2014 June-September Consulting Matters by Consult Australia

WINTER - SPRING 2014

Leading

our sector The World in

Making the most of our resources

2020

Leadership charisma or learnable skill set

It’s always good to be first.

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Consulting Matters

CONTENTS

Nuclear Power

26 MAKING THE MOST OF OUR RESOURCES Industry updates Industry updates

What’s happening in Consult Australia

Greenfields reform to balance investment future

Nuclear Power

Work isn’t working for women

Business essentials

From the President

From the CEO

Consult Australia Board: two new appointed Directors

Consult Australia staff appointment

The Business of Sustainability

The solution to Australia’s future isn’t a riddle

Turning on the lights

Our industry

Modular Construction

Trimble Building Opus

To PPIR or not to PPIR?

Making the most of our resources

Aurecon’s journey to meaningful reconciliation partnerships

Leadership – is it charisma or a learnable skill set?

Protecting your business

Super funds: Homework the key to funding success

Education and art offer a new life away from the dump

Does professionalism matter?

State Division updates

Corporate social responsibility

The World in 2020

Understanding the business case for Environmental Upgrade Finance

Competition Law Review

Features

Modular Construction

Cover image: Pluto LNG Pluto LNG onshore gas plant courtesy of Woodside

Industry comments What do you think is the most pressing issue our industry is today facing? Submit an industry comment to Consulting Matters by sending an email to our Editor at kisanne@consultaustralia.com.au. You can speak about any subject matter you wish. Write about issues you feel are important to the consulting industry—government policy, business issues, opinions on consulting related topics, changes you feel the industry should make or anything in between!

Consulting Matters

Industry updates

Industry updates NEW APPOINTMENTS

New beginnings for Singleton

Arup Group appoints new Chairman

New CEO for Aurecon

One of Australia’s leading experts on planning, infrastructure, resilience and leadership is retiring from his role at Arup after 40+ years with the firm. David Singleton, who was CEO of Arup from 1999-2004 and President of Consult Australia from 2000-2002, says he will continue to be a voice for the engineering industry. David will continue in his role as Chairman of the Infrastructure Sustainability Council of Australia and with his roles on Boards including Standards Australia and Swinburne University of Technology.

Arup has seen recent movement with Gregory Hodkinson taking over the role of Arup Chairman; joined by Deputy Chairmen Tristram Carfrae and David Whittleton. Hodkinson brings more than 40 years’ experience in large-scale projects to the new role, including the Sony Centre in Berlin; Darling Harbour Development in Sydney; Terminals 2,3,4,5 and 7 at JFK Airport; and the Fulton Street Transit Centre and Second Avenue Subway projects in New York.

Global engineering and technical services company Aurecon has announced the appointment of Giam Swiegers as its new Chief Executive Officer (CEO) effective 1 February 2015. Giam leaves his current role as Chief Executive Officer of Deloitte Australia after a highly successful 12 years in the role. He will be based in the company’s Sydney office.

URS appoints new Managing Director URS has appointed Bob McGowan as Managing Director, Australia. Having previously served as the firm’s Regional Manager, Queensland, his background includes leadership in delivering major infrastructure projects, such as Legacy Way and joint venture alliance partnerships including the Hinze Dam Stage 3 project. Mr McGowan also has a strong focus on health and safety, and has recently been appointed to the Safety Leadership Group for the Coal Seam Gas/LNG industry in Queensland.

New Chief Executive appointed to lead AECOM’s Australia New Zealand business AECOM has announced the appointment of Lara Poloni as Chief Executive—Australia New Zealand (ANZ). Ms Poloni replaces Michael Batchelor, who has stepped down as Chief Executive to pursue opportunities outside AECOM. Formerly AECOM’s Managing Director—Southern Australia, Ms Poloni has been a key member of AECOM’s Australia New Zealand executive team for several years, commencing her AECOM career twenty years ago as an urban planner in its legacy Maunsell business in Melbourne.

Harrison Grierson appoints GM—Australia Harrison Grierson has appointed John Moore as General Manager for its Australian operations. Mr Moore is a highly experienced civil engineer and has joined the firm for this newly created role from a large international engineering consultancy where he was New Business Manager in Australia.

C-Suite moves bolster strategic growth at NDY Following a successful period as Perth office manager, NDY director Andrew Macgregor is moving to build on the firm’s growing opportunities in the resources sector. Andrew will also lead the ongoing development of NDY’s presence in South East Asia, fostering relationships with clients that operate between Australia and SE Asia. Meanwhile, fellow NDY director Alan Edler is taking on the mantle of NDY Perth Office Director-in-Charge following a successful stint improving NDY’s profile and performance in the Canberra market. Alan brings his 15 years of industry experience to complement the Perth executive team, managing the ongoing success of NDY’s WA operations.

SMEC CEO Ross Hitt retires Ross Hitt has been CEO and Managing Director of SMEC since January 2009. During this period, Ross has strengthened the SMEC brand, epitomising the Company’s ethos of ‘Local People. Global Experience.’ and has grown the Company to more than 5,500 people working across a network of over 40 countries, with projects delivered in over 100 countries.

SMEC appoints new CEO Andrew Goodwin took over the role of CEO effective 2 July 2014. With over 30 years of engineering experience in South Africa, Europe, Asia and the Middle East, Andy joined SMEC in mid-2012 as Chief Operating Officer (COO) of SMEC’s South Asia Middle East Division. A member of SMEC’s Executive Committee (since 2012), Andy is ready for his next challenge as CEO.

Beca NSW Regional Manager – Peter Twomey Beca has recently appointed Peter Twomey as NSW Regional Manager. Peter has 28 years’ experience in design, construction management and leadership roles having worked across the rail, ports & marine, telecommunications and government sectors.

Industry updates

Beca QLD Regional Manager

INDUSTRY UPDATES

Beca has recently appointed Mark Griffiths as QLD Regional Manager. Mark brings with him over 25 years of consulting experience, with extensive experience in managing multidisciplined services agreements and project teams in the steel, mining, pulp & paper and beverage industries.

Cardno buys US oil and gas consultancy Cardno has purchased US company PPI, a specialist consultancy in the oil and gas sectors, for $US145 million ($160 million) in a deal the Brisbane-based company said would boost its earnings immediately. Cardno has raised $50 million through a placement as part of the deal.

Consulting Matters

SLR’s growing market prompts New Zealand opening Leading independent environmental firm, SLR Consulting, has opened a central New Zealand base in response to a growing market for its multi-disciplinary services across the Infrastructure, Mining, Oil and Gas, Renewables and Waste sectors. SLR will trade in New Zealand as SLR Consulting NZ Limited.

URS to join AECOM Parsons Brinckerhoff Regional Director WA – Andrew Schroth Parsons Brinckerhoff’s team in WA has welcomed the appointment of Andrew Schroth as Regional Director. Mr Schroth’s remit is to continue to work to strengthen the Parsons Brinckerhoff footprint in Western Australia by strengthening team capability in response to the identified needs of the local marketplace.

Farewell and Welcome—Property Council of Australia changes CEO After more than two decades at the helm as Chief Executive of the Property Council of Australia, Peter Verwer has retired to head the Asia Pacific Real Estate Association, based in Singapore. Playing a key role in the development of the Green Building Council of Australia, and a powerful voice for the built environment with every sphere of government, Peter will be much missed as a great friend of Consult Australia. We congratulate the incoming Chief Executive, Ken Morrison, who re-joins the Property Council from his most recent role as Chief Executive Officer of the Tourism and Transport Forum, having previously served as the Property Council’s Chief Operating Officer and Executive Director of the organisation’s NSW Division.

MAJOR WINS PB staff member wins global ‘Compliance Specialist of the Year’ Parsons Brinckerhoff Senior Ethics and Compliance Officer for Asia-Pacific and Africa, Kathryn Higgs won the ‘Compliance Specialist of the Year’ at the 2014 Women in Compliance Awards in London. Ms Higgs, who has worked with the firm for two years and is shortly to assume the role of Head of Ethics and Compliance for Balfour Beatty in London, has an established background in corporate fraud and antibribery compliance and litigation.

On 13 July 2014 URS Corporation and AECOM Technology Corporation announced they had signed a definitive agreement under which URS will join AECOM. The transaction is expected to close in the fourth quarter of 2014. Until then they will continue to operate as two completely separate companies and it is ‘business as usual’.

GHD and Conestoga‐Rovers & Associates unite GHD has merged with Canadian firm Conestoga-Rovers & Associates (CRA) in an all-share deal through which GHD will be able to expand its water, property and transport services to CRA’s northern American clients such as Chevron, Shell, ConocoPhillips and General Motors. The firm is also purchasing architecture firm Woodhead, furthering the firm’s move into architecture.

Editor Kisanne Dulin

President Matthew Harris

Chief Executive Officer Megan Motto

Director of Membership Julia Lemercier

Director of Marketing & Services Kisanne Dulin

Director of Policy & Government Relations

Hyder Consulting acquires Flinders Group Hyder has announced that it has acquired Flinders Group, a leading planning, environment and project management services firm headquartered in Brisbane. Flinders Group employs 70 staff and specialises in offering services through each stage of the infrastructure lifecycle from initiation to planning and delivery. The Flinders team have delivered a portfolio of successful projects across the energy, environment, mining, property, transport, power transmission and water sectors.

Jonathan Cartledge

Senior Advisor, Policy & Government Relations Robin Schuck

National Events Manager Alexandra Hopper

Corporate Designer Voltaire Corpuz

Editorial submissions kisanne@consultaustralia.com.au

Advertising enquiries info@consultaustralia.com.au Consulting Matters is produced by Consult Australia. Phone: (02) 9922 4711. Website: www.consultaustralia.com.au

For enquiries about advertising in Consulting Matters please contact the editor Kisanne@consultaustralia.com.au.

Back row left to right: Paul Davis Hyder, Paul Tracey Flinders, Darren English Hyder, John Cotter Flinders. Front row (shaking hands) left to right: Shane McDowall Managing Director of Flinders and Greg Steele Hyder’s Managing Director for Australasia. Photo courtesy of Hyder Consulting.

Consulting Matters

What’s happening at Consult Australia

From the President ...a Leader needs to be able to anticipate; to be constantly vigilant and have the ability to anticipate change; they also need to be able to challenge; by questioning the status quo, challenging their own and others assumptions and encouraging divergence through patience and through keeping an open mind.

Much has been written about leadership, leaders, leadership skills, leadership qualities, leadership strategies and of course about the fact that great companies are created around great leaders— but what does it all mean..? Where does it all take us..? Our industry, the built environment, has been a most unpredictable environment over the past eight years or so; we have seen leaders come and go across all aspects of the profession and we have seen new leaders emerge with a range of mergers and acquisitions. Our recent CEO Conference saw many of our industry leaders come together to discuss good business practice, integrity, trends and economics— but what makes these people leaders? What does good leadership look like? Is it simply good luck or just being in the right place at the right time? Or is it a complex strategy by an individual to self-promote or exploit an organisation at a time of weakness? Research would suggest that leadership can be learnt, however good strategic leadership requires a well-balanced skill set allowing leaders to think strategically and navigate the unknown. My personal experience is that the most effective leaders are those who are prepared to set the example, have a clear vision that they are able to articulate well, they are good and willing listeners, who make it about the people they lead, they are adaptable, and are willing to learn or be coached, but perhaps above all, they are those that show integrity by doing what they say

they are going to do—when and how they say they are going to do it. Of course it is also essential that they possess the core leadership skills of being able to anticipate, challenge, interpret and decide— but I believe that it is when these skills are married together with personal humility and professional will that is becomes great leadership and that great leaders emerge. To expand on the above: a leader needs to be able to anticipate; to be constantly vigilant and have the ability to anticipate change; they also need to be able to challenge; by questioning the status quo, challenging their own and others assumptions and encouraging divergence through patience and through keeping an open mind. In utilising these skills to best effect they become subject to a vast array of information which they must then be able to interpret in order to expose the hidden implications; and it is then that they need to be able to decide; being willing to make the tough calls and balance speed and rigour, account for short and long term goals and bring to the fore the courage of their convictions. A great leader needs those skills, but also needs to add personal humility; which is demonstrated through acting modesty and with quiet calm and determination, and by channelling ambition into the company and the people they lead rather than into themselves (or as author Jim Collins puts it “… looking not in the mirror at one’s self, but out of the window to other people to apportion credit is the sign of a great leader…”) and professional

will; which in my view reflects the ideology that it is the leader that creates results, demonstrates resolve, sets standards and has the ability to take responsibility whilst sharing credit and not blaming others for mistakes. With great leadership we will build great companies and our industry will continue to thrive, there are many great leaders amongst us, every day we work with people that are driven, and self-effacing, the challenge is for the company boards to engage with those that show humility and the will to create results.

Matthew Harris President

What’s happening at Consult Australia

Consulting Matters

From the CEO As our industry continues to experience patchy market conditions, many firms have been implementing a heightened level of internal change, which has seen a lot of movement in the leadership ranks of our sector. This was evident in the number of new faces at Consult Australia’s ASPAC CEO Conference, where over 50 leaders of our industry in Australia and abroad gathered to discuss the difficulties currently being experienced and the future of our industry more broadly.

(especially in times of difficultly) takes great strength and resolve, but also an element of humility and vulnerability.

The first of its kind, the Conference was an exclusive event for the CEO’s (and Chairmen/ other C-suites) of Asia Pacific’s major consulting companies to come together to discuss the major issues facing our industry and our region in particular. Strong attendance from the international community via our FIDIC connections also made for valuable contributions to the debate, with Europe, UK, India and Indonesia well represented.

So these patchy times provide a fabulous opportunity for many new leaders in the built environment professions to prove their mettle and manage through times when work is scarce, competition is fierce and margins are squeezed. This requires some different leadership qualities, such as flexibility and resilience. Just as the test of a building or road is more about how it weathers a storm rather than sunny days, the test of great leadership is how we manage through the tough times more than the good.

The Conference provided an opportunity to discuss the impact of the economic and political climate on markets and growth strategies and offered a platform to CEOs for high level financial and strategic advice to help position and direct their corporate vision, mission and corporate strategy.

They say a problem halved is a problem solved. We certainly know this to be true on projects where strong, diverse teams provide the best solutions. But it is also true in our businesses, where cohesive executive leadership and transparency with the workforce are critical factors in implementing necessary change.

