National harmonisation of safety laws gathers momentum

The New Year is here. The year of harmonised national safety laws. 

The harmonisation process is well underway with the goal of achieving balanced and nationally consistent safety laws becoming ever closer after five jurisdictions recently enacted the Model Work Health and Safety Act (Model Act). 

New South Wales, Queensland, Northern Territory, Australian Capital Territory and the Commonwealth have all taken the final steps to ensure the commencement of the Model Act from 1 January 2012. While South Australia and Tasmania will likely take similar steps either later this year or early in 2013 to enact bills before their parliaments, Victoria or Western Australia are yet to release any bill. It is still unclear whether they will adopt the Model Act. But we are closer than ever to harmonisation.

For the mining industry, the Model Act will place the primary duties under the regulations on mine operators, and will endeavour to strike the right balance between providing the requirements that are necessary to maximise work health and safety outcomes without being too prescriptive. 

The status of the Model Work Health and Safety Regulations is a little less certain. While the regulations have been have been finalised by Safe Work Australia, they are yet to be adopted in all of the five jurisdictions which have agreed to adopt the Model Act.

So 2012 has begun, and will be a year to watch the safety space – especially for those in mining industry where safety remains a high priority.

The Big Freeze

A major part of risk management when operating across national boundaries involves a carefully constructed dispute resolution mechanism. Such mechanisms are intended to confine disputes to mutually agreed jurisdictions and procedures (usually international arbitration in an acceptably ‘safe’ country).

But how effective are such mechanisms? The reality is that parties to international contracts are at risk of foreign courts freezing their assets around the world, despite any dispute resolution clauses and despite there being no security over those assets.

Parties who fear that their counterparty might deal with its assets in a manner that would result in a judgment or arbitral award being wholly or partly unsatisfied may be able to approach courts other than the courts of the place where the dispute is being resolved to obtain orders freezing the counterparty’s assets in a jurisdiction where they may seek to enforce that judgment or award. These are known as ‘freezing orders’ or ‘Mareva orders’ (after the case in which they first came to prominence).

Freezing orders can have a major impact on businesses, their day-to-day operations, commercial negotiations and financing arrangements. They may be obtained even if:

• there is no dispute about the venue and method of dispute resolution
• the assets are located in a jurisdiction that is otherwise unconnected to the dispute; and
• the moving party has given no security over those assets to the person with whom they are in dispute.

The Federal Court of Australia recently froze shares worth over AUD$700 million in an Australian publicly listed company in a case involving three parties, none of whom actually operated in Australia, but one who held a significant parcel of shares in an Australian listed company. One of the parties subject to the freeze was not even a party to the contract. See The Big Freeze: Exposure to asset preservation orders around the world.

Parties seeking certainty as to the courts that may make interim orders might provide in their contract that the parties submit to the exclusive jurisdiction of particular courts for the purposes of interim relief. But such clauses are untested in Australia, could cut both ways and may affect the conduct of any proceedings for final relief. Are your international contracts sufficiently insulated against the big freeze that might come your way?