Safety, Rehabilitation and Compensation Act 1988

Part VIII

Optus Administration Pty Limited

NOTICE OF EXTENSION AND VARIATION OF LICENCE

Notice No 6 of 2015

Optus Administration Pty Limited, ABN 79 055 136 804, (‘the Licensee”) was declared to be eligible to be granted a licence under Part VIII of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (“the SRC Act”) by legislative instrument dated 7 July 2004, registered as F2006B00169 on the Federal Register of Legislative Instruments as Legislative Instruments on 19 July 2004.

The Safety, Rehabilitation and Compensation Commission (“the Commission”), acting under sections 103 and 104 of the SRC Act, granted a licence (“the Licence”) to the Licensee on 1 November 2004 for a period commencing on 1 December 2004 and ending on 30 June 2006.

The grant was notified by Notice No. 1 of 2005 in Commonwealth Gazette No. P5 on 29 June 2005.

The Licence was subsequently extended and/or varied by the Commission on:

9 June 2005 by Notice No 2, 3 and 4 of 2005, Commonwealth Gazette No P 5 on 29 June 2005;
30 April 2007 by Notice No 9 of 2007, Commonwealth Gazette No 17 on 2 May 2007;
25 June 2007 by Notice No 17 of 2007, Commonwealth Gazette No S 121 on 27 June 2007;
18 June 2008 by Notice No 29 of 2008, Commonwealth Gazette No 25 on 25 June 2008; and
15 June 2011 by Notice No. 9 of 2011, Commonwealth Gazette No. GN 24 on 22 June 2011.

Prior to this extension, the Licence had a cessation time and date of midnight (Australian Eastern Standard Time (“AEST”)) on 30 June 2015.

The Commission, acting under subsection 105(1) of the SRC Act, extends the term of the Licence, for the period of eight (8) years commencing, 1 July 2015 at 12:01 am (AEST) and a cessation time and date of midnight (AEST) on 30 June 2023.

The Commission acting under subsection 108D(2) of the SRC Act, varies the conditions of the Licence as follows:

Prudential Condition 6 and is amended as follows:

6. Deed of Guarantee

6.1 The Licensee:

(a) must at all times be a party to a Deed of Cross Guarantee in accordance with Prudential Condition 6 of this licence; and

(b) must not engage in any act or omission that may compromise the enforceability of a Deed of Cross Guarantee.

6.2 In this licence a reference to the Deed of Cross Guarantee is a reference to:

(a) The Deed of Cross Guarantee, made on 30 March 2007, as amended or varied from time to time in accordance with its terms, to which the following are parties:

(i) SingTel Optus Pty Ltd ACN 052 833 208;

(ii) Optus Broadband Pty Ltd ACN 087 048 440;

(iii) Optus Internet Pty Ltd ACN 083 164 532;

(iv) Optus Multimedia Pty Ltd ACN 087 048 011;

(v) Prepaid Services Pty Ltd ACN 094 689 219;

(vi) Simplus Mobile Pty Ltd ACN 098 145 218;

(vii) Sibalo Pty Ltd ACN 003 944 947;

(viii) Source Integrated Networks Pty Ltd ACN 085 676 955;

(ix) XYZed Pty Ltd ACN 092 450 783;

(x) Aussat Finance Ltd ACN 008 609 041;

(xi) Optus Finance Pty Ltd ACN 086 656 162;

(xii) Optus CI Satellite Pty Ltd (formerly known as Cable & Wireless Optus Satellites Pty Ltd) ACN 087 587 504;

(xiii) Optus Data Centres Pty Ltd ACN 095 832 134;

(xiv) Optus Administration Pty Ltd ACN 055 136 804;

(xv) Optus Mobile Pty Ltd ACN 054 365 696;

(xvi) Optus Mobile Investments Pty Ltd ACN 090 242 505;

(xvii) Optus Networks Pty Ltd ACN 008 570 330;

(xviii) Optus Systems Pty Ltd ACN 056 541 167;

(xix) Uecomm Ltd ACN 079 083 195;

(xx) UE Access Pty Ltd ACN 090 950 931;

(xxi) Unite.com Pty Ltd ACN 090 950 977;

(xxii) Uecomm Operations Pty Ltd ACN 093 504 100;

