&D tax concession Practice Note (PN). The latest instalment in the ACEA PN suite provides members with a simple and user friendly guide to accessing the generous concession for firms engaging in innovation. This PN provides an overview of the Tax Office’s requirement in order to access the Research and Development (R&D) Tax Concession. From 2010/11, the Government will replace the R&D Tax Concession with a simplified R&D Tax Credit. However, for the coming financial year, the Practice Note still stands. With great potential for financial reward, comes great administration. Two Government departments manage the accessibility and application of the Concession, AusIndustry and the Australian Tax Office. AusIndustry (Innovation Australia) determines the extent to which the investment constitutes true R&D. Annual registration of R&D activities by Innovation Australia is a prerequisite for claiming the Concession. However, registration is not an indication that activities are eligible R&D. The expectation is that companies are able to self-assess against the relevant definitions

and may be subject to later assessment. Additionally, Innovation Australian requires the firm to carry out the proper planning to prove that genuine R&D has been embarked on. The Tax Office is responsible for determining what components of the R&D Tax Concession are applicable and the delivery of the financial reward. Fortunately, the ATO introduced an R&D Tax Concession schedule to assist companies to comply with the legislative and administrative requirements for claiming deductions for R&D expenditure in their income tax returns. The PN begins with a flow chart detailing a concise summary of each step in the process of accessing the concession. This is followed by the steps to access the R&D tax concession, and an explanatory guide to each of those steps. The How to access the R&D tax concession PN is available to ACEA member firms at Matthew King


SKILLS SURVEY TELLS THE SAME OLD STORY The Association of Consulting Engineers Australia (ACEA) has now finalised its 2009 Skills Survey report. This year’s survey delivered some fascinating results as to the nature and impacts of skills shortages and trends in Australian consulting engineering firms. The most crucially important outcome of this year’s survey is that the economic downturn has highlighted that skills shortages in the consulting engineering industry are systemic and not cyclical. Fluctuations in the economic cycle have not alleviated the pressure of inadequate levels of skilled labour in critical engineering disciplines, and there’s work for government to do in addressing this issue. More than half of the respondents indicated that despite a reduction in activity, they are still recruiting. Almost a third of firms (30 per cent) reported that they are still recruiting and there is a skills shortage. When asked about fluctuations in staff numbers, the results revealed almost an even split between firms experiencing net reductions, no change and growth. 22 per cent of respondents indicated they are experiencing net employment reductions, 19 per cent indicated they are experiencing no change in staff numbers, whilst 19 per cent reported they are experiencing net growth in staff

numbers. This dispels the assumption that the economic downturn has alleviated the skills shortage crisis. The 2009 Skills Survey revealed that the two stages of the employee life cycle most prone to shortages are middle level and senior/ principal. Consulting engineering firms still find it difficult to attract and retain staff with five years or more experience. The engineering discipline most affected by the skills shortages is geotechnics, according to 37 per cent of firms. This is very closely followed by civil and structural engineering professionals (33 per cent respectively). This is particularly startling in light of the infrastructure-centric spending agenda from both Federal and State Governments. Environmental engineers are also in short supply according to almost a third of firms. Once again, with climate change response, sustainability and energy efficiency, high on government priority lists, this result is a thought-provoking one. Matthew King

PERFORMANCE BENCHMARKING: HOW DOES YOUR FIRM MEASURE UP? The annual ACEA Practice Performance Survey (PPS) 2009 will be released in September. The results of the PPS will be used for an ACEA report that will allow you to judge your firm’s financial and strategic performance against your competitors. The PPS report will enable industry comparison across a range of indicators, such as: profit performance, cost structure, debt to equity ratios, sources of fees, employment, and more. SO DON’T MISS OUT ON GETTING YOUR 2009 SURVEY IN!


