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Four safety traps (and solutions) for principal contractors with joint ventures and alliance projects There are a range of safety challenges that can arise for principal contractors working in a joint venture/ alliance context, write Melissa Carnell and Katherine Morris
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oint venture (JV) and alliance contractual arrangements are a common model for delivering major construction projects in Australia. There is a range of practical and operational safety challenges that can arise for principal contractors (i.e. civil constructors) working in a joint venture (JV)/alliance context (references to JVs in this article are to unincorporated joint ventures) where there is more than one delivery contractor that may not necessarily arise under more traditional client/contractor models (e.g. design and construct (D&C) agreements), and one head contractor delivers the project. In this article, we examine this issue in further detail, in particular: • the legal and practical context of JV/ alliance contractual models. • specific legal responsibilities of a principal contractor (which are separate from the general safety duties of a PCBU). • safety operational issues or ‘traps’ that may arise for principal contractors in a JV/ alliance context, and recommendations and tips for managing these.
OHS PROFESSIONA L | JUNE 2022
Legal and practice context of alliance and JV arrangements
The core feature of both JV and alliance models is the collaborative approach taken to project delivery with multiple delivery partners, as opposed to a more traditional model, where most of the legal and practical responsibility for the delivery of the project is placed upon a head contractor. Under a JV model, the JV partners (rather than the head contractor alone) will be responsible for delivering the project under the head contract with the client. Each party to a JV has joint and several legal liabilities to the client. Similarly, under an alliance model, all participants in the alliance will be responsible for delivering the project under the project alliance agreement. There will usually be a range of alliance principles that each party must agree to, such as a commitment to working together in a spirit of cooperation and openness and developing a culture of collaboration. Depending on the delivery model, there may not be any agreement or breakdown in the delivery contract as to specific
project responsibilities between the parties in a JV/alliance. For example, this will be the case in a fully integrated JV. However, in practice, there may be different aspects of the work that each party takes practical responsibility for.
Specific legal responsibilities of a principal contractor
A principal contractor has a number of specific legal responsibilities regarding construction risks under Australian work health and safety (WHS) laws (or, in the case of Victoria, occupational health and safety laws), as set out in the table below. These are separate duties from the general safety duties held by a person conducting a business or undertaking (PCBU), and only the principal contractor is subject to these duties. Principal contractor duties are also specific and only apply to the construction industry. A principal contractor cannot legally delegate, transfer, or contract out of these duties. From a practical perspective, this means that the principal contractor should aim to fulfil the principal contractor duties itself, or to the extent that other parties will
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