news archive
Prisoners voting in federal elections
The High Court’s decision in this case (Roach v
Electoral Commissioner & Commonwealth) is the topic
of one of the articles in our latest issue of Litigation
Notes. Other articles deal with significant constitutional
decisions on anti-terrorism control orders and the defence
power, disciplinary proceedings and judicial power, and
acquisition of property and reduction in workers compensation.
A brief summary of other High Court decisions relating
to constitutional matters is also included. +
See Client Login
After the election — what happens?
The latest issue of AGS Legal Briefing discusses
administrative rearrangements following the prorogation of
Parliament and the dissolution of the House of Representatives,
the effect of those events on particular parliamentary business,
and the employment issues involved in machinery of government
changes. +
See Client Login
AGS rated best professional services firm in the ACT
Our Canberra office has received this year’s BRW-St
George Client Choice Award for best professional services
firm in the ACT. The awards are judged entirely on feedback
from clients, who praised us for our government knowledge,
approachability and sound management of matters.
Our client commitment
Louise Vardanega, AGS Director Clients and Market and Director
Canberra, who accepted the award at a ceremony in Sydney
on 14 March, commented on this achievement: ‘We understand
that recognition at these awards will increase our clients’ expectation
of the level of service they should receive. So we certainly
can’t expect to rest on our laurels and will strive
to ensure that we continue to improve our service standards
to our clients across Australia’.
The awards
The state awards are not broken down by professional category,
so in winning Best ACT Firm, AGS was judged to be the best
of any nominated professional services firm with an ACT office.
‘Everyone at AGS can take pride in knowing that our
commitment to client care is being increasingly acknowledged
and valued,’ said Louise Vardanega.
‘The award reflects the dedication to client care
not only of AGS people based in Canberra but also of the
many individuals and teams around the country who have contributed
directly or indirectly to the Canberra practices.’
For further information on the award please contact:
Louise Vardanega
Australian Government Solicitor
T 02 6253 7217 F 02 6253 7333
louise.vardanega@ags.gov.au
Developments in Commonwealth environmental law
The Environment Protection and Biodiversity Conservation
Act 1999 (the EPBC Act) is the key Commonwealth law
relating to the protection of the environment and conservation
of biodiversity. The Act has the potential to impact upon
all government agencies that engage in activities related
to the use of land or sea. Amendments to the EPBC Act that
commenced operation in February this year have clarified
many aspects of the operation of the Act, extensively modified
the process for assessment and approval of actions, and
improved the strength and flexibility of compliance and
enforcement measures.
At the next meeting of the Government Law Group in Canberra
on 18 April, AGS Senior General Counsel Susan Reye and Senior
Lawyers Susie Brown and Greg Prutej will examine:
- constitutional issues affecting the Commonwealth’s
expanding role in environmental regulation
- key aspects of the operation of the EPBC Act
- the most important decisions on the Act, including Booth
v Bosworth, Minister for the Environment and Heritage
v Queensland Conservation Council (the Nathan Dam
case), Wildlife Preservation Society of Queensland
v Minister for the Environment and Heritage, and Brown
v Forestry Tasmania – some of the main recent
amendments to the Act.
Federal Court awards $5.5 million in pecuniary penalties
in Australia’s first Spam Act case
On 27 October 2006, the Federal Court ordered Clarity1 Pty
Ltd to pay a $4.5 million pecuniary penalty and its director,
Wayne Mansfield, to pay a $1 million pecuniary penalty for
contravening various provisions of the Spam Act 2003 (Cth)
concluding the first proceedings brought by the Australian
Communications and Media Authority (ACMA) under the Spam
Act.
Earlier findings
ACMA v Clarity1 Pty Ltd [2006] FCA 410
In the court’s earlier decision, Nicholson J found
that between 10 April 2004 (the commencement of the Spam
Act) and 13 April 2006 (the date of the decision), Clarity1
contravened section 16(1) of the Spam Act by sending at least:
- 213 million commercial electronic messages (41.7 million
successfully) to over 5.6 million unique electronic addresses,
and
- 56.8 million commercial electronic messages (33.1 million
successfully) to over 2.2 million unique electronic addresses.
Nicholson J further found that a majority of the unique
electronic addresses referred to above had been obtained
from harvested-address lists or were compiled using address-harvesting
software prior to the commencement of the Spam Act. By sending
commercial electronic messages to electronic addresses obtained
in such ways, Clarity1 contravened section 22(1) of the Spam
Act.
Nicholson J found Mr Mansfield aided and abetted, counselled
and procured, and was directly or indirectly knowingly concerned
in or party to the Clarity1’s contraventions of the
Spam Act, thereby contravening sections 16(9) and 22(3) of
the Spam Act.