The global recession began with a financial crisis, and we are unlikely to see its appeasement until global financial markets are restored. In its July 2009 World Economic Outlook Update, the International Monetary Fund (IMF) stated that “the main policy priority remains restoring financial sector health.” The IMF went on to outline that global financial markets remain impaired and bank balance sheets still need to be cleaned and institutions restructured. It’s fair to say that interest rate cuts, easing of credit flows, bank deposit guarantees, bank recapitalisation, and asset ‘stress tests’; have lessened concerns about systemic failure; however meaningful change is still not in sight. While substantive progress has been made in restoring bank solvency, it is not yet sufficient to stop the deleveraging. Bank lending conditions will remain tight and external financing conditions constrained for a considerable time. Achieving credible recapitalisation, together with appropriate restructuring of financial institutions, is what is needed to end this debacle. Forceful and transparent implementation of these steps would help rebuild confidence and reaccelerate credit growth. Accordingly, continued unified efforts to restore financial sector health, will be pivotal to a lasting recovery in global financial markets and the strength of the recovery in the real economy. Matthew King

SPRING 09 National Outlook


skills & resources Caroline Ostrowski is a Policy Officer for the Association of Consulting Engineers Australia. Caroline represents the needs and interests of ACEA member firms across the Skills and Sustainability business portfolios. Caroline can be reached at

WILL THE 2009-10 BUDGET HELP PRODUCE MORE ENGINEERING GRADUATES? The Rudd Government has announced a $5.7 billion package over four years to deliver reforms across the higher education and innovation sectors in response to the Bradley Review of Australian Higher Education and the Cutler Review of the National Innovation System. The ACEA sees a great potential for improvement within Australia’s higher education sector. The first is to increase the completion rates of graduate engineers. In order to achieve this we must first determine why the non-completion rate is so high for engineering degrees across Australia. The recently announced education reforms include a move to a student centred system. Whilst a student centred system that allows better choice and access to funds for the student is welcomed, a student centred model for tertiary system may not align with industry skill needs if the right balance between demand and supply is not achieved. The effectiveness of Australia’s universities should primarily be measured by their abilities to produce graduates which meet labour market and Industry needs. There are a number of avenues through which a better graduate output can be achieved. Work-integrated learning is one such avenue. Although we view the primary role of work integrated learning or internship programs should be not be to provide graduates with employability skills, this does occur as a biproduct of this process and is clearly beneficial. We consider that university curricula should be able to provide graduates with employability skills in the primary instance in order to meet the needs of modern businesses. The student experience of higher education should continue to be measured through surveys and teacher evaluation. It is important that the right questions are asked and that surveys aim to capture responses from first year students’ right through to final year students and graduates. Connecting with other education and training sectors is a critical role of the tertiary sector in modern Australia. As movement of persons between sectors, employers, and skills upgrading becomes more frequent and common, the higher education sector needs to adapt and provide the avenues required for Australians to participate in the contemporary labour market. The ACEA 44

National Outlook SPRING 09

The effectiveness of Australia’s universities should primarily be measured by their abilities to produce graduates which meet labour market and Industry needs. There are a number of avenues through which a better graduate output can be achieved. Work-integrated learning is one such avenue. Although we view the primary role of work integrated learning or internship programs should be not be to provide graduates with employability skills, this does occur as a bi-product of this process and is clearly beneficial.

sees a huge potential in improving the transition between the Vocational Education and Training (VET) sector and university with regards to mutual recognition. Universities Australia, in their 2009-10 prebudget submission state that the university sector has been “deprived of public funding for the past decade”. The issues surrounding ‘public investment for the public good’ arise in this instance. The OECD has summed up these tensions well in a 2008 report “Academic freedom has been, according to some groups, under threat as a result of a number of trends within tertiary education. At the same time, institutions are under pressure to use public funds to the benefit of society as a whole.”1

The same OECD report acknowledges that Government control and oversight is not the only means to steer the behaviour of educational institutions – and in some instances may not be the best. A collaborative model which still allows universities to remain autonomous and competitive, whilst ensuring quality education benchmarks for students will undoubtedly postulate the tertiary sector to meet the current and future needs of Australia. The ACEA is of the view that we need to strike the right balance between a student centred model and strong industry engagement and advice, to ensure that our future graduates have employment opportunities, and that areas of skills shortage can be addressed effectively. Caroline Ostrowski

1 OECD, Tertiary Education for the Knowledge Society – volume 1, ISBN 978-92-64-04652-8 © OECD 2008

OHS Neil Bassett is a Policy Officer for the Association of Consulting Engineers Australia. Neil represents the members interests in the area of Occupational Health and Safety and Infrastructure. Neil can be reached at



