The Pulse | Edition Eight

EDITION EIGHT

innovative genuine helpful

THE INFORMATION IN THE PULSE IS PROVIDED FOR INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL OR PROFESSIONAL ADVICE. FORMAL LEGAL OR PROFESSIONAL ADVICE SHOULD BE SOUGHT IN RELATION TO SPECIFIC CIRCUMSTANCES.

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A message from Director James Dunn efforts of our people in getting through such a trying year. The unwavering support our staff provided to each other and their clients, and their overarching sense of positivity in a year which truly tested even the most optimistic amongst us was truly remarkable.

With the first quarter of 2021 complete, we reflect on what has passed, and what is still to come.

That is especially the case as we charge through 2021 which we’re excited to say is Proximity’s 10th anniversary year. We have plenty to celebrate as we look back on a decade which has been as rewarding as it has been challenging.

The Proximity team can be especially proud of what was achieved in 2020, in what most people have described as one of the toughest 12 months for our nation and our economy.

We continued with our steady but solid growth, both in terms of new business and staff recruitment.

Incredibly, against the backdrop of a global pandemic, 2020 was a stellar year for us. We are enormously grateful to our valued clients (old and new) and our remarkable staff who were unwavering in their commitment as we all battled through the unprecedented challenges thrown at us by COVID-19.

Many valuable lessons were learnt over the past 12 months but, as I look back, none more important than appreciating the amazing

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The year ended on a real high, with Proximity winning the prestigious 2020 Professional Services Business of the Year in the My Business Awards, which ‘recognises the professional services business that has most effectively capitalised on market opportunities and found a way to pivot or adapt to changing circumstances.’ This was the icing on our 10th birthday cake, even before we’d started baking it!

In our 10th year we have plenty to look forward to. We have moved into our new, larger premises, still within the Boeing Building in Blackall St, Barton. We’re looking forward to welcoming you there (in a COVID safe way of course) very soon.

I trust you’ll find plenty of interest in this latest edition of The Pulse, and for anyone looking for an exciting new challenge with a business that prides itself on being innovative, genuine and helpful, please email your resume to recruitment@ proximity.com.au, we’re always looking for great new people to join our growing team!

James Dunn Director, Proximity

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consulting hub

SYNTHETIC MEDIA AND DEEPFAKES THE FALLOUT FOR GOVERNMENTS

SYNTHETIC MEDIA AND DEEPFAKES 101

BY PAULA GONZALEZ JASON RILEY GROUP MANAGER – ADVISOR CLIENT ENGAGEMENT

We live in crazy times, seeing is no longer believing – truths are untruths. Welcome to the world of synthetic media and deepfakes.

Here is a brief introduction to how technology is aiding the weaponisation of misinformation and why you need to know about it.

Synthetic media: used to describe “algorithmically created or modified media”. That is, audiovisual information in digital form – constructed rather than captured. Includes synthesis of still images, music, speech and videos.

Deepfakes: are just one of the many forms of synthetic media. It refers to media that takes a person in an existing image, video or sound recording and replaces them with someone else’s likeness.

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WHY ARE DEEP FAKES TAKING OFF? There are a number of factors at play globally that have come together to create a perfect climate for the proliferation of synthetic media.

Firstly, somewhere between 30-50% of us get our news from social media, Facebook, YouTube, Twitter and Instagram. We are more reliant than ever on social media to get news content, but we don’t necessarily question the quality of that content. Research shows that young people are more vulnerable to online misinformation and conspiracies.

Secondly, we live in a time where the level of distrust in government as an institution is at an all-time low.

The Organisation for Economic Co-operation and Development (OECD) has reported that only 45% of citizens trusted their government in 2019.

Thirdly, there is a growing sense of social disconnectedness, we are more connected but some of us feel more alone and alienated than ever. We are in many ways more disconnected than we were before the advent on the online age. We’ve seen an explosion of social-media based groups that aim to bring together people who feel disenfranchised, alienated and letdown by our institutions on a range of socio-political causes. These online groups have contributed to the deep polarisation of our society.

Key elements that fuel the fire of deep fakes and synthetic media: 1. Deepfake technology is becoming harder to detect, but they are capable of being produced at an unprecedented speed and with significantly fewer resources – they are cheap to make.

2. Over time more user-friendly tools will be developed and shared.

3. Individuals peddling deepfakes can quickly reach a massive, even global, audience via social media platforms.

WHY SHOULD THIS BE ON YOUR RADAR? The ability to corrupt and distort the notion of truth lies at the root of the power of this technology. This kind of power, left unchecked has the potential to: › Threaten personal safety, both physical and reputational. › Create social havoc. › Undermine national security. › Destabilise the rule of law. ›

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HOW LAWYERS CAN BE PART OF THE SOLUTION? The technology is rapidly developing, and it is developing at a rate that is much faster than the technology that counters its spread and its impact.

The solutions are just as much in legal and policy responses as they are in technology.

Getting a handle on the topic is a start – and you can be ready and well-prepared to respond.

As lawyers, you may find yourselves having to advise on the complex legal and policy issues surrounding the development of regulation and laws to prevent the harm that can come when the underlying technology of deep fakes and synthetic media is misused.