Decision on relief
ACMA v Clarity1 Pty Ltd [2006] FCA 1399
Nicholson J’s decision on relief followed his earlier
findings on contravention that Clarity1 and Mr Mansfield
had breached specified sections of the Spam Act by sending
millions of commercial electronic messages without the recipients’ prior
consent, many of which had been obtained by using address-harvesting
software or from harvested-address lists.
The orders
The Federal Court ordered:
- that Clarity1 pay the Commonwealth a pecuniary penalty
of $4.5 million
- that Mr Mansfield pay the Commonwealth a pecuniary penalty
of $1 million
- declarations stating how and why Clarity1 and Mr Mansfield
contravened the Spam Act
- injunctions restraining Clarity1 and Mr Mansfield from
engaging in such conduct in the future
- that Clarity1 and Mr Mansfield pay ACMA’s costs.
While the pecuniary penalties imposed are considerable,
the court acknowledged that ‘the innovative character
of the legislation, the boundaries of which the respondents
were at liberty to contest on its first application’ was
also a factor, suggesting that higher penalties may be imposed
for similar conduct in the future.
Implications for agencies
As the first decision made under the Spam Act, the decision
demonstrates the importance of complying with the Act. Agencies
that are subject to the Spam Act need to ensure that they
have the consent of everyone in their email database before
sending any commercial electronic messages, even if that
email database was compiled prior to the commencement of
the Spam Act. Contraventions of the Act can result in substantial
penalties being imposed.
Text of the decision is available at:
http://www.austlii.edu.au/au/cases/cth/federal_ct/2006/1399.html
Justin Jones of AGS appeared as junior counsel with Stephen
Owen-Conway QC on behalf of the Australian Communications
and Media Authority. Justin is a lawyer in AGS Perth’s
commercial and trade practices teams.
For further information please contact:
Justin Jones
Lawyer
T 08 9268 1125 F 08 9268 1771
justin.jones@ags.gov.au
Important: The material is provided to clients as an
early, interim view for general information only, and
further analysis on the matter may be prepared by AGS.
The material should not be relied upon for the purpose
of a particular matter. Please contact AGS before any
action or decision is taken on the basis of any of the
material in this news item.
Limited liability in ICT contracts: Finance Circular 2006/03
The Department of Finance and Administration has released
Finance Circular 2006/03 dealing with limiting liability
in information and communications technology (ICT) contracts.
The release of the circular coincided with the release of
the Department of Communications, Information Technology
and the Arts' A guide to limiting supplier liability in
ICT contracts with Australian Government agencies (the
DCITA Guide). The Hon. Gary Nairn MP, Special Minister of
State, referred to this policy change in his keynote address
to industry representatives on 17
August.
Changes to Australian Government policy regarding liability
capping in ICT contracts
The circular states that liability of ICT suppliers should
be capped at 'appropriate levels' in most cases. This policy
applies to agencies subject to the Financial Management
and Accountability Act 1997 (FMA Act) and only applies
to contracts for ICT supplies (whether or not the contractor
in question is an ICT supplier or not). The DCITA Guide indicates
that the ICT supplies subject to the policy are those falling
within Finance's Endorsed Supplier Arrangement, but not those
subject to the Whole of Government Telecommunications Arrangement.
The exception to the policy is where there is a 'compelling
reason' to require unlimited liability. The circular indicates
that a 'compelling reason' would be where unlimited liability
represents an 'accurate reflection of the potential risks'
of a particular procurement.
The circular is stated to be policy for the purposes of
regulation 9 of the Financial Management and Accountability
Regulations 1997 (FMA Regulations) and for the purposes of
the Commonwealth Procurement Guidelines (CPGs). Implicitly
it has to be read that, in respect of ICT procurements, the
circular amends the statements of policy in the CPGs and
previous circulars regarding the policy preference for agencies
to seek unlimited liability.
The circular does not require agencies to modify either
their Chief Executive Instructions or other procedures regarding
risk assessment and procurement, but provides a step-by-step
approach that agencies can follow when applying the general
policy on capping liability for ICT suppliers. The circular
sets out the following steps for agencies:
- Determine the appropriate liability regime for the project
(i.e. whether liability should be limited or unlimited).
- Determine the appropriate level for the initial estimate
of the liability cap.
- Determine how the liability issues will be handled in
the procurement process and the contract (i.e. which liabilities
should be capped, and the level of the proposed cap).
- Establish agreement and complete the contract.
Which liabilities can be capped?
The circular states that it is particularly appropriate to
include caps for:
- 'standard breach of contract'
- supplier negligence, except to the extent the supplier's
negligence relates to personal injury, property damage,
breach of intellectual property rights, confidentiality,
privacy and security obligations or unlawful conduct.
The circular proceeds to state that it is generally appropriate to
retain unlimited liability (unless there is a compelling
reason) for liabilities involving:
- personal injury including sickness or death
- unlawful or illegal acts
- damage to tangible property
- intellectual property obligations
- confidentiality and privacy obligations
- security obligations.