The development of a model OHS Act is currently in the process of being drafted by Safe Work Australia (new national OHS body). Safe Work Australia will use the recommendations by the National Review Panel to draft the model OHS Act which has been approved in principle by all Workplace Relations ministers. The model OHS Act will consist of a principal OHS Act, supported by model regulations and model Codes of Practice that can be readily adopted in each jurisdiction. This requires each jurisdiction to enact, or otherwise give effect to, their own laws that mirror the model laws. A model OHS Act aims to provide greater certainty and protections for all workplace parties. As part of their work to develop a model OHS Act, Safe Work Australia is currently working with key stakeholders (including the ACEA) to work through the critical issues (although not policy issues) that are causing concern. These include issues on who has duties of care and to what level (e.g. designer duties), union right of entry and the powers of health and safety representatives. The ACEA in recent months, have raised concerns with Safe Work Australia over the implementation of designer duties of care in a model OHS Act, and to recommend that guidance material is developed to help meet these new duties. It has been proposed by Safe Work Australia that a potential national Code of Practice could be developed based on the WA Code of Practice for the Safe Design of Buildings and Structures. The development of a Code could begin early 2010. While the model OHS Act is being drafted the ACEA continues to lobby all Workplace Relations Ministers to propose that designer’s duties of care in a model OHS Act are proportionate to a designer’s level of control, qualification and expertise. The ACEA will keep members informed of developments in this area. Neil Bassett

UK GOVERNMENT CONSTRUCTION REPORT: ‘ONE DEATH IS TOO MANY’ An inquiry into UK construction industry fatalities has resulted in a number of key recommendations being called for in a UK Government report titled: One Death Too Many. The Report calls for a number of changes to the UK construction industry with most notably the proposal directors should have a positive legal duty to ensure good health and safety management. The Report proposes that construction workers join a Trade Union and that construction employers support the input made by Trade Unions in the industry, especially in health and safety. The Report calls for an expanded role for Trade Unions Safety Representatives, including Roving Trade Union Safety Representatives called ‘Worker Safety Advisors’ to cover small companies. Also called for in the Report was better regulation of the use of Gangmasters (labour only subcontractors) to prevent exploitation of workers in the construction industry. A fulltime government minister for the construction sector has also been suggested, with a coordinating brief to lead on construction. These recommendations are just some of the 28 made by Rita Donaghy, who chaired the government-convened inquiry, which has been described as ‘hardhitting’ by safety lobbyists in the UK.

The new Australian Government Implementation Guidelines for the National Code of Practice for the Construction Industry have come in to effect on 1 August 2009. The revised Guidelines will apply to all projects that are the subject of an expression of interest or tender for the first time on or after that date. The new Guidelines have been updated to reflect the commencement of the Fair Work Act 2009 and some of the comments in the Wilcox Report (report into the transition to Fair Work Australia for the building and construction industry). The National Code of Practice for the Construction Industry is a set of principles which describes good practice in relation to workplace relations, occupational health and safety, procurement and security of payment in the construction industry. The Code and Guidelines outline the responsibilities of Australian Government agencies as clients, project managers, contractors, subcontractors, consultants, related entities, industrial associations and employers in the construction industry. The Government believes the Guidelines will assist in encouraging lawful behaviour in the construction industry for the benefit of all participants. A copy of the revised Guidelines is available at: building. Neil Bassett

