11 minute read
Helping avoid costly crane repairs
from AMT FEB/MAR 2021
by AMTIL
Advances in preventative maintenance help avoid costly crane repairs
Preventative maintenance isn’t just an investment in crane performance, it’s an investment in safety too. By Thomas Schnittger, Engineering Manager, Konecranes Australia.
When it comes to cranes, gone are the days where a fault would present itself, and then you’d call in a technician to fix it. The crane would be isolated and taken offline until the issue was identified and then repaired, creating costly downtime for busy facilities that just cannot afford unnecessary downtime. Konecranes has always had a corporate culture of putting safety first and advocates for an intelligent preventative maintenance programme over a ‘fix it once something breaks’ approach. All companies want every employee and visitor to return home safely at the end of the day, and preventative maintenance is an ideal way to keep crane machinery operating at optimal levels of safety. Crane machinery is generally designed for 10 years of operation, and crane structures for 25 years. For companies looking to extend or change usage, calculate remaining design life and maintain top levels of safety and Standards compliance, Konecranes can perform a Major Assessment. Major Assessments are a vital part of an ongoing preventative maintenance programme and a requirement of AS2550.1 2011 Section 9. They aim to identify maintenance needs and detect items that need repair before they fail. A Major Assessment is particularly useful if production needs are changing, with the crane’s usage likely to change as a result. It can provide a detailed overview and show whether the crane can match the updated operational needs. The assessment looks at structures, mechanical components and electrical systems, and highlights possible maintenance, modernisation or upgrade needs. In a Major Assessment, Konecranes specialists observe the production and operating environment of the crane. The overall condition of the crane structures and components is evaluated, with a focus on safety, productivity, reliability, usability and remaining design life. Operators and maintenance personnel are interviewed, and pertinent documentation is reviewed. The team provides a report and further consultation with advice on maintenance, modernisations and future investments In addition to Major Assessments, Konecranes now has a raft of advanced technology available to remotely monitor cranes and identify early warning signs. Technologies like Konecranes’ TRUCONNECT Remote Monitoring and Reporting can look more deeply into a crane in real time to identify areas that need to be serviced, or find previously unseen efficiency gains. Crane safety and compliance to Standards are two things that cannot be overlooked, even as Covid-19 changes the way businesses work across the globe. As the world’s largest crane service organisation, with more than 600,000 pieces of lifting equipment under service contract worldwide, Konecranes has extensive experience ensuring cranes are operating at peak efficiency and productivity.
www.konecranes.com.au
066BMS ACLR8
Business succession planning – now is the time to take control
As we start the new year, there is no better time than now to take control of your succession plan. Rachael Grabovic offers advice.
As we reflect on 2020, we will no doubt remember how unexpected life can be and how much is out of our control. However, there is one aspect of our lives we can control, and that is our estate planning. As we start 2021 with anticipation and possibly some trepidation, there is no better time than now to take control of your succession plan. The succession plan for a family business can often be quite complicated, especially where only one or some of the founder’s children work in the business or are interested in the business. Leaving your business interests to only those children who work in the business can cause disenchantment among the children, resulting in a potential challenge to the Will. Careful planning is required but there are strategies which can be implemented to mitigate any potential risk of dispute between those you leave behind. In this article we will review the importance of shareholder agreements and buy/sell agreements, and what can happen when these documents are not in place prior to death or incapacity. The value of formalising business owners’ arrangements
Shareholders’ and unitholders’ agreements are increasingly being implemented for companies or trusts that involve two or more arms’ length parties. There are very good reasons for this trend: such agreements help to guide decision-making, establish governance procedures and stipulate mechanisms to resolve deadlocks. Business owners are also increasingly entering into what is commonly called a ‘buy/sell deed’. This is a deed under which the owners of a business entity agree that, if one of the owners dies or becomes permanently disabled, the others will have an option to purchase that owner’s equity. Again, there is a very good reason for this trend. Specifically, owners are wary of having to be “in business” with whoever may become entitled to the control of the shares of the deceased or disabled owners (often the spouse or the children of the relevant owner). Importance of owners’ arrangements in succession planning
Unfortunately, these crucial agreements are often overlooked in the context of succession and family-owned businesses. For example, a business may have been started by a parent through a company in which he or she holds all the shares. Over the years, all three of their children have become involved in the business. The parent intends for the business to stay in the family and wishes to leave the business to those three children in equal proportions. Accordingly, the parent’s Will makes provision for each of the children to receive one-third of the shares upon the parent’s death. As the parent was the only shareholder until their death, the company has no shareholders’ agreement or buy/sell deed. The company constitution includes the usual provisions allowing a majority of shareholders to appoint directors by ordinary resolution, to control the issue of shares and generally to control the affairs of the company. If for any reason, one of the children falls out with the other two after the death of the parent, the two “majority” children can now effectively exclude the third one from the affairs of the company. They could remove any representation that person had on the board of the company. They may even seek to dilute the holdings of the third shareholder. The minority child’s only remedy may be to ask a Court to step in to prevent or rectify any oppression. While a Court will often grant some relief in these circumstances, the nature and extent of the relief to be granted is hard to predict. The litigation process will also usually involve significant costs. Alternatively, if one of the children subsequently passes away, their shares will be dealt with in accordance with their Will. For example, this may result in their shares being held by a spouse who was not intended by the parent to be a shareholder in the company. Implementing owners’ arrangements in succession planning
There are various potential ways to overcome these issues. If the business is conducted through a company or a unit trust, it is possible to make the gift of the shares or units under the Will conditional upon the entry into a shareholders’ (or unitholders’) agreement and a buy/sell deed. This would mean that each of the children in the above scenario would be required to execute the agreement and deed before they become entitled to the shares. The shareholders’ agreement could: • Ensure that each of the children had the right to appoint one director to the board (presumably themselves) even without a majority of votes • Make certain key business and corporate decisions (such as the issue of further shares) dependent on a unanimous agreement. The buy/sell deed could ensure that the shares stay in the family by, for example, giving each of the children an option to purchase the shares at market value if one of them dies or becomes incapacitated. Alternatively, some of these mechanisms could be implemented by a change to the company’s constitution (and/or the deed of the relevant trust). We can help
Rigby Cooke’s Wills, Trusts & Estates and Tax teams include experts in succession planning, taxation and business governance issues. Together, we can provide business succession strategies that are effective from both commercial and tax perspectives.We will help to implement your wishes and protect the business you have worked hard to build.
