International FIDIC conference highlights global contract challenges

07 Dec 2021

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The Official FIDIC International Contract Users’ Conference 2021 took place online and was delivered in-house by FIDIC over three days on 7-9 December 2021.

This annual event, targeting the global contract users’ community internationally, gave delegates a unique opportunity to share progress on the application and use of FIDIC contracts internationally and across different regions and included participation from MDBs, private sector organisations and clients, government, engineers, contractors, investors, consultants, and other stakeholders who have an interest in FIDIC contracts.  

President sets scene for key event

Welcoming delegates to the conference, FIDIC president Tony Barry set the scene for an event which would give a comprehensive update on the work of the FIDIC contracts committee and also hear from key stakeholders like the multilateral development banks, which Barry said that FIDIC was working ever closer with. FIDIC's president also highlighted the needed for countries, especially in the developing world, to invest in quality infrastructure as the world emerges from the Covid pandemic. "The consulting engineering industry has a vital role in contributing to better, more sustainable, more climate smart infrastructure and a great opportunity through FIDIC to establish frameworks through which it is delivered," said Barry.

He highlighted the vast range of services that FIDIC provides to develop the infrastructure to serve people, communities, businesses and governments. "All of these services address the issues of quality, sustainability and resilience and drive excellence in leadership, project and risk management while condemning bribery and corruption and promoting safety, diversity, equal opportunity and inclusiveness. Everything we are doing is guided by our statutory objectives and our focus on the business of consulting engineering. FIDIC contracts are crucial in delivering all this," said Barry.

He went on to highlight FIDIC's important global role in translating its contracts into many international languages and paid tribute to the "FIDIC contract ecosystem" which had seen key support offered to contract users, especially during the Covid pandemic. Barry said this support was critical in capacity building and increasing knowledge of FIDIC contracts globally. He also thanked the members of the FIDIC contracts committee for their valuable work and said that delegates would be hearing from many of those members over the coming three days. 

Introducing day one of the conference, FIDIC CEO Dr Nelson Ogunshakin highlighted the important role of FIDIC in representing the consulting engineering industry globally and its key work in enhancing the image of consulting engineers. This work included being an authority on issues relating to business practice, advocating for the viability of the global consulting engineering industry and also driving excellence in quality, risk and project management and leadership. He also mentioned the key role that FIDIC has in stimulating and encouraging the development of talent, skill and future leaders of the consulting engineering industry, which he said was vital for the future vitality and viability of the industry. While he was delighted to see this annual contracts conference taking place online, Ogunshakin also expressed the hope that next year would see delegates meeting in person once again in London.

Working together and collaboration

Giving the keynote address on the first day of the conference, international judge and arbitrator, Sir Vivian Ramsey, shared his thoughts and insights on current perspectives and challenges for the global consulting engineering and construction industry and the direction of travel for the sector. Ramsey began by highlighting the continuing effects of the global pandemic and made a appeal for countries to work together better to ensure that the vaccine roll-out reaches all those areas that need it. “You cannot solve the challenges we face on an individual country basis,” he said.

Ramsey also spoke about the changes in working practices that had been ushered in by the pandemic which were giving rise to new challenges for the industry. As far as dispute resolution was concerned, Ramsey said that there was a growing realisation that working together and avoiding disputes in the first place was the way to work. “The avoidance role of dispute avoidance/adjudication boards (DAAB) is critical and no major project can be contemplated without a DAAB in place,” he said. Hybrid and virtual meetings will continue for the foreseeable future, he said, but he hoped that in-person meetings and engagement would be possible soon.

The key role of FIDIC in the global industry was also highlighted by Ramsey. “One of the important features of FIDIC is to ensure that around the world, especially the developing world, that there are sufficient qualified engineers to do the vital work that needs undertaking post-pandemic and this is a key role of the organisation on the global stage,” he said.

Update from FIDIC Contracts Committee

Following Sir Vivian’s address, FIDIC contracts committee chair Vincent Leloup introduced a session giving an update on the work of the committee during which he highlighted the launch of the new FIDIC Green Book and talked about other new contracts in the pipeline, new initiatives and developments. These included the development of new FIDIC contracts for collaborative working, PPP projects and EPCM. Leloup also gave a brief overview of how the contracts committee works and appealed for candidates to assist in the committee’s task groups on various industry contract initiatives.

Speaking next, FIDIC contracts committee vice chair Kiri Parr described the work of FIDIC task group 17 (TG17) on developing the new collaborative contract and Bird & Bird partner and chair of TG17, Andrea Chao, highlighted the progress made to date. The task group had gone back to first principles with its approach, asking some key questions about how best to collaborate with key stakeholders. The collaborative contract needed to be “more than a contract” and very much foster a team approach. To that end, the task group would be engaging with the industry to get the widest possible range of views and applying a collaborative approach to the development of the contract itself.

FIDIC Green Book launch

The second session of the conference began with the launch of the much-anticipated 2021 update of the FIDIC Green Book. This newly updated Short Form of Contract meets the current demand of the international construction industry for projects where the perceived level of risk is low and/or where construction parties need a contract form that is simple to use and doesn’t require significant contract administration and management resources.

Speakers from the FIDIC contracts committee Adriana Spassova, Vincent Leloup, Mahmoud Abu Hussein and task group members James Perry and Robert Werth said that the Green Book 2nd Edition was continuing FIDIC’s key principles of balanced risk sharing while seeking to build on the substantial experience gained from the original Green Book’s use over the past 22 years.

The updated contract captures the essential rights and obligations of the parties and is used as an alternative to the 2017 Red and Yellow Books, providing for a fully-fledged range of contract solutions to meet different project specificities. These include employer’s or contractor’s design of the works, appointment of an engineer to administer the contract, wide range of valuation methods, simplified contract machinery, two distinct contractual routes to handle claims and variations, tabulated insurance requirements, use of liquidated damages provisions for delay and termination events for a faster and easier management of damages flowing from such events, early appointment of an adjudicator who can provide dispute avoidance services on top of her/his regular dispute resolution services, to name a few.

The Green Book also includes some brand-new features such as the prolongation cost (PGC) mechanism, a tabulated summary of contractor’s entitlement for employer’s risks, the use of an insurance certificate to be signed by an insurer or broker, user-friendly flow charts and 40 communication forms provided as guidance for practitioners.

FIDIC Credentialing update

The next session of the conference gave delegates a deep dive into FIDIC Credentialing (FCL) and the various programmes it is running and delegates heard from the various programme committee members. Henry Musonda, KM Associates director, highlighted the Adjudicator Programme, Dr John Boyd of Golder Associates and Design Firm Seminars, spoke about the Consulting Engineer Programme, Stephane Giraud, founder and CEO of Plan J Consulting, explained the Contract Manager Programme, Dr Michele Kruger, general manager - water infrastructure at SMEC South Africa highlighted the Consulting Practitioner Programme and Dr Ron Watermeyer, founder of Infrustructure Options, highlighted the Trainer Programme.

Chair of the FCL Certification Board, professor John Uff, then asked the programme committee members to highlight different aspects of their respective FCL programmes and also posed a number of questions from the floor, which included a number of challenges to be addressed when working with FIDIC contracts, especially where these had been ‘adapted’ or changed by employers and clients.

Summing up day one of the conference, FIDIC vice president Catherine Karakatsanis, thanked FIDIC’s global strategic partner, law firm CMS, for their support for the conference and their inputs into FIDIC’s work in the contracts arena. She also thanked all of the speakers for offering their thoughts and insights and the delegates for taking part in a successful first day.

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