These include: › The development and the efficacy of detection technologies– think about the importance of these technologies to establishing evidence in a court of law. › The development of laws or regulations that curb the development and the dissemination of deepfakes, and how to balance the right to privacy and security with rights to freedom of speech and artistic expression.

Government lawyers will also play an important role in non-legal strategies that attempt to either prevent or rectify the damages from the misuse of this technology.

Through education and behavioural change: work alongside your APS colleagues to develop an explicit narrative for the public and other stakeholders about the truth to debunk an untruth. It might mean that as government lawyers you will have to collaborate more closely with your communications and media colleagues, to get ahead of a deepfake or anticipate synthetic media with well-timed communication and social media strategies.

Creating alternative communication platforms and protocols that are protected, and trusted to disseminate verified and credible information, particularly to deal with significant national crises like pandemics and natural disasters.

This kind of work would see lawyers actively involved in and working alongside industry, media and technology partners to collaborate on the development of many of these types of initiatives.

› The development of laws to introduce “firebreaks” or media blackouts to prevent the deepfakes and synthetic media undermining politically sensitive situations (elections). › The development of authentication standards to help identify deep fakes and certify legitimate content. › The development of legislation to establish more oversight bodies and greater transparency within social media platforms. › The development of online games and apps to educate the public to spot synthetic media and identify misinformation. Cambridge University for example has developed a game which tests a person’s ability to detect deepfakes, and fake news.

Need assistance developing strategies, response plans and guidance materials to counter misinformation and achieve policy outcomes?

Reach out enquiries@proximity.com.au or 1800 959 885.

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consulting hub

ENERGY POLICY: THE STATES POWER AHEAD WITH RENEWABLES Retirements of coal-fired power generators will leave a big shortfall in power generation capacity.¹ Variable renewable energy (VRE), having been nurtured by government programs including the Commonwealth renewable energy target (RET) and by international R&D efforts, is now seen as a cost-effective way of covering much of that shortfall while reducing carbon dioxide emissions - even without a formal national price on carbon.²

BY SIMON TAYLOR SPECIAL ADVISOR

And at the end of 2020, the Commonwealth’s RET program went into maintenance mode, freeing up room for the States and Territories to come up with their own policies.³

While we’ve been distracted by COVID, the States and Territories have been doing a lot of work to expand renewable energy generation. There are several reasons for this.

Most States and Territories have set their own renewable energy targets and been encouraging a range of renewable projects. Recently they have also been announcing renewable energy zones (REZs) where further projects will be built.

This is happening faster than you might have thought.⁴ Council of Australian Governments (COAG’s) bodies such as the Energy Security Board (ESB) want the changes to unfold in an orderly way, without prejudicing energy supply or the technical stability of the grid.

¹ It has been estimated that over the next two decades 61% of the coal generation, equivalent to 16 gigawatts of capacity, will cease operation: see the Energy Security Board’s Post 2025 Market Design Directions Paper (January 2021). ² See e.g. the Australian Energy Market Operator’s Final 2020 Integrated System Plan at p 9 and Lazard’s Levelised Cost of Energy and Levelised Cost of Storage 2019. ³ Although the Commonwealth still has a number of other relevant programs, e.g. loans through the Clean Energy Finance Corporation. ⁴ It has been forecast that 26-50 gigawatts (GW) of VRE projects will come on line before 2040 and this will be over and above VRE projects already in the pipeline. It is also forecast that the VRE will be supported or ‘firmed’ by between 6 GW and 19 GW of new flexible and dispatchable (as opposed to variable) resources. See The Energy Security Board’s Post 2025 Market Design Directions Paper (January 2021), p 6.

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What is a Renewable Energy Zone?

Financial underpinnings

Think of these as electricity generators and storage facilities. Rather than a 20th century power station, you have a defined geographical region where solar panels, wind turbines, pumped hydro systems, large batteries and other renewable energy assets are aggregated, co-existing with other activities like farming. An REZ will be connected to the National Energy Market (NEM) grid, like a large power station.

A generator and their financier will want some assurance as to future income from a renewables project. But in the national market, generators sell electricity to retailers at spot prices calculated throughout the day by the Australian Energy Market Operator. These will vary considerably according to supply and demand. Moreover, there is no explicit price on carbon in Australia.

The concept comes from the 2017 Independent Review into the Future Security of the National Electricity Market chaired by Chief Scientist Dr Allan Finkel (who was inspired by Competitive Renewable Energy Zones in Texas). In June 2018, the Australian Energy Market Operator (AEMO) fleshed it out and identified 34 REZ candidates with favourable characteristics. AEMO’s 2020 Integrated System Plan for the National Energy Market includes possible pathways for the development of REZs.⁵ A number of States have been publishing renewable energy roadmaps detailing how they propose to implement REZs. For example, Victoria has proposed REZs for Barwon South West, Loddon Mallee, Hume, Grampians and Southern Gippsland, and Queensland has announced the Southern, Central and Northern Queensland REZs. We are also starting to see more clarity around the legal frameworks. In NSW the Electricity Infrastructure Investment Act 2020, which received Assent in December 2020, gives the relevant Minister power to declare REZs on his or her own initiative or on application from another person. The NSW Act requires each REZ to be identified on a map with the declaration particularising ‘specified generation, storage or network infrastructure, including planned or existing infrastructure’ and the proposed capacity in gigawatts of the REZ. The Act goes on to require that the Minister declare REZs in Central-West Orana (with an intended capacity of 3 gigawatts), New England (8 gigawatts) and Illawarra, South West and Hunter-Central Coast (1 gigawatt).