How do agencies set the amount for a cap?
Agencies will need to conduct a risk assessment prior to
issuing request documentation to set an appropriate level
for the cap. The circular does not require that the cap represent
a best or worst case scenario established by the risk assessment – agencies
therefore remain free to state a dollar figure that represents
a plausible worst case scenario. The figure should represent
a realistic amount in the context of both the agency’s
risk assessment and the prevailing market conditions.
Following selection of a preferred tenderer, agencies will
need to conduct a further risk assessment to reassess the
appropriate level for the cap (this level could be expressed
as a contract multiple equivalent to that assessed level
in the final negotiated contract).
Relevance of SourceIT model contracts
Finance has released draft SourceIT model contracts (available here
on Finance’s website). The circular does not
refer to these contracts, but the DCITA Guide refers to
them as an example of a limited liability regime that will
be consistent with the circular. We understand that new
drafts of the SourceIT model contracts are to be released
in next few weeks.
Application of the DCITA Guide
The DCITA Guide provides guidance to assist agencies in
implementing the policy in the circular. It provides valuable
information in respect to the potentially complex issues
that need to be considered to ensure that an agency achieves
value for money from limiting supplier liability as appropriate
in accordance with the policy.
The DCITA Guide provides a discussion of issues to be considered
by agencies in both setting caps and negotiating liability
caps with ICT suppliers. It also describes a useful process
for developing and implementing a risk assessment and risk
mitigation strategy for less complex ICT projects.
It is worth noting that the DCITA Guide does not represent
Australian Government policy for the purposes of regulation
9 of the FMA Regulations – it is stated to be a guide
that only provides examples of how agencies may choose to
implement the circular. Agencies may choose to adapt and
amend their existing Chief Executive Instructions or other
procedures regarding risk assessment and procurement to reflect
aspects of the DCITA Guide as they see fit.
Where can Finance Circular 2006/03 and DCITA Guide be found?
The circular is available here
on Finance’s website.
The DCITA Guide and the Companion to the DCITA Guide are
available here
on DCITA’s website.
A more general discussion of risk management in the Commonwealth
context can be found in AGS’s Legal
briefing No.79: Indemnities in Commonwealth Contracting.
Next steps for agencies
Many agencies will need to revisit their template procurement
documentation and their procedures for developing requests
for tender in relation to ICT contracts to reflect the requirements
of the circular.
If you require further information or advice regarding the
application of the circular or the DCITA Guide to your template
procurement documentation or a particular procurement process
please contact:
National Tony
Beal 02 6253 7231
Canberra Stuart
Hilton 02 6253 7254
Sydney John
Berg 02 9581 7624
Melbourne/Hobart Kenneth
Eagle 03 9242 1290
Brisbane Robert
Claybourn 07 3360 5767
Perth Justin
Jones 08 9268 1125
Adelaide/Darwin Andrew
Schatz 08 8205 4201
Important: This material is provided to clients as
an early, interim view for general information only,
and further analysis on the matter may be prepared by
AGS. The material should not be relied upon for the purpose
of a particular matter. Please contact AGS before any
action or decision is taken on the basis of any of the
material in this note.
Clarification of the Commonwealth Procurement Guidelines
The Department of Finance and Administration has released
Finance Circular 2006/02, which clarifies certain elements
of the Commonwealth Procurement Guidelines (CPGs).
The circular is the product of a review of the current CPGs,
which came into operation on 1 January 2005. The circular
states that it is to be read ‘in conjunction with the
CPGs’. Like the CPGs, the circular applies to all departments
and agencies subject to the Financial Management Accountability
Act 1997 (FMA Act) and to relevant CAC Act bodies. (Relevant
CAC Act bodies are those bodies listed in Schedule 1 of the
Commonwealth Authorities and Companies Regulations 1997.)
The circular at a glance
Scope of procurement
The circular clarifies that the CPGs only apply to circumstances
where there is a proposal to spend public money on the acquisition
of property or services. This means that, amongst other things,
the CPGs do not apply to investment activities and sales
by tender.
The circular also provides that the CPGs have no application
to the disposal of public property. Rather, the management
of disposals falls within the responsibilities of an agency’s
Chief Executive under s 44 of the FMA Act (promoting efficient,
effective and ethical use of Commonwealth resources).
Measures to protect security, health and national treasures
Paragraph 8.2 of the CPGs provides that Chief Executives
are not prevented from applying measures to protect security,
health and national treasures by anything in Division 2 (the
Mandatory Procurement Procedures). The circular states that
para 8.2 should now be treated as also having application
to Division 1 of the CPGs (the Procurement Policy Framework).