It was also a wonderful opportunity for many of our industry’s leaders, old and new, to connect with each other and remind themselves that united as an industry (through Consult Australia), we stand stronger than individually.

Coming off the back of a couple of decades of boom years for our industry (closely linked to the capital investment phase of the mining sector), steering the course has been about managing resources and building profitability by working for the right clients in the right markets. My Canadian colleague John Gamble often laments that our industry is so distracted by best practice consultant selection that we tend to forget about client selection. Being selective, however, is much harder when the pipeline dries up.

It also gave a platform for some of our sector’s most distinguished leaders, like John Grill from WorleyParsons and Ian Shepherd from GHD to demonstrate to the next generation of leaders some of the qualities that give rise to both sustainable and transformational leadership. What struck me the most from these conversations is that great leadership

This is when the advocacy efforts of Consult Australia become even more important, reminding governments (as both clients and policy makers) that the long term viability and sustainability of our industry (and the resultant infrastructure outcomes that political hats are now hung on) depends on stability, collaboration and reasonable contract terms.

With these issues in mind, Consult Australia will continue our collaboration and advocacy with our national and international counterparts over the coming months, in particular through our participation at the Annual FIDIC Conference in Rio in late September. Australia’s leadership in forums such as this strengthen our global position and cement our relationships with our sister organizations abroad. I encourage members to consider attending. And finally, what better way to showcase leadership than through a winning entry in the Consult Australia Awards for Excellence! This year we received a smaller amount of entries (demonstrating the leaner times I expect), but they are of outstanding quality as always. I look forward to sharing in the celebrations with members and guests (with a post-World Cup Carnivale theme) in Sydney on Friday 5 December.

Megan Motto Consult Australia

Consulting Matters

What’s happening at Consult Australia

Consult Australia Board: two new appointed Directors CONSULT AUSTRALIA IS PLEASED TO WELCOME ANDREW MATHER (WSP BUILDINGS) AND BRUCE SHAW (THE BUCHAN GROUP) AS OUR TWO NEW APPOINTED DIRECTORS TO THE CONSULT AUSTRALIA BOARD. ANDREW AND BRUCE JOIN CONTINUING DIRECTORS: MATT HARRIS (RIDER LEVETT BUCKNALL), JAMES WRIGHT (BECA) AND JOANNE METCALFE (GHD), RE-ELECTED MEMBER: IAN HOPKINS (NDY) AND NEW MEMBERS: CAMILLE MCGREGOR (JACOBS SKM), NEILL STEVENS (NS PROJECTS) AND KIRI PARR (ARUP).

I BELIEVE THAT CONSULT AUSTRALIA PLAYS A CRITICAL ROLE IN REPRESENTING OUR INDUSTRY TO GOVERNMENT AND OTHER STAKEHOLDERS, IN A MANNER THAT CANNOT BE DONE BY INDIVIDUAL MEMBERS. I AM EAGER TO USE THE EXPERIENCE GAINED FROM SERVING ON THE BOARD OF A SIMILAR INDUSTRY BODY IN ANOTHER COUNTRY, AS WELL AS FROM RUNNING BUSINESSES ACROSS 13 DIFFERENT COUNTRIES, TO PROVIDE A DIFFERENT PERSPECTIVE TO BOARD DISCUSSIONS. I AM VERY KEEN TO MAKE A DIFFERENCE AND TO GIVE BACK TO THE INDUSTRY.

Andrew Mather Regional Managing Director WSP Buildings Andrew Mather is the Regional Managing Director of WSP Group for the Asia Pacific Region. Andrew has over 25 years’ history as an integral part of the development of the WSP Group including CEO of WSP Africa and Regional Managing Director for WSP Group’s Asia Pacific Region. He is responsible for WSP Group’s interests in the region and for expanding the region both geographically and into new disciplines and sectors. Andrew was on the Council of the Consulting Engineers South Africa (CESA) for seven years prior to re-locating to Australia.

THE VOICE OF THE ARCHITECT NEEDS TO BE HEARD IN THE DEBATE AND DISCUSSION ABOUT THE ROLE OF CONSULTING PROFESSIONALS IN THE DYNAMIC AND FAST-CHANGING PROPERTY DEVELOPMENT SECTOR. I HOPE TO BRING THAT VOICE TO CONSULT AUSTRALIA, SPEAKING FOR MY PEERS FROM MY OWN YEARS OF EXPERIENCE.

Bruce Shaw Managing Director The Buchan Group Bruce Shaw is a leading designer and master planner of large-scale retail, mixed use and town centre developments. He has led The Buchan Group on projects such as Emporium Melbourne and Myer Melbourne, Westfield London and Westfield Stratford City, the Chatswood Chase development in Sydney, the Vogue mixed use development in South Yarra, Epping Plaza and Werribee Plaza shopping centres and Watergardens Town Centre, Taylors Lakes. Currently Bruce has projects underway in Canada and South East Asia. Bruce is the Managing Director of The Buchan Group in Melbourne and plays a key role in the strategic direction and leadership of the Firm.

What’s happening at Consult Australia

Not a member of Consult Australia? To find out more about how your firm can benefit from our: • Benchmarking

Consult Australia welcomes new member firms:

Management for Design Material Connexion Australia McGill-Morton & Associates Pty Ltd

B. E. Lewis Engineering Pty Ltd Clark Engineering Consultants Construction Assignments Pty Ltd

• Staff development

mgp building and infrastructure Pty Ltd Michels Warren Munday

Craden Projects Pty Ltd

Midas Engineering Group

EPCM Consulting Pty Ltd

MYD Consulting Engineers

Florian Fire Consulting Pty Ltd

NMM Professional Services Pty Ltd

• Business development

FortisEM

Contact Consult Australia’s Director of Membership, Julia Lemercier on (02) 8252 6702 or email julia@consultaustralia.com.au

Irwinconsult Pty Ltd J Wyndham Prince Pty Ltd

Alchimie Pty Ltd

• Business support

• Advocacy

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Gamcorp (Melbourne) Pty Ltd

Osborn Lane Consulting Engineers

Hydricity Systems Australia

Red Mallee Pty Ltd

Infra Tech Pty Ltd

Tweed Coast Consulting Engineers

Instech Group

www.consultaustralia.com.au

Consult Australia staff appointment Senior Advisor, Policy & Government Relations Natalie Williams Natalie joined consult Australia in July 2014 with responsibility for policy and advocacy in Western Australia. Natalie brings with her a strong background in law and public policy, with her experience mostly centred around the energy sector in Western Australia. Natalie previously worked as in-house legal counsel for the ACCC/AER, Principle Policy Advisor for the West Australian Public Utilities Office and most recently as Legal and Policy Analyst for ATCO Gas Australia. Natalie has a degree in law and Diploma in Japanese from the University of Western Australia and spent some time working in a Japanese law firm for her studies.

www.thebusinessofsustainability.com.au Gold sponsor

Consult Australia’s The Business of Sustainability website guides professional services businesses of all sizes and disciplines, at any stage of their journey, towards a more sustainable business. The website is live at www.thebusinessofsustainability.com.au

Consulting Matters

Whatâ&#x20AC;&#x2122;s happening at Consult Australia

Change. For the first time in history, more than half the planet makes its home in cities. By 2030, an estimated two thirds of us will. And itâ&#x20AC;&#x2122;s through cities that the built environment allows communities to come together to share experiences, exchange capital, goods and ideas, and where we build our most ambitious and symbolic structures. We believe that the built environment is where environmental, economic and social imperatives converge to play a vital part in our future. This future will include buildings, facilities and infrastructure that contribute positively to energy creation, carbon reduction and reduced reliance on natural resources. Positive impact; NDY is already contributing to this evolution.

ndy.com/sustainabilityreport

What’s happening at Consult Australia

Consulting Matters

The Business of Sustainability Consult Australia, with the support of Norman Disney & Young (NDY)—has released a landmark new tool to be used by the professional services industry to improve business sustainability. thebusinessofsustainability.com.au will help guide professional services towards the delivery of a better business in every sense: more efficient, smarter, more competitive and more profitable. The project has been led through Consult Australia’s Sustainability Roundtable and a Task Group comprised of some of Australia’s leading sustainability professionals from member firms AECOM, Arup, Aurecon, GHD, Jacobs SKM, Parsons Brinckerhoff, URS, and Norman Disney & Young who are also the Gold Sponsor of the project. The Business of Sustainability website provides a Decision Support Tool structured across four broad-based activity areas: sustainable governance, reporting and accounting; internal engagement and staff culture; collaboration and engagement; and technological improvements to offices and infrastructure. The authors have developed a catalogue of questions—structured under the four activity areas—against those key issues firms should consider. The site is premised on the view that any plan for sustainability must be fully integrated with the day-to-day business practices of the organisation. The questions provided as part of the Decision Support Tool are designed to assist firms to identify the path by which they are most likely to achieve their corporate vision. The Business of Sustainability has been developed with a particular focus on professional services firms including legal, accounting, finance, management, consulting or government; of all sizes and disciplines, at any stage of their journey. For these firms—whose dominant capital sits within people rather than plant or equipment—the path towards sustainability is not always clear and nor is there one correct path. NDY’s global director of sustainability, and former Chair of the World Green Building Council, Tony Arnel agrees. “This site demonstrates that every firm must consider its own circumstances, commercial objectives and social and environmental

responsibility before deciding which interventions they will use to achieve more sustainable practices, products and ultimately business. “In recognition of the diversity of professional services firms, the aim of this website is to stimulate what will be a sometimes unpredictable dialogue around sustainability and to act as an aid for firms who are trying to identify and develop their own journey.” The site also includes an exploration of the challenges that often arise on the path to sustainability; many unique to professional services businesses. Knowing what you are talking about, mistaking superficial change for real action, and the importance of drive and vision are all explored in detail. How these challenges are overcome is explored through inspiring illustrations of best practice. The website provides a review of a sample of activities undertaken across a range of organisations in Australia, all

with the common goal of supporting more sustainable business practices in professional services firms. Consult Australia members are encouraged to use The Business of Sustainability to support their firms success, but also to promote The Business of Sustainability to clients and peers across industry. This is a fantastic example of the value our industry can offer to the wider business community and the amazing work and expertise that sits within our member firms. www.thebusinessofsustainability.com.au

Jonathan Cartledge Director of Policy & Government Relations

Consulting Matters Whatâ&#x20AC;&#x2122;s happening at Consult Australia

Competition Law Review IN LATE MARCH, COMMONWEALTH MINISTER FOR SMALL BUSINESS, THE HON BRUCE BILLSON MP, ANNOUNCED THE TERMS OF REFERENCE FOR A ROOT AND BRANCH REVIEW OF AUSTRALIAN COMPETITION LAW. THE REVIEW, TO BE CHAIRED BY PROFESSOR IAN HARPER, REPRESENTS THE FIRST MAJOR REVIEW OF THESE LAWS SINCE THE 1993 HILMER REVIEW. Given the importance of competition laws to the operating environment for our industry, the review is a timely opportunity to consider those regulations that inhibit our ability to compete for work, and other aspects of the legal and policy framework that affect our industry. In developing our response to the inquiry and the initial discussion paper, Consult Australia will be focusing on three broad issues. The first of these relates to the prohibition on cartel conduct, and how it applies to the establishment of joint ventures. Under this law, businesses are prohibited from engaging in a range of anti-competitive behaviour including price fixing, rigging bids, sharing markets, or controlling the level of output available to the market. There is a specific exemption for joint ventures, provided that the arrangement or understanding between the parties is set out in the contract. Where this creates a potential issue for our industry is in the lead up to establishing the joint venture. The law is unclear around the question of price signalling as parties negotiate their arrangement, and we will be submitting that the law be adjusted to provide clarity and certainty to those businesses who enter into joint ventures. The second of the issues Consult Australia will be raising relates to general barriers to competition, and especially situations where a public sector agency is the end client. In our

industry, the high cost of tendering, together with a range of poor risk management and procurement practices represent a significant disincentive for industry to tender for work, in turn reducing competition. While procurement and risk is not the central focus of the inquiry, the terms of reference are wide enough to encompass all issues that stymie competition. As the procurement environment in which we operate is a significant source of red tape, and onerous risk, it will be interesting to see the response (if any) from the review. The third of the issues we will be raising in our submission is the use of the prohibition on misleading and deceptive conduct in litigation against consultants specifically. Misleading and deceptive conduct is prohibited as a consumer protection to prevent consumers from being fraudulently induced into entering a contract, often through purchasing a good or service. However, increasingly this prohibition is being added into claims against consultants where they have undertaken a forecast for a feasibility study, and the final report is erroneous. While the contract and negligence law would ordinarily deal with such an error by a consultant, a charge of misleading and deceptive conduct goes further, and has the effect of overcoming any contractual limit on liability. While this review will only partially be considering consumer protection elements of competition law, this practice is important to place on the agenda, and does also represent a disincentive to competing for certain types of work. The review is expected to be completed within 12 months, although there will be further opportunities for comment as it progresses. We are confident that the final report of the Harper Review will provide business, and our industry, with a blueprint for more efficient competition laws that

The law is unclear around the question of price signalling as parties negotiate their arrangement, and we will be submitting that the law be adjusted to provide clarity and certainty to those businesses who enter into joint ventures.

continue to evolve to match our needs as consumers and taxpayers, while also respecting the requirements of business operating in a strong and functioning marketplace.

Robin Schuck Consult Australia

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Forecast 2014 An economic forecast for consulting in the built and natural environment On sale now To purchase your copy go to http://bit.ly/caforecast

Consulting Matters What’s happening at Consult Australia

STATE DIVISION UPDATES WA UPDATE Consult Australia WA Division continues to have a strong focus on lobbying and advocacy and we are proud to welcome our new Government Relations and Policy advisor Natalie Williams who will work alongside our State Manager Josephine Howlett to further enhance our profile. Our final Consult Australia event for the 2013-14 financial year was on 30 May with Peter Coleman CEO and MD of Woodside as our guest speaker. This is the third time Peter has presented at our breakfasts and as always, this was well attended. Peter was informative, incisive and witty in responding to the probing enquiry of Mark Pownall, Editor at Large from WA Business News. We also took this opportunity to present David Porter with his well-deserved Life Membership from Consult Australia. We have commenced a new boardroom luncheon series which aims to promote closer ties with politicians—Federal, State and Local. Our first luncheon was on 2 July where Senator Scott Ludlam, outlined the rationale behind his party’s policies and the challenges to the new Senate.