The intention is to bring these online (12 gigawatts, backed up by at least 2 gigawatts of storage usable for up to 8 hours), by 2030, with fast-tracking of network infrastructure, and it is open for other REZs to be declared.

It should be emphasised that these initiative are being undertaken at State and Territory levels rather than in a closely co-ordinated way across the National Energy Market.

Certainty is often achieved by governments entering into long-term (e.g. 10 year) power purchase agreements (PPAs)6 with the generators.

Generators will typically bid for the right to enter into a PPA through a ‘reverse auction’, where the aim is to bid as low a price as possible per megawatt hour of electricity. PPAs are usually accompanied by a form of financial protection known as a ‘Contract for Difference’ (CFD). A CFD insulates the generator from the fluctuations in the spot market.

If the spot price is lower than the ‘strike price’ of the CFD, the government agency (or local electricity distributor) pays the generator the difference.

The generator pays the government agency or distributor the difference if the spot price is higher than the CFD strike price. So one way or another, the generator gets the strike price for what they produce.

This has been done in the ACT under sections 18 and 19 of the Electricity Feed-in (Large-scale Renewable Energy Generation) Act 2011 (ACT), under the Victorian Renewable Energy Auction Scheme, and it also looks like PPAs and CFDs will feature in NSW under the new Electricity Infrastructure Investment Act, with the possibility of reverse auctions in NSW later in 2021.

⁵ See Australian Energy Market Operator’s Final 2020 Integrated System Plan, pp 49-50. ⁶ It may be more accurate to describe these as synthetic or virtual purchase agreements because the electricity will put into the national grid. E.g. an arrangement with the ACT Government might involve a generator in a different jurisdiction. The electricity generated won’t be ‘piped’ directly to the ACT for its exclusive use but rather it will be notionally allocated to the ACT.

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Managing the transition

Action and constructive caution

The issue vexing the Energy Security Board (which was set up under the auspices of COAG to help implement the Finkel Review) is that these arrangements, when combined with other government support policies, may yield results a little too quickly for comfort. Coal-powered generators could become uncompetitive and tumble out of the market faster than expected, leaving gaps and reliability issues.⁷ Reliable backup power is needed at night and on windless, sunless days, and to ensure stability of the grid in an engineering sense. Coal-fired stations will likely have a role until pumped hydro, batteries and other technologies (possibly including gas-fired stations that can be converted to run on hydrogen) are able to firm up the power grid.⁸ Exactly what that transitional role is and how long it should last will attract a lot of debate. The ESB will be presenting options to relevant governments between now and mid-2021. These may include:

There is a lot of action, enthusiasm and initiative on one side and constructive caution on the other.

Against this background the Commonwealth has mooted Snowy Hydro building a one gigawatt gas station (presumably of the kind that can be turned on and off reasonably quickly) in NSW to provide backup power. Beneath the headlines there are some tricky technical problems (and it is unfortunate that discussion is so often shrouded in jargon).

Expect to see a lot of activity and creative tension throughout 2021 as governments and agencies grapple with the implications of the rapid growth of renewables.

› Designing incentives for investment in back-up or ‘firming’ power. › Increasing the period of notice coal-fired generators have to give before ceasing operations. › Taking a leaf out of the banking regulator book - approved resolution plans for coal-fired generators. › Having a centrally-procured operating reserve to cover variability in electricity supply. › Strengthening the ancillary markets and infrastructure that provide services to the grid to help maintain its technical stability. › Harmonising financial support arrangements (e.g. PPAs and CFDs). › Strengthening the existing Retailer Reliability Obligation (RRO) to require retailers to factor in reliability and supply security issues when entering into arrangements with generators.

The Australian Energy Market Operator is also commenting on these issues (see the Renewable Integration Study Stage 1 Report April 2020).

⁷ See generally the ESB’s Post 2025 Market Design Directions Paper (January 2021). ⁸ As if to under-score this point, Energy Australia has recently announced that Yallourn Power Station will be closed in 2028, 4 years ahead of schedule. See the ESB’s Post-2025 Market Design Directions Paper and Alan Finkel, Quarterly Essay 81 ‘Getting to Zero’, P85 (e-book version)

PHOTO BY ALEX ECKERMANN ON UNSPLASH

We thrive when working on complex policy proposals.

Need help getting your projects across the line?

Contacts us on enquiries@proximity.com.au or 1800 959 885.

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legal hub

WHAT A SECRETARY LOOKS FOR IN THEIR GENERAL COUNSEL

BY KERRI HARTLAND PRINCIPAL ADVISOR

I have always included my General Counsel as an integral part of the Executive team. They need a seat at the table to be most effective and that means not just as an add-on when issues go pear shaped!

As is the case with all officers, the General Counsel added most value when they had as much context about the operating environment and contemporary issues as possible. When stepping into a new organisation, I found that the General Counsel could provide the history of key issues, which helped me avoid going down the wrong path or paths that have thrown up rocks in the past. This tends to be the case as the General Counsel will often be privy to organisational information not known by others - that quiet word before briefing a Minister about the go/no go areas is invaluable.