The Report can be found at: Neil Bassett

SPRING 09 National Outlook



STATE/TERRITORY OHS ROUNDUP JAN TO DEC 2009 Federal The Workplace Relations Ministers Council agreed to a framework for uniform OHS laws and provided detailed instructions to the Safe Work Australia Council to commence drafting model legislation. The Workplace Relations Ministers Council decided that Safe Work Australia will be established as an executive agency. The ACTU passed a resolution to step up its campaign to derail the proposed national OHS laws despite assurances from Federal Workplace Relations Minister Julia Gillard that harmonisation would discourage employers from cutting corners on health and safety. According to the latest Notified Fatalities Statistical Report Australia has experienced a 22 per cent increase in work-related deaths over the first half of the current financial year from 1 July 2008 to 31 December 2008, up from 72 in the equivalent period in 2007. The death rate in the agriculture, forestry and fishing sector has nearly doubled. ACT The ACT Work Safety Act 2008 will come into force on the 1st October 2009 and the new Act will replace the existing Occupational Health and Safety Act 1989. The existing Act, Regulations and Codes of Practice continue to apply until the 1st October 2009. The ACT Minister released an exposure draft of the Work Safety Regulations, which will impose fines of up to $50K on employers that fail to consult with workers about safety. The ACT has announced a commitment of $569,000 over four years to support national OHS and the establishment of Safe Work Australia authority in its 2009/10 budget. The budget will provide for the development, review and maintenance of industrial relations, OHS and workers’ compensation legislation.

VIC A record fine was handed down in the Victorian State County Court for OHS breaches, after a go-kart amusement operator was fined over the death of a customer. Judge Allen heard that prior to this incident there were seven other collision incidents resulting in injuries to customers at the go-kart circuit over a three-year period. He fined the operator $1.4 million for breaching s21(1), 21(1)(c) and 23(1) of the Occupational Health and Safety Act 2004. In March the ACEA held a drill rig safety workshop in Melbourne which was attended by around 60 industry stakeholders. The purpose of the workshop was to initiate the process of drafting best practice industry guidelines through collaboration and consultation with key stakeholders, as well as raising issues that impact on the safe operation of drill rigs in Australia. In July the Industry Standard for the Safe Erection of Structural Steel for Buildings was launched. The industry standard has been designed to raise awareness associated with erection of structural steel in the construction industry. NSW The High Court granted an employer and its director leave to appeal OHS charges, and determine whether aspects of the Occupational Health and Safety Act 1983 were impossible to comply with. A NSW IRC full bench clarified for the first time that it is a criminal offence to obstruct and impede authorised officials under the OHS Act. NSW small businesses will receive more OHS support from WorkCover as part of the 2009/10 State budget. The NSW Government committed itself to working in cooperation with federal agencies to develop a mandatory labelling system for nanomaterials used in workplaces.

Qld Amendments to Queensland’s Coal Mining Safety and Health Act 1999 and the Mining and Quarrying Safety and Health Act 1999 took effect. The Queensland budget allocated $1.5 million for monitoring the State’s 33 major hazard facilities. A Queensland employer was hit with a record electrical safety fine of $85,000 after allowing unlicensed workers to undertake electrical work. WA The WA Government has threatened to withdraw its support for OHS harmonisation due to concerns that the new regime would adopt “inferior standards to the existing State regime”. State Minister for Commerce, Troy Buswell, said the State Government supported the principle of nationally harmonised laws and would remain committed to the process “in the spirit of cooperation.” SA Work capacity reviews for long-term workers' compensation recipients came into effect as part of the next phase of legislative amendments to the SA Workers Rehabilitation and Compensation Act 1986. The information for this article was sourced from OHS Alerts at: Neil Bassett

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MORE THAN ONE PERSON CAN BE IN ‘CONTROL’ A South Australian Magistrates Court recently found a principal contractor not guilty of an OHS offence because none of its employees were at the site on the day a visitor was injured. The principal contractor had engaged a real-estate agent to sell 92 beach house properties. The real-estate agent was not supposed to show potential buyers around the development as this was to be done by the principal contractor. On the day of the incident the real-estate agent unlocked a set of gates and allowed customers to access the site unsupervised. One of these customers subsequently entered a half-finished house and climbed a ladder before falling through gyprock and sustaining multiple injuries. The principal contractor was charged with breaching s22(2)(a) of the State Occupational Health, Safety and Welfare Act 1986, for failing to ensure the safety of a non-employee. It pleaded not guilty.

