2032 and Beyond: Dispute Resilience for Brisbane’s Olympic Legacy (Part 1)

Andrew McCormack:

Hello and welcome to Ashurst Business Agenda. This is the latest episode of 2032 and Beyond, our podcast series focusing on the Brisbane 2032 Olympic and Paralympic Games. My name is Andrew McCormack, I'm a partner in Ashurst's Projects and Energy Transition team. In this podcast series, we're taking a detailed look at a range of important issues relevant to the preparations for and legacy flowing from the 2032 games.

In this two part episode, I will be speaking with industry experts, Melissa Yeo, a partner in the Ashurst Dispute Resolution Team, and Mike Duggan, a director in our Ashurst Risk Advisory Business who specialises in strategy and sustainability. Together we'll be discussing the critical topic of building dispute resilience and why it is so critical for Brisbane 2032. We will consider the importance of early planning and of supporting dispute resolution through a risk-based approach.

Mike, I might get you to kick us off. Why is dispute management so critical for Brisbane 2032?    

Michael Duggan:

Well, Andrew, I think the main thing here is for those listeners to really understand that these games for Brisbane really are such a big deal. I mean, when a city signs up to host Olympic and Paralympic games, I mean they're signing up to deliver one of the most compressed, complex and capital intensive projects on the entire planet. And it's coming down on them under a bright, shining hot global spotlight.

Brisbane has fewer than seven years. We just celebrated this. In fact, I got a pin sitting on my desk right now from meeting with the local organising committee recently and they've literally just celebrated seven years until the date that we have our opening games ceremony. And that is not a long time to really be able to procure, plan, build, and operate the portfolios, venues, transport links and accommodation assets, and even digital infrastructure that's necessary to have these games come off in an incredibly Brisbane-like and Australian manner.

And there's bound to be a few disputes along the way. Getting this deal done is not going to be easy. The scale of the games, I mean alone creates so many different touch points for disagreement, things like land access, which we've been certainly seeing as a flashpoint around those stadiums. Design and development, where are you going to put the stadium on Victoria Park? How is it going to integrate the local community?

We'll see things along the way like supply chain capacity issues and sustainability specifications that try to make these games the most sustainable and the most, let's say globally recognised games that have ever been presented. And look, workforce issues are something that you're always going to see with huge volunteer and private construction and other types of workforce. And inevitably all those interfaces are going to create significant risks amongst the dozens of major contractors and various different businesses that'll be part of the game's buildup.

I think there'll be a lot of flash points. They're going to have to be managed proactively. Experience from past games, and you can read this out there on the internet if you want to Google, it can really show that things like cost overruns are going to escalate super quickly. London was up to 76% over its initial capital budget, and Rio more than doubled. So things like these delays are really going to compress development. Construction schedule is going to be under increasing pressure, and these are going to be expensive measures that these types of organisations are going to have to catch up with. Damaging protracted disputes that drain things like management bandwidth and really erode collaboration, it's just going to create so many problems on the ground. And Brisbane 2032 is going to face a really heightened reputational dimension.

The game's IOC contract really hard wires in some pretty stringent contractual requirements. I'll pick out one of those; sustainability commitments are like none other. Things like low emissions construction, genuine circular economy practices, and transparent supply chains are things that they're going to have to really be pushing for over the next few years to ensure that there are things that are demonstrable when the games are actually delivered. And the public, and you're seeing this play out in so many different contexts across Australia, really has a very low tolerance for green washing. And litigation against emitters or higher carbon emitting businesses and projects are really being put up in the spotlight across Australia. If disputes around things like providence of materials or low carbon footprints, you'll spill out to the public domain, that reputational impact really could undermine the broader legacy narrative that Queensland's designing to seek and build through these games.

So what's my key message, Andrew? Dispute management is not a back office function. It's mission-critical for delivering the games on time, on budget, and with Brisbane and Australia's credibility intact.

Andrew McCormack:

Thanks, Mike. So Mel, given Mike's opening remarks and based on past experience, how can early planning prevent disputes before they even arise?

Melissa Yeo:

Thanks, Andrew. Well, firstly, I would like to say that I wholeheartedly endorse Mike's comments and they lead me to identify, in response to your question, what strikes me as a critical thing to remember if you are going to try and prevent disputes before they arise. And really, from my perspective, I think mindset is going to be really important. And that mindset is really acknowledging that, look, on any project like this, given its magnitude, its complexities, you can expect the disputes are going to happen. And that's not a bad thing if you recognise that at the outset. And certainly if you recognise it at the outset, then you can start to plan for it. And you can start to work out frameworks to try and minimise the impact of any disputes and actually avoid them before they become a full-on complex dispute that goes on for many, many years and has a significant tail.

A number of ways to prevent disputes before they arise, I think as part of that mindset piece, is really just acknowledging that look, it's really important to put the time and the effort into thinking about, well, what are the mechanisms that we can implement to plan for them at the outset? And this really involves taking a really good look at your contracts, ensuring that they are fit for purpose, that they incorporate provisions that are designed to help you through that process if a dispute arises, rather than adopting a boilerplate that relates to a totally different type of project that actually isn't fit for purpose. You want all of your contracts upstream, downstream talking to one another, and you want there to be provisions in there that facilitate the management of issues as they arise. Oftentimes you can end up having a dispute about your dispute calls, and that's the last thing you want. And that tends to happen when we adopt boilerplate provisions.