Some of my closest working relationships have been with my General Counsel and my experiences with all General Counsel have invariably been positive.

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In my role as a Secretary with responsibility for workplace relations, I had to manage a steep learning curve and a politically-charged environment. In that environment, the expertise of my General Counsel in industrial relations law made the relationship even more vital, particularly as many of the organisations in the portfolio were investigative and regulatory, such as the Fair Work Commission, Fair Work Ombudsman and the Australian Building and Construction Commission.

The relationship also needs to be one where the General Counsel is confident in being able to tell it as it is. Again, I was fortunate to have people who were willing to be brutally honest and in doing so protect the organisation and me as the accountable authority.

The best General Counsel understand that the legal approach answer is rarely the only approach. At one point in my career, I was threatened with being held in contempt of Parliament. The General Counsel was calm I looked to my General Counsel to provide not only in his advice to me and we worked through the legal sound legal advice, but to be aware of the political options. However, in the end, it was the political process that resolved the issue (all involved recognised environment in which we were working (not that a joint sitting of Parliament on an issue to be confused with being political) and of accessing commercial-in-confidence to provide as many options as possible The best sector information was in no for Ministers.

General Counsel private one’s interest). It was escalated to I have been fortunate to have worked understand that the the then shadow Attorney-General with General Counsel and to have had and Leader of Business in the Senate. legal support more generally from legal approach answer This was a good example of where people who were prepared to listen and is rarely the only understanding the legalities was vital find ways of achieving outcomes rather but where in the end it was a non-legal approach. than putting hurdles in the way. In short, process that proved to be the solution. they understood that there are many factors In short, the best General Counsel see their to consider in developing policy and while legal opinion is important, it is only one part of the picture – as value-add as part of an Executive to provide the legal dimension, aware of the environment in which they are long as whatever path you take is within the law. working. The legal viewpoint is a critical, though not It is also important that the General Counsel knows your the only, part of the picture. General Counsel who are risk appetite and, by implication as the Secretary, the team players striving for agreed outcomes and know organisation’s risk appetite. It is highly likely that there where to draw a line, legal or otherwise, are integral to will be different risk appetites for different issues being organisational success. managed by the department. For example, the risk appetite looked very different for workplace relations than employment.

Want more?

Download the panel discussion ‘Thoughts from the top: what Secretaries value most from in-house legal teams’ from our most recent Government In-House Counsel Day. The panel session includes former Secretaries Kerri Hartland, Glenys Beauchamp and Renee Leon and includes a robust discussion around emerging expectations and what they value most from high performing in-house legal teams.

Visit proximity.com.au to download now.

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legal hub

FOUNDATIONS FOR SUCCESSFUL NEGOTIATION

During precontractual negotiations parties are more likely to be collaborative, motivated to build a good working relationship and wanting the same outcome – to execute the contract and start work. Conversely, in a dispute context the relationship is likely to be strained and have deteriorated over time, the parties may be under pressure to resolve the dispute, avoid litigation or just want to ‘win’.

BY SARAH COLMAN SPECIAL ADVISOR

Navigating precontractual or dispute negotiations can be challenging at the best of times! So how can we best prepare for negotiations? Firstly, we recommend considering the nuances of your negotiation as this may provide some helpful insights.

The circumstances of your particular scenario may influence how you prepare for, or run, the negotiation.

Here are a few tips for helping you successfully navigate negotiations whether in a precontractual or dispute context:

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PREPARE AND PRIORITISE

SEPARATE ISSUES FROM EMOTIONS

PROBLEM SOLVE AND GENERATE OPTIONS

Whether you’re in a precontractual or dispute context, planning is key to successful negotiations.

Plan your negotiation strategy and prioritise the issues and know which issues you will raise first.

Know your fallback positions and your BATNA (best alternative to a negotiated agreement), i.e. if an agreement cannot be reached, when will you walk away?

Compare a precontractual negotiation with a dispute. In a precontractual context the parties will be motivated to develop a good working relationship so it’s important not to damage this relationship during negotiations. Ideally you want to develop a relationship of trust, understanding and respect with the other side. In a dispute context this may be more difficult, but remember you are dealing with human beings and managing your emotions will be important to enable issues to be resolved.

Ask questions such as ‘why?’ and ‘why not?’ and try to find mutual gains. If you’re trying to change the other side’s mind, it helps to understand where their mind is now. Try to generate creative solutions and remain openminded and avoid becoming entrapped on positions.

SEEK OBJECTIVE STANDARDS SET THE GROUND RULES (BOTH INTERNALLY AND WITH THE OTHER SIDE) Work with the other side to define the rules/procedures of the negotiations (e.g. timing and agenda, communication channels, and who the decision-makers are for each side). Set internal ground rules so that everyone in the negotiation team knows who is responsible for what. In a dispute context ensure all correspondence is being sent on a ‘without prejudice’ basis and contract processes are being followed.

CLARIFICATION AND JUSTIFICATION State what you want and why – being able to bolster and justify why your position is important.

Communicate your interests so that the other side understands why they are important and legitimate. Allow the other side to be similarly honest about their needs and expectations. Also know the potential areas of weakness in your arguments or justifications.