ACT UPDATE Consult Australia’s ACT Division has continued to embed strong relationships both at a federal and local level. The first meeting of the ACT Federal Committee has established a new capability within Consult Australia in the ACT that will help further deepen our relationships with the Commonwealth Government both as policy maker and as client for many of our member firms operating in the Territory. With Boardroom lunches now being organised with senior representatives from the Department of Defence, and the Department of Infrastructure and Regional Development, our ACT members are continuing to raise their profile and engage on those issues critical to the future of the industry. Later in the year the publication of the Northern Australia White Paper will

FutureNet likewise continues to have great attendance from an increasing number of members and their guests. Our final FutureNet event of the year was a panel discussion involving architect Andrew Low, project manager Neill Stevens, engineer Angus Leitch and lawyer Claire Pope. WA Business news journalist Dan Wilkie once again proved there is no such thing as a free breakfast, making the panel work hard responding to numerous issues important to young practitioners in the construction and design professions.

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Platinum Sponsors:

Another great turnout was for the FutureNet breakfast with Gareth Parker, State Political Editor for The West Australian. The breakfast, titled ‘Painting the State Political Landscape’ was entertaining and very informative. Consult Australia continues to work closely with the Built Environment Design Professions engaging with BMW to improve their conditions of engagement and we are currently focused on the direct engagement of all consultants.

Gold Sponsors:

We are pleased to advise that Jackson McDonald and St George Bank have recently confirmed their ongoing sponsorship of Consult Australia.

provide a framework to consider further engagement with the Commonwealth Government as they look to explore this issue further and tap into our members expertise in the ACT. At a local level, continued discussions with the ACT Government work to deliver better value both for our members and government. These have been supported by productive conversations with the office of the Chief Minister, an engaging Boardroom lunch with Deputy Chief Minister Andrew Barr and continuing conversations with senior levels of the ACT public service. Our ACT FutureNet has launched The Future Sessions in conjunction with Brand Canberra, CBR. The aim of The Future Sessions is to mix personal development with city development; promote collaboration; and develop an awareness of bigger picture issues—to put the ‘can be’ in Canberra. With a launch event at

the National Library, followed by Shadow Assistant Treasurer Andrew Leigh MP talking about economic growth at the National Arboretum, The Future Sessions are tapping into an exciting energy in Canberra’s young professionals. The second event, ‘Glass Ceiling’ at the Canberra Glassworks saw the launch of the inaugural Chief Minister’s Challenge.

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STATE DIVISION UPDATES VIC UPDATE The Victorian Division started the new year with a line up of fantastic events. Our first event for our ‘Meet the Client’ series was held on 3 April with VicRoads, Chief Operating Officer, Peter Todd. BRS Results Director, Kym Williams also hosted a seminar providing tips and techniques to assist our member firms with their next bids. Our annual Economic Forecast event, hosted by Geoff Bills, proved very popular with many of our members wanting to hear about economic trends and the future of the Consulting Industry. We have an exciting line up ahead, with Contractors and delivery agencies presenting to our members. We hope to see you there! Our Policy Paper for 2014 has been released as a means of engaging with Government

and stakeholders on various issues the industry is facing within Victoria. Our recommendations are outlined within the paper. We were fortunate enough to attend the Minister of Public Transport & Roads, Terry Mulder MP’s, 2014-15 State Budget Infrastructure Breakfast and look forward to attending more government initiatives and meetings on behalf of our industry.

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The Hon Louise Asher MP also invited us to meet with her to discuss Employment & Trade, providing another way to advocate on behalf of our members and ensure the industry is best placed when government is making decisions. We will continue to discuss procurement, contracts and risk concerns with VicRoads, and give them the opportunity to hold workshops with member firm representatives to ensure best policy practice is put into place.

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TAS UPDATE The Tasmanian Division recently hosted a Professional Indemnity Insurance Seminar entitled ‘Managing your professional risk.’ Bovill Risk & Insurance Consultants’ (BRIC) Broking Manager, Darren Pavic, outlined the unique way in which professional indemnity policies operate and explained the implications for professionals. Thank you to pitt&sherry for sponsoring this informative event. Gold sponsor Easyconsult has hosted a series of webinars providing Tasmanian members with another opportunity to view these fantastic presentations without having to leave their desks! Topics such as, ‘How to build a $1M consulting practice in 12 months’; ‘The 7 high performance habits of great consultants’; ‘The 7 steps to world class time management’ and ‘From being known as technical to a great consultant’. If you missed out and would like to view the webinars, please email zeina@consultaustralia.com.au Tasmania has an exciting line up of events for 2014 which kicked off on July 3, when Senator David Bushby joined us for an interactive boardroom lunch with our members.

National Strategic Partner We greatly appreciated Senator Bushby sharing his insights on the economic and financial matters of importance to Tasmania. Thank you to Entura for sponsoring this lunch! Are you interested in becoming part of the Tasmanian Division committee? Please register your interest, by emailing zeina@consultaustralia.com.au

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STATE DIVISION UPDATES QLD UPDATE Relationships are key to consulting businesses, and are also a key factor in the success of the Qld Division. Continuing to nurture our existing relationships with key stakeholders and develop new ones is a key goal of incoming Chair Steve Williams. Lambert & Rehbein Director of Transport & Infrastructure, Steve Williams, has recently stepped into the chair role following the re-location of our chair of the last two years Satyajit Datar who has taken a role that sees him more offshore than onshore, meaning he made the difficult decision to step down. Whilst it is pleasing to see some positive signs in the Queensland market—with our members indicating a rise in the number of projects being tendered—margins remain low and times are still tight. Costs of tendering are a huge impact to firms and this remains a key focus of our advocacy work. Creating efficiencies in procurement and better contract conditions also remain a

NSW UPDATE Leading into the NSW March ‘15 elections, the NSW Division continues to engage with government to advocate for more collaborative relationships between business and government. In particular we are advocating for a better planned and developed infrastructure pipeline, for new funds to be released for infrastructure investment, best practice procurement, and practices to support a better business environment. To further support these activities, the division will be meeting with the Small Business Commissioner—Robyn Hobbs OAM, the Minister for Resources and Energy—the Hon Anthony Roberts MP, the Leader of the Opposition—John Robertson MP and the (Federal) Assistant Minister for Infrastructure and Regional Development— the Hon Jamie Briggs MP in the coming months. In addition the division has been approached by Transport for NSW as a key stakeholder in the consultation process which will create a road map for the potential adoption of BIM

high priority. The Queensland Government Procurement Transformation, Brisbane City Council infrastructure panel renewal and Seqwater Planning and Design panel have all provided opportunity to mobilise members to provide input. Queensland Division has a well-established relationship with the Department of Transport and Main Roads (TMR). This relationship is long standing and has produced a number of win-win outcomes for TMR, Consult Australia member firms and the professional services industry. To help drive the agenda at these regular meetings, the Qld Division has established a Transport Advisory Group. This group will meet twice a quarter (once in the lead up to the scheduled TMR meetings, and once soon after). These meetings will provide member firms with an ongoing opportunity to communicate any items that they would like included as agenda items, and to also contribute feedback on existing agenda items as they arise.

in TfNSW. We are working hard to ensure that our members are well represented in this process. We are looking to increase activity in Newcastle with a commitment to run both, Consult Australia CPD and (young professional) FutureNet events in the current financial year. Members in Newcastle are encouraged to proactively engage with the NSW State Manager with suggestions of issues/topics for consideration. Our young professionals in both Newcastle and Sydney are continuing to do great work in representing our industry. FutureNet Sydney held a fantastic event with NASA and the UK BIM Academy to uncover the advantages of BIM, in addition the committee rolled out an annual Politics in the Pub event, which analysed the effects of the NSW budget. Given the recent announcements in the area, FutureNet Newcastle recently held an event featuring Bob Hawes, General Manager of the Hunter Development Corporation, who provided an update on the vision for Newcastle and the Hunter region.

We would also like to thank our smaller and regional firm members for their recent input to the Division agenda. Creating change is a collaborative effort and we all have a role to play. National Strategic Partner

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STATE DIVISION UPDATES SA UPDATE The SA Division welcomes new Chair Sam McCarthy of Tonkin Consulting who has taken over the reins from Nic Murphy of MLEI Consulting Engineers. We are pleased Nic will continue on as a member of the Executive Committee and thank him for his dedication and the many hours of work spent progressing the interests of our members over the past three years. Following the Division’s February Boardroom lunch with federal Assistant Minister for Infrastructure The Hon Jamie Briggs to discuss alternative infrastructure funding and financing models, reducing the cost of building infrastructure through greater efficiency and removal of red tape, and the Federal Government’s commitment to funding infrastructure in the state, the 2014-15 Budget has identified infrastructure investment as a critical economic lever to build productivity, jobs and growth for years to come. A win for South Australia is the announcement that the North South Road Corridor upgrade will proceed with the Torrens to Torrens and Darlington projects being undertaken at the same time. The May Boardroom Lunch, was a “Meet the Client” event with guest Mr John

NT UPDATE The NT Division continues to engage with various Government departments to advocate for procurement expertise across government, improve business consultation and engagement, and develop and support the implementation and use of best practice, fairer contracts (incorporating fair allocation of risk), guidelines and training for agency procurement officers. Our latest meetings and engagement include: Following a request from NT Department of Infrastructure, Chief Executive, Dave McHugh for Consult Australia’s preferred contract for engagement, we strongly advocated for the use of AS4122-2010 across all jurisdictions. The NT Division Executive Committee continue to endorse the use of AS4122-2010 by both the private and public sector for the benefits to be felt

Ringham, Chief Executive, SA Water discussing a wide range of topics relating to his and his organisations role, SA Water’s projects both in delivery and development, and explored ways in which member firms can impress as a service provider. The SA Division welcomes an agreement from John for SA Water and Consult Australia representatives to meet regularly to discuss business issues affecting both parties and take a collaborative approach to finding solutions of benefit to both groups. The SA Division continues to pursue our policies with government Ministers and departments, building on strong relationships already forged on both sides on the political arena. Meetings have been held over the past months with

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• The Hon Stephen Mullighan MP, Minister for Infrastructure • Corey Wingard MP, Shadow Minister for Transport • John Ringham, CEO SA Water • Ian Nightingale, Industry participation Advocate • Andrew Grear, Executive Director Planning Division, Department of Planning, Transport & Infrastructure (DPTI)

by the building and construction industry more broadly.

• Dr William Freeland, Chair of the NT Environmental Protection Authority

We met with Department of Infrastructure (DoI) Director of Procurement Cindy McDonald to discuss the use and structure of tender panels.

• Julie Jenkins, Chief Procurement Officer, Power and Water Corporation

A meeting was held between Department of Business (DoB) procurement representatives and a number of Division Executive Committee members regarding whole of government procurement reforms. The Division also met with Department of Infrastructure (DoI) Head of Engineering, Jacqueline Bohn to discuss the use and structure of panels and government reporting going forward. The Division continues our very successful member only Boardroom Breakfast Series— details of each event will be emailed to those who have their details registered with us. Recent Boardroom Breakfast guests include:

• Fabio Finocchiaro, Executive Director Land Services, Department of Lands, Planning and the Environment If you would like to receive the NT Division e-newsletter or event details simply contact NT State Manager Jan Irvine to be included. National Strategic Partner

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The World in 2020

5 Mega Trends that will transform your consultancy

OUR WORLD IS FACING UNPRECEDENTED TECHNOLOGICAL, SOCIETAL AND ECONOMIC CHANGES. HOW CAN YOU PREPARE TO PROSPER? BST GLOBAL’S JAVIER BALDOR EXPLORES FIVE EMERGING BUSINESS AND TECHNOLOGY MEGA TRENDS THAT WILL RE-SHAPE WHERE AND HOW YOUR CONSULTANCY WILL DO BUSINESS IN THE FUTURE.

“A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” -Wayne Gretzky I am going to share with you where the puck is going to be in the coming years. My research is based on the latest available findings from some of the world’s leading firms: Gartner, Forester Research and International Data Corporation (IDC) in information technology research; Environmental Financial Consulting Group (EFCG) in industry financial consulting; technology companies like Google and private equity organizations like Kleiner Perkins Caufield and Byers in Silicon Valley. Let’s begin.

“The global cloud computing market will grow by 592% to a USD 241 billion market in 2020.” Source: Forrester

THE GLOBAL SHIFT: The golden BRIC road.

The world’s top 10 economies in 2013 according to the Center for Economics and Business Research. #1 #2 #3 #10

USA: China: Japan: India:

USD 15 trillion USD 8.2 trillion USD 5.9 trillion USD 1.8 trillion

Brazil, Russia, India, China and South Africa, often referred to as the BRICS nations, will dramatically change the global economy in just two decades. According to the China Center for International Economic Exchanges the combined GDP of the BRICS nations counted for 18 per cent of the global total in 2010. They estimate that the combined BRICS nations will grow to a staggering 47 per cent of the global total by 2030. According to HSBC’s published report entitled The World in 2050: Quantifying the Shift in the Global Economy, China will overtake the USA as the world’s largest economy with over USD 24 trillion in GDP. The USA will be second at USD 22 trillion and India third at USD 8.1 trillion. Three of the top seven largest global economies will be BRICS countries according to HSBC.

MERGING & ACQUISITIONS:

SO WHO IS MAKING THESE ACQUISITIONS BY TURNOVER SIZE? - 90 per cent of firms greater than 1 billion. - 64 per cent of firms 100 million to 1 billion. - 35 per cent of firms less than 100 million. Bottom line. This merging and acquisition trend will continue to escalate and the strong will get stronger.

Source: Gartner

WEB 3.0:

Where the Cloud meets internet pervasiveness.

There is a significant transformation in computing architecture emerging at present. It is called Cloud Computing. Simply put Cloud Computing is the use of computing resources (hardware and software) that are delivered as a service over the Internet. According to Forrester’s forecast data reported in Sizing the Cloud, the global cloud computing market will grow from a USD 40.7 billion to a USD 241 billion market in 2020 representing a 592 per cent increase. The Cloud will be the foundation of the internet of the future: Web 3.0. Let me share with you briefly where we have come from first. WEB 1.0 (1990-2000): Web 1.0 provided a medium for exposure where a company could put their brochures on web sites, and removed the geographical restrictions associated with a bricks-and-mortar business. The challenge with Web 1.0 sites is they are static, aren’t interactive and are proprietary.

