Sydney – Global law firm K&L Gates continues to strengthen its energy, infrastructure and resources team with the appointment of Matt Baumgurtel as a partner in its Sydney office.Read More
Cyber-physical attacks on critical infrastructure that have the potential to damage those physical assets and to cause widespread losses to third parties are keeping your insurer awake at night. A cyber-physical attack on critical infrastructure occurs when a hacker gains access to a computer system that operates equipment in a manufacturing plant, oil pipeline, a refinery, an electric generating plant, or the like and is able to control the operations of that equipment to damage those assets or other property. A major cyber-physical attack on critical infrastructure is a risk not only for the owners and operators of those assets, but also for their suppliers, customers, businesses and persons in the vicinity of the attacked asset, and any person or entity that may be adversely affected by it (e.g., hospital patients and shareholders).
Because damages caused by a cyber-physical attack can be widespread, massive, and highly correlated, affecting multiple sectors of the economy and many lines of insurance, the insurance industry is giving this risk heightened attention. The U.K. insurance marketplace Lloyd’s, London and the University of Cambridge, for example, conducted a major study of the losses resulting from a hypothetical cyber-physical attack on 50 electrical generators in the Northeast U.S. Other insurance market participants have also published reports addressing cyber-physical risks to critical infrastructure. The insurance industry’s focus on cyber-physical risks perhaps should be action-guiding for corporate policyholders as well.
To read the full alert on K&L Gates HUB, click here.
The collapse of the global mining and energy sector has already led to severe consequences for hedge funds, private equity, and other sources of institutional investment that have lost large sums. The loss in equity in the Australian mining sector already rivals losses on mortgage-backed securities in the US subprime crisis. There are other echoes of the 2008 crisis, but the global financial markets should be better placed to weather the storm this time around. Are they?
A bipartisan agreement on the revised Renewable Energy Target (RET) was finally reached between the Australian Government (represented by Industry Minister, Ian Macfarlane and Environment Minister, Greg Hunt) and the Opposition (represented by Mark Butler and Gary Gray) on the morning of 18 May 2015 in Melbourne. There have been reports that the agreement was reached with intervention from the Prime Minister Tony Abbott’s office.
As contemplated by the in principle agreement reached between the Government and the Opposition on 8 May 2015, the existing target of 41,000 GWh of large scale renewable energy by 2020 will now be reduced to 33,000 GWh. This reduction will be effected by way of legislative amendment to the Renewable Energy (Electricity) Act 2000 (Cth).
Australia is the first developed country to formally reduce its renewable energy target. There are suggestions the reduced RET will cause investment in Australian renewable energy projects to fall from an expected AUD20.6 billion by 2020 to AUD14.7 billion.
The Government has agreed not to pursue its proposal to continue reviewing the target every two years. This alleviates concerns over the retention of the two-yearly reviews of the scheme. These reviews have arguably been the predominant cause of the current investment freeze in the renewable energy industry. In lieu of the two-yearly reviews, annual statements detailing achievement towards meeting the RET and impacts on electricity prices will be provided by the Clean Energy Regulator.
Despite lack of support from the Opposition, the Greens and the renewable energy industry, the Government’s plan to include native forest wood waste in the range of energy sources that are eligible to contribute to the RET will be included in the relevant amending legislation which is expected to be presented to Parliament next week. The Government intends to pass this proposal with support from the Senate crossbench.
It is expected the revised RET should be passed by both the House of Representatives and the Senate before the winter recess on 25 June 2015.
The Opposition has indicated that it would increase the 2020 target if it wins the next election, which is to be held on or before 14 January 2017.
After months of negotiations, Industry Minister Ian Macfarlane has confirmed that on 8 May 2015 the Australian Government and the Opposition have agreed in principle a revised Renewable Energy Target (RET) of 33,000 gigawatt-hours (GWh) of large scale renewable energy by 2020. Read More
Recently the High Court of Australia handed down its unanimous decision in Australian Communications and Media Authority v Today FM (Sydney) Pty Ltd  HCA 7 (HCA Decision) which relates to the powers of the Australian Communications and Media Authority (Authority).
The HCA Decision accepts that the Authority was permitted to make a finding of fact that a licensee committed a criminal offence and in doing so had breached a licence condition, despite the fact that no proceedings in relation to the criminal offence had been commenced or successfully prosecuted.
A recent Victorian Supreme Court case has clarified the impact of Commonwealth insolvency set-off provisions on State-based security of payments legislation.
The case demonstrates that although a principal is generally precluded from relying on a set-off or counterclaim in certain contexts under the Building and Construction Industry Security of Payment Act 2002 (Vic) (BCISP Act), this general preclusion does not apply if the claimant is in liquidation, due to the operation of section 553C of the Corporations Act 2001 (Cth) (Corporations Act).
The case also provides useful commentary on what is considered a ‘payment schedule’ for the purposes of the BCISP Act.
If you would like to read more about this case, please click here.
 Façade Treatment Engineering Limited v Brookfield Multiplex Construction Pty Ltd  VSC 41.
On 12 March 2015 the Australian Energy Market Commission (AEMC) released its draft report about a model for optional firm access to electricity transmission networks.
The report follows the development, testing and assessment of the optional firm access model by the AEMC at the request of the Council of Australian Governments’ Energy Council.
The Emissions Reduction Fund (ERF) forms a key part of the Australian Federal Government’s Direct Action Plan to address climate change. Under the model, successful bidders in an ERF auction enter into “carbon abatement contracts” with the Clean Energy Regulator. These contracts require the bidder to provide carbon abatement to the Regulator according to an agreed schedule.
Previously, carbon abatement contracts may have been considered “derivatives” and “financial products” for the purposes of the Corporations Act 2001 (Cth) (the Act) and Corporations Regulations 2001 (Cth) (Regulations). This characterisation would have subjected ERF participants to onerous regulatory burdens under the Act and Regulations (such as the requirement to hold an Australian Financial Services Licence).
To ensure that persons are not burdened by these regulatory obligations simply because they regularly enter into contracts with the Clean Energy Regulator, the Corporations Amendment (Emissions Reduction Fund Participants) Regulation 2015 (the Amendments) exempt carbon abatement contracts from the definitions of “derivative” and “financial product”.
The Amendments will commence the day after they are registered on the Australian Federal Register of Legislative Instruments.
SGI-Mitabu, a joint venture of two Australian solar companies, The Solar Guys International and Mitabu Australia, has revived its plans to fund its Indonesian 250 megawatt solar project with Islamic compliant funding. The solar project will require up to A$550 million of financing. Commencing in July 2015, the first phase of the project will be funded through an offer of A$150 million of sukuk (a type of Islamic investment instrument, similar to a bond).
Read more here.