If possible, use external, independent and legitimate standards. Using factual information from a credible source can be helpful. For example, finding case law that supports your position in a dispute, or objective standards that can be applied in a precontractual negotiation context.

Think about the context of your negotiations and how this might affect your strategy and tactics.

The more preparation you do, the better equipped you’ll be in the negotiation room.

Navigating precontractual or dispute negotiations? We can help you!

Contact us on enquiries@proximity.com.au or 1800 959 885.

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legal hub

THE BUSINESS CASE FOR PRO BONO WHY AND HOW JUNIOR LAWYERS SHOULD PRIORITISE PRO BONO?

BY DECLAN NORRIE ADVISOR AND MANAGER – COMMUNITY

While many lawyers believe there is a “morale obligation” and “professional responsibility” to do pro bono, for junior lawyers especially, there are also plenty of professional and personal benefits that can be realised by doing pro bono.

Through explaining these benefits, how they can be achieved, and some of the major considerations in deciding to do pro bono, this article hopes to begin instilling a stronger desire in junior lawyers to seek out pro bono opportunities and engrain those behaviours as we progress through our careers.

This article doesn’t detail the benefits and opportunities are for junior lawyers to undertake pro bono – there’s plenty of literature out there that explains how pro bono benefits the individual. This simple diagram summarises a lot of the literature (and lived experience in my case).

Professional Benefits

Personal Benefits

Diversity in practice areas

Boost mental health

New contexts for problem solving

Explore the law that you love

Different clients needs and reception to technical advice

See the impact of your work, first hand

All walks of life to hear from and communicate directly with

Increase your exposure

Opportunity to manage aspects of legal work and effort

Build a personal brand

New ideas and solutions to bring to your fee-earning work

Better understand the world

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This article instead explores the important factors that junior lawyers should take into consideration when trying to prioritise, or even get access to pro bono.

BURNING OUT ON PRO BONO DOES NOBODY ANY FAVOURS Balancing pro bono with your existing workload is important if these professional and personal benefits listed are to be realised.

Open communication with all stakeholders about your capacity, competing priorities, and when it’s getting to be too much is vital.

Ad hoc support through community legal centres and clinics is great, but those dedicated individuals that make a habit out of their pro bono and can be relied on to turn up each week/fortnight/ month are what community legal centres value the most. Find your sustainable limit and only add to it when your existing workload allows it. Inversely, if you want to carve out some time for pro bono and you’re currently at capacity, show the image on page 14 to your manager and let them come back to you with reasons why pro bono is a bad idea – I’ll shout anyone a coffee that reaches out to me with three justifications against pro bono.

YOUR PRO BONO CLOCK AND FEE-EARNING CLOCK RUN ON THE SAME TIME For many not-for-profit organisations and disadvantaged individuals, the offer of pro bono legal assistance generates a sigh of relief.

Some feel as though the kindness of a firm to do free/reduced fee work for them means that any work standard is better than not getting the advice – however, this isn't always the case.

Your professional obligations are the same regardless of the client, and the impact of subpar legal advice to pro bono clients is likely to have very real, very negative consequences. Think about your personal brand and increased exposure – it works both ways and the timeliness and quality of your pro bono advice is the key factor that will help you to realise or negate that benefit.

“YEAH, I HAVE ACCESS TO A DATABASE” If you wish to use your workplace legal database for extra-curricular pro bono, make sure you run it by your manager/HR. In the case of government lawyers, government resources are only to be used for government purposes, and while a government purpose includes professional development, that is an ancillary consequence of pro bono work.

It is also okay to say you cannot use work resources for extra-curricular pro bono. Most junior lawyers will be providing extra-curricular pro bono through established clinics and services which should have all the resources needed to provide sound legal advice.

WHOOPS, I GOT IT WRONG… Private practice lawyers are generally not covered by their workplace’s professional indemnity insurance for advice provided outside of their operations (i.e. outside of a firm’s pro bono engagement or arrangement with a community legal centre).

Likewise, in-house government legal teams are generally not covered by professional indemnity insurance. However, if a junior lawyer works with a community legal centre or the pro bono is being provided through a clinic, the lawyer is likely to be covered by the partner organisation’s professional indemnity insurance. It is important to check there is appropriate insurance coverage for any pro bono work you do.

A version on this article first appeared in the ACT Law Society Ethos Issue 28 Summer 2020.

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commercial hub

COLLABORATIVE CONTRACTING IN COMPLEX ACQUISITIONS

BY DOUGAL PIDGEON SENIOR ADVISOR

Your Department is caught in a conundrum, seeking improved procurement models and partnerships with industry but, all too often, relying on transactional, armslength contracts.

A better alternative for delivering and supporting high risk and highly complex capabilities is a collaborative contract.

Collaborative contracts are business relationships where parties work together to achieve common outcomes. A collaborative contract enables the parties to cooperate to treat risk and address complexity, rather than relying on the contract to fully specify all of the contractor’s responsibilities under all possible states of nature. The concept has for many years been the staple for major infrastructure and construction projects.

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Collaborative contracts demand detailed planning. The procuring organisation must consider:

Feasibility

Contract Design

Duration

What is the ability of the Department, and industry, to implement and abide by collaborative arrangements? Is there commitment at all levels? Are the right people with the right skills and the right systems in place?

