While the Charter of Human Rights and Responsibilities Act 2006 (Vic) (Charter) commenced in full on 1 January 2008, its impact has, to date, been limited within the private commercial sector. A number of commentators are of the view that the Charter is a sleeping giant for private industries, including the construction industry, and that companies need to ensure that they understand its operation and how it may impact on their business dealings in the future. As yet, only Victoria and the ACT have gone down the path of a human rights charter, although various bodies are pushing such legislation in other States and Territories.

The Charter establishes a framework for the protection and promotion of certain civil and political human rights, such as the right to liberty and property rights. Two examples of apparent instances where the impact of the Charter could be extended to those in the construction industry are as follows:

  1. The Charter applies to “public authorities”. The term “public authorities” is very widely defined to include entities whose functions include functions of a public nature, when exercising those functions on behalf of the State or a public authority (Public Authorities). These Public Authorities are now expressly prevented from acting in a manner that is incompatible with the human rights protected by the Charter. Accordingly, entities which contract directly with a Public Authority, and in so doing are required to exercise functions that are of a ‘public nature’, will need to ensure that they comply with the Charter. For example, a private prisons operator, an electricity distribution company or a construction company building publicly funded infrastructure, could each be required to comply with the Charter. Companies should be particularly conscious of these obligations in government contracting; and
  2. The Charter requires that, with certain exceptions, all statutory provisions must be interpreted in a way that is compatible with human rights. Accordingly, legislation impacting the construction industry such as the Domestic Building Contracts Act 1995 (Vic) (DBCA) or the Building Act 1993 (Vic), must also be interpreted so as to give effect to human rights and to take into account international authorities. These rules of statutory interpretation are likely to have particular relevance where the legislation relates directly to domestic consumers, such as the warranties contained in the DBCA. For example, a person’s human right to security, the right not to be treated in a degrading way and the right not to have one’s home arbitrarily interfered with, could arguably be used to significantly widen the current interpretation of the DBCA warranties.

Obviously, construction projects can also be directly impacted on by the Charter. The industry is starting to see some Public Authorities requiring that contractors accept and comply with their obligations under the Charter (and indemnify the public authority in respect of the same). This sort of drafting is recent and not yet common, but may become more prevalent as more major social infrastructure projects start to come on line in Victoria.

Given the fairly recent operation of the Charter, it is difficult to predict the effect the obligations under the Charter may have in the construction industry. However, it takes only a little imagination to envisage that rights such as those noted above could operate to, at best, change the way D&C and O&M Contractors carry out public projects and, at worst, change the scope of the works they are required to carry out. As contractors will often be required to accept the obligation to comply with all laws, this issue may well be at the contractors time and cost risk. Obviously one simple solution for the contractor is to include a carve-out for responsibilities under the Charter (although this may not be commercially acceptable).

It is still not clear whether the above impacts will materialise for the construction industry, so the question of whether the Charter is a sleeping giant or a toothless tiger still remains. However, as with all such potential risks, companies need to be mindful of the Charter’s obligations particularly if the company is involved in major public projects which are likely to have a significant impact on private individuals. Finally, it is worth noting that legal risk aside, there may be benefits in companies being generally aligned with a rights framework and otherwise avoiding reputational risk that may be associated with allegations of breaching human rights.