(xxiii) Optus Vision Pty Ltd ACN 066 518 821;

(xxiv) Reef Networks Pty Ltd ACN 085 525 113;

(xxv) Alphawest Ltd ACN 009 222 931;

(xxvi) Alpha West Holdings Ltd ACN 101 883 327;

(xxvii) Alphawest Services Pty Ltd ACN 009 196 347;

(xxviii) Perpetual Systems Pty Ltd ACN 004 009 447;

(xxix) Inform Systems Australia Pty Ltd ACN 070 199 450;

(xxx) Evolution IS (ACT) Pty Ltd ACN 079 093 691;

(xxxi) Path Communications Pty Ltd ACN 058 025 442;

(xxxii) The Net Effect Pty Ltd ACN 061 391 740;

(xxxiii) Alpha West ERP Pty Ltd ACN 088 539 404;

(xxxiv) Evolution IS Pty Ltd ACN 001 429 321;

(xxxv) CV Services International Wholesale Pty Ltd ACN 001 081 787;

(xxxvi) Virgin Mobile (Australia) Pty Ltd ACN 092 726 442;

(xxxvii) Vividwireless Pty Ltd ACN 137 696 461 (joined by execution of Assumption Deed dated 14 March 2013);

(xxxviii) Akal Pty Ltd ACN 094 107 794 (joined by execution of Assumption Deed dated 14 March 2013);

(xxxix) Unwired Australia Pty Ltd ACN 094 107 589 (joined by execution of Assumption Deed dated 14 March 2013);

(xl) Bkal Pty Ltd ACN 105 833 681 (joined by execution of Assumption Deed dated 14 March 2013);

(xli) Vividwireless Group Ltd ACN 008 082 737 (joined by execution of Assumption Deed dated 14 March 2013);

(xlii) Ubowireless Pty Ltd ACN 111 654 847 (joined by execution of Assumption Deed dated 14 March 2013);

(xliii) Optus Retailco Pty Ltd ACN 092 221 406 (joined by execution of Assumption Deed dated 14 March 2013);

(xliv) Optus Satellite Pty Ltd ACN 091 790 313 (joined by execution of an Assumption Deed dated 20 March 2014);

(xlv) Optus Satellite Network Pty Limited ACN 091 789 945 (joined by execution of an Assumption Deed dated 20 March 2014);

(xlvi) Optus Billing Services Pty Ltd ACN 088 011 536 (joined by execution of an Assumption Deed dated 3 December 2014);

(xlvii) Optus EPayment Ventures Pty Ltd ACN 092 227 551 (joined by execution of an Assumption Deed 3 December 2014); and

(xlviii) XYZed LMDS Pty Ltd ACN 093 342 628 (joined by execution of an Assumption Deed dated 3 December 2014).

(b) Where the Commission, in its absolute discretion, notifies the Licensee in writing that another, alternative, Deed of Guarantee will satisfy the requirements of Prudential Condition 6 of this licence, that Deed.

6.3 In relation to the Deed of Guarantee referred to in 6.2 above the Licensee must:

(a) be a party to that Deed for at least seven (7) years following the period of this licence, as varied from time to time;

(b) if that Deed is amended or varied, including if:

(i) another entity becomes a party to that Deed; or

(ii) a party to that Deed ceases to be a party,

provide a copy of the document amending or varying that Deed to the Commission;

(i) the Australian Securities and Investments Commission informally or formally raises any issues in relation to that Deed; or

(ii) the Licensee becomes aware of any reason why a creditor of the Licensee may not be able to enforce that Deed.

This variation to Prudential Condition 6 takes effect at 12.01 am (AEST) on 1 July 2015.

The scope and conditions of the Licence as varied are as set out below in this notice.

LICENCE

Part 1 – Grant and Scope of Licence

Note: Under section 46(1) of the Acts Interpretation Act 1901 (Cth), unless the contrary intention appears, expressions used in this instrument have the same meaning as in the Safety, Rehabilitation and Compensation Act 1988 (Cth) (“the SRC Act”).

Eligible applicant

Optus Administration Pty Limited, ABN 79 055 136 804, (“the Licensee”) was declared to be eligible to be granted a licence under Part VIII of the SRC Act by legislative instrument dated 7 July 2004, registered as F2006B00169 on the Federal Register of Legislative Instruments on 19 July 2004.