What collaborative features do we need to employ? What are the necessary Commonwealth controls and legal rights over the contractor? What is a fair allocation of risk between the parties? What are the barriers to and incentives for collaboration, and how should these be addressed in the contract?

Should the approach to market use stages to progressively down-select tenderers? Should a staged contract be used to allow the collaborative relationship to grow? What is the optimal term for the contract and are options to extend appropriate?

What exit clauses are necessary should the Commonwealth wish to replace the contractor?

Preparedness What changes will be required to collaborate successfully?

Do we have the right culture, organisational structure, business processes? Do the potential suppliers? How should we engage with industry pre-contract to grow their ability to collaborate?

Relationship Management What governance structures are required and how will they be employed? How will decisions be made? How will disagreements and disputes be managed? What performance measures are appropriate?

Collaborative contracts provide the means to meet your Department’s goals of forming partnerships with industry.

Detailed and careful preparation of the partnering relationship and the contractual vehicle is necessary; however, effort spent prior to contract execution will be richly rewarded in the delivery and support of capability.

We can work with you to develop and implement contracts that fit your needs, and that facilitate change within your organisation.

Contact us on enquiries@proximity.com.au or 1800 959 885.

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commercial hub

MANAGING CRITICAL TECHNOLOGY VENDORS IN GOVERNMENT

BY JOHN PISANI​ SPECIAL ADVISOR

All government organisations rely on third party technology vendors to support and deliver services to the public.

Sometimes those services are critical services and the role a third party technology vendor plays can be at the heart of those services.

For example: › In emergency management situations, information in systems can be large, timely and critical to providing the quick decisions needed. › In courts and legal proceedings, services are complex, challenging and stressful, and you need the systems to support you to make the right decision every time. › In health and infrastructure settings, having systems available 24/7 is expected and any downtime can lead to catastrophic consequences.

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Not only in these examples, but across government we expect technology to be modern and third party vendors to be mature to handle any urgent need to support delivery, but it’s not always the case.

The way we identify relationships with third parties, typically fall into the following categories: › Adversary - every discussion ends up with lawyers in the room and/or an argument about resources, scope or costs. › Supplier - we get them to deliver something and they do an ok job at it, but they don’t really add value. › Partner - they are embedded in our team, they come to all the meetings and the discussions are open, they are part of the solution.

Most critical technology systems do not get changed very often as they are big and complex so your vendor relationship may be long term. Everyone knows it’s not easy to go elsewhere, so you must make it work. But as a customer how well are you really managing them?

A few questions to consider... › How do you really ‘treat’ them? › Are you really an important customer in their overall business? › Do you completely understand what their scope of services are? › Is your list of initiatives, change requests or variations getting too big? › Do you have the right governance established to track performance? › Are you giving them the space and opportunity to innovate? › Do you have right roles and skills at the management layer to bring this all together?

Contract and vendor relationship management is often a skillset lacking in many organisations, as many roles spend a lot of time focusing on procurement and project management processes, as these are often the areas that have the most scrutiny with respect to process and budget.

A procurement project is always the start of the contract and vendor relationship that can be long-term and costly to maintain, but it’s often left to the management of these service areas to deal with the contract as part of the day-to-day operations. This may be sustainable for a small or non-critical services, but if this vendor is the core part of a critical ecosystem that you are known for as an organisation, then contract and vendor relationship management is a key skillset to manage your supply of technology services, while your internal business partners are managing demand with your stakeholders.

A vendor relationship that feels like a partnership requires work on both sides, as well as having the right commercial arrangements in place. This, together with a strong relationship with your internal stakeholders and a managed funnel of activity is where we see the greatest results.

Need help managing your critical technology vendors?

Contacts us on enquiries@proximity.com.au or 1800 959 885.

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commercial hub

MULTI-STAGE PROCUREMENTS MANAGING THE PROBITY RISKS These days, government procurement is much more sophisticated, and panel arrangements have obviated much of the legwork for agencies, especially in the IT and consultancy space.

BY BRUCE BROWN EXPERT CONSULTANT

In the good old (simpler), days, the options for a procurement were treated pretty narrowly. Mostly, an agency just went to the market (ATM) with a request for tender (RFT).

But many agencies are now commonly using multi-stage procurements, with the choice of market approach being influenced by various factors including the nature of the procurement, (for example, value, complexity, quantity, time and location), the characteristics and availability of supply, and the objectives of the agency.

The most common reason, however, is that the agency wants to first know what solutions the market might offer before it crafts the criteria and requirements for its RFT or RFP - referred to usually as ‘industry consultation’.

Sometimes, agencies may also want to know which suppliers in the market are even worth considering; they may want a shortlisting process to be applied so they aren’t wading through multiple proposals that aren’t worth a full assessment - usually done through an expression of interest process (EOI).

Multi-stage procurements bring with them an additional set of probity challenges though, particularly where there is an industry consultation stage.

Agencies often use experts to assist them during this stage. This has the advantage of usually leading to better targeting of consultations and a quicker analysis of the results. Most large consulting firms, however, have multiple divisions and may have an interest in one of their other divisions tendering for the final project.

An agency needs to determine upfront whether it would be comfortable with this potential conflict.

Some won’t be. If the agency is comfortable with this scenario, there are a number of probity steps that should be taken.

