Although the underlying principle of an alliance is that project risks are shared, it is appropriate that some risks are fully retained by one Participant where that Participant has either the legislative responsibility for the risk (e.g. health and safety or Federal taxation) or full control of the risk without any input from the alliance. For example, risks the Owner may retain fully (particularly where full control of risk management is also desirable) are native title, cultural heritage and material procurement with long lead times.
Certain professional indemnity risks should also be fully retained by the Participants and not passed on to the alliance. Such risks include responsibilities under the alliance agreement and other contractual representations made during the alliance Participant selection process.
However, allocated risks should be kept to the absolute minimum to reinforce the collective responsibility of the Participants for delivering the project.