Client Update: Breaking Ground
31 August 2012
In brief: Breaking Ground is a regular publication by the Allens Infrastructure and Construction group to keep you informed of the latest news and developments in this area. For more information or for legal advice, please contact one of the Partners listed below. We look forward to hearing from you.
BHP's Olympic Dam decision reported widely – 23 August 2012
BHP Billiton has decided not to proceed with the $28 billion expansion of the Olympic Dam mine in South Australia and the $20 billion expansion of Port Hedland, indicating a decline in the resources boom. Causes reported for this decline include soaring construction costs, a high Australian dollar and sliding commodity prices.
Source: Peter Ker and Clancy Yeates, 'BHP's Olympic failure leaves $50bn hole', The Age, 23 August 2012; Lauren Barrett, 'SA now in economic crisis', Mining News.net, 23 August 2012
Likely liquidation of Murchison Metals – 17 August 2012
Murchison Metals shareholders have voted to approve a capital reduction of $207 million. It has been reported that it is likely liquidation will follow.
Source: Nick Evans, 'Vote ends Murchison Metals' Mid West dream', The West Australian, 17 August 2012
Administrators of St Hilliers Construction granted extension – 11 August 2012
Administrators of St Hilliers Construction have successfully sought an extension to the administration period, taking the period of administration to almost five months. The extension will allow the administrators to continue talks with three potential buyers, and seek to realise all value in subsidiary and group company loans in an attempt to get back as much of the $106 million owed to creditors as possible.
Source: Susannah Morgan, 'Struggling St Hilliers' name no longer floats chairman's boat', The Australian, 11 August 2012
Possible mining legislation review in Northern Territory – 26 August 2012
Before election day, the Northern Territory Country Liberals environment and mining spokesman, Peter Chandler, stated his party would review mining legislation if it won government. This policy statement followed an environmental lobby group wishing to stop the issue of mining exploration permits in the NT national parks. The Country Liberal Party has since won the elections in the NT.
Source: Emma Masters and Penny Timms, 'Call to protect national parks from mining boom', ABC News, 17 August 2012; 'Country Liberal Party wins Northern Territory election', The Australian, 26 August 2012
Immediate ban on 'fracking' in Victoria and New South Wales – 24 August 2012
The Victorian Government has placed a moratorium on 'fracking' – effective immediately – following the NSW Government having done so. The reforms include: a hold on approvals to undertake hydraulic fracturing as part of onshore gas exploration, a hold on the issuing of new exploration licences for coal seam gas and a ban on the use of BTEX (benzene, toluene, ethylbenzene and xylene) chemicals. The moratorium will remain in place until the national regulatory framework proposals have been considered.
Source: 'Baillieu Government to freeze fracking', Weekly Times Now, 24 August 2012
Alpha coal mine project approved – 24 August 2012
The Federal Environment Minister, Tony Burke, has approved the Alpha coal mine and rail project in central Queensland, after four years of negotiations.
Source: 'Alpha coal mine nod devastating for reef', ABC News 24 August 2012
BHP Billiton set to double output in Pilbara after reaching native title agreement – 18 August 2012
BHP Billiton has signed a native title agreement with the Nyiyaparli people in the Pilbara region that will allow for a major expansion of its operations. The agreement was reached after four years of negotiations with the Yamatji Marlpa Malbra Aboriginal Corporation. BHP will now be able to progress plans to double output from its Pilbara operations by 2020.
Source: 'BHP strikes native title deal in the Pilbara', ABC News, 18 August 2012
Citic Pacific faces Sino Iron delay – 17 August 2012
Citic Pacific has announced a delay in the $7.4 billion Sino Iron project in Western Australia. Instead of trial production beginning this month, it will commence in November. Citic is hoping to begin exporting iron pellets by the end of 2012.
Source: Paul Garvey, 'Citic Pacific's Sino Iron project faces new delay', The Australian, 17 August 2012
Port of Melbourne Webb Dock project advances as contracts are awarded – 20 August 2012
Port of Melbourne Corporation's $1.6 billion redevelopment of Webb Dock is advancing, with the awarding of civil and maritime design contracts to Aurecon and Arup.
Source: Port of Melbourne media release
Proposed deep sea port facility to undergo environmental assessment – 9 August 2012
The South Australian Planning Minister, John Rau, has released guidelines for the environmental impact statement to be undertaken on the proposed deep sea port facility at Port Bonython. The environmental impact statement could take up to 18 months to complete, before construction of the $600-700 million proposed facility can commence.
