Contingent liabilities — unquantifiable
Attorney-General’s
Integrated Cargo System
In October 2005 the Australian Customs Service (Customs) implemented a new Integrated Cargo System for imports. Subsequent technical and business issues resulted in the delayed movement of some cargo. Customs have received claims for reimbursement of costs incurred by some importers in relation to the implementation of the new system. The extent of any potential liability cannot be quantified at this stage.
Defence
ADI Limited — HMAS Westralia indemnity
The Department of Defence is subject to claims by ADI Ltd for the indemnity for uninsurable losses relating to the fire on HMAS Westralia. This claim is under the 1999 deed of indemnity given by the Australian Government to ADI.
Sale of ADI Limited
ADI Group Pty Ltd has initiated litigation in relation to the alleged non-disclosure issues associated with the sale of ADI Ltd by the Australian Government. A claim for damages by the purchasers was lodged in October 2005.
ASC Pty Ltd — Australian Government indemnities provided to Electric Boat Corporation under the services agreement
In early October 2002, the Department of Defence entered into a services agreement with Electric Boat Corporation (EB) and its subsidiary Electric Boat Australia (EBA) to provide technical and commercial support to ASC Pty Ltd as it transitioned from being a producer of submarines to an agency for through-life support. EB/EBA staff commenced at ASC Pty Ltd on 14 October 2002. The initial services agreement ran for three years and the Australian Government has taken up the option to extend the agreement by a further three years.
Under this agreement, EB and EBA are provided with a warranty by the Australian Government and ASC Pty Ltd that they had the right to provide EB/EBA with confidential and other information and the Australian Government provides an indemnity to EB and EBA against claims arising from a breach of that warranty.
The Australian Government also indemnified EB and EBA against claims arising from property loss or personal injury resulting from a defect in the operation or performance of the Collins Class submarine, other than caused by unlawful conduct, gross negligence or wilful misconduct of EB or EBA, against claims exceeding the greater of US$1 million or profit earned by EB under the agreement.
Decontamination of Defence sites
The Department of Defence is currently quantifying its total land, buildings and infrastructure decontamination liabilities. Where a decontamination liability can be reliably quantified, a provision is created in the accounts. However, there are a significant number of contaminated sites where the estimated decontamination costs have not yet been quantified, or cannot be quantified.
Transport and Regional Services
Assumed residual liabilities of the Australian National Railways Commission
The Australian Government under Schedule 3 of the Australian National Railways Commission Sale Act of 1997 assumed the residual liabilities of the Australian National Railways Commission. A writ of summons has been filed in the High Court of Australia and a statement of claim on behalf of 24 other plaintiffs has been filed in the District Court of South Australian seeking unspecified damages for personal injuries as a result of exposure to lead and other particles from trains carrying lead and zinc ore.