On 12 October 2020, the Australian Constructors Association (ACA) launched a ground-breaking Australian Construction Industry Charter (“Charter”) which is intended to be the driving force to ensure that stimulus projects are delivered efficiently and that their benefit is maximised across Australia.

The Charter consists of ten commitments to reform the industry which have been developed by some of Australia’s leading construction and contracting companies. They focus on addressing and improving an array of matters which notably include: mental health and well-being, working more closely with clients to improve project outcomes, improving industry diversity, nurturing the supply chain, increasing female participation and overall creating a positive and less hostile industry culture.

All ACA members have pledged to conduct their operations in a manner that adheres to the 10 commitments outlined in the Charter, which can be viewed in full on the Australian Constructors Association website.

“In an industry first, we have clearly identified the key elements required to improve the poor sustainability of our sector and effectively deliver the pipeline of stimulus projects. We have also developed our own Charter to ensure we are able to achieve lasting positive change and set the industry up for future success.”
– ACA Chief Executive Officer Jon Davies.

Ten Commitments

The ten commitments to clients of the construction industry encompassed by the Charter read as follows:

  1. Improve outcomes for all project stakeholders – ensuring all participants are aligned on achieving the same project goals and appropriately compensated for accomplishing them.
  2. Maximising the social and economic benefit of construction – this includes prioritising procurement from local suppliers, and social and indigenous enterprise to maximise the economic and social benefits of the projects.
  3. Improve industry diversity – particularly gender diversity. This will have a profound and positive impact on the culture of the construction industry, interaction with key stakeholders, and the success of businesses and projects.
  4. Improve the health and wellbeing of the workforce – recognising that a sustainable industry is one in which the longer-term wellbeing of the workforce is understood, managed, and continuously improved.
  5. Build capacity, capability, and skills – employing a large number of skilled and unskilled workers, playing a critical role in the health and prosperity of Australia and its citizens, and improving both the retention of employees and the permanency of employment across the industry.
  6. Build social licence to operate – keeping communities informed and involved as important project stakeholders; committing to improving social outcomes through the engagement of social and indigenous enterprises; and providing employment opportunities to those that have been displaced or are disadvantaged.
  7. Reduce our impact on the environment – committing to reducing carbon emissions from our activities, increasing the amount we recycle and reducing the amount we waste.
  8. Strive for improved industrial relations – commitment to improved engagement with our workforce and those that represent them; and to the creation of stable employment opportunities that allow for flexible working in an inclusive and safe environment.
  9. Encourage innovation and improve productivity – embracing digital technologies that have the potential to provide whole of life asset cost savings and supporting the development of an Australian prefabrication industry.
  10. Collaborate with all stakeholders to ensure risk pricing is open, transparent and appropriate – to identify risks early in the project procurement process, allowing time for risk to be better quantified and mitigation strategies developed.

Mr Davies has announced that definitive targets to achieve these commitments will be set over the next few months, with progress openly and transparently monitored and reported on a regular basis.

The Framework

The Charter has been developed alongside a Framework for a More Sustainable Construction Industry (“Framework”). The Framework identifies three pillars that are essential to support a sustainable construction industry with enough capability, capacity and skills to deliver and leverage the social and economic benefits of construction stimulus spending. The three pillars are:

  1. Positive Industry Culture (less conflict-driven industry will drive higher productivity);
  2. Equitable and Aligned Commercial Frameworks (benefits of projects are spread across all stakeholders, not captured by a few); and
  3. Sufficient Capacity, Capability and Skills (lifting the skill base of the nation).

The flow-on effect of the implementation of the Charter could be considerable and aligns with other initiatives in the industry such as collaborative contracting and a focus on mental health and female engagement. The Framework is clear in its message that the construction of new infrastructure plays a significant role for any government seeking to stimulate their economy following an economic recession, such as the current COVID-19 induced recession here in Australia.

The members of the association (listed here) include many of the largest contractors in Australia who often undertake major projects for the Federal, state and local governments as well as large developers. Parties that subcontract to those members should review and consider the impacts that it may have, however, the Charter would appear to hopefully result in a more collaborative, successful industry as a whole.

The Charter can be viewed here.

And the framework is available here.

If you are concerned about any implications or obligations that may arise as a result of the Charter, please don’t hesitate to get in touch with us at Morrissey Law + Advisory

Morrissey Law + Advisory communications are only intended to provide commentary and general information as at the date of publication. They are for reference purposes only, do not constitute legal advice and should not be relied upon as such. Formal legal advice should always be obtained about particular transactions, contracts or matters of interest before taking any action based on this communication. Authors and contributors may not be admitted in all State and Territories.