Fields Apart – Part 1: Brownfield and Greenfield Projects

Whether a project is to be constructed on a brownfield or greenfield site represents a key factor which drives commercial and contractual decision making for parties during the early stages of a project. This can also translate into ongoing delivery considerations which must be properly managed to ensure that best for project outcomes can be achieved.

This series will conduct a deep dive into:

1. what brownfield and greenfield sites are;
2. identifying brownfield and greenfield sites;
3. the key factors to consider when assessing the site;
4. potential risks which may be associated with brownfield developments;
5. the use of latent conditions on brownfield developments and the impacts this has to the risk allocation; and
6. the contractual conditions you should consider when negotiating your next project.

Brownfield and Greenfield: What Are They

Brownfield sites are those which have been subject to prior development. This may mean they have existing infrastructure in place, or that prior infrastructure has already been subject to removal. Normally, these sites will have been subject to activities which may have contributed to the actual, or perceived, contamination of the site. Broadly, brownfield sites will ordinarily need to be “cleaned up” prior to being used in a future development. This does not necessarily mean the remediation of contamination or hazardous substances but will ordinarily include a level of work due to existing or prior infrastructure before a project can commence.

In contrast, greenfield sites are those that have not been subject to prior development. The practical effect of this that that they do not require the need to be “cleaned up” prior to commencement of a project.

Greenfield sites will commonly be located in rural or farming areas, that have not been subject to major infrastructure developments in the past. While projects in rural locations can be a good indicator that works are on greenfield site, in isolation this is not enough to establish such, and further investigations should be undertaken about prior works or infrastructure in and around the project site.

Why It Is Important?

Being aware of the nature of the site can have material impacts on a project which all parties should be aware of prior to contract formation. Importantly, works on a brownfield site will often require specific contractual provisions for how the parties seek to allocate risk and address issues which may arise. Similarly, there will often be programming considerations resulting from the nature of a site, which need to be taken into account during contract negotiations and early stage project works.

The issues which arise during developments on brownfield sites will often be determined on a project-by-project basis, and be informed by:

1. any existing infrastructure which may exist on the site;
2. the prior uses of the site;
3. any environmental considerations impacting the works, regardless of if such is known, or merely suspected;
4. the works taking place;
5. the degree to which sub-surface conditions are likely to impact the work;
6. any existing sub-surface infrastructure which may be in place and impact the works, including to the extent it influences design considerations or construction methodologies.

Importantly, knowledge of if a site is brownfield or greenfield can drive the parties’ investigations and contractual negotiation processes to ensure it properly addresses the project requirements and is developed in such a way which identifies and allocates risks clearly in accordance with the parties’ intentions.

Contractual Drafting

Risk allocation forms the basis of all contractual negotiations and drives parties’ commercial positions. By seeking legal assistance during contract negotiations, it can ensure provisions are included which effectively and clearly set out the parties’ intentions.

This early engagement can also assist parties to identify relevant contractual provisions which may need to be updated, or otherwise included, to ensure effective operation of required mechanisms, during the works. This may include provisions around latent conditions, unknown public utility plant, existing interests in the land, contamination, existing use requirements, or specific provisions required for the project.

Further, the critical milestones required to complete the project may be reflected within the contract, and where these are driven by earthworks or subsoil activities, the nature of a site can have material impacts on such. Legal assistance during negotiations can ensure that all timeframes are clearly understood, and the parties can satisfy themselves of the adequacy of such.

LPC Lawyers

LPC Lawyers has extensive experienced in drafting and negotiation project on both brownfield and greenfield sites. Our team can utilise their experience and understanding of projects to ensure contracts are drafted in such a way which accurately reflects the risks of a given project.

If you require assistance with your next project, please do not hesitate to contact our team.

Contact: Peter Lamont or Ryan Bryett

Email: [email protected] or [email protected]

Phone: (07) 3248 8500

Address: Suite 1, Level 1, 349 Coronation Drive, Milton Qld 4064

Postal Address: PO Box 1133, Milton Qld 4064