Rachael Grabovic is Partner, Wills, Trusts & Estates, Notary Public Ph: 03 9321 7826 RGrabovic@rigbycooke.com.au www. rigbycooke.com.au
The Right to Repair the unrepairable
Spurred by the impetus of the “Right to Repair” movement overseas, it is possible that in a year’s time Australia may have legislation in place. Guido Verbist explains the developments supporting this country’s moves towards the Right to Repair and the situation overseas.
The first Right to Repair legislation was introduced in Massachusetts USA in 2012, in response to a growing demand from motorists and independent car repairers to be granted access to spare parts. In the following years another 20 US States tried to introduce Right to Repair legislation. They were systematically challenged in court by companies such as Apple, Microsoft and Dyson. It’s now farmers driving the Right to Repair social movement in the US, through their efforts to gain access to the data and software needed to repair tractors and machinery manufactured by John Deere. In Europe a strong environmental agenda is driving the repair movement. An EU directive requires manufacturers to design products that minimise waste, save energy, are easier to repair and ultimately contribute to a sustainable circular economy. Soon, manufacturers will have to guarantee spare parts for 10 years for a range of white goods and lighting. Sweden has gone as far as introducing tax deductibility for the repair of larger household appliances and electronic items, and has reduced GST for repairs on items such as bikes and shoes. Australia can look to Europe to see the benefits of having the Right to Repair enshrined in legislation. It is estimated by the UK Green Alliance that the measures will save nearly 50 million tonnes of CO2. It’s also likely these measures to ensure sustainability will create around 700,000 new jobs by 2030. Making goods more repairable and encouraging and facilitating the repair culture saves natural resources, reduces waste and brings the world closer to achieving a circular economy, where components and materials can be reused many times. Globally speaking, the world requires a huge shift; businesses accustomed to generating ongoing revenue via ‘planned obsolescence’ or embedded proprietary software need to move towards a culture of Product Stewardship. The current practice – which makes it almost impossible to have items repaired by anyone other than the manufacturer – is too common. It goes against the manufacturers’ interests to allow customers access to a cheap and easy fix. This industry will not self-regulate; legislative action is required to create a level playing field. Locally, we have taken some significant steps. The October announcement by the Australian Productivity Commission that it plans to prepare legislation around the Right to Repair is encouraging. It is possible that in a year’s time Australia may even have legislation in place, or at least be very close to it. There has been a number of other developments supporting this country’s increasingly progressive stance on the Right to Repair. They include: • A successful legal claim brought by the Australian Competition and Consumer Commission (ACCC) against Apple under
Australian consumer law, for making the iPhones and iPads of 257 customers inoperable after downloading software from a third party repairer. Apple was fined $9m. The ACCC didn’t stop there. Taking cues from the US, they expressed support for the mandatory sharing of car repair information, and launched an inquiry to examine whether Australian farmers should have the Right to Repair their own machinery.
European Right to Repair campaign in Berlin, Sept. 2020
• A review of the Product Stewardship Act by the Department of Agriculture, Water and the Environment recommends broadening the Act’s objectives for product design improvements based on durability, reparability and reusability. • Federal Member for Parramatta, Julie Owens, raised the
Right to Repair campaign in Federal Parliament. Australia’s
Minister for The Environment, the Hon Sussan Ley MP, commended The Bower’s campaign and expressed the
Australian Government’s interest in Right to Repair, noting its environmental benefits. • The Morrison Government announced a Recycling
Modernisation Fund. While a positive step, it is a flawed approach. Until waste avoidance and extended producer responsibility are part of this initiative, Australia will fail to achieve best practice measures for achieving a truly circular economy. • The ACT Minister for Consumer Affairs, Shane Rattenbury, was successful in his lobbying of state and federal governments to request the Productivity Commission examine the economic benefits of a fostering the Right to Repair culture through an official Inquiry. This commission has so far published an Issues Paper outlining the scope of the inquiry and is calling for submissions in response to the paper from the community at large. It has formally identified a number of barriers that will be addressed during the inquiry (difficulty around e-waste disposal, planned product obsolescence, intellectual property rights) as well as the importance of grass roots organisations, tax breaks for repair and other regulatory and policy changes needed to encourage a thriving repair economy. As the EU experience has shown, Right to Repair legislation can offer an attractive alternative to the problem of overflowing, dangerous e-waste. As Australia’s resources grow scarce, while our recycling options continue to wane and our rubbish dumps continue to overflow, there is no time to lose.