Where the strong survive.

According to EFCG, when comparing firms surveyed in 2002 to 2013, acquisitions for engineering and environmental consulting firms increased 310 per cent. The same survey indicated firms making acquisitions also increased 293 per cent.

“By 2016 Android will be the number one smartphone operating system at just over 50%.”

“BRICS nations will grow to a staggering 47% of the global GDP total by 2030.” Source: China Center for International Economic Exchanges

WEB 2.0 (2000-2010): Web 2.0 refers to a second generation of the Web and is based on user communities and a wide range of services, such as social networks, blogs, wikis, that encourage collaboration and efficient exchange of information among users. Most people use it to refer to things like social networks such as Facebook, YouTube and LinkedIn where people can post things and others can comment.

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“About 170 million iPads will be sold in 2016.” Source: Gartner WEB 3.0 (2010-2020): With Web 3.0 everything will be connected, anywhere and all the time over the Cloud. Things like computers naturally come to mind but also refrigerators, clothing and cars will all carry IP addresses. Web 3.0 is also known as the ‘Semantic Web’. What does Semantics Web mean? ACCORDING TO MURRAY STATE UNIVERSITY’S PRESENTATION ENTITLED “WHAT IS WEB 3.0?” “Semantic Web researchers are trying to teach computers to understand us better so they will know what we mean when we search for something, not just which keywords we’re typing in. The purpose is to make the web readable by machines and not only by humans. According to Tim Berners-Lee’s Semantic Web it will be a world in which: Software ‘agents’ perform Web-based tasks we often struggle to complete on our own. A Semantic Web agent could be programmed to do almost anything, from automatically booking your next vacation to researching a term paper. It involves a re-annotation of the Web, adding all sorts of machine-readable metadata to the human-readable Web pages we use today.”

CONSUMERISATION: From mobile to ‘the wearables’

The consumerisation of technology has taken shape and is dictating what the business technology landscape will be. According to private equity firm Kleiner Perkins Caufield and Byers (“KPCB”), computer operating systems have been reimagined and seen a transformation that no one could have predicted. From 1998 through 2005 Microsoft dominated with 96 per cent market share. As of 2012 Microsoft’s share is 35 per cent with Apple IOS and Android commanding 60 per cent share. What is driving this? According to KPCB, there were 2.4 billion global Internet users in 2012. The fastest growing segment is in emerging markets like China which has added 264 million users alone from 2008-

2012 with the majority of those users accessing the Internet via mobile devices. KCPB estimates that global mobile traffic has exploded and is expected to be about 23 per cent of total internet traffic at the end of this year up from 15 per cent in May of 2013. KPCB indicates that smartphone subscriptions are a staggering 1.5 billion witnessing a 31 per cent growth year over year in China, 28 per cent in the USA and more impressively 52 per cent in India. This represents only 21 per cent penetration of the mobile market. We are actually in the early innings of this game with 1.5 billion smartphone subscriptions out of 5 billion mobile phone users worldwide. There is opportunity for growth of 300-400 per cent of present levels. So who will win the smartphone wars? According to Gartner by 2016 Android will be the number one smartphone operating system at just over 50 per cent, Microsoft will be second at 23 per cent and Apple at 21 per cent. According to KPCB, the tablet wars have been won thus far by Apple. Apple has sold about 140 million tablets in the first three years since the iPad was introduced and more than three times what Apple did with the iPhone over the same period. Who will be number one in tablet market share in 2016? According to Gartner it will be Apple. Gartner forecasts about 170 million iPads will be sold in 2016 and about 137 million Android based tablets. The next shift in computing as we transition from mobile internet computing will be wearable or everywhere computing which will begin in 2014 with the introduction of Google Glass and similar devices. According to KPCB the average person reaches for their Smartphone 150 times a day. That would not be necessary with wearable technology.

“The average person reaches for their Smartphone 150 times a day.” Source: KPCB

“The next shift in computing will be wearable or everywhere computing.” Source: KPCB The benefit being that Sensor Enabled Wearable Attributes are: •

Hands free with voice and gesture control,

•

Always on/connected to the Internet and

•

Environment aware with built in GPS.

Want to learn more about how this looks emerging technology looks like? Visit Google Glass at: http://www.google.com/glass/start/how-itfeels/#video=hif-video

SURFACE COMPUTING:

The Vision of the Future.

Imagine a world where everything is a computing surface. Your coffee table, your mirror, desk, refrigerator and even home or office windows. It is coming by the year 2020. The best way to envision this Surface computing future is to see a video of what it may look like. A good example can be found at: https://www.microsoft.com/office/vision/ In conclusion, the world will witness unprecedented changes and opportunities in the years ahead leading up to 2020 and beyond. There are many opinions on where the puck is going to be in the future. Will you be ready?

ABOUT THE AUTHOR: Javier A. Baldor is Executive Vice President, Board Member at BST Global, a worldwide business management software and cloud solutions provider for Architectural, Engineering and Environmental Consultancies. Javier can be reached at jbaldor@bstglobal.com or www.bstglobal.com with comments on this article.

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Super funds: Homework the key to funding success There is wide public debate about tapping into the $1.7 trillion of assets invested by Australian superannuation funds. Included in the conversation is a view that the Federal Government should consider legislating that super funds direct a proportion of total assets into infrastructure investment. In our view this is not only not required, but appears to be based on the assumption that super funds have little interest in infrastructure investments. In fact, the opposite is true. There is a significant appetite across the superannuation industry for these investments. Infrastructure provides super funds with opportunities to diversify investment portfolios and, often, to secure consistent long-term earnings and income streams aligned to the interests and aspirations of fund members. The secret to successfully tapping into that pool of assets is to do your homework. Spend time examining super funds, the sort of investments they have and the mechanisms by which they assess and invest in infrastructure. There are over 200 super funds in Australia and it is worth taking the time to undertake some segmentation work to understand their differences. Depending on your objectives and, in particular, the scale of the proposed investment, your analysis will likely reveal between five and ten funds aligned to your requirements. We propose that you consider at least the following criteria in creating your funds shortlist: SCALE – This will be a major factor in the success of your proposal. There are very few superannuation funds in Australia that can even consider direct investment or partnership in assets of over $500 million. This is a direct result of the funds’ need to remain diversified across their portfolios. For example, this level of investment for Equip, with $6.25 billion under management, would represent 8 per cent of the fund’s total assets. At this level, the asset can affect fund investment strategies supporting liquidity to pay member benefits, reserving requirements and distort the risk associated with the fund’s investment portfolio. RISK/RETURN – Like most investors, superannuation funds seek maximum return at minimum risk. Good superannuation funds

The secret to successfully tapping into that pool of assets is to do your homework. Spend time examining super funds, the sort of investments they have and the mechanisms by which they assess and invest in infrastructure. are very sensitive to risk, bearing in mind that the investment horizons for both the funds and their members are generally longterm. Super funds are rational, professional investors and their investment specialists will thoroughly evaluate the balance of risk and return. The profile of the investment will generally fall into one of two categories: • An income-generating investment that delivers bond-like returns in the 6 to 8 per cent per annum range; or • A growth asset that can deliver equitylike returns in the range between 10 to 12 per cent per annum. This will be an important factor, as it will prescribe how the potential investor assesses its fit into the fund’s overall portfolio. Gearing is also a factor in the attractiveness of assets, as it influences the potential volatility of cash flows to the fund. INCOME – One of the attractions of infrastructure assets is their potential to deliver a consistent income stream over time, often indexed to CPI or similar. As more fund members enter retirement phase, super funds will increasingly be interested in assets that deliver predictable income streams with relatively low volatility. Generally, this will mean assets that deliver bond-like returns. GATEKEEPERS – Do your target funds have a pattern of behaviour that suggests they are interested in direct investments, or do they prefer to invest via external managers, unit trusts or other investment vehicles? Funds of a scale similar to Equip will more often than not allocate funds via specialist investment managers, so your proposal will be best directed through one of the funds external managers. Generally, funds publish a list of their external managers and a broad description of their mandates on their websites.

This point is significant for infrastructure investments in the range $100 million to $500 million. These are often best pitched to smaller investment managers who will aggregate investors to support the project. In this instance, the reputation of the investment manager among super funds is paramount as they will make the pitch on your behalf. ACTIVE SHAREHOLDING - Where super funds are co-investors in assets, particularly direct investors, they generally want some influence over decisions in the development and/or management of the assets. They usually do not want to be passive providers of equity. The reality is that none of this should be surprising. While there is a huge appetite for infrastructure investments across the superannuation industry, there is also a lot of competition, including from overseas. Super funds treat infrastructure as they do any other investment. The challenge is to create a shortlist of those funds whose objectives and investments align with the profile of the asset you are funding. Then determine the best means of approaching those funds – directly or through third parties such as reputable external managers with substantial infrastructure investment expertise.

Danielle Press Chief Executive Officer Equip

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Making the most of our resources

Pluto LNG Loading jetty, Pluto LNG onshore gas plant courtesy of Woodside

Long term planning The age of the mega project is upon us. These projects are popularly identified by being worth more than $1 billion. They are complex and require the intersection of private sector, government and the community at scales rarely seen. Managing such projects takes a special skill set, and Australian companies are poised to take advantage of resources mega projects across the world. Recent mega projects like Gladstone LNG (GLNG) or Gorgon gas project, and iron ore projects like BHP Billiton’s Rapid Growth Project 5 (RGP5) or Roy Hill, highlight more challenges. The skills needed are hard to find and their reliance on overseas providers encompassed trades and labourers as well as high-end scientific, design and other technical consultancy services. Mapping out the mega-projects of the next decade and next generation will help project owners and service providers to plan ahead. The right mix of resources and non-resources projects will keep the workflow smooth, rather than pushing up peaks of unsustainable demand that are followed by troughs of joblessness, economic slowdown and significant downsizing of organisations and associated loss of skills. Such peaks and troughs also add significant costs during growth periods due to the burdens associated with recruiting and training a new workforce all over again. Project owners need to be able to respond to market conditions, and governments to infrastructure needs, and there is an opportunity to map the short, medium and long term needs of each. This would aid workforce planning, especially with regard to training, recruitment and temporary skilled migration needs.

Regulatory hurdles: supporting the project pipeline Regulation is red tape if it is inefficient or leads to perverse outcomes. Industry has a role to play in informing governments of ways to improve regulatory processes. For resources projects, the most pressing is environmental regulation. The industry agrees that regulation is essential, but in its current form it tends towards red tape (which more recently is frequently referred to as green tape). Industry can help untangle the regulations to ensure that the environment is protected through robust and efficient regulation whilst permitting sustainable and well-founded projects to proceed with minimum up-front cost and time investment.

Case study: pacific national nebo train maintenance facility, nebo, Queensland Pacific National operates bulk and intermodal services throughout Australia and, in 2010, the company proposed the construction of a provisioning and maintenance facility for trains approximately 10 kilometres south of Nebo. This facility is purpose-built to support the operations of locomotives and rolling stock.

Features and innovations With the capacity to service up to 25 coal trains over a year, the new facilities enable the provisioning and maintenance of Pacific National trains to ensure reliable and efficient operation, including refuelling, routine inspections and wagon and locomotive maintenance work. The facility’s remoteness, coupled with its requirement for access to water for proper functioning, posed a significant design challenge. The consulting team designed a water treatment and reuse system that enables approximately 85 per cent reused grey and black water and results in the facility being fully self-sufficient for its water requirements. This outcome has been both environmentally and financially advantageous. The remote location also provided the impetus for the development of a fully integrated 3D Building Information Model (BIM) which included modelling and information from all team members. The common model enabled the design of all aspects of the project from the alliance offices in Brisbane. It was fully geo-referenced which enabled the team to provide data sets to the site for the placement of elements of the project on site via GPS technology, removing the need for traditional on-site setting out and calculations. The result was a significant improvement in accuracy, delivery speed and coordination.

A nexus of advanced procurement strategy, broader exploitation of the innovative DNA of resources sector players, and longer term planning and collaboration for major infrastructure development—all wrapped in a clear and stable regulatory framework—is a goal worth striving for. If achieved, there will be a transformational improvement in sector-wide efficiency of operations.

Australia may be minerals rich, but there are challenges for the continued operation and expansion of the resources sector.

MAKING THE MOST OF OUR RESOURCES DELIVERING EFFICIENCY, SUPPORTING ENGAGEMENT AND MINIMISING RISK INDUSTRY DISCUSSION PAPER

Consulting firms have a profound effect on the industries they serve, the communities they work in and the environment. A sector of particular importance is resources, and Consult Australia has released a discussion paper for project owners, operators, and consultants in the mining, oil and gas resources sector. The paper is a primer for discussion. Australia may be minerals rich, but there are challenges for the continued operation and expansion of the resources sector. Some are external factors that are hard to predict or control: post-GFC economics and global commodity pricing being the most removed from our influence. Others, while affected by and interconnected with global factors, are things that Australian businesses are able to influence: • Operational efficiency drivers and innovation.

Labour is relatively scarce and its costs are high in Australia, so long term planning of projects in consultation with other users of labour—especially governments—are a big issue and one that will deliver huge cost-of-labour dividends.

• Community engagement and the social licence to operate. • Competition and risk. These three factors represent the core issues which the consulting sector is set up to address. With our collective experience across a wide range of built environment projects, Consult Australia’s members are uniquely placed to partner with owners and operators to identify new opportunities to add value to existing projects as well as support the creation of new markets for investment. For this to happen, we need to all work together. This doesn’t mean relinquishing control of projects and long-term strategies, but is an encouragement to owners and operators to bring all stakeholders

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together under one tent so that the best minds have the opportunity to demonstrate their expertise. Smarter procurement and new technologies can drive shorter-term efficiency. Long term gains will be won when there is crossindustry planning, construction, management and use of infrastructure. Labour is relatively scarce and its costs are high in Australia, so long term planning of projects in consultation with other users of labour—especially governments—are a big issue and one that will deliver huge cost-of-labour dividends. Achieving all of this is not easy, but the rewards make it worth striving for. We raise some questions to provoke reflection on how the resources sector is meeting efficiency goals: • Is the Australian workforce properly trained to manage complex projects? • Is innovation really embedded in day-to-day operations? • What would it take for resource and public infrastructure projects to be planned in tandem? • Are owners prepared to sacrifice full control of infrastructure to ensure it gets built? Community engagement to win the social licence to operate is one of the most

important factors to securing better, and more stable, returns on investment. There is real value in taking a thoughtful, evidencebased approach to engagement and many resources companies are already very good at this. It is easy, however, to stumble when faced with coordinated opposition and once a social licence to operate is lost, it is hard to regain. The science and emotion of each project need to be balanced in messages to communities as they use this and other information sources to make informed decisions about what is in their best interests. There are some hard questions to be asked if we are to keep community engagement on a positive path:

risks—and rewards—with several partners. Trust and the freedom to take calculated risks together will win out over the long term when companies communicate sooner, align incentives to perform, and create collaborative contracting partnerships. We must, however, ask ourselves:

• How do we recover unconventional gas in markets destroyed through ineffective community engagement?