Grant of licence

2. The Safety, Rehabilitation and Compensation Commission (“the Commission”), acting under sections 103 and 104 of the SRC Act, granted this licence to the Licensee on 1 November 2004 and which commenced on 1 December 2004.

Period of licence

3. Subject to the SRC Act, this licence is for the period commencing at 4.00 pm (Australian Eastern Standard Time (“AEST”)) on 30 June 2005 and, in accordance with the most recent extension, ending on midnight (AEST) on 30 June 2023 (“the period of this licence”)

Scope of licence – acceptance of liability

4. The Licensee is authorised to accept liability to pay compensation and other amounts under the SRC Act in respect of all injuries, loss or damage suffered by, or in respect of the death of, any of the employees of the Licensee where such injuries, loss, damage or death occur within the period of this licence.

Note: “Employee” is defined in section 5 of the SRC Act.

Scope of licence - management of claims

5. QBE Insurance (Australia) Limited, ABN 78 003 191 035 (“the Claims Manager”) is authorised to manage, on behalf of the Licensee, claims under the SRC Act made by the employees of the Licensee who are covered by the scope of this licence so far as it relates to the Licensee’s acceptance of liability in accordance with clause 4 of this licence.

Note 1: “Claim” is defined in section 99 of the SRC Act.

Note 2: “Manage”, in relation to a claim for payment of compensation and other amounts under the SRC Act, is defined in section 99 of the SRC Act.

Note 3: Subsection 108B(4) of the SRC Act provides that if a Licensee enters into a contract with another person for the management, on the Licensee’s behalf, of the claims that the Licensee is authorised to manage, that contract does not come into force unless and until the Commission has varied the licence to note the identity of the person with whom the Licensee has contracted.

Conditions

6. This licence is granted subject to the conditions specified in Part 2.

Part 2 – Conditions

Definitions

7. In this Part Licensee includes, where the context permits, the Claims Manager.

General conditions

Directions of Commission

8. The Licensee must comply with any written directions, whether general or in respect of a particular matter or class of matters, given by the Commission to the Licensee with respect to the performance by the Licensee of its functions or the exercise of its powers under the SRC Act.

9. If the Licensee’s claims are managed by a Claims Manager – the Licensee must give a copy of the Commission’s directions to the Claims Manager.

Requirements

10. The Licensee must comply with the requirements of:

(a) the SRC Act, its Regulations and any applicable guidelines issued by the Commission under section 73A of the SRC Act;

(b) any applicable laws of the Commonwealth, States or Territories with respect to the safety, health and rehabilitation of employees; and

11. The Licensee must have regard to guidelines issued by the Privacy Commissioner under the Privacy Act 1988 (Cth), but must comply with any such guidelines dealing with covert surveillance of employees.

Fees

12. The Licensee must pay the licence fee notified in writing to the Licensee under section 104A of the SRC Act within one month of receiving the notification.

Manner of managing claims

13. In managing claims, the Licensee:

(a) must be guided by equity, good conscience and the substantial merits of the case without regard to technicalities;

(b) is not required to conduct a hearing; and

Audits

14. The Licensee must co-operate with, and give reasonable assistance to, the Commission or its representatives in respect of any audits and evaluations of the Licensee to be conducted by the Commission or its representatives.

Reviews and proceedings

15. The Licensee must not cause, or permit to be made on its behalf, any submission to a court or tribunal in relation to the interpretation of a provision of the SRC Act or associated transitional or consequential provisions that Comcare or the Commission requests the Licensee not to make.

16. If the Licensee brings court proceedings in relation to a matter arising in respect of a claim under the SRC Act, the Licensee must inform Comcare as soon as practicable that the proceedings have been brought and give Comcare a copy of the initiating process.

Note: If proceedings are brought against the Licensee, section 108C(8) of the SRC Act requires the Licensee to inform Comcare as soon as practicable.

Failure to comply with conditions or change in circumstances

17. The Licensee must notify Comcare in writing immediately that it becomes aware:

(a) that the Licensee has not complied with, or is likely not to comply with, a condition of this licence; or

(b) of any event that may materially impact upon its suitability to hold a licence, including its capacity to meet its liabilities under the SRC Act or of any material change in its financial position; or

(d) of any significant change in its employee numbers or significant change in the risk profile of the work undertaken by its employees.