Value for money
The circular promotes the following measures to support
the obligation of an agency to achieve value for money:
- the use of written contracts to manage procurement risk
- regular review of contracts
- the inclusion of a clear end-date and/or termination
provision in any contract.
Management of confidential information (FMA Act agencies
only)
The circular highlights the need for agencies to consider
on a case-by-case basis the inclusion in a contract of the
model provisions to protect confidentiality maintained by
Finance, and provides some guidelines on when such provisions
should be used.
Time limits
The circular clarifies how the time limits for potential
suppliers to prepare and lodge a submission in response to
an approach to the market (paragraphs 8.32 and 8.33 of the
CPGs) should be applied.
Conditions for direct sourcing
One of the conditions under which an agency may conduct
a covered procurement using direct sourcing is where, in
response to an approach to the market, ‘no submissions
were received’ (sub-paragraph 8.65(a)(i) of the CPGs).
The circular provides that this condition is intended to
include circumstances where no submissions were received which
represented ‘value for money’.
AusTender
Paragraph 7.21 of the CPGs requires that, to the extent
practicable, request documentation be available for download
from AusTender. The circular clarifies that this requirement
is not diminished by the operation of paragraph 8.21, which
requires that, where practicable, request documentation be
distributed electronically.
Other publications to read in conjunction with the CPGs
The following Finance Circulars should also be read in conjunction
with the CPGs:
- Finance Circular 2005/12, which provides guidance on
the definition of the procurement of construction services
as used in the CPGs and the treatment of leases
- Finance Circular 2005/14, which defines contracts
for labour hire and exempts them from the Mandatory
Procurement Procedures in the CPGs.
Further, an agency’s Chief Executive Instructions
will contain agency-specific information about spending public
money on the acquisition of property and services.
Where can Finance Circular 2006/02 be found?
The circular has been issued to all CFOs of FMA Act agencies
and relevant CAC Act bodies. It is available, along with
the other circulars noted above, here
on Finance’s website.
For further information please contact:
Important: This material is provided to clients as an
early, interim view for general information only, and further
analysis on the matter may be prepared by AGS. The material
should not be relied upon for the purpose of a particular
matter. Please contact AGS before any action or decision
is taken on the basis of any of the material in this note.
John Scala interview in Lawyers Weekly
AGS Chief Counsel Commercial, John Scala has recently been
featured in a wide-ranging interview ‘In the Public
Interest’, published in Lawyers Weekly. + see full
interview
Government Lawyer of the Year
For the second time in three years an AGS lawyer has been
selected as the Australian Corporate Lawyers’ Association ‘Government
Lawyer of the Year’. This year’s winner, Susan
Pryde, is AGS’s Senior Executive Lawyer in charge of
the trade practices team in AGS’s Melbourne office.
The awards selection committee praised Susan’s leadership
skill and her loyalty and commitment to protecting the legitimate
interests of government. Her nomination cited her great capacity
to win the respect and confidence of government clients in
a short time.
The award was established three years ago, with the inaugural
winner being Simon Daley, Special Counsel Litigation and
National Practice Leader of AGS’s litigation practice.
Susan is a highly experienced litigation lawyer, having
acted for the ACCC in many major matters – including
the recent Boral case in the High Court and in the ACCC’s
intervention in South Sydney District Rugby League Football
Club Limited v News Limited. She handled a major and
important precedent matter in successfully defending the
Commonwealth and CSL Limited against a claim for psychiatric
damage arising from exposure to Creutzfeldt-Jacob Disease.
Susan was also involved in the defence of a class action
against the Bureau of Meteorology and other defendants arising
from the Sydney–Hobart yacht race in 1998. She played
a key role in that matter in resolving the claims against
the Bureau.
Susan recently acted as Director of AGS’s Adelaide
office. She holds a practitioner’s certificate in mediation
and conciliation. In addition, she provides training to AGS
clients on topics ranging from the management of large-scale
litigation, through to dealing with legal professional privilege
or public interest issues, and the ability of government
to intervene in private proceedings. Susan is an active member
of Victorian Women Lawyers.
‘The great benefit in working at AGS is the diversity
and variety of matters that I have the opportunity to work
on’, said Susan. ‘Each matter brings with it
new challenges, new people and new issues. My litigation
team at AGS works as a tightly knit unit and it is a real
plus to have such talented and dedicated colleagues. It’s
a delight to see junior lawyers come through the team structure
and be able to mentor them and follow their career development’,
she said.
1 December 2005
For further information contact Noela L’Estrange,
Director Legal Practice Support
T 02 6253 7224 F 02 6253 7305 E noela.l’estrange@ags.gov.au.
Australian Government Property Ownership Framework: to
own or not to own?
The Australian Government’s core business excludes
property ownership unless specific government objectives
require it. From 1 July 2005 proposals to own or divest property
(other than surplus property) must be prepared in accordance
with the Australian Government Property Ownership Framework.