In the Magistrates Court, Industrial Magistrate Michael Ardlie heard that the principal contractor managed the site and was responsible for controlling access to and from its grounds and ensuring the safety of visitors. As such, the real-estate agent was subject to the principle contractor’s rules “as if they were an employee”, and should have been instructed by the contractor not to allow visitors to attend the site unsupervised. Industrial Magistrate Ardlie, however, said that more than one person or employer could ‘control’ a worksite. The incident occurred on a Sunday, he noted, when none of the contractor’s employees were present. “The Court cannot be satisfied beyond reasonable doubt that the workplace was under the management and control of principal contractor on that day,” he said. “They could only have

management and control when it was physically present on the site and when it had the actual ability to do something to prevent injury occurring or risks to health from arising.” Industrial Magistrate Ardlie also rejected the contention that the building company failed to ensure the safety of visitors by neglecting to erect bunting and warning signs around the unfinished dwellings. There was no evidence “to satisfy the Court”, he said, that these measures would have prevented the customer from entering the development. This article was sourced from OHS Alerts at: Neil Bassett

SAFETY IN DESIGN POCKET GUIDE LAUNCHED The ACEA Safety in Design Pocket Guide is now available on the ACEA website for members to access and download. The Guide aims to raise awareness of the benefits of Safety in Design and to assist members to better understand the principles of safety in design, as well as the steps designers are recommended to adopt in the safe design of buildings, structures and plant. The Guide should be used in conjunction with the ACEA Practice Note 9.02 OHS Legislative Matrix & Practice Note 9.04 Principles of Safety in Design, both of which are available on the ACEA website (members section only). The ACEA would like to thank the OHS Roundtable and other members who participated in the development of the Guide. Neil Bassett

SPRING 09 National Outlook


infrastructure Neil Bassett is a Policy Officer for the Association of Consulting Engineers Australia. Neil represents the members interests in the area of Occupational Health and Safety and Infrastructure. Neil can be reached at

INVESTMENT IN COMMUNITY INFRASTRUCTURE The Government is heavily investing in community infrastructure as part of their $42 billion Nation Building – Economic Stimulus Plan. The Government has allocated $800 million to a Community Infrastructure Program to fund local government to build and modernise local infrastructure. These include parks, playgrounds, community centres, town halls and sports facilities. The Community Infrastructure Program is to be delivered in two components: $250 million allocated between all councils and shires; and $550 million, which has been determined on a competitive basis known as the Community Infrastructure Program – Strategic Projects. The investment in community infrastructure will support local jobs, especially local construction, over the short and long term.

Community Infrastructure Program - $250 million Projects Under the $250 million allocation, all councils and shires allocated funding were requested to submit projects that were ready-to-go and meet the program’s guidelines. More than 3,600 projects

were submitted and 3,200 approved for payment. Projects include new playgrounds, sports facilities and community centres. The Government has also allocated funds for the local communities affected by the Victorian bushfires and the Queensland floods, and is currently consulting with councils to determine options for assisting the rebuilding effort in their communities.

Community Infrastructure Program - $550 million Strategic Projects All successful Community Infrastructure Program – Strategic Projects have been announced and funding agreements are being negotiated. Funding under the Community Infrastructure Program – Strategic Projects was available for projects requiring a minimum $2 million Federal contribution. Projects being funded in this range include renovations to halls and community centres. For more information on the Community Infrastructure Program under the Nation Building – Economic Stimulus Plan please visit: Neil Bassett

BUDGET BOOSTS INFRASTRUCTURE SPENDING The recent Federal 2009-10 Budget greatly increased economic and social infrastructure investment. The ACEA has welcomed around $22 billion in new ‘nation building’ spending in which major investments includes: $3.4 billion for roads $4.6 billion for metro rail $389 million for ports and freight infrastructure $4.5 billion for the ‘Clean Energy Initiative’ (including $1 billion existing funding) $2.6 billion for universities and research $3.2 billion for hospitals and health infrastructure. As part of the $22 billion budget spending noted above, the Government is committing around $8.5 billion towards ‘nationally 48

National Outlook SPRING 09

significant’ infrastructure projects. These projects recommended by Infrastructure Australia will have an estimated total value of $35 billion. The budget also included an initial $4.7 billion for the government’s proposed national fibre optic broadband network. The government will establish a new National Broadband Network company to own, build and operate the $43 billion broadband network. In addition, the states and territories have significant infrastructure investment programs in place which are separate from those announced in the budget. The large increase in infrastructure investment in Australia aims to support jobs and economic growth. Neil Bassett