Natural resources are extracted by companies that make enormous investments and take great risks, and there are emerging opportunities and challenges, and more ways to add value to operations. The consulting sector has a central message: if viewed as a collaboration—and collaboration is the essential ingredient—between resource owners, operators and consultants, the future is bright for the resources sector.

• Why is debate on resources projects so emotional? • Is NIMBY-ism a valid community policy? • What works, and what has gone wrong, with the sector’s community messaging? The minimisation of risk builds confidence in the potential for good returns on investment from resources projects. The many players can ‘go it alone’ or choose to instead share

• To what extent do producers, constructors and consultants trust each other? • Is collaborative contracting just hype? The Consult Australia discussion paper presents this range of issues and questions and recommends that the wider resources sector considers them together.

Jonathan Cartledge Director of Policy & Government Relations http://bit.ly/consultaustraliaresources

How does your super fund measure up? Like you, we believe the future can only be built on vision, planning and skilled implementation. It is a philosophy that has enabled us to deliver consistently strong investment performance for over 80 years. Our goal is to better equip you to achieve an adequate income in retirement. As an Equip member, your ready access to information and professional advice can help you make the most of your super. If you’re an employer considering a switch to a high-performing fund for your employees, or you’re just looking for a fund that can take care of your future, we’re ready to take your call. National Sponsor

John Farrington Executive Officer, Corporate Relationships

For personal super inquiries:

(03) 9248 5911; Mob: 0438 302 746

1800 682 626

Email: jfarrington@equipsuper.com.au

www.equipsuper.com.au

Equipsuper Pty Ltd ABN 64 006 964 049 AFSL 246383 is the Trustee of the Equipsuper Superannuation Fund ABN 33 813 823 017. This information is general information only. Before making a decision to invest in the fund, you should read the appropriate Equip Product Disclosure Statement (PDS). Past performance is not an indication of future performance.

Consulting Matters Features

The solution to Australia’s future isn’t a riddle Australian Petroleum Production & Exploration Association

What is invisible, odourless, and abundant in Australia? What is a million years old and is relied on by the Australian food, manufacturing and mining industries? What industry has already delivered more than 100,000 jobs across the Australian economy and paid more than $8 billion in taxes last year? Do you have clients in the natural gas industry, or the capability to provide services to them? If so, then LEADING YOUR SECTOR will become more achievable as the natural gas industry grows. A strong Australian economy improves business—more jobs are created, new technology emerges and capital increases. If you are consulting to the manufacturing, mining, retail or dozens of other sectors, growth of the natural gas industry will mean improved economics for your sector. When your clients (and potential clients) grow, there are more dollars available for planning, project management and advising services—in other words, for your business. Natural gas is critical to Australia’s businesses, either as a source of fuel or as a raw material for products, such as with fertiliser and petrochemicals. In particular, Australia’s manufacturing sector—including our distilleries, food processing, textiles, plastics and glass producers—are heavily reliant on this reliable, versatile and clean fuel. Fortunately, Australia is rich in this important resource, with enough gas beneath us to fuel both our domestic and international markets. Discovery and development of natural gas has already delivered massive economic benefits. This is particularly true as an export product to our Asian neighbours, who are willing to invest in and buy a commodity so critical to their own energy needs. In 2012, 33 cents in every private sector dollar invested in Australia was being spent on new oil and gas projects, much of it from those who will be the industry’s future customer

Gas is our natural advantage. Australia depends on energy, and gas is the most reliable and abundant source in Australia’s energy mix. While solar and wind power are great, the sun doesn’t always shine, and the wind doesn’t always blow. In fact, energy produced from renewables does not even come close to powering Australia. base (a double benefit). As the industry grows, so does the need for consultants who help it.

electricity in this way, it produces up to 70 per cent fewer carbon dioxide emissions than coal.

The natural gas industry even funds the social benefits on which so many Australians depend. The taxes paid by the industry, which will grow as the industry does, build and improve the hospitals, schools and roads that we all use. At a time when traditional industry is faltering and our population is ageing, the importance of a growing revenue source for state and Commonwealth budgets can’t be overstated.

Countries that have seen increased gas use, like Japan and the U.S., have also experienced improved air quality and reduced smog. At his state of the union speech, U.S. President Obama acknowledged the importance of natural gas to improved air quality in the U.S.

Are you concerned about the environment? Natural gas is a cleaner burning fuel than traditional fossil fuels. Every state in the Commonwealth has gas-fired power, with some states, like South Australia, dependent on gas for the majority of its electricity generation. When gas is used to generate

Gas is our natural advantage. Australia depends on energy, and gas is the most reliable and abundant source in Australia’s energy mix. While solar and wind power are great, the sun doesn’t always shine, and the wind doesn’t always blow. In fact, energy produced from renewables does not even come close to powering Australia. Technology improvements have made even more sources of gas accessible, and provided

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The industry has potential to do even more and we are set to become the world’s number one exporter of LNG. There is a further $180 Billion worth of Australian oil and gas projects to be approved and/or developed. even more ways to use it, such as the natural gas buses that so many cities have embraced.

Misinformation is influencing a public policy that will slow the flow of natural gas and its many benefits.

The industry has potential to do even more and we are set to become the world’s number one exporter of LNG. There is a further $180 Billion worth of Australian oil and gas projects to be approved and/ or developed. Gas can keep Australia’s economy strong—if we let it.

Thousands who rely on natural gas for their job, their business, or their way of life, have already pledged their support for the natural gas industry through http://www. ournaturaladvantage.com.au/ - it is easy to do, just takes a minute, and may make a big difference.

However, there are those who would stop this growth from happening. These people are creating fear where there need not be.

If you haven’t already figured it out, there is only one solution to powering Australia’s future and to the riddles above: NATURAL

GAS. Whether you are doing so for your business, for the environment or for the good of the nation, it is time to become part of the solution.

The Australian Petroleum Production & Exploration Association is the peak national body representing Australia’s oil and gas exploration and production industry.

Consulting Matters Features

Greenfields reform to balance investment future THE 2014 FEDERAL BUDGET HAS PROPOSED TOUGH MEASURES TO PUT AUSTRALIA BACK ON THE PATH TO FISCAL SUSTAINABILITY, BUT TO REVIVE AUSTRALIA’S REPUTATION AS AN ATTRACTIVE PLACE TO INVEST, AUSTRALIAN MINES AND METALS ASSOCIATION (AMMA) CHIEF EXECUTIVE SCOTT BARKLAMB SAYS BUDGET MEASURES MUST BE BACKED BY WORKPLACE RELATIONS REFORM. For instance, in 2013, a cook working for six months on offshore resources project construction was earning $355,000, which is 47 per cent or $105k more than the same role in 2007. Barge welders now command $2180 per day, or about $396,000 for working just six months of the year. Breaking the union monopoly over ‘greenfields’ agreements is a clear priority in the Coalition’s workplace relations reform bill. However, undoing the existing impacts of such a monopoly has largely been overlooked. Under the current bill, Employment Minister Eric Abetz has proposed a ‘prevailing industry standards’ test for future resource projects. While perhaps intended to stop the ‘leap frogging’ of offshore construction contract wages, this provision inadvertently has the potential to lock-in the inflated wages and conditions imposed during the so-called ‘boom era’.

Joe Hockey’s first budget as national Treasurer was met with cautious approval by the business community where increased taxation was generally accepted as an unfortunate compromise to restoring stability and sustainability to Australia’s fiscal position. However, to reboot Australia’s reputation as a globally attractive place to do business, more must be done to rebuild our national economic and policy framework. Specifically, if we are to secure new projects and new jobs on Australian shores we must support hard budget measures with a better workplace relations framework. Already, the Abbott Government has moved toward a fairer workplace system with the tabling of its Fair Work Amendment Bill 2014, but crucial oversights in the proposed legislation continue to pose a threat to Australia’s $208 billion investment pipeline. Among those most concerning are provisions affecting negotiations for workplace agreements on new resource developments, or ‘greenfield’ projects.

Under the former Labor government, trade unions were handed unprecedented bargaining power for greenfield project negotiations, leading to the extortion of unsustainable wages and conditions from resource employers whom were left with extremely limited scope to resist union demands. Looking back on the past five years, it’s clear that uncommercial and uncompetitive workplace settings have greatly contributed to the competitive decline of Australia’s resource industry.

As the national resource employer group, AMMA has never bought into the ‘boombust’ dichotomy often relayed in media rhetoric, but one cannot ignore that the economic face of the resource industry has shifted dramatically in recent times. The Bureau of Resources and Energy Economics (BREE) reported that in the past 12 months alone, 33 potential resource projects have been cancelled in Australia, underpinning a $43 billion loss from the investment pipeline. At the coalface, resource employers have consistently pointed to ‘greenfields’ agreement-making as an obstacle against

Already, the Abbott Government has moved toward a fairer workplace system with the tabling of its Fair Work Amendment Bill 2014, but crucial oversights in the proposed legislation continue to pose a threat to Australia’s $208 billion investment pipeline.

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Together, these tests ensure employees can enjoy rewarding workplace conditions without perpetuating the unsustainable workforce agreements discouraging investment in Australia’s mining, oil and gas industry. investment, with a study commissioned by AMMA to RMIT revealing that one in five new resource projects were delayed as the result of unfair union tactics in negotiating new workforce agreements, or refusing to negotiate at all. The threat of industrial action in Australia is a risk exceeded only by growing labour costs, which are now 20-30 per cent higher than those in the United States. Likewise, the construction of an LNG project in our closest economic neighbour Canada is 20-30 per cent less than in Australia. Making outdated and unsustainable wages the benchmark on new projects with a ‘prevailing industry standards’ test serves only to deter new capital investment even further. However it is not all ‘doom and gloom’ for our industry.

If we can develop a sustainable and competitive policy framework—starting in key areas such a new project agreement making—our nation can still secure the $208 billion worth of new project investment currently slated, but not yet committed for our shores. So how do we develop a more realistic and sustainable approach to greenfield agreement making? The key principle here is to allow market realities to inform employment conditions in place of artificially inflated industry rates. Current expectations for new project agreements adhere to the National Employment Standards safety net, the Better Off Overall test and the public interest test, a triad of protection for both Australian workers and their employers.

Together, these tests ensure employees can enjoy rewarding workplace conditions without perpetuating the unsustainable workforce agreements discouraging investment in Australia’s mining, oil and gas industry. Budget policy and our employment laws not only impact employment and projects for the national resource industry, it affects all Australians and their job opportunities. These challenges are now pressing and we cannot miss the opportunity to take action as part of accelerating the course back to a budget surplus. Working closely with the federal government now and into the future, AMMA is committed to seeing this opportunity brought to fruition. AMMA is Australia’s national resource industry employer group, a unified voice driving effective workforce outcomes.

Consulting Matters Features

Nuclear Power A report in the Straits Times of April 23, headed “Singapore starts nuclear safety and science research programme“ should be a wake-up call for Australia. It is an indication of the interest some countries, big and small, are now taking in the possibility of using nuclear energy as a source of clean power generation. This follows a two-year study by the Singapore Government which concluded that, while current nuclear energy technologies are not yet suitable for Singapore, it should continue to participate in global and regional discussions about nuclear safety, science and engineering. This is smart policy.

Eighteen other countries are looking to use it, or have construction underway. China will have 400,000 MW of nuclear power generation in place by 2050, seven times Australia’s current total electricity generating capacity. Nuclear power is a proven technology for this purpose. Accidents at Three Mile Island, Chernobyl, and Fukushima must be acknowledged, but not excused, occurring as they did because of shortcomings in plant design and operation, combined in the case of Fukushima with a tsunami which swept 18,600 people to their deaths.

containment structure and intimidating appearance, is likely to become a thing of the past. Over the next 20 years, Australia has a chance to learn about and participate in early deployment of smaller, lower cost, simpler, safer, efficient nuclear reactors that could transform our political and economic landscape, while reducing greenhouse gas emissions by significant amounts. Nuclear reactors can be designed to produce high-temperature process heat to dissociate hydrogen directly from water, or enable high-temperature electrolysis for the same purpose. The hydrogen can then be used to help make diesel and jet fuel from Australia’s fossil fuels or biomass.

Extensive nuclear R&D in the USA and For many years, Australia has eschewed China is focussed on reducing waste, the use of nuclear power. A landmark study lowering costs, reducing proliferation risks, At the same time, the nuclear power could by the National Academies Forum* in 2010 and reinforcing inherent safety. Many new be used to generate electricity for irrigation found that Australian attitudes to nuclear reactor designs are coming forward, such as and local community use, or desalinate saline power were formed in the context of the the Liquid Fluoride Thorium Reactor (LFTR) or brakish water. This can all be done without mining and supply of uranium which, over the and the Integral Fast Reactor (IFR), but there creating greenhouse gas emissions in years, had become conflated with historical are others at various stages of development operation, unlike current methods which rely objections to bomb testing by on steam reforming of methane major powers on Australian soil using fossil fuels, and/or fossil Nuclear energy is a remarkable resource and in some parts of the Pacific fuel driven refining or electricity still available to humankind, but like fire it Ocean. generating methods. These measures would need to be high must be used sensibly and safely. It is now No sane person would want a cost and large scale, but would at return to fears of nuclear weapons, used in over 850 reactors around the world least offer some security towards which must be eliminated from Australia’s looming liquid fuel —240 small research reactors for medicine the earth, but this historical vulnerability. and industry, 180 reactors for submarines experience should not deter us from an intelligent understanding Singapore’s action demonstrates and specialty ships, and 433 reactors for of the science and engineering a planned, sensible approach to generating electricity in 31 countries. of peaceful nuclear power as it is incorporating safe, reliable nuclear now developing, and which could technology into its future clean be eminently suitable to our needs. energy portfolio. Australia would do well to attracting both public and private sector take note. investment. Some of these reactors can be Nuclear energy is a remarkable resource still installed underground, others do not need available to humankind, but like fire it must * Australian Academy of Science water for cooling, relying instead on air be used sensibly and safely. It is now used Australian Academy of the Humanities cooling which enables their installation away in over 850 reactors around the world—240 Academy of the Social Sciences in Australia from the coast. small research reactors for medicine and Australian Academy of Technological industry, 180 reactors for submarines Sciences and Engineering. The traditional, large, pressurised light water and specialty ships, and 433 reactors reactor, with its high cost, inefficient use for generating electricity in 31 countries. Barry Murphy of fuel, waste disposal problems, heavy

Photo courtesy of Daniel West

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Work isn’t working for women WORK SIMPLY ISN’T WORKING FOR WOMEN WHEN IT COMES TO CAREER PROGRESSION—PARTICULARLY IN THE PROFESSIONS.

level with women and men entering the professions at the same rate—until women reach the age of 28 when they begin leaving the professions in droves. (See graph 1).