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THE MOST OBVIOUS ONES ARE: 1. Implementing “Chinese walls” between the industry consultation team and any team that may ultimately tender for the project.

Strategies that we have seen agencies use to minimise probity risks in this area include: › If possible, consult with an industry association rather than specific members of the industry.

2. There must not be any common membership between the two teams.

› Develop scripts for the consultation process – and follow them.

3. All members must execute confidentiality undertakings.

› Don’t flag the detail of what the tender documents will likely contain.

Having said this, there is the old lawyer’s adage that should be remembered - ‘there is no Chinese wall so high that a grapevine cannot grow over it’.

› Make a record of all the industry consultations.

The industry consultation process also creates probity challenges, because in some cases it may necessitate the agency consulting with a select number of firms, some of which may ultimately decide to tender for the final project.

› Have at least two agency staff (and if appropriate, probity advisors) at any meeting with industry firms.

The consultation process can give those firms a number of advantages over other tenderers:

ADVANTAGE 1 – INFORMATION

› Require members of the companies that you do consult to complete confidentiality undertakings.

› Put as much information about the project in the final tender documents as you can, so any information advantage is minimised. › Give tenderers as much time as the project will allow to provide their responses, so any timing advantage is minimised.

They will have a deeper knowledge of the project because they were involved in its development.

ADVANTAGE 2 – TIMING They can start putting their ideas together for the tender long before the rest of the industry.

ADVANTAGE 3 – RELATIONSHIPS Depending upon the level of consultation, they may have developed a positive relationship with the members of the agency’s project team (usually, the agency staff who undertake the industry consultation process are also heavily involved in the subsequent tendering and sometimes even the evaluation processes).

Need help with multistage procurements and managing probity risks?

Contact enquires@proximity.com.au or 1800 959 885

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commercial hub

GOVERNANCE IN CONTRACTS RISK MANAGEMENT

BY ANDREW GIBSON SENIOR ADVISOR

Joint risk management that does not place an unnecessary risk burden on contractors allows them to be more innovative in their approach to delivery of the goods or services. This combined with a fail fast culture ensures that the barriers that prevent a collaboration of ideas and innovation are removed. Risk share models will also allow contractors to engage innovative subcontractors without passing on levels of risk that may be unacceptable to a small to medium enterprise (SME), or attempting to price in risk where the outcomes focus on the need to flexibly pivot to meet changing needs.

DECISION MAKING

Governance is often thought of as just one aspect of commercial arrangements, however a change in focus to view governance as a toolset to drive collaborative behaviours with contractors can provide contract managers with more efficient decision making in support of achieving better quality outcomes.

Having clear decision-making authority that is embedded within a culture of innovation will encourage new ideas to be jointly generated and realised.

Decision making at the lowest possible level will enable an agile team that will be able to provide benefits realisation early within your contract term.

Having joint decision making within your contract will reduce the risk of having an adversarial culture and increases responsiveness on key decisions in support of achieving best for program outcomes together.

By establishing joint governance within your contract construct you will achieve multiple benefits including:

By establishing joint leadership within your contract at appropriate levels, normally with your delegate, the contractor and the contract management team will be empowered with the same contract vision. When the joint leadership is consistently aligned to the same vision, the messaging to the delivery teams with regards to the ‘big picture’ outcome the parties are working towards increases in effectiveness.

› Faster decision making. › Shared risk and reward. › Evolution of metrics to maintain relevance as the contract evolves. › Better-quality information flow.

Here are some the key aspects for establishing joint governance.

LEADERSHIP

COMMUNICATIONS Clear pathways for communication are key to the success of collaborative contracts. Having clear communication pathways at all levels significantly reduces the risk of disputes, ensures disagreements are raised early through the management and governance structures to be resolved at the lowest possible level, and ensures a common goal is understood as the foundation for success.

Need assistance constructing your contracts with joint governance?

Get in touch enquiries@proximity.com.au or 1800 959 885.

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highlights

SIX PROXIMITY LAWYERS RANKED IN THE 2022 BEST LAWYERS™ LIST! We are delighted to announce that six Proximity lawyers have been included in the 2022 Edition of The Best Lawyers in Australia.

We would like to congratulate the following team members for making the highly regarded list:

Bruce Brown Government Practice

Robin Creyke Alternative Dispute Resolution Government Practice Public Law

James Dunn Commercial Law Government Practice Information Technology Law

Julie Fox Public Law

Lawyers on The Best Lawyers in Australia list are reviewed by their peers and their ranking is based on professional expertise and an authentication process to ensure they are in current practice and in good standing. A listing in Best Lawyers is widely regarded by clients and legal professionals as a significant honour, bestowed on a lawyer by his or her peers.

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Sean King Commercial Law Government Practice

Tara Munro-Mobbs Government Practice

Sean King, Proximity Director stated, “A listing in Best Lawyers is a major achievement and honour, and for six Proximity team members to be recognised this year speaks volumes of the quality and experience held in our team.”

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staff profile

TWO MINUTES WITH...

Each edition we profile a staff member who is an integral part of the Proximity story. Today we meet, Advisor, Caitlin Morgan.

Tell us how you came to join Proximity?

What’s the best advice you have ever been given?

I was finishing up a graduate program at a national firm.