Australian Government Property Ownership Framework
The framework replaces the Australian Government Property
Principles and applies to all government agencies, but not
government business enterprises.
A proposal to own or divest property, other than property
that has no alternative efficient use, must be developed
in accordance with the Budget Process Operation Rules and
apply the framework.
The Commonwealth Disposals Policy (disposals policy) will
still apply where property has no alternative efficient use.
Such property must still be sold on the open market at full
market value. Exceptions to the disposals policy are priority
sales and concessional sales.
Factors to be considered in the proposal
A proposal to own or divest property must consider the following
criteria:
- any symbolic, national heritage or environmental reasons
to own
- whether the property is of a highly specialised nature
- any national security or other strategic considerations
in support of ownership
- whether to own or divest provides value for money to
the Australian Government over the longer term after consideration
of all risks.
The Department of Finance and Administration (Finance) will
assess proposals against the criteria and based on a rate
of return commensurate with the exposure to risks associated
with the nature of the property (financial assessment).
When demonstrating value for money, an agency must consider
risks including:
- planning, design, development and construction risks
- capital risk
- market risk
- environmental risk
- residual value risks
- change of strategic requirement risk.
Risks may be identified through risk workshops that include
discussions with users, advisors, project managers and stakeholders.
The agency must then assess whether the likelihood of an
identified risk occurring is low, medium or high and if the
risk does eventuate, whether the impact on the government
will be low, medium or high. Finance suggests that preparing
this risk profile may involve considering:
- events that can occur at each stage of ownership and
their likely impact on the Australian Government
- factors contributing to an increase/decrease in the
chance of each risk occurring
- whether the risk will result in the crystallisation
of other risks
- whether the risks have eventuated with other property
and any similarities with this property
- how these risks have been managed in the past and whether
that management strategy was successful.
It is the responsibility of the agency to clearly demonstrate
the characteristics of the property (including value for
money) that warrant government ownership or divestment, including
whether the identified risks make the proposal low, medium
or high risk. The latter is important as it has a direct
impact on the discount rate used during the financial assessment
of the proposal undertaken by Finance.
The financial assessment will be based on a discounted cash
flow model using an appropriate discount rate. Finance will
publish discount rates annually to accommodate different
property asset types and levels of risk.
Implications
While value for money (and risk) may not be the sole criterion
to consider when developing a proposal, the agency must carefully
assess the nature of a property and the risk associated with
a proposal of that kind. Reference should be made to the
agency’s prior experiences with similar property and
where appropriate, the views of those outside the agency,
including stakeholders.
For further information please contact:
Important: The material in this note is provided as an
early, interim view for general information only, and further
analysis on the matter may be prepared by AGS. The material
should not be relied upon for the purpose of a particular
matter. Please contact AGS before any action or decision
is taken on the basis of any of the material in this message.
Draft Commonwealth Procurement Guidelines issued by the
Department of Finance and Administration
The Department of Finance and Administration (Finance)
has issued draft Commonwealth Procurement Guidelines (draft
CPGs) incorporating changes to implement Australia’s
obligations under Chapter 15 of the Australia – United
States Free Trade Agreement (FTA). In addition, a draft
Ministerial Direction has been prepared under section 47A
of the Commonwealth Authorities and Companies Act 1997 (CAC
Act) that will require, for the first time, certain CAC
bodies to comply with the CPGs. It is proposed that the
draft CPGs will apply from 1 January 2005.
Introduction
The draft CPGs continue to apply to the procurement of property
and/or services by agencies. The general procurement policy
framework is set out in Part 1 of the draft CPGs. In addition,
to implement FTA requirements, there are now mandatory procurement
procedures for ’covered procurements’. These
are set out in Part 2 of the draft CPGs. An overview of the
mandatory procurement procedures is set out below.
Open competition and non-discrimination
Under the procurement policy framework, the core principle
underpinning Australian Government procurement remains ‘value
for money’, based on whole of life costing. Value for
money is enhanced by:
- encouraging competition by ensuring non-discrimination
in procurement and using competitive procurement process;
- promoting the efficient, effective and ethical use of
resources; and
- making decisions in an accountable and transparent manner.
The concepts of non-discrimination and competitive procurement
processes clearly reflect the influence of the FTA. It is
significant that in the current and previous versions of
the CPGs, there was a recognition that non-competitive procurement
processes may be used where this could be justified on a
value for money basis. By contrast, the draft CPGs have a
greater focus on competition.
In addition, the draft CPGs require agencies to consider
the procurement of goods and services on the basis of their
suitability for their intended purpose, and not on the basis
of their origin. This will mean there is far less scope to
include industry development or local content requirements
in tender documentation, although agencies are still encouraged
to source at least 10% of their purchases by value from SMEs.
