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Contractors may miss out on joint venture opportunities

3 August 2012

“Over cautious” contractors may be missing out on joint venture opportunities

Civil contractors may be missing out on legitimate collaborative joint venture opportunities due to being “overcautious” regarding the Commerce Act.

Commerce Commission Chief Advisors Nicky Beechey and Barry Sutton told the annual conference of the New Zealand Contractors’ Federation (NZCF) that contractors needed to strike a balance between ‘being too cautious or too brave”.

Mr Sutton said that, while illegal anti-competitive agreements can result in significant penalties under the Commerce Act, with more severe penalties expected to be introduced next year, collaboration can also be pro-competitive and businesses can also sometimes seek to collaborate via lawful agreements.

He advised contractors to gain a good working knowledge about the key rules of the act, to seek legal advice around any collaboration and to contact the Commerce Commission for guidance when needed.

“It’s important to know what to do to stop us stepping into the area of anti-competitive behaviour but also how to avoid being too cautious and missing out on legitimate opportunities,” he said.

Federation chief executive Jeremy Sole said: that the message from the commission was appropriate and timely given the economic conditions and the availability of larger projects where smaller contractors are not able to compete with only their own resources and expertise.

“Clarity in this area will encourage those SME businesses who are willing and able to grow and will ensure there are more options on the growth path through the industry,” he said.

“The Commerce Commission is to be congratulated on this proactivity and contribution to productivity and economic development.”

The challenges and advantages of joint ventures also came under the spotlight in an address to the conference by Ross Barrett, President of the Civil Contractors Federation of Australia.

Mr Barrett, who was recently awarded the Order of Australia Medal (OAM) and named as one of the 100 most influential engineers in Australia by Engineers Australia, has worked on joint ventures of various types and sizes for 40 years.

“The most fundamental accessory for a joint venture is a detailed legal agreement between the parties,” said Mr Barrett.

“A successful joint venture will widen the range of work available to you; extend the range of work, increase resources and increase knowledge.”

There are 370 people attending the conference at the Marlborough Convention Centre. It finishes tomorrow.

ENDS

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