SYDNEY AIRPORT MASTER PLAN APPROVED The Sydney Airport Master Plan 2009 has been recently approved by the Australian Government (June 2009), following an extensive consultation period with the community and other key stakeholders. The Master Plan 2009 is a vision for the operation and development of Australia’s largest passenger airport to the year 2029 and the strategies needed to sustainably meet Sydney’s future air transport needs. The Airport Master Plan is based on: No changes to aircraft flight paths No changes to the curfew No changes to the aircraft movement cap No new runways No change to access arrangements for regional airlines. The Master Plan 2009 shows that Sydney Airport can accommodate forecast growth in airline travel because: airport facilities, including terminals, hangars, freight facilities, aircraft parking, airport roads and car parking, are proposed to be progressively upgraded over the next 20 years aviation technology is improving all the time: the new generation aircraft are quieter, cleaner, and more efficient and they consume less fuel upgrades to the M4 and M5 motorways, along with new bus services and more frequent trains are also being considered by Governments. New infrastructure and public transport services will alleviate congestion, making it easier for people to travel to and from Sydney Airport. The Sydney Airport Master Plan 2009 will allow the airport to grow and develop over the next 20 years and maintain its social and economic contribution to Sydney and NSW. Neil Bassett

THANK YOU TO THE JUDGES 2009 Judges: Bob Gussey Ken Conway Jocelyn Jackson Merv Jones (Head Judge) Dick Kell Dale McBean Reviewers: Wayne Costin Tony Denham Malcolm Gallasch Rod Jeffrey Merv Jones (Head Reviewer) John Miles Michael Nash David Sweeting Bill Southwood Clive Humphries Special Awards Judges: Pam Behncke Daniel Samson Dario Tomat SPRING 09 National Outlook



ASK A LAWYER: STATUTORY DUTIES QUESTION: I’m a Director of a small consultancy firm who has recently received a contract for services. The contract contains clauses that are not covered by my insurance. Are there any statutory duties as a Director that I should be aware of when entering contracts such as these? ANSWER: Broadly speaking your duties as a Director is covered in the Corporations Act 2001 (Cth) (the Act). Specifically Directors in discharging their obligations that may be relevant to your circumstances are: (a) Duty to act with care and diligence - s180(1) - A director or other officer must exercise their duties with a degree of care and diligence that a reasonable person would exercise in their position. (b) Duty to exercise powers in good faith – s181(1) - A director or other officer of a corporation must exercise their powers and discharge their duties: (1) in good faith in the best interests of the corporation; and (2) for a proper purpose.

Any breaches of the above by a Director may provide a number of remedies that ASIC may choose to pursue, these include Civil penalties (up to 200K). The statutory formulation of s180(1) adopts an objective standard of care, measured by reference to what a reasonable person of ordinary prudence would do, enhanced where an appointment to the board of directors is based on the appointee having some special skill, by an objective standard of skill referable to the circumstances. To help determine what a reasonable person would do consideration of the magnitude of the risk and the degree of probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities you may have, are also pertinent. The business judgment rule in s180(2) provides that directors will be shielded from liability in relation to decisions made in the best interests of the company. More specifically, it is a

defence for actions that may otherwise be in breach of s180(1) which imposes an obligation on directors to exercise care and diligence when discharging their decision-making responsibilities. So under this rule, directors are assumed to have acted with appropriate care and diligence if all the factors contained in s180(2) are satisfied. One case where the court found a Director had breached his duty of care to the company was in Mistmorn Pty Ltd (In Liq) v Yasseen (1996) 21 ACSR 173, the director had built up large stocks of tobacco in his duty free shop. There had been three previous thefts from the shop and he had not insured the stock. A further theft occurred after which the company went into liquidation. Because the director had knowledge of the previous thefts the court held that he had breached the duty of care he owed to the company and was liable to pay the amount of the loss of the tobacco amounting to in excess of $170K. Shaye Chapman