Source: Minister for planning news release
Funding for NSW electronic freeway management system announced – 24 August 2012
The Federal and NSW Governments have announced that they will each provide $8.5 million to equip Sydney's M4 with an electronic freeway management system, which will improve traffic flows and ease congestion. This technology will give authorities the tools to better manage traffic flows, respond quickly to accidents, and deliver real-time information to motorists so they can plan their journeys and avoid delays.
Source: NSW Minister for Infrastructure and Transport media release
Support for land corridors to build NSW motorways – 20 August 2012
Infrastructure Partnerships Australia (IPA) has written to Infrastructure NSW, advocating an M9 motorway along the base of the Blue Mountains. IPA also wants land set aside to connect the F3 freeway and the M7 motorway, linking Newcastle with western Sydney. The NSW Roads Minister, Duncan Gay, has welcomed the concept of land corridors, but will wait until the release of Infrastructure NSW's 20-year plan, which will be released in September, before acting.
Source: 'NSW govt backs land buy idea for motorways', The Australian, 20 August 2012
240 hectares of Port Melbourne industrial land has been rezoned – 25 August 2012
Following the Victorian Government's decision to create five new inner-city suburbs over the next 15 to 20 years, the Melbourne Ports precinct, known as 'Fishermans Bend, has been rezoned. The rezoning of 240 hectares in Port Melbourne will allow residential, commercial and retail infrastructure to be developed. It is likely to increase buyer demand for secondary industrial property in the area.
Source: Sarah Danckert 'Baillieu rezoning paves way for 'Toorak of industrial property', The Australian, 25 August 2012
WorleyParsons awarded pipeline design contract – 17 August 2012
WorleyParsons has been awarded the pipeline design contract from Arrow Energy for 1150-kilometre pipelines in its LNG project. This is reported as being among one of the largest pipeline projects in Australia, and will include two major pipelines that will transmit natural gas from gas fields in the Bowen and Surat basins to Gladstone.
Source: Arrow Energy media release
Wood Group wins Melbourne Water contract – 27 August 2012
Wood Group PSN has been awarded a $232 million contract by Melbourne Water to provide maintenance services and low-risk capital works to its metropolitan water and waste water network.
Source: Wood Group news release
CFMEU defies court order and continues blockade – 24 August 2012
CFMEU, Australia's construction union, is defying a Victorian Supreme Court order to lift its blockade of Grocon's $1.2 billion Myer Emporium project in Melbourne. The union also faces a workplace bullying complaint for targeting workers.
Source: Mark Skulley and Nick Lenaghan, 'CFMEU defies court', Australian Financial Review, 24 August 2012
Court rules striking workers not entitled to accommodation – 17 August 2012
The Federal Court has handed down its decision in Construction, Forestry, Mining & Energy Union v Mammoet Australia Pty Ltd  FCA 850, ruling that workers on strike in a remote mining camp could be denied access to their accommodation by their employer. The court ruled that, under the Fair Work Act 2009 (Cth), the accommodation provided by the company was considered part of the workers' pay and entitlements, and since the company could withhold pay from striking workers, it was also entitled to withhold access to accommodation.
Source: 'Court rules company had a right to deny accommodation to striking workers', ABC Rural, 17 August 2012
Focus – The new NSW planning system – planning and zoning, 28 August 2012
The NSW Government is substantially overhauling its planning system, providing developers with greater certainty and fewer risks. In the first of a three part series, Allens Partner Paul Lalich and Lawyer Dennis Smith examine the implications the proposed new planning system will have on environmental plans and the way land is zoned within NSW.
Focus – New PPP guidelines for NSW, 27 August 2012
The NSW Government has issued new guidelines to govern the private public partnership procurement process in that state. Allens Partner Nigel Papi and Lawyer Tom Levi report on the new guidelines, which are intended to supplement the national PPP guidelines.
Focus – Guidance on show cause notices and expert evidence, 22 August 2012
The Supreme Court of Victoria has provided practical guidance on the content of show cause notices issued under Australian Standard form contracts and how parties should respond to them. The court also commented on the requirements for the admissibility of expert evidence. Allens Partner Nick Rudge, Senior Associate Nicholas Gallina and Law Graduate Matthew De Remer report.