Information and reporting requirements

18. On written request of the Commission, the Licensee must give to the Commission, within the timeframe specified in the request, such information relating to the Licensee’s operations under the SRC Act in the form and at the place specified in the request.

Note: Information likely to be requested by the Commission includes information required for the Commission’s annual report, Commission Indicators, CPM and Return to Work Monitor.

Specific Conditions

Previous licence holders

19. Where any claim that was made to the Licensee in its capacity as a licence holder had not been finally and completely dealt with at the time that this licence is granted, the terms and conditions of this licence apply to the management of such a claim in the same manner as they apply to any other claims within the scope of this licence.

Claims Manager

20. The Licensee is responsible for ensuring that the Claims Manager complies with the conditions in this licence.

21. In addition to other conditions in this licence which are applicable to the Claims Manager, the Claims Manager must:

(a) not do, or omit to do, anything which would put the Licensee in breach of any term or condition of this licence;

(b) not undertake, or cause to be undertaken, any surveillance of an employee, unless it has the prior written approval of the Licensee;

(c) implement appropriate structures and mechanisms to ensure the consistent application of policy and procedures in respect of the management of claims;

(d) when requested in writing by the Commission to provide information to it, to provide the information to the Commission in the timeframe specified in the request;

(e) permit the Licensee to conduct at least an annual audit of the Claims Manager’s performance (“Performance Audits”) in accordance with audit methodology approved by the Commission or as otherwise required by the Commission;

(f) provide the Licensee with reasonable access to the Claims Manager’s records, premises and personnel to enable the Licensee to carry out Performance Audits;

(g) provide the Commission or its representative with unrestricted access to documents and records in the possession or control of the Claims Manager in so far as the documents relate to matters arising under the SRC Act; and

(h) inform the Licensee as soon as practicable after it becomes aware that the Claims Manager has done or omitted to do something which has the effect that the Licensee is, or is likely to be in breach of a term or condition of this licence.

Note: “Documents” and “records” have the same meaning as in the Acts Interpretation Act 1901 (Cth).

22. The Licensee must:

(a) conduct at least once every year a Performance Audit of the Claims Manager; and

(b) within six weeks of the completion of each Performance Audit, give the Commission a written report on the Claims Manager’s performance for the period covered by the audit.

23. The Licensee must be accountable for all claims management policies issued by the Claims Manager.

24. The Licensee must notify the Commission in writing as soon as practicable after it becomes aware that the Claims Manager has done, or omitted to do, something which has the effect that the Licensee is, or is likely to be, in breach of a term or condition of this licence.

25. The Licensee must enter into and maintain a written contract with the Claims Manager and if requested to do so, give a copy of the contract to the Commission.

26. The Licensee must ensure that each of the obligations imposed by this licence on the Claims Manager are included in the contract between the Licensee and the Claims Manager and that the Claims Manager warrants, under the contract, to comply with the conditions imposed by this licence.

Prudential Conditions

27. The Licensee must comply with the Prudential Conditions at Attachment A.

Performance Conditions

28. The Licensee must comply with the Performance Standards at Attachment B.

Dated the 2nd day of July 2015.

Barry Sherriff

Chairperson

Safety, Rehabilitation and Compensation Commission

Attachment A

PRUDENTIAL CONDITIONS OF LICENCE

These conditions are “the Prudential Conditions”.

1. LICENSEE CERTIFICATION

1.1 The Principal Officer of the Licensee must certify in writing to the Commission, by 30 June of each financial year, that the Licensee has:

(a) arranged, in accordance with Prudential Condition 2, for the estimation of the liability of the Licensee to pay compensation and other amounts under the SRC Act in accordance with the scope of this licence; and

(b) made, in accordance with Prudential Condition 3, provision in its accounts, in accordance with the estimates in the Liability Report required by Prudential Condition 2, for meeting its liabilities; and

(c) the capacity to meet any single claim up to the reinsurance policy retention amount (excess amount) determined in accordance with Prudential Condition 5.

2. LIABILITY REPORT

2.1 The Licensee must commission a written report (“the Liability Report”) in respect of each financial year and calculated as at the end of that year.

