Since force majeure risk is by definition beyond the control of either party, the mitigation options available to the parties are almost exclusively concerned with minimising the consequences of materialised events.
One of the few courses of action that can be taken before a force majeure risk materialises is the taking out of insurance, which effectively transfers the risk to the insurer. Depending on the availability of alternative venues for providing the service or alternative services (or a combination of both) and the commerciality of business interruption insurance, insurance may assist with the immediate problem of the interruption to service resulting from a force majeure event, as well as providing funds for remediation or reinstatement of the facility.
To minimise insurance risk (the risk that cover proves incomplete or ineffective, or that a claim is rejected), the contract should provide that:
• insurance is with insurers approved by government
• where possible, government is a co-insured party, not merely that its interests are noted on the policy
• insurance is not altered without government approval and
• evidence of insurance renewal is required or any change in currency of the insurance coverage be notified.
Insurance policies should also be reviewed regularly to ensure that coverage is adequate and effective.
Both government and the private party should have an appropriate contingency plan for dealing with the consequences of a force majeure event, the most important element of which will be a consideration of whether temporary arrangements for providing the service can be put in place and, if so, how this can be done. As services provided under public private partnership projects are ultimately services to the public, government may generally, but not always, be in the best position to locate or make available temporary service arrangements and should preserve for itself the right to do this.
From government's perspective, the impact of the force majeure event may be mitigated if government can obtain similar services from an alternative source at the same or similar cost. For example, in the case of a damaged water treatment plant, water may be able to be treated at an alternative site or by alternative means, or in the event of damage to a prison, government may obtain prison accommodation services by transferring prisoners to another facility (depending, of course, on the state of supply relative to demand and any security issues).