So I think in terms of practical steps for stakeholders, government, development contractors who are fortunate and participating in this exciting phase for Brisbane's future, I think really just embracing the fact that problems are going to arise and there's going to be differences of opinion, and that's okay. And the important thing is that you work together at the outset to agree frameworks to facilitate resolution of any issues rather than just turning a blind eye and hoping for the best. If you fail to plan, you plan to fail. I can't take credit for that saying. Obviously, everyone's heard it before. I don't know who originally coined that phrase, but it is absolutely true in the disputes.

And there's a number of things to consider when you're thinking about managing your disputes that will undoubtedly arise as you go forward on a project that involves alternative dispute resolution mechanisms. There's any number of ways that parties can think to resolve their disputes, and a number of them are certainly tried and true. You've got expert determination, you've got arbitration, you've got facilitation, you've got conciliation, you've dispute resolution boards or dispute avoidance boards as they call them. Those can be baked into the front end and incorporated into your contract before your dispute even arises.

And you can think about, well look, how do we want to resolve issues as they arise and what's going to be most suitable for this project? And I think just touching on the point that Mike made earlier, which is the giant spotlight that's going to be on Brisbane, one of the particular features of the 2032 infrastructure projects that are underway is the fact that the entire world is watching. Now, that is not ordinarily the case, and with that in mind, there is really no alternative but to get these projects done by the time that we welcome the world. And those athletes need to get on the pitch or in the pool to do their thing.

And so that creates another element of pressure that parties should have regard to when they're thinking about, well, look, how do we plan for the issues that might arise, and how do we implement a framework and what framework is most suitable for us to resolve those quickly so that hey, when the games do finally kick off, we get to focus on that and not on all the variety of disputes that have emerged up until that point.

Andrew McCormack:

Thanks. Well, there's certainly a lot of food for thought there. Bear in all that in mind Mike, how can risk management support dispute prevention and dispute resolution?

Michael Duggan:

Well, I love that concept that Mel just spoke about mindset. And I think for a newish board games executive, they really need to be taking that mindset. And in the risk world, we call that a risk-based approach. They need to look at that from the outset and they should be starting to consider risk as a key topic, any of their meetings, their plans and their strategy. And some of the risk-based approach, the way that you kind of look at that is really, it's about getting in early. They want to target those areas where disputes are most likely to happen, what you'd call risk-based hotspots.

And practically that means doing things like embedding clear contractual mechanisms up front, those kind of early warning notices that might help them to be able to point out some of the issues that might be arising. And then put in place things like recording records, escalation pathways, those things that can help them to move an issue from something that's, let's say at a site level up to the executive's office so it can be discussed, and if necessary, as Mel said, put forward to something like a standing dispute board.

And then as they progress through this process, it's about layering on the next levels of risk management and prevention or various different controls. And that can be things like systemic tracking of issues. So if they're building a new stadium, being able to understand and have every contract manager understand that they need to maintain a live issues register. And that has to be aligned to the way the program's actually being delivered, and that has to be aligned to some form of risk management system or an enterprise risk system. Those types of things allow them to be able to not skimp on managing and analysing those things that they need to understand along the way that will help them to make decisions to be able to head off some of those key risk issues that might pop up that will eventually potentially lead to disputes.

They also need to really consider things like real-time monitoring. You can't just kind of continuously try to, off the cuff, understand what kind of risk environment you're dealing with. You need to have systems that set up things like dashboards that track issues as they occur, track resolutions as they occur. And also create an ongoing set of documentation, those audible records, meeting minutes, design chain logs, environmental monitoring data, those types of things that become objective evidence bases if they're needed when you move into a dispute environment. Those types of things, with data, allow you to be able to plan for early resolutions. So bringing all the parties around the table to talk about things that are actually recorded, understood, and accepted by, let's say a games committee. Those types of things will really assist in those disputes being able to progress forward.

And finally, they really need to have some form of key performance indicator around risk. You'll have safety metrics. They need to have risk-based metrics that'll help the leadership to be able to look for issues and understand where those issues are escalating beyond where they should and that they could potentially lead to a dispute.

Andrew McCormack:

Some really excellent insights there, Mike. Thank you very much for sharing those.

Thank you for listening to Ashurst's Business Agenda and this latest episode in our 2032 and Beyond podcast series. To listen to previous episodes in this series and subscribe for future episodes, check out Apple Podcasts, Spotify, or wherever you get your podcasts. While you're there, please feel free to leave us a rating or a review, but for now, I've been your host, Andrew McCormack. Thanks again for listening and goodbye.

This podcast contains general information and does not constitute legal advice. Ashurst is not a sponsor, licensee, or promotional partner of the Brisbane 2032 Olympic and Paralympic Games, the Olympic movement, nor any Olympic body, event, team, or athlete. Nothing in this podcast is intended to suggest any such sponsorship, license or promotional affiliation.