Focus – Changes to WA mining rehabilitation regime, 21 August 2012
Legislation was recently introduced into the WA Parliament to reform the state's system of mining securities. If passed, the legislation will largely replace the existing regime of unconditional performance bonds with a state-wide rehabilitation fund. Partner Jodi Reinmuth, Senior Associate Jessica Ham, and Lawyer Peter Jensen look at the new proposal that is intended to deal with the escalating costs of operators defaulting on mine site closure and rehabilitation obligations.
Infrastructure Partnerships Australia releases 'Fixing NSW: A long-term vision for better infrastructure' – 20 August 2012
Infrastructure Partnerships Australia has released a report, calling for the forthcoming Infrastructure NSW strategy to provide a detailed, ambitious and long-term vision that focuses on: protecting land corridors, certain projects and sustainable growth. The report claims that NSW needs to substantially increase the quality, capacity and efficiency of its transport, utilities, social and community infrastructure. According to the report, this will require the state to increase the amount of investment and be more selective in choosing the projects in which it invests, through a 'rigorous prioritisation methodology'. The prioritisation methodology must include the development of systems to gather submissions and the full range of project options across transport, utilities and social infrastructure, recognising that some of the valuable and beneficial projects may not be in existing plans.
Source: Infrastructure Partnerships Australia, 'Fixing New South Wales: A long-term vision for better infrastructure', 20 August 2012; Australian Government Asbestos Management Review, June 2012
Building Codes Board may review national earthquake standards – 18 August 2012
Work has begun on the first earthquake hazard map in Australian for 20 years. The Australian Building Codes Board, which sets standards, has said it may review national earthquake standards when the map is completed.
Source: Jason Dowling, 'Building code shake-up to send tremor through city', 18 August 2012
NSW Public Private Partnerships Guidelines – August 2012
The revised NSW Public Private Partnerships Guidelines are now available on the NSW Treasury website and the Public Private Partnerships website. These guidelines supersede the Working with Government Guidelines for Privately Financed Projects (NSW, December 2006).
Source: NSW Treasury Policy Papers
BHW Solutions Pty Ltd v Altitude Constructions Pty Ltd  QSC 214 – payment claims
The Queensland Supreme Court has held that a failure to comply with the requirements for a progress claim set out in a contract will not invalidate a payment claim, providing the requirements of a payment claim in section 17 of the Building and Construction Industry Payments Act 2004 (Qld) have been fulfilled.
The contract required a statutory declaration to be submitted with a progress claim, as a 'precondition' of payment. The contractor failed to submit a statutory declaration with their progress claim in accordance with the contract, and the principal denied the contractor payment on this basis. However, the Queensland Supreme Court noted there was no statutory, only a contractual, requirement to submit a statutory declaration with progress claims, and the contractor had complied with any requirements in the Act regarding payment claims. Read more>>
Trans Petroleum (Australia) Pty Ltd v White Gum Petroleum Pty Ltd  WASCA 165 – good faith – not implied for termination by notice without cause
Without deciding the point, the WA Supreme Court held the implication of a duty of good faith in the context of commercial contracts, both in performing obligations and exercising rights, while not universally accepted, reflects the law in Australia. However, there will be no imposition of good faith where either party is entitled to terminate an agreement without reason upon notice, and there is no evidence of an intention to permit termination only for proper purpose (in contractual language or by the apparent purpose or object of the transaction). The presence of an implied duty of good faith was rejected in such a case, as it would, in effect, be inconsistent with the terms of the bargain as agreed by the parties. Read more>>
Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd  WASC 228 – International Arbitration Act 1974 (Cth) – conditions on parties
The WA Supreme Court has upheld the courts' right to impose conditions on parties under s7(2) and (3) of the International Arbitration Act 1974 (Cth), but has reservations about whether the courts' powers extend to imposing conditions that affect the procedure to be adopted in an arbitration.
The court held that conditions staying proceedings in the court to defer to mediation, and paying disputed amounts into escrow, were not intended to bind the arbitrator, as it was expressly contemplated that an arbitrator could review the conditions if requested to do so. Read more>>
- Leighton O'BrienPartner,
Ph: +61 2 9230 4205
- Brian MillarPartner,
Ph: +61 2 9230 4839
- Emma WarrenPartner, Sector Leader - Infrastructure & Transport,
Ph: +61 3 9613 8856
- Nick Rudge Partner,
Ph: +61 3 9613 8544
- Ren NiemannPartner,
Ph: +61 7 3334 3005
- Michael HollingdalePartner,
Ph: +61 8 9488 3708
- Stephen McComishPartner,
Ph: +61 8 9488 3767