Excel signs bug accord

By Adam Gifford

Excel Corporation has become the first New Zealand company to sign a "Millennium Accord" aimed at avoiding what some commentators have predicted could be a firestorm of litigation arising from Y2K bug problems.

The accord is an international initiative being promoted in this part of the world by Australasian dispute resolution organisation LEADR.

Excel chief executive Earl Stevens said the accord committed his company, an infrastructure outsourcer and civil engineering contractor which grew out of Manukau City Council's works department, to first seek mediation rather than litigation if the millennium bug affected its business.

"The accord is a good way to signal we would rather go down a proactive and cooperative route rather than leave people thinking problem can only be solved by litigation," Mr Stevens said.

He said most of Excel's exposure was in this country, including a number of water and sewage pumping systems. In Australia, its contracts were to manage parks and reserves.

"We've worked through where our exposure is. For example, we've arranged to have back up generators to provide power to the pumping stations, in case anything happens.

"There are bound to be some problems, and we want to work through them in a way they can be solved cost-effectively."

While many councils had outsourced infrastructure provision to companies like Excel, "if anything goes wrong we will carry the can in perception and reputation, whether we're legally liable or not."

LEADR chief executive Babette Smith said the Millennium Accord was an opportunity "to add another dimension to risk management strategy and business continuity strategy".

Alternate dispute resolution or mediation were ideal for Y2K disputes because "they are going to arise between organisations which have an interest in maintaining relationships".

If disputes arise, LEADR can quickly put firms in touch with one of the 1800 registered mediators in New Zealand or Australia, or link them with similar organisations around the world who are also promoting the accord.

Almost 450 businesses in Britain, United States, Singapore and Hong Kong have already committed to the accord, including Cable & Wireless, Nortel Works, the Singapore Stock Exchange and British American Tobacco.

Babette Smith said mediation allowed the parties to reach agreement by identifying mutual interests rather than getting stuck arguing positions based on rights.

"Reaching agreement is constructive, so the chances of the relationship continuing are high. It's important problems can be resolved without permanent damage and business continuity is maintained," she said.

A further benefit was cinfidentiality.

"This does not take place in public court, so brawls between interlocked business can be sorted in private."

Copies of the Millennium Accord can be obtained by ringing LEADR's Auckland office at 09 373 5020.