The focus on open competition is also reflected in the proposed
new requirement for agencies to publish annual procurement
plans to enable suppliers to be better aware about procurement
opportunities.
Mandatory procurement procedures
Covered procurements
The mandatory procurement procedures in Part 2 of the draft
CPGs apply to ‘covered procurements’. Covered
procurements are procurements that exceed the following monetary
thresholds:
- $80,000 for procurements in FMA agencies, other than
for construction services;
- $400,000 for procurements in relevant CAC bodies, other
than for construction services; and
- $6 million for procurements of construction services
by FMA agencies or relevant CAC bodies.
However, certain kinds of procurements are excluded from
the mandatory procedures (although not necessarily from the
other parts of the draft CPGs). These are set out in Appendix
A to the draft CPGs, and include leasing of real property,
purchases funded by grants or sponsorships and the procurement
of research and development services.
Open, select and direct sourcing
The mandatory procurement procedures have a presumption
in favour of open approaches to the market, that is, approaches
inviting submissions from any interested business. A more
restricted procurement process (ie ‘select tendering’ or ‘direct
sourcing’) is permitted only in limited circumstances.
Select tendering may be used only where an agency has a
basis for identifying all interested (or potentially interested)
eligible suppliers. However, this does not mean that an agency
can rely on its ‘knowledge of the market’ to
select suppliers for inclusion in its tender process. Agencies
may use select tendering only by shortlisting from an initial
expression of interest, or by using a multi-use list (eg
the current endorsed supplier arrangement) or by issuing
a tender to all suppliers who comply with essential external
legal requirements (eg suppliers who hold a particular kind
of licence).
An agency may use direct sourcing only in certain defined
circumstances. Direct sourcing is where an agency invites
one or more suppliers of its choice to tender. The circumstances
include cases of extreme urgency brought about by unforeseen
events, purchases made under exceptionally advantageous conditions
that only arise in the very short term, or in particular
cases where there is no reasonable alternative or substitute
supplier.
Other particular requirements
Part 2 of the draft CPGs also sets out particular requirements
that must be met by agencies in relation to the content of
their tender documentation and the tender evaluation and
contract award processes. In brief, agencies are required
to ensure that:
- conditions for participation are limited to requirements
aimed at ensuring a supplier has the legal, commercial,
technical and financial abilities to fulfil the requirements
of the procurement. These conditions may include a requirement
for relevant prior experience, but not a requirement that
the relevant prior experience is with a particular agency,
the Australian Government or in a particular location;
- tender documentation is available electronically (where
possible) and fully describes the nature of the procurement,
conditions for participation, evaluation criteria to be
used, and other terms and conditions relevant to tender
evaluation;
- as far as possible, any technical specifications are
specified in terms of functional and performance requirements
and based on international standards where they exist;
- a time limit of at least 25 days is given for suppliers
to lodge submissions (except in certain circumstances which
may permit a lesser period, but no less than 10 days);
- all tenders are assessed fairly and impartially and
are treated in confidence;
- contracts are awarded to complying tenders that represent
the ‘best value for money’; and
- reasons are given to unsuccessful suppliers.
Agencies should also be aware of the proposed requirement
that they put in place an internal review process for dealing
with any complaints arising from procurement processes. Agencies
will be required to ensure that suppliers have fair, equitable
and non-discriminatory access to the review process. The
involvement of an independent probity auditor in the review
process may be invaluable in assisting with the conciliation
and resolution of any complaints.
Application of the draft CPGs to CAC bodies
The decision to apply Part 2 of the draft CPGs to certain
CAC bodies is also significant. The current CPGs apply to
FMA agencies and not to CAC bodies. However, it is important
to note that the draft Ministerial Direction will not require
the relevant CAC bodies to also comply with other parts of
the draft CPGs, that is, the CAC bodies will not be subject
to those parts of the CPGs that set out the requirements
of FMAR regulations 9, 10 and 13. CAC bodies will also not
be subject to Part 3 of the draft CPGs which deals with other
Government policies that interact with procurement.
Further information
A more detailed analysis of the draft CPGs and the current
version of the CPGs will be contained in the forthcoming
edition of Commercial Notes.
For further information please contact:
Harry Dunstall
Senior Executive Lawyer
T 02 62537066 F 02 6253 7301
M 0417 201450
Government response to the Uhrig Review
The Government has adopted most of the recommendations
of the Review of the Corporate Governance of Statutory
Authorities and Office Holders. Ministers will review all
relevant bodies against the governance templates identified
in the Report. Also, responsible Ministers will prepare
a Statement of Expectation for most bodies, and the bodies
will respond with a Statement of Intent.