The material provided is for general informational purposes only, and is not intended to constitute, and should not be construed as, legal advice on any subject matter. No lawyer--client relationship was/ or is formed. Therefore, you should not consider the material to be an invitation to a client relationship and should not rely on the material provided herein as legal advice on any subject matter for any purpose, and should always seek the legal advice of competent legal counsel. All questions provided to us in this column are treated as confidential and fall within the terms of our Privacy Policy, which can be found on our website:


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An ounce of prevention is worth a pound of cure

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Indigenous Territorians Welcome “Protective Shield”

The natural colours and earthy textures of Austral Bricks Terraçade terracotta façade system have combined with sensitive design to create a contemporary head office for the Central Land Council. Opened in June 2009, the outstanding new building has been described by the CLC’s constituents as their “Parliament House” and a “protective shield”. It is currently being evaluated for a Green Star Rating, a first for Alice Springs. Terraçade’s environment credentials – the tiles are fully reusable without reprocessing and all systems components are fully recyclable – and its excellent thermal properties bolster the case. “Our mechanical engineer (MGF Consultants) was very happy with Terraçade from the thermal modeling perspective and it made their mechanical design much easier,” says Vicki Jacobs, project architect for Woodheads. Townes Chappell Mudgway handled structural, hydraulic and civil engineering. The Council represents 24,000 indigenous central Australians who have a strong affinity for the land that often does not extend to buildings. Jacobs conducted extensive consultations with CLC staff to ensure the building would be both workable for staff and approachable for visitors. Despite the large floor plate – a single level of 2720 square metres – there is direct access to natural light throughout. The southern and northern elevations are fully glazed, the latter shaded by a massive overhang.

In contrast, the eastern and western elevations are clad in Terraçade XP tiles, with continuous slot windows behind deep reveals giving the feel of a solid masonry element blocking the powerful, low sun. The Terraçade continues into the reception area and also delineates the main circulation spaces between the three wings. The installation was carried out by local builders, Sitzler Bros., their first says site manager Allan Brown. “I just downloaded some of the technical info and gave it to the boys doing the installation.” Unlike some cladding systems that require specialist installers, Terraçade can be installed without special tools or training. On site alterations are also easily achieved. Natural anodised flashings matching the Terraçade trims formed the deep reveals allowing the tile installation to proceed as normal. “It’s just a matter of putting up some battens, and then the aluminium hangers screw on really easy and the tiles just clip on,” Brown adds.

About Terraçade

Terraçade combines the durability, low maintenance and natural aesthetics of genuine kiln-fired terracotta with the construction efficiency of a modern, lightweight cladding system. Developed by Austral Bricks, Terraçade is available in two systems: TN and XP. Tile sizes are identical and the fixing methods similar but using slightly different models. Both Terraçade systems are fully tested to all relevant Australian Standards including structural performance and static and dynamic water penetration, and have also been successfully tested at the Cyclone Testing Station.


For Terraçade product information, test reports, technical data, case studies and more go to or call 1300 881 712 (within Australia) or 0800 AUSTRAL (New Zealand).

Despite Terraçade’s excellent credentials, its selection was subject to rigorous competition, including aluminium composite panels – “cost-prohibitive and too slick,” Jacobs believes – and metal cladding which CLC staff dismissed because of its industrial connotations. This was Woodheads first exposure to Terraçade. “Since using the product there has been a lot of interest in it,” says Vicki Jacobs. “People are not sure if it is a tile or a block and are keen to find out what it is made from and how they might be able to utilise it in other projects.” Allan Brown was also impressed. “Once you get the hanging system up, it’s really good. It’s pretty user-friendly.”

Project funding was partially provided through the Aboriginal Benefits Account of the Australian Government’s Department of Families, Housing, Community Services and Indigenous Affairs.

The design and construction team in the CLC foyer (from left): Vicki Jacobs, David King Jones, Bill Giamos, Allan Brown, Emma Hill and Tim Blackshaw.

Designed in consultation with one of Australia’s leading architects, Terraçade is the long-lasting, low maintenance and environmentally sound choice in tile facades. Both commercial and custom-designed residential projects will benefit from Terraçades highly distinctive and individual finish.

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National Outlook Spring 2009  
National Outlook Spring 2009  

Australia's Magazine Built for the Environmental Consultant