Someone I used to work with had moved over to Proximity and thought I would be a good fit too. Being relatively new to the corporate world I wasn’t really sure what I was in for. However, it turns out she was right – as four years later I am still here!

Stress is temporary. Sometimes a task can feel overwhelming and impossible but remembering that stress is temporary is always helpful motivation for me to get through the challenges life throws at me.

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PROXIMITY

TRIVIA CORNER What is your proudest moment in a professional context?

I haven’t been around that long yet, so let me get back to you in a few years! However, I am always proud when I receive great client feedback or clients ask for me to come back to work on new engagements with them.

What advice do you give to someone starting out in a career?

Ask questions! It’ll save you a lot of time in the long run if you just ask the question. More often than not people are happy to help if you ask for it.

With an eye on the future, what does success look like for you?

Success for me is being stimulated day to day and having balance in all areas of life. I aim to continue to build strong networks and relationships, while increasing my knowledge and being a source of knowledge for others.

How do the Proximity values, innovative, genuine and helpful underpin your work ethic?

The three Proximity values are central to my day-today work ethic and service delivery style. The values underpin my work ethic by actively stimulating me to deliver the best outcomes for Proximity and our clients.

Away from work, what is your passion?

Competition – whether it be competing in a local Rowing Regatta or in an Apple Watch competition (challenge me, I dare you). Competition gives me a lot of joy, motivation, and endorphins.

The year 2021 is a special one for Proximity, marking 10 years since the business was created in 2011. A lot has happened in those 10 years, so let’s test your memory as we step back in time to some of the significant events of a decade ago.

1. The Queen has visited Australia on 16 occasions since taking the throne. Her last visit was in 2011. What was the reason for that visit?

2. Name the Australian/Canberran who won a Noble Prize for Physics in October 2011?

3. It was described as the wedding of the year in 2011, and it took place in the UK? 4. In 2011, which country had only 364 days and why?

5. He was described as ‘the world’s most wanted man’ and he was killed in May 2011?

6. What big new event was launched in Canberra for the first time in 2011?

7. Name the first Australian to win the Tour de France in 2011?

8. The Canberra Raiders lost how many games in a row to equal their longest ever losing streak in 2011?

9. For the first time in history, in 2011 women simultaneously held the positions of GovernorGeneral, Prime Minister and Chief Minister of the ACT. Who were they?

10. Kimbra featured on what pop song that took out the 'Single of the Year' at the 2011 ARIA Music Awards?

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highlights

Great response to Government In-House Counsel Day Proximity’s second Government In-House Counsel Day on 17 February drew a big (COVIDsafe) attendance at the National Museum of Australia for a full-day’s program centred around a range of practical and contemporary topics.

More than 170 participants attended the day from across more than 20 Commonwealth Government departments and agencies, including Defence, Health, Home Affairs, Social Services, Industry, the Australian Tax Office and Services Australia.

This day opened with a panel discussion featuring three former departmental Secretaries; Kerri Hartland, Glenys Beauchamp (both from Proximity) and Renee Leon, and provided many valuable insights into what Secretaries value most from their in-house legal teams, with special emphasis on their lawyers understanding the broader context of their department’s priorities, not just the issues inside their legal section.

Proximity’s experienced team also presented on negotiation strategies and techniques, differing perspectives of contract management, effective grants administration in uncertain times, why we should care about probity, and how lawyers and non-lawyers communicate.

The feedback from attendees was overwhelmingly positive and planning is already underway for our third Government In-House Counsel Day early next year.

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Trivia answers: 1. The Queen visited Australia primarily to open the Commonwealth Heads of Government meeting in Perth.

2. Prof Brian Schmidt, now ViceChancellor of the Australian National University.

3. The marriage of Prince William and Catherine Middleton on 29 April 2011.

4. Samoa moved across the International Date Line in 2011, skipping 30 December. It is now 24 hours ahead of its neighbouring American Samoa.

5. Osama bin Laden, the leader of alQaeda, was killed by US Navy SEALs in Pakistan on 2 May 2011.

6. The Enlighten Festival was held for the first time in February-March 2011.

7. Cadel Evans took out the Tour de France on 24 July 2011.

8. Eight, between Round 2 and Round 9.

9. Quentin Bryce (G-G), Julia Gillard (PM) and Katy Gallagher (CM).

10. “Somebody That I Used to Know” by Gotye ft Kimbra.

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If you missed out on attending, never fear!

You can relive the day (plus gain those crucial CPD points) by watching all of the recorded sessions by visiting our website proximity.com.au

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PROXIMITY ON A PAGE It’s not easy to capture the breadth of what we do, and how we do it, but kudos to our design team on this effort.

VALUES VE ATI V NO IN

E SIT N O

Organisational Planning & Transformation

GENUINE

HEL PF UL

DELIVERY ADVISORY

PRO DU CT T S I O U L N O S S

Procurement & Tendering

COM

Risk Management & Compliance

S U LTI N G

Reviews, Investigations & Inquiries

CON

Digital, Data & Cybersecurity

M E R CIAL

Governance

Contract & Vendor Management Probity Business Cases & Cost Models Project & Program Management

Policy, Programs, Grants & Regulation

Negotiation

LEGAL

Corporate & Commercial Law Workplace Compensation Law

Public Law

Legal Support Services Property & Environment Law

Litigation & Dispute Resolution