The Uhrig Review and Report
The review, headed by Mr John Uhrig, was commissioned by
the Government in November 2002. The objective of the review
was to improve the performance of statutory authorities and
office holders and their accountability frameworks. The terms
of reference required an examination of structures for good
governance, including relationships between statutory authorities
and the responsible Minister, Parliament, and the public
(especially business), and the identification of policy options
for improving performance and structures.
The review reported to the Government in June 2003. On 12
August 2004, the Government released its response to the
Report.
Most recommendations accepted; Reviews, and Statements
of Expectation and Intent
The Government has adopted all of the recommendations, except
the establishment of an Inspector-General of Regulation to
review regulatory authorities’ systems and procedures
in administering legislation. Instead of an Inspector-General,
the Government has announced a timetable for the review of
all relevant bodies.
Portfolio Ministers responsible for statutory authorities
and other bodies will assess the bodies against the governance
templates identified in the Report, with a view to implementing
any necessary improvements. The assessments are to be completed
by March 2006.
Significantly, the Government has agreed that responsible
Ministers should prepare Statements of Expectation for statutory
authorities, and other bodies. In response, the bodies are
to prepare Statements of Intent, indicating how they will
meet those expectations. The Statements will include the
values central to the success of the body, particularly those
relating to its relationship with the public. The Statements
of Expectation and Intent will be made public. The Report
recognises, however, that the Statements will have to be
carefully formulated taking into account each body’s
establishing legislation, and may not be necessary in some
cases (eg where the government does not have a role in providing
direction, or for government business enterprises).
Governance templates
The Report outlines two main governance templates for ideal
corporate governance for statutory authorities.
- Board Template: recommended only where the Government
delegates full power to act (including power to dismiss
the chief executive), such as for commercial operations.
- Executive Management Template: recommended where the
Government retains significant oversight, such as for regulatory
or service delivery organisations.
The Government response adopted the recommendation flowing
from these templates that Boards are appropriate only where
they can be given the full power to act.
Governance principles
After considering both private and public sector practices,
the Report identified good governance principles. In summary,
the principles are as follows.
- Owners, or their representatives, need to establish
an understanding of success for the activity, including
their expectations of performance.
- There should be a governance framework that is appropriate
for the entity given the nature of ownership and its functions.
- To be successful, the body must have the necessary power,
some of that power must be delegated, and the delegates
must take responsibility and exercise the delegated power.
- There should be clarity of roles within the governance
arrangements of organisations to ensure that efforts are
directed towards success and that responsibilities are
performed in an efficient manner.
- With responsibility there needs to be accountability.
- For a board of directors to be effective, it must have
the full power to act, including the ability to appoint,
supervise and remove senior management as well as approve
strategy.
FMA Act and CAC Act
The Government has also accepted the recommendation that
financial frameworks be based on the governance characteristics
of the authority. Hence Budget-funded agencies, whose money
and property should be held by the Commonwealth, typically
should be subject to the Financial Management and Accountability
Act 1997.
Where it is appropriate that the authority be legally and
financially separate from the Commonwealth and the authority
is best governed by a board, it should be subject to the Commonwealth
Authorities and Companies Act 1997.
AGS Governance Forum and further briefing
AGS will be hosting a Governance Forum later this financial
year for which a more detailed briefing will be prepared.
If you would like to be on our mailing list for that forum,
please email michelle.easte@ags.gov.au.
The Report and Government Response are available at:
Report
Government
Response
For further information please contact:
David
Lewis
Counsel
T 02 6253 7053
F 02 6253 7304
|
Anne Kelly
Special Counsel
T 02 6253 7004
F 02 6253 7316
|
Important: This note is provided to clients as an early,
interim view for general information only, and further
analysis on the matter may be prepared by AGS. The material
should not be relied upon for the purpose of a particular
matter. Please contact AGS before any action or decision
is taken on the basis of any of the material in this message.
Energy reform legislation
On 30 June 2004, two Commonwealth Acts, forming part
of national energy market reforms, received Royal Assent.
Current energy regulation
Current energy regulation involves:
- the Commonwealth Trade Practices Act 1974;
- co-operative legislative schemes for both electricity
and gas comprising:
- the National Electricity Law, and National
Electricity Code, under the National Electricity (South
Australia) Act 1996 (SA), applied as a law of the
jurisdiction by participating States and Territories;
and
- the Gas Pipelines Access Law, and National Third Party
Access Code for Natural Gas Pipeline Systems, under the Gas
Pipelines Access (South Australia) Act 1997, applied
as a law of the jurisdiction by the Commonwealth and
participating States and Territories; and
- State and Territory specific regulation of electricity
and gas, generally involving licensing and retail regulation.
Reforms
The recent Commonwealth Acts are part of changes to national
energy regulation outlined by the Ministerial Council on
Energy, comprising the energy Ministers from the Commonwealth,
States and Territories, in its report of 11 December 2003.