While engineering firms struggle at the intake level to attract enough women, the other professions show that all that work can be for naught if a profession can’t retain women.

Women now make up the majority of the workforce—according to the 2011 Census there were 5.86 million women between 20 and 60 working compared to 5.73 million men, or 51 and 49 per cent of the workforce respectively.

The number one reason for women leaving the professions at this stage of their career is their experience that professional life is incompatible with family life. It’s something that firms are working to change, but the numbers don’t lie.

However, when it comes to the professions of law, accounting and engineering, consulting and medicine these positions reverse: Men make up 62 per cent of the professions (the census says there are 191,000 men working in the professions) compared to women who make up 38 per cent of the profession (there are 118,000 working in the professions).

When the professions are split out (see graph 2) engineering performs well against law and accounting; while it struggles to attract women at the intake level, the drop off is not so severe.

However, while law is the worst performer, engineering firms should see how they compare with management consulting and medicine as careers; all three attract similar numbers of women to each respective profession but consulting and medicine manage to keep them for longer.

This shouldn’t surprise; the professions have traditionally long been dominated by men and it will take time to change. But dig a bit deeper into those census figures and we see that it has changed at the intake

In fact law is the worst performing profession, attracting huge numbers at the intake level but then losing them at such a rate that its profile in graph 2 looks similar to that of engineering which has a much lower intake level. A comparison between engineering firms with law and accounting firms should alert the former to the problems that the latter have experienced when it comes to retention.

7,000

Graph 1

Male (Prof Svcs)

6,000

Female (Prof Svcs)

No. employed

5,000

These short transactions make it easier for women to combine family and career, he suggests. But in addition “it’s my impression that the custom and practice in these professions is much less macho than in consulting engineering, law and accountancy,” he continues. “Hence the men have been more willing to adjust their habits to accommodate women—for example, by job sharing.” The professions have much to learn from each other in how they perform in terms of gender equity. Underlying structures that relate to why women prosper in one profession but not in another could provide a pathway to changing female representations across the professions.

4,000

3,000

2,000

1,000

0 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

Age

3,000

Graph 2

Kate Mills is the CEO and founder of www.professionalmums.net an online community for female lawyers, accountants, engineers and management consultants who wish to be contacted by employers for family friendly work opportunities. ProfessionalMums.net is currently supported by PwC, EY, Arup, Hyder Consulting, Clayton Utz and Brown Wright Stein.

Accountants

2,500

Lawyers Consulting engineers No. employed

George Beaton, executive chairman at Beaton Consulting + Research notes that in health care service the client is an individual rather than an organisation. In addition for both medical workers and consultants “the unit of service is a short duration transaction—a consultation, service, discrete piece of advice—in contrast with an extended engagement lasting months, even years, and requiring attention on the job for a full day every day in consulting engineering,” he says.

2,000

Management consultants Doctors

WHAT YOUR FIRM COULD DO BETTER  Do you have informal or formal support networks such as working parent groups?

1,500

 Consider redesigning jobs—take a scientific approach to how a job can be done.

1,000

 Develop a network of sympathetic partners that anyone can approach where they are having problems with work.  Discuss working arrangements with women before they go on maternity leave

500

Charts: All data from 2011 and 2006 Census 0 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

Age

Consulting Matters Business essentials

Understanding the Business Case for Environmental Upgrade Finance Environmental Upgrade Finance (EUF) is a growing form of finance for building upgrades that reduce operating costs and improve the value of commercial buildings and at the same time improve waste, water or energy efficiency or increase renewable energy. NSW and Building Upgrade Finance in SA (soon to be introduced).

470 Collins St in Melbourne, which implemented a $720,000 energy upgrade using Environmental Upgrade Finance

Finance can be a major obstacle to getting sustainable building upgrades across the line, particularly for older, ‘mid-tier’ building stock. Now a new financing mechanism is helping more building owners to undertake energy and environmental upgrades to their building without any upfront cost, and share the costs with their tenants in a win-win way. Environmental Upgrade Finance (EUF) is a growing form of finance for building upgrades that reduce operating costs and improve the value of commercial buildings and at the same time improve waste, water or energy efficiency or increase renewable energy. Despite the potential of this type of finance to improve the attractiveness of sustainable upgrades, it is still not well understood in the property sector. A new program to clearly and simply communicate the business case for EUF is scheduled to be launched in late August. The program is a joint initiative by ClimateWorks Australia and the Sustainable Melbourne Fund and is funded by the federal Department of Industry. It covers the finance mechanism known as Environmental Upgrade Agreements (EUAs) in Victoria and

ClimateWorks Project Manager, Eli Court says sustainable building upgrades benefit building owners and tenants, as well as service providers such as property and facility managers, and specialist consultants. However, in many cases, upgrade projects are obstructed by the sometimes high upfront costs and the fact that building owners face these while much of the benefit in terms of energy cost savings and improved working environment goes to the tenants (the ‘split incentive’). Mr Court said in many cases EUF can be a more attractive option than a traditional loan as a means of achieving a sustainable building upgrade. “Environmental Upgrade Finance is a proven market mechanism that makes it easier for businesses to access finance for improvements to existing buildings,” he said. “It is very well suited to smaller owners of middle-tier stock, who may have limited other options for accessing finance for building upgrades. It also presents a new option for large institutional and corporate property owners of the premium grade office stock, and is available for other building types, including retail sites and industrial warehouses.” Mr Court said the key benefits of EUF are: •N o upfront capital or security: Traditional finance generally requires additional security and requires the building owner to contribute some of their own capital upfront. •R educed re-financing risk: EUF provides competitive interest rates fixed for up to 20 years, meaning reduced refinancing risk. Traditional finance generally requires re-financing every 2-5 years, and rates may go up.

• Improved cash flow: The long-term nature of EUF means the energy savings from the building upgrade can meet most or all of the loan repayments, delivering immediate cash flow benefits to the owner. Traditional finance is generally only available for 2-5 years. • Win-win for owner and tenants: EUF provides a secure and transparent mechanism for building owners to share the costs and benefits of building upgrades with their existing tenants. This enables a win-win for both parties, with the owner getting a better asset, and existing tenants getting a lower-cost, more comfortable, and healthier working environment without having to wait until the end of their lease, and without increased rents. Mr Court said a number of banks, including NAB and ANZ, currently offer EUF. “This kind of finance is similar to council rates, attached to the building with repayments collected by the local council for redistribution to the financier. This structure reduces the risk for banks, and allows them to offer more attractive finance terms,” he said. In coming months, the project aims to improve the property sector’s understanding of EUF through a new interactive website and a series of workshops. The website provides illustrative business cases for real buildings across South Australia, Victoria and New South Wales, as well as a simple ‘mortgage calculator’ style comparison that enables users to compare EUF to traditional finance. It is scheduled to be launched in late August 2014, and will be available at www.BetterBuildingFinance.com.au. For more information about the Business Case for EUF program go to www.climateworksaustralia.org.au, or contact Eli Court at eli.court@climateworksaustralia.org.

Business essentials Consulting Matters

Does professionalism matter? IS PROFESSIONALISM RELEVANT TODAY? WHAT ARE SOCIETY’S EXPECTATIONS OF A BUILT ENVIRONMENT PROFESSIONAL? DAVID SINGLETON, ADVISOR TO BUSINESSES ON LEADERSHIP AND PRACTICE, SAYS THAT IF A PROFESSION IS TO BE ACCEPTED IN SOCIETY IT MUST FIRST GENERATE TRUST… AND PERHAPS ENJOY LONG WALKS ON THE BEACH! If the list of ‘authorised witnesess’ for a statutory declaration is a yardstick for being seen as a ‘professional’ profession, then many of today’s growing list of professions including journalists, sports administrators, programmers and architects, will be unhappy indeed. Does their omission mean these professions are not considered professional? Or are they not on the list because it was created when the term profession was generally applied to the arenas of law, medicine and the church, plus other knowledge-based occupations, such as teaching, the military, accountants, scientists and engineers? Or is the underlying reason for a particular profession’s omission that it fails to meet society’s expectations of what a true profession entails? Mid-nineteenth century laws required professions to be altruistic and moral and to address society’s concerns. To be a professional was to belong to an exclusive club and society had high expectations of those accorded this label. But today the term professional is used loosely and as society becomes more complex, with technological advancements, globalisation and changing work habits, people are perhaps becoming less trusting of the professions. To be a professional in any field required dedication and there are a plethora of characteristics to define it. Let’s look at the engineering profession. Organized into some sort of professional body? Tick. Confers status in society? Tick. Is ‘learned’ i.e. entry requires a high level of specialised training, research and education over a lengthy period? Tick. It offers autonomy in the job role, is informed by an ethical code, has a collective influence within society, is self regulating and collegiate? Tick. Is orientated towards service rather than profit? Tick. It is perhaps this final characteristic that is viewed today with some scepticism, with professionalism being brought into disrepute when profit overshadows altruism. Today’s professions are faced with conflicts related to duties of professionalism and competence which must be balanced with the needs of multiple stakeholders such as clients, patients, government and

“If professionalism was a prospective partner, we should be looking for someone who is honest, has integrity, shows due diligence, perseveres, listens and learns, is trustworthy, a creative thinker and perhaps likes long walks on the beach!” insurance companies. Although a profession is essentially altruistic, society accepts that they may obtain reasonable profit from their actions. Enter stage left the code of ethics. The definition of a profession includes that a code of ethics governs their activities. These codes require high standards of behaviour and practice beyond the personal moral obligations of the individual, in respect to the services provided to the public and in dealing with professional colleagues. At the risk of sounding like the TV show ‘Perfect Match’, if professionalism was a prospective partner, we would be looking for someone who is honest, has integrity, shows due diligence, perseveres, listens and learns, is trustworthy, a creative thinker and perhaps likes long walks on the beach! Our professional advisors are expected to hold our most intimate secrets in the name of client/professional confidentiality. Trustworthiness is paramount. If a profession is to be accepted by society, it must create, build and demonstrate trust. Members of professions need to reassure the community that standards are met, training has been undertaken, appropriate skills and knowledge have been attained and that they–the professionals–will apply the power of their knowledge in a fair and honest way. In the aftermath of the Canterbury earthquakes in New Zealand, the Royal Commission raised the need for engineers

to understand their responsibility to disclose information if the health and safety of people is at “significant and immediate risk”, despite perhaps being conflicted by a duty to preserve confidentiality owed to their client. How professions balance their power with their knowledge for the public good builds and characterises professionalism in the long run. It is also what keeps the professions relevant in our rapidly changing world. In the globalised world economy we now face new threats to professions, including the democratisation of knowledge via the internet, which has lowered entry barriers into professions. The democratisation of knowledge is unlikely to mean the end of specialised professions; it may simply mean that more people understand the opportunity to apply such knowledge. While professionals remain free to maintain their independence of thought and conscience, to maintain their integrity to use their asymmetrical knowledge and related power for the good of humanity they will flourish, even in an age of globalisation, and will retain their relevance for years to come. And maybe as knowledge grows, so too will the list of professions listed on the ‘authorised witness’ form. Engineers can sign a ‘stat dec’ now and we may soon see architects or journalists on the list as well. David J Singleton

Consulting Matters Business essentials

LEADERSHIP – is it charisma or a learnable skill set?

There is no doubt that in this media driven age that leadership can sometimes be mixed up with charisma. We tend to judge a politician’s leadership skills by how they appear on TV rather than actual policies or actions. Therefore those who may not feel particularly charismatic can begin to doubt their leadership aspirations. The truth is of course that the foundation for leadership is based first on real knowledge of the business or profession in which we seek to lead others and secondly a desire to accept the responsibilities of leading others. As for providing leadership—it is not about charisma but rather a series of learnable skills. Indeed experience with coaching many business leaders and empirical research shows that there five key skills that lead to the development of lasting leadership qualities.

1. EXHIBIT STRONG CHARACTER Of crucial importance to your team is their individual importance to you and your attitude to developing and testing their skills. In short they are asking you to create challenges and opportunities for them as well as providing useful critiques of their work. Indeed it is all about helping them to perform by improving either the environment, systems or strategies of the team overall. This is where character rather than charisma becomes very clear. Your team will judge you not on a wonderful speech—but rather on your everyday performance and the example you set for them. If you are transparent, treat others with respect, constantly search for improvement from yourself and your team, are passionate about your clients and your team – then you will be leading by example— delivering what you are asking them to deliver.

2. BUILD RELATIONSHIPS Here you need to work with individuals and your team as a whole. Communication is a must. Issues such as how their team performance contributes to the company overall should be understood by the team

Your team will judge you not on a wonderful speech—but rather on your everyday performance and the example you set for them.

as a whole. You should be seeking ideas from them and when relevant using them. Giving credit to the team or team member who thought up the idea is critical. Be quick to let incompetent people go if you are satisfied that it is their incompetence not that of the team or the company which is at fault. The old saying about bad apples in barrels is quite true—don’t be seen to reward incompetence. Look for ways to celebrate with your team rather than with individuals because at the end of the day it is the team that you want to deliver. Lastly, be accessible. I know one senior chairman in the communication industry who always tried to answer his own phone. Rather than inundate him with trivia his team appreciated his availability and used it wisely.