2.2 The Liability Report:

(a) must be prepared by a Fellow of the Institute of Actuaries of Australia (IAA), or any body substituted therefore, with at least five years’ post-qualification experience as an actuary in general insurance; and

(b) must be prepared by an actuary who is not an employee or a partner of the organisation which provides financial audit services to the licensee or who in any way has a material financial dependence on the auditor; and

(c) be prepared drawing on any available expert advice and substantially using IAA professional standard P S 300, or any standard substituted therefore, as the basis of estimation, with any departure from this standard to be highlighted in the report; and

(d) must be addressed by the actuary to the Commission; and

(e) must be provided by the Licensee to the Commission by 31 May of the financial year to which it relates.

2.3 The Liability Report must:

(a) estimate the liability of the Licensee to pay compensation and other amounts under the SRC Act in accordance with the scope of this licence as follows:

(i) contain a recommendation for the level of provisions in the licensee’s accounts which must be made to at least the 50th percentile (net central estimate); and

(ii) contain a valuation of current outstanding liability and the projected liability in 12/18/24* months time; and

Note: 12 months for Licensees in the 6th or more year of the licence; 18 months for Licensees in the 4th-5th year of the licence; 24 months for Licensees in the 1st-3rd year of the licence.

(b) contain a recommendation of the maximum reinsurance policy retention amount (excess amount) referred to in Prudential Condition 5; and

(c) make an assessment of the financial capacity of the Licensee to meet amounts, from the balance sheet, up to the excess amount recommended by the actuary; and

(d) describe the arrangements for compliance with Prudential Condition 5 and provide an assessment by the actuary of whether the arrangements are appropriate to meet the Licensee’s obligation under Condition 5.1.

Note: The Commission will have regard to the matters in (b) and (c) in determining the excess amount in accordance with Prudential Condition 5.

2.4 The Commission may at its discretion submit a Liability Report to a peer review process.

Note: The Commission will organise and pay for any such peer review process.

2.5 After receiving a peer review assessment of a Liability Report, the Commission may by written notice to the Licensee require a Second Liability Report by an actuary approved by the Commission.

2.6 The Commission may direct the date for provision of a Second Liability Report.

2.7 Unless the Commission directs otherwise, the Licensee must pay for a Second Liability Report.

2.8 If the Commission receives a Second Liability Report, it replaces the original Liability Report and:

(a) references in Prudential Conditions 3-5 to the ‘Liability Report’ are to be construed as references to the Second Liability Report; and

(b) references in Prudential Conditions 3-5 to the actuary who prepares the Liability Report are to be construed as references to the actuary who prepares the Second Liability Report.

3. YEARLY ACCOUNTS

3.1 The Licensee must:

(a) lodge with the Commission a copy of:

(i) any report that it is required to prepare or obtain for a financial year under Division 1 of Part 2M.3 of the Corporations Act 2001 (Cth) within 7 days after it is required to be lodged with the Australian Securities and Investments Commission or it is in fact lodged, whichever is the earlier;

(ii) any periodic financial information regarding the affairs of the Licensee for a financial year that it is required to give to any financial market as defined in the Corporations Act 2001 (Cth) (for example, in respect of the Australian Stock Exchange this would be information that must be given under Listing Rule 4.3B) within 7 days after it is required to be given to the financial market or it is in fact given, whichever is the earlier. For the avoidance of doubt this condition does not require the Licensed Corporation to provide information that is released to the financial market pursuant to the Licensed Corporation's continuous disclosure obligations;

(iii) if the Licensee is not required to report in accordance with Division 1 of Part 2M.3 of the Corporations Act 2001 (Cth) because its parent company is required to report in accordance with Division 1 of Part 2M.3 of the Corporations Act 2001 (Cth), then the Licensee must provide any report that the parent company is required to prepare or obtain for a financial year under Division 1 of Part 2M.3 of the Corporations Act 2001 (Cth) within 7 days after it is required to be lodged with the Australian Securities and Investments Commission or it is in fact lodged, whichever is the earlier;

(iv) if the Licensee (or its parent company) is not required to report in accordance with Division 1 of Part 2M.3 of the Corporations Act 2001 (Cth) and the parent company is a company not subject to the laws of Australia then the Licensee’s parent company must prepare a financial report and directors’ report as if it was required to comply with Division 1 of Part 2M.3 of the Corporations Act 2001 (Cth), including having that report audited in accordance with that Part, and must give the report to the Commission within three months after the end of the Licensee’s financial year;

(b) include, and identify, in any report or information referred to in Prudential Condition 3.1(a), provision for meeting the Licensee’s accrued and contingent liability as at the end of the accounting period for claims made under the Act in the accounting period.