You can get the report or further information about energy
reform, and subscribe to regular email bulletins on energy
reform at this link.
The first stage of reform involves:
- establishing two new statutory bodies, the Australian
Energy Regulator, by the Commonwealth, and the Australian
Energy Market Commission, by South Australia;
- amending the National Electricity Law and Code to confer
functions and powers on the new bodies; and
- amending the State and Territory Acts which apply the
National Electricity Law and Code as a law of their jurisdiction,
and enacting a Commonwealth application Act.
In due course, the reforms will also bring gas regulation
under the two new statutory bodies, and make changes to electricity
retail regulation.
There are two Commonwealth Acts.
Trade Practices Amendment (Australian Energy Market) Act
2004
This Act amends the Trade Practices Act to establish the
Australian Energy Regulator as a body corporate with strong
organisational links to the Australian Competition and Consumer
Commission (ACCC). The Regulator will have one Commonwealth
member (also an ACCC Commissioner) and two State/Territory
members.
The Act also streamlines the process for changes to the
National Electricity Code. It allows the ACCC to rely on
consultations undertaken by the Australian Energy Market
Commission in the Code change process, when the ACCC does
certain things under Parts IIIA and VII of the Trade Practices
Act.
Australian Energy Market Act 2004
This is the Commonwealth application Act. It applies the
National Electricity Law, regulations and Code as Commonwealth
law in offshore adjacent areas. It also allows regulations
to prescribe further State or Territory energy laws to be
applied in the offshore areas.
The Acts are available at:
Australian
Energy Market Act 2004
Trade
Practices Amendment (Australian Energy Market) Act 2004
AGS was closely involved in advising the Department of Industry,
Tourism and Resources on formulating the Acts, and continues
to advise on energy reform. Cathy Reid and Kenneth Eagle
of AGS Melbourne are advising on commercial aspects, while
AGS Canberra are advising on statutory aspects.
For further information please contact:
Robert
Orr QC
Deputy General Counsel
T 02 6253 7129
F 02 6253 7304
M 0409 922 437
|
David Lewis
Counsel
T 02 6253 7053
F 02 6253 7304
|
Important: This note is provided to clients as an early,
interim view for general information only, and further
analysis on the matter may be prepared by AGS. The material
should not be relied upon for the purpose of a particular
matter. Please contact AGS before any action or decision
is taken on the basis of any of the material in this message.
29.01.04 Australia honours AGS Chief General Counsel
AGS Chief General Counsel, Henry Burmester, has been made
an Officer of the Order of Australia (AO) in this year’s
Australia Day awards. Henry was recognised for his ‘service
to the community in the field of law as Chief General Counsel
of the Commonwealth providing advice on diverse issues including
international law, and administrative and constitutional
matters’.
‘This award is a fitting accolade for a person who
has served Australia for more than 30 years as a government
lawyer, the last 8 or so as Chief General Counsel’,
said AGS CEO Rayne de Gruchy. Henry achieved high recognition
of his professional standing in 1998 when he was appointed
a Commonwealth Queen’s Counsel.
Henry plays a very significant role in AGS, and thus for
the Australian Government, in a number of respects:
- He is a source of high-level legal advice to the Prime
Minister, Attorney-General, and other Ministers, officers
of the Parliament, Secretaries of departments and chief
executives of agencies.
- He appears as advocate for the Commonwealth in important
cases in international tribunals, the High Court, the Federal
and Family Courts, and other courts and tribunals.
- He acts as Solicitor-General of the Commonwealth when
the Solicitor-General is overseas or on leave.
- As professional leader of AGS, he works with and is a
mentor to many AGS lawyers, assisting them with complex
matters and advice.
‘We are delighted for you and proud of you’,
said Rayne de Gruchy in congratulating Henry on behalf of
AGS.
News Release PDF
27.01.04 Launch of new AGS website
Welcome to our redesigned and restructured
website. It reflects the fresh approach we have taken to
our corporate identity, which includes an updated logo
and a new look for our documentation and marketing material.
As a government business enterprise operating as a commercial
and competitive law firm, we are keen for our visual identity
to help express our dedication to the needs of our special
group of clients.
We hope you’ll find the information
on the site interesting and useful, and that you’ll
be able to find your way around easily. However, if you’d
like some help with site navigation, please consult our
User Guide [PDF]
[DOC].
The new site has five information categories:
- Who we are
- What we offer
- Who to contact
- Publications & research
- Careers @ AGS
Explore
We encourage you to investigate the different doors and pathways into the site.
To gain an overview, you might like to look at the sitemap.
Search
To locate information quickly, use our search button. Tips
for searching will help you refine your searches. If you can’t find
what you’re looking for, please contact us at webhelp@ags.gov.au.
Feedback
If you encounter technical problems or have suggestions for improving the site,
please let us know.
© Australian Government Solicitor
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