3. LEAD THE CHANGE ‘If it’s not broke don’t fix it’ is in many cases a truism of business. However if it is ‘broke’ then it is time to demonstrate your leadership by looking to change the way your company or your team does business. Chances are your team will feel threatened by the difficult operating climate and even more threatened when you set out to make changes. It is therefore critical to set out clearly why changes are required and co-opt the support of the team to implement them. Your relationship with the team will now be critical. Set objectives, involve the team in your strategies, and keep them abreast of the success resulting from change.

Business essentials Consulting Matters

4. FOCUS ON RESULTS

BE AN EFFECTIVE LEADER

Ultimately good leadership is judged by positive results. If you are to accept the accolades and rewards for good leadership then you must realise that your individual performance is a key ingredient of leadership. Here are a few questions you should be asking yourself on a regular basis:

We began by suggesting that charisma is often confused with leadership. It is true that many great leaders have charisma. Some leaders are shaped by circumstances such as a family with a history of leaders in business or the services. However for 95% of current and future leaders the areas we have outlined make up a manual for learning great leadership skills.

• What stretch goals need to be set for my company, my team and for me? • Do I constantly focus on the goals we set or do I drift off and think only of today’s operational jobs?

This article is really about improving your game—lifting your skills so that you will be

a better leader who is capable of helping others to also improve both as individuals and team members. Why not make “being a better leader” your objective for 2014.

Sean Wolrige Senior Partner LINK Business seanw@linkbusiness.com.au

• Do I give feedback to my team on their performance? • Have I provided a clear vision for my team? • Do I give strong consideration to the needs of my clients with appropriate customer service standards? • How can I improve?

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5. CONTINUALLY DEVELOP YOUR SKILLS

J O I N N OW A N D G E T 6 W E E K S F R E E

Jack Nicklaus once said that many golfers failed because they tried shots that they were not capable of completing successfully. He was saying that we need to understand our level of skill and then if we want to improve – set about improving those skills.

We understand that your health is important. That’s why we’re offering you 6 weeks free cover when you take out both hospital and extras cover through the Consult Australia health plan.*

Just as leading sports stars have to constantly set new goals and develop new skills via coaching, applying psychology and constant practise—so too, today’s business leaders need to constantly improve.

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You should consider attending professional workshops, reading journals in your industry and associated industries, seek business coaching and mentoring and learn to use technology more effectively.

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Seek inspiration from those around you. Talk to your coach about setting personal goals, talk to and copy other leaders or people you respect. Most of all accept that the hardest person to change is ourselves. Many who are happy to change others do not like change being instituted in relation to their own roles. So accept the challenge of change and consider:

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• New ways to improve productivity • New approaches to client service and marketing • New systems and tools • New ways to train and develop your team. In short, step outside your comfort zone. With each step you will grow as a leader.

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Consulting Matters Protecting your business

PPIR OR NOT TO PPIR? The Professional Performance and Innovation Protocol (PPIR) arose from the difficult professional indemnity insurance environment of the early 2000s. The engineering profession was determined to identify a solution that would be a ‘game changer’ for the liability and risk landscape that existed at that time and which was believed to be the cause of the difficulties in securing professional indemnity insurance. Through the Warren Centre for Advanced Engineering (an independent, industrylinked institute operating within the Faculty of Engineering at Sydney University which is committed to fostering excellence and innovation in high level engineering throughout Australia) a plan was developed that has now become the PPIR. Our organisation was honoured to be invited onto the Liability and Insurance subcommittee charged with identifying how the PPIR could be introduced to the various stakeholders involved from the liability and insurance perspective. Having had extensive involvement with the PPIR, we applaud the efforts of numerous individuals and organisations involved with its development. The principals and objectives espoused by the PPIR are highly honourable and set the bar for a level of excellence within the engineering profession. The strategies identified within the protocol can be, and are, used within the profession to minimise risk and to enhance the quality of engineering services provided. Having been fortunate enough to bring our expertise to the table in discussing the PPIR we examined it from the perspective of the risk and liability landscape. Whilst applauding its idealistic objectives we, as experts operating at the ‘sharp’ end

The engineering profession was determined to identify a solution that would be a ‘game changer’ for the liability and risk landscape that existed at that time and which was believed to be the cause of the difficulties in securing professional indemnity insurance. of the risk and liability field, believe the protocol has some fundamental issues that need to be addressed. These concerns have been repeated by lawyers and similar professionals. The main concern revolves around the perception that this protocol be considered the official ‘standard’ against which all engineers’ performance is to be measured. Whilst we have no problem with the protocol being used as a ‘guide’ for engineers to strive towards achieving; we have significant difficulties with the concept of it being introduced as a ‘standard’. This difficulty stems from the prescriptive wording used in the protocol. This wording implies that the engineer must fulfil all the requirements of the protocol otherwise they have failed in achieving; the expected level of professional standard of care. In the latest iteration of the PPIR there are no less than 47 tasks an engineer ‘should’ perform on every project from an individual perspective before they actually undertake any work. The use of the term ‘should’ leaves one with the impression that if an engineer does not perform any one of those tasks or is unable to demonstrate in a court of law they have

considered each task then they have failed to achieve the standard and therefore have breached their duty of care to their client. The intention of the PPIR is that its application is not isolated to engineers. The objective is to secure the ‘buy in’ of clients be they private or government organisations. This admiral objective will no doubt require a lengthy process before all purchasers of engineering practices adhere to the PPIR protocol. The other concern about this intent is that there does not appear to be any mitigation provided for in the protocol nor any suggested risk or liability transfer standards that clients are expected to adhere to once the engineer conforms to the PPIR protocol. It all seems somewhat ‘one way’ traffic— remaining yet again in favour of the client. How does the insurance industry view the PPIR Protocol? Unfortunately, with few exceptions, the insurance industry does not hold itself out to mould how society operates. The industry is like a mirror in that it reflects what our society has determined is normal procedure for undertaking business. The industry’s greatest concentration is upon making sure they return a reasonable return for their shareholders and grow their business.

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The intention of the PPIR is that its application is not isolated to engineers. The objective is to secure the ‘buy in’ of clients be they private or government organisations. A significant amount of time and effort is expended by insurers in identifying those areas of risk which cause them the greatest financial loss. When identified, Insurers then either exit that market segment or increase their premiums to a more profitable level. The PPIR Protocol is a bundle of excellent measures aimed at minimising risk and encouraging innovation within the engineering profession. Its implementation should be supported by all in the engineering profession. However it should not be ‘forced’ upon the profession as a ‘standard’ by which every engineer’s practice is measured. Having such a prescriptive standard by which engineers are measured may benefit the insurance industry in that it will make it much easier for liability to be determined, thereby removing some significant legal expenses incurred in attempting to debate a claim based upon conflicting expert engineering testimony. However this does not mean it will reduce the insurance cost burden of the engineering profession. It simply means claims will be settled more easily and in our opinion more frequently in favour of the client against the engineer. This could enhance the attractiveness of the engineering sector to the insurance industry as it will make judgments more predictable. But the question we ask is “at what cost?” Will the adoption of the PPIR have the long term effect of increasing insurance costs for engineers by 10 per cent, 20 per cent, 30 per cent or more? We do not believe it will result in a reduction in claims against engineers, more likely it will increase claims settlements awarded against engineers by making it easier for plaintiffs to establish a cause of action against them. In summary our final recommendation is to examine the PPIR Protocol in detail and adopt those aspects of the Protocol that can be practically introduced into your business model. Do not hold it up as a standard by which you and all other engineers of all disciplines and sizes are to be judged by in a court of law. Chris Bovill Principal

Professional Indemnity question? Consult Australia believes that it is important to support members in all aspects of their business. We also recognise the impact that the insurance market has on Consult Australia member firms in terms of availability, affordability and quality of Professional Indemnity insurance. Post your latest Professional Indemnity insurance cases on the Consult Australia Linkedin group and our PI Insurance Pathway will advise you on the best steps to tackle these issues.

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Bovill Risk & Insurance Consultants

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BRIC are specialist professional indemnity Insurance Brokers for engineers and members of the Consult Australia PI Pathway. To the extent that any of the above content constitutes advice, it is general advice without reference to your needs or objectives and therefore cannot be relied upon. Before acting on the above information you should obtain advice specific to your needs.

Consulting Matters Corporate social responsibility

Education and art offer a new life away from the dump soft drink cans, which are turned into a variety of fashionable retail products such as handbags, wallets and jewelry. Mothers working within the Livelihood Program can earn approximately four times more than they would expect to receive through scavenging for recyclable materials on the local dump site. The goods produced are sold locally and internationally with the funds going back into the school. Hyder Consulting has had a long association with the PCF, having first provided engineering services for the new school which is made from recycled shipping containers. Since then, Hyder has funded a class every year—including all activities, food and excursions.

For many of us the thought of children as young as three years old working on a dump site is too distressing to think about. However for some children in Manila this is a reality. Jane Walker was determined to make a difference and in 2003 set up the Philippine Community Fund (PCF)—initially operating a school and a daycare centre in a derelict warehouse adjacent to the Smokey Mountain Dump site—intending to break the poverty cycle through education. Since then, the Tondo School has grown significantly in student numbers and in 2010 moved to a new site. It now offers education to 500 children, with a further 300 students supported in other schools and colleges. Philip Levine, General Manager of the Tondo School and PCF operations in the Philippines, says that they follow a holistic approach to education. “We provide the students with an accredited curriculum, healthy food and programs for emotional and spiritual development. In return for good attendance children are also supplied with food to take home to their families”. “Our ultimate goal is to go from enrolment to employment. And although it is still early days–with many of our earlier students still studying–we are seeing that we can achieve this goal. We will soon welcome back one of our original students as a teacher, and we have a further 29 children currently studying

in colleges and universities. This has been remarkable progress in just a few years”. In recent years PCF has also developed a business to support the parents of the children attending the school and through this enterprise raises much needed funds. The Livelihood Program now employs around 100 mothers who recycle materials, including magazines and ring-pulls from

Greg Steele, Hyder Consulting’s Managing Director for Australasia, says that Hyder is passionate about making a difference in the communities where they are active. “Hyder has an office in Manila, which is one of our Global Excellence Centres, providing engineering services for our offices in Australia and globally. It’s been great to be involved with an organisation that is changing the lives of these children. The Hyder team recently held a charity collection to provide a variety of goods for the school for their annual Tondo Market Day where the students are given items of clothing, toiletries, books and educational supplies as rewards for achieving their

Corporate social responsibility Consulting Matters

educational goals and meeting the school’s objectives for behavior. The response from the Hyder team was overwhelming”. To further extend their involvement in the school, Hyder has also commissioned the PCF to create artwork collages of some of Hyder’s iconic projects using the recycled materials. There are collages on display in Hyder’s UK and German offices, and Hyder’s Australian team recently commissioned the creation of a collage of the Sydney Harbour Bridge for their Sydney boardroom. Philip says the commissions from Hyder for the collages have been used to create an After School Art Club that gives students the opportunity to explore art and music. Students can join the choir or take art classes or ballet lessons as part of the program. “The After School Art Club has been very popular with the kids. Some really love the choir while others enjoy the art; it really gives them an opportunity to explore an area of interest which is a real privilege for these children. Extending the school day also means that many of the children can avoid having to work on the dump site after school. We have also seen some success; Jessa was a waste picker prior to enrolling in the school and through our association with Ballet

Manila she discovered a love and natural talent for ballet. She has now performed on Manila’s national stage”. Philip says that such life changing results make all the efforts worthwhile and they are hoping for a very bright future for their

children. “But we do need more supporters to help us keep the dream alive”. Jill Murray Hyder Consulting For more information please go to www.p-c-f.org

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Consulting Matters Corporate social responsibility

Aurecon’s journey to meaningful reconciliation partnerships As part of its Reconciliation Action Plan commitments, Aurecon has partnered with the University of Technology Sydney (UTS) in support of Galuwa – the University’s program to entice Indigenous Australian high school students to pursue studies in Engineering and Information Technology. “Developing a Reconciliation Action Plan for Aurecon has been the start of a journey to deliver meaningful opportunities for Indigenous peoples within our Industry”, said Abbie Wright, Aurecon’s Diversity and Inclusion Manager. “We were looking to form relationships which would directly increase the percentage of Indigenous peoples in our organisation, and more importantly within our industry; Galuwa was exactly the kind of program we were hoping to become involved with”. Galuwa is delivered in the form of one-week student experiences at which the participants engage in numerous activities that relate to the Engineering profession. “As a partner organisation, Aurecon has the opportunity to participate alongside the students and provide insight into life as a professional Engineer”, said Abbie Wright. “The University has developed a fun, informative and respectful schedule of activities that will spark not only an understanding of, but also passion for, our profession”. “Galuwa means ‘to climb’ in the Gadigal language, and that’s exactly what we want Aboriginal and Torres Strait Islander high school students to do through this experience”, said UTS Galuwa Program Manager, Maritza Messina. “Galuwa ensures Indigenous students have the opportunity to access high quality education that can lead to rewarding professional careers”. Aurecon’s Reconciliation Action Plan focuses on laying foundations for successful Indigenous recruitment programs. “We know from research findings that only a small percentage of Aboriginal and Torres Strait Islander students who complete Year 12 gain a university entrance score, and that less than half who commence university studies actually complete their degrees”, said Abbie Wright. “If we are serious about increasing racial diversity within our industry, as well as creating opportunities for our Indigenous peoples, we need to be a part of programs that support qualification attainment with respect for cultural differences”. Aurecon’s Indigenous cadetship programme has been incredibly successful

in New Zealand with Memorandums of Understanding with both the Ngai Tahu and Waikato Tainui iwi that support the professional development and employment of young Maori. “We have learnt an incredible amount from our New Zealand Maori Cadet Programme”, said Bill Cox, Aurecon’s Australia and New Zealand General Manager, “and it is through these lessons that we now look to support Aboriginal and Torres Strait Islander internships and employment within our business”. A key component of the success of Aurecon’s Maori Cadetship Programme has been the pastoral care elements, addressing the cultural and social needs of the cadets. “The fact that Galuwa is run in collaboration

with the University’s Indigenous House of Learning, Jumbunna, was very appealing to us”, said Abbie Wright. “We feel safe in the knowledge that should we recruit Indigenous employees as a result of our Galuwa partnership, they have been and will continue to receive pastoral care support through Jumbunna”. “Our partnership with the University of Technology Sydney has not only supported our Indigenous strategy”, said Abbie Wright. “It has put us in contact with a dedicated team of like-minded individuals, all committed to supporting meaningful Reconciliation”. William Cox Aurecon

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Consulting Matters Corporate social responsibility

Turning on the lights It’s hard to believe—surrounded as we are by the endless buzzing, flashing, beeping and glowing—that one in four people in the world’s second most populous country lives completely without electricity. Approximately 25 million of those living in energy poverty in India live in urban slum areas spread across the country’s major cities, practically invisible to most. These families use kerosene for lighting in their small, enclosed tent homes–a fuel which is expensive, environmentally damaging and dirty. Indoor air pollution from burning fuels such as kerosene is the second biggest killer of women and children in India. Alternative, appropriate options are desperately needed. Various individual, portable and cheap solar lights are already readily available in the global market, so the problem in slum communities is not necessarily a lack of technical solutions. Rather, it is a lack of accessible distribution and financing. Pollinate Energy is a social business bringing sustainable products to India’s urban poor, providing opportunities for local entrepreneurs, “Pollinators”, to start their own distribution business selling lights door-to-door in urban slums. For many families, kerosene is an ongoing cost burden, so substituting instalments that pay for the light over a five week period is an attractive proposition. This is sustainable

Top: Solar light - Making life easier so life can continue after the sun goes down. Left top: Cook-stove demonstration – AECOM’s Rosanna Sanderson supporting a Pollinator in the demonstration of a new product Left: Kate Crowley completing a product demonstration with a Pollinator, April 2014.