3.2 The provision mentioned in 3.1(b) must be consistent with a written evaluation, by an actuary, of the Licensee’s current and non current liability for the accounting period and the actuary’s evaluation must be lodged with the Commission.

3.3 The Licensee’s accounts must also make provision for the Licensee to meet its accrued and contingent liability as estimated by the actuary in accordance with Prudential Conditions 2.2 and 2.3.

3.4 It will be sufficient compliance with Prudential Condition 3.2 if the Licensee provides the Commission with a statement at the time of lodging its accounts that the actuary’s written evaluation required by this prudential condition is contained in the Liability Report provided to the Commission, and identifying the location of the information in that report.

3.5 For the purposes of Prudential Condition 3.2, “actuary” means the actuary who prepares the Liability Report referred to in Prudential Condition 2.1.

4. GUARANTEE

4.1 The Licensee must, for each financial year, obtain a guarantee for the due discharge of its liability to pay compensation and other amounts under the SRC Act in accordance with the scope of this licence.

4.2 The guarantee in respect of each financial year must be:

(a) in the form and subject to the terms agreed in writing by the Commission; and

(b) for an amount calculated by the actuary in accordance with Prudential Condition 4 and specified in the Liability Report for that financial year; and

(i) banking business in Australia under the Banking Act 1959 (Cth) and has an issuer credit rating of or equivalent to a Standard and Poor's AA- rating or better; or

(ii) insurance business in Australia under the Insurance Act 1973 (Cth) and has an issuer credit rating of or equivalent to a Standard and Poor's AA- rating or better and a financial strength rating of or equivalent to a Standard and Poor's AA- rating or better.

4.3 The Licensee must provide the original of the guarantee to the Commission by 30 June of the financial year to which it relates.

For the purpose of this condition:

“Balance Date” means the last day of the financial year immediately before the year to which the guarantee relates.

“Outstanding Claims Liabilities” includes accrued and contingent liabilities.

4.4 The guarantee must be for an amount calculated by the actuary as the greater of:

(a) the 95th percentile of Outstanding Claims Liabilities at the Balance Date and the addition of one reinsurance policy retention amount specified in Prudential Condition 5; or

(b) the 95th percentile of projected Outstanding Claims Liabilities in 12/18/24 months* time from the Balance Date and the addition of one reinsurance policy retention amount specified in Prudential Condition 5,

subject to a minimum amount of $2,500,000.

*Note: 12 months for Licensees in the 6th or more year of the licence; 18 months for Licensees in the 4th – 5th year of the licence; 24 months for Licensees in the 1st – 3rd year of the licence.

Note: The liability estimates are to include an allowance for the cost of administering claims and be calculated net of reinsurance recoveries.

4.5 In preparing the level of guarantee, the Licensee must direct the actuary to:

(a) calculate existing and projected estimates of outstanding claims liabilities plus costs of administering claims to the 95th percentile and to include this result in the Liability Report; and

(b) base the calculation on a full statistical analysis of data, trends and variability and according to any relevant IAA standards and guidelines on liability valuation for general insurance.

5. REINSURANCE

5.1 The Licensee shall maintain an appropriate level of reinsurance to limit its liability to pay compensation and other amounts under the SRC Act in accordance with the scope of this licence for any single event in excess of an amount determined by the Commission (“excess amount”).

Note: The Commission will have regard to the maximum excess amount recommended by the actuary in the Liability Report.

5.2 The reinsurance policy must be with an insurance company granted an authority to carry on insurance business by the Australian Prudential Regulation Authority under the Insurance Act 1973 (Cth).

5.3 The Licensee must:

(a) provide a copy of the reinsurance policy to the actuary and the Commission within seven days of the issuing of the new policy; and

(b) seek the prior approval of the Commission to any reinsurance amount which is in excess of the amount previously determined by the Commission under 5.1 above.

6. DEED OF GUARANTEE