Corporate social responsibility Consulting Matters

Above left: Megan and Kate with a local Pollinator, April 2014. Above right: AECOM’s Chris Austin-Berry, Megan Aspinall and Kate Crowley, who completed Pollinate Energy’s Young Professionals Program in April 2014.

in every sense of the word. It is economically viable for the families through micro-finance loans, it reduces environmental damage by switching families to a clean energy source, and it is socially beneficial through enabling study and night time interaction for families. Additionally, the light systems selected have mobile phone charging capability, allowing community members to be connected and contactable for personal and employment reasons.

Pollinate Energy is a social business bringing sustainable products to India’s urban poor, providing opportunities for local entrepreneurs, “Pollinators”, to start their own distribution business selling lights door-to-door in urban slums.

To date, Pollinate Energy has installed more than 4,500 solar light systems, reaching more than 21,500 people in 500 communities. This has saved more than 173kL of kerosene, and 415 tonnes of carbon dioxide emissions.

smokeless cook-stove, developing an annual Impact Assessment Report and exploring new products such as a toilet and a shelter.

Pollinate Energy was co-founded by five energetic young Australians. As they developed their business, they quickly realised that they would have to look for help to continue growing. This is how Pollinate’s fellowship and “intrapreneurial” Young Professionals Program (YPP) began. As a corporate partner, global professionaltechnical services consultancy AECOM supports its team members participation in Pollinate’s Young Professionals and Fellowship programs. To date, six such AECOM team members, including engineers, project managers and marketing specialists, have participated in the two week YPP, and two in the four week fellowship, working on a range of projects including introducing a new

AECOM’s team members have all found that learning about social business and intrapreneurship has not only allowed them to contribute to the community in a meaningful way, but has taught them innovative ways to interact within their own company. Megan Aspinall, a Renewable Energy engineer at AECOM, was a YPP participant this year. “One of Pollinate Energy’s key differentiators is the team’s client focus. Working in consulting, client focus is a driving factor for business success and is commonly preached. From being out in the field with Pollinate’s co-founders, it’s clear Pollinate goes above and beyond to ensure its products suit the needs of its customers; indeed, the business has focused on appropriate technologies and on developing a business model that suits

its diverse customer base. They have trialled many products in the field and welcome constructive criticism from their customers, as it allows them to understand which products and approaches work, and informs those products’ further development.” Pollinate Energy runs multiple programs a year, with the next fellowship in July and YPP in October. Most of AECOM’s program participants are ongoing volunteers; having witnessed first-hand the benefits of a simple light on a family’s life, they’re emboldened to continue brightening the future for India’s urban poor. www.pollinateenergy.org Samantha Passmore and Rosanna Sanderson Professional Engineers - AECOM Program Alumni - Pollinate Energy

Consulting Matters Our industry

Fast, efficient, sustainable

RESEARCH BY THE MASSACHUSETTS INSTITUTE OF TECHNOLOGY IN THE US HAS FOUND THAT MODULAR CONSTRUCTION CAN DELIVER A SIX PER CENT REDUCTION IN COSTS. IN A MARKET WHERE A ONE PER CENT SAVING CAN MEAN THE DIFFERENCE BETWEEN PROFIT AND LOSS, MODULAR MAKES BUSINESS SENSE. AND, IN A WORLD OF FINITE RESOURCES, MODULAR MAKES ENVIRONMENTAL SENSE. In the past, the term ‘modular building’ may have evoked flat-packed homes or cold-war era architecture, but it’s time to rethink this view. As our population grows, we must consider construction approaches that take less time, use fewer materials and leave a lighter environmental footprint. While there have been many innovations in our industry, the construction process itself

has undergone relatively few changes over the last century. Each project continues to be built in roughly the same order: design, site work, foundations, structural work, exterior, mechanical systems and interior finishes. Modular construction condenses this process by undertaking off-site and on-site work in tandem. As a result, the time taken to complete a project can be halved.

Modular construction condenses this process by undertaking off-site and on-site work in tandem. As a result, the time taken to complete a project can be halved.

The ‘B2’ residential skyscraper in Brooklyn is currently on track to be the world’s tallest modular building, consisting of 32 storeys of prefabricated apartments. A number of innovations—including the application of a rubber sealant to the façades of individual modules which eliminates the need for metal welding work—are expected to reduce the construction time by a third. Modular projects are faster to build but they are also more sustainable. Using precision engineering, large-scale purchasing power and careful quality control, a modular approach uses fewer materials than traditional building methods and generates far less waste. In 2010, the National Waste Report found that construction and demolition waste accounts for 38 per cent of Australia’s waste sent to landfill. The

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floor plans and attractive façades are possible, we’ll see more companies—and consumers—take to modular.

efficiency of factory-manufactured building components can significantly reduce materials wastage. Buildings are made to measure, and nothing is wasted due to damage, storage or the vagaries of weather. It’s also a process that is worker-friendly— with fewer worksite injuries reported. Melbourne-based company Unitised Building (UB), for instance, estimates that its process can cut waste by around 80 per cent. Modular construction essentially avoids waste upstream, rather than diverting it downstream. In the last few years, UB has built everything from hotels in the Pilbara to apartments in Melbourne. One project, a joint venture with the Hickory Group, is The Little Hero apartment building in Melbourne. Designed by Fender Katsalidis, the project was completed in an accelerated time frame of nine months using parallel on-site and off-site construction—taking around half the time of a conventional build. Transport efficiencies were also gained from not moving small amounts of materials to site. Reducing truck movements by around 60 per cent saved time, and minimised greenhouse gas emissions, air pollution and congestion. Modular buildings can also be more easily disassembled, refurbished and relocated, which reduces the demand for raw materials

and minimises the energy expended to create a new building. While some modular LEED-rated buildings are awarded points for being ‘designed for disassembly’, it’s no new concept. London’s Crystal Palace, constructed in Hyde Park for the Great Exhibition of 1851, was one of the first examples of a modular approach. Built in just a few months, the Crystal Palace featured a series of prefabricated parts that were able to be disassembled and reassembled in just five months. While the building is long gone, it’s still considered a model of modular construction. In the US, modular building accounts for just one per cent of the construction market— although it is growing. In the UK, modular still only accounts for around two per cent of the market. In Australia, just a few companies are embracing modular. SO, WHY HASN’T IT TAKEN OFF? It’s fair to say that modular construction needs an image makeover. The standard criticism is that exciting architecture isn’t possible within the constraints of the modular form and that the value of modular buildings is uncertain. But modular construction shouldn’t be viewed as a barrier to creativity—but rather as an opportunity to be more ingenious. As more projects demonstrate that high end finishes, unique

Certainly, our industry remains slow to embrace innovation, and the potential for modular to revolutionise the entire construction process has made some people nervous. Currently, around 10 per cent of Australia’s workforce is in construction—if we halve the time taken to complete a project, will that mean less jobs? Pacific Modular Solutions, for instance, recently completed a three-storey commercial building in Collingwood from modules prefabricated in China then shipped and lifted onto an existing rooftop. That trickle of outsourced projects has the potential to become a tsunami. However, while Australian companies may begin to offshore parts of the construction process to China, Australian companies that can commercialise their expertise may find themselves exporting their techniques to the world’s biggest housing market. The potential advantages in scheduling, costs and environmental efficiency could be a solution for the housing needs of more than two billion people in India and China over the next 20 years. And it’s not just homes— everything from offices to medical facilities to military installations to restaurants and churches can be made to measure. Professor of Sustainability at Curtin University, Peter Newman, has recently suggested that modular construction may provide a solution to “turn around [Australia’s] manufacturing industry from ailing to growing.” Modular construction has the potential to create green jobs and new industries, cut waste, improve efficiency and deliver more sustainable buildings. It’s up to us to seize those opportunities. Tony Arnel Global Director of Sustainability Norman Disney & Young

Consulting Matters Our industry

Trimble Building BUILDING ON A RING OF FIRE Located on the southern boundary of the Pacific Ring of Fire, New Zealand is a seismically active country. Low level shaking occurs in some parts of the country on a near daily basis, and while the level of activity hasn’t changed, significant earthquakes in Christchurch and Wellington in recent years are a reminder that ‘stronger’ isn’t always better. Since the significant Napier earthquake in 1931, seismic design has featured in New Zealand structural design. The world’s first baseisolated building was designed by Opus International Consultants (formerly Ministry of Works) in 1982, and on-going research means engineers now have a suite of tools that enable them to design for performance objectives, not just the Building Code. PERFORMANCE BASED DESIGN Current New Zealand codes are based on the principle that a minor earthquake should cause no building damage, a moderate earthquake may cause repairable damage, and a large earthquake may cause irreparable damage but the building should not collapse. During the numerous significant earthquakes in Christchurch between 2010 and 2013, many buildings withstood larger earthquake forces than many people expected without collapse, but these structures were not economical to repair. Traditional design methods typically rely on the ability of the primary structure to deform and absorb energy without failing in a brittle manner. Forces are concentrated in the most ductile regions of the building that may be significantly damaged in a large earthquake, sometimes beyond repair. The ductile behaviour reduces earthquake design loads, making it possible to achieve economic seismic designs that will not collapse prematurely in a very large earthquake. By taking a performance based approach, a building can be designed to meet specific needs, and damage limited to specific areas of the building. This means the building could be designed to remain fully operational following a major earthquake if required.

There are a number of systems that can be utilised to deliver the required performance following a seismic event, depending on the needs of the structure and the client. BASE ISOLATION Base isolation reduces the effect of ground shaking on the structure by ‘isolating’ it from the ground using elastomeric or sliding bearings, and allowing the structure to behave as a rigid unit without differential movement between floors. LATERAL LOAD TRANSFER In contrast, the structure itself can also be designed to dissipate energy at chosen locations, incorporating buckling restrained braces to transfer lateral loads or viscous dampers which act like shock absorbers and reduce loads being transferred in traditional steel moment frame structures. PRES-LAM By utilising pre-cast concrete or laminated veneer lumber (LVL) beams, columns and walls with prestressing tendons, another low damage solution can be designed that allows a building to move in a controlled way and re-centre following an earthquake. Developed off the back of research at the universities of Canterbury and Auckland, the systems known as PRESSS and PRES-Lam are able to reduce damage through the use of ‘plug-andplay’ energy dissipaters, which provide an economical repair solution as they are easily replaced following significant seismic events.

damage in 2011, and the new 6000m2 building is the first commercial building in New Zealand to use both post-tensioned LVL frames and walls with energy dissipating devices. It is the largest PRES-Lam building ever constructed, and increased public awareness of safety and the benefits of timber as a structural material have driven the use of this new technology on this scale. The performance-based design approach means we can give the tenant certainty around performance in future events, and around post-event operational and occupancy needs. For Opus, it has been a natural progression from its pioneering role in baseisolation to leading the design of low damage buildings.

Jamie Lester Senior Structural Engineer Diana Barr Structural Engineer Opus International Consultants Christchurch

BUT – ONE SIZE DOES NOT FIT ALL Design solutions need to address the competing priorities of building acceleration during a quake and the drift that occurs as result of the earthquake forces. This means giving careful consideration to selecting a system that best meets a client’s seismic performance expectations. CASE STUDY Opus has implemented a range of these damage-limiting designs, most recently in the Trimble Navigation Offices in Christchurch. The building suffered earthquake and fire

What do you think is the most pressing issue our industry is facing? Submit an industry comment to Consulting Matters today. Send your comment to our Editor (max 200 words) at voltaire@consultaustralia.com.au.

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THE LATEST PATHWAY TESTIMONIAL SLR Consulting Australia’s range of environmental engineering and scientific services has broadened considerably over the past several years. As we continue to grow, new services are being introduced, new offices open and other consulting practices are being acquired. Our overseas work on significant international projects has also increased markedly. As a consequence, greater focus on managing the technical and commercial risks of our multi-disciplinary service delivery was required. Significant changes to our Professional Indemnity (PI) Insurance cover became necessary. We realised that professional risk management advice well beyond that provided by a normal PI broker was required – we needed an insurance advisory service with considerable consulting industry experience.

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SLR Consulting Australia selected a broker associated with Consult Australia PI Pathway, as the services provided seemed an ideal match. The broker was able to ensure continuity of cover, broadening the scope of cover and negotiating a reduced premium. Their contract review service and ongoing staff risk management training have proven invaluable to our business, enhancing the professional standard of our client contractual relations and improving the quality of our service delivery. SLR Consulting Australia Pty Ltd

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Consult Australia’s PI Insurance Pathway gives Consult Australia members access to the PI market through a Panel of Brokers selected by Consult Australia. Consult Australia is providing a referral service only and is not providing any form of financial advice or offering a financial product. Consult Australia does not guarantee the value, price and terms of cover that may be received from any member of the Panel of Brokers. Any agreement entered into through use of the PI Insurance Pathway will be expressly between the Panel Broker and the Consult Australia member firm.

March 2014

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