MTECC member chairs conference session in Beijing
25/06/10 Dr Donald CharrettFIDIC, the International Federation of International Consulting Engineers, conducted a workshop and two day conference for users of its standard form contracts in Beijing from 23 - 25 June. This conference was one of three Users' Conferences now held in different parts of the world each year.
The themes of the workshop were: "Contracts risk management for FIDIC projects" and "Advanced dispute resolution strategies in the Asia-Pacific Region". Speakers at each of these workshop sessions were from international law firms with offices in Beijing, Hong Kong, Tokyo, Singapore and London.
Attendees at the conference were a mix of engineers and lawyers, mostly from the Asian region. Speakers included not only engineers with considerable "hands-on" experience of using the FIDIC contracts, but also members of the drafting committees.
Current activities in respect of the FIDIC contracts discussed included a review of the 1999 "rainbow suite" [Contract for Construction (Red Book), Contract for Plant and Design-Build (Yellow Book) and the EPC/Turnkey Contract (Silver Book)]. The 2009 test edition of the FIDIC Subcontract was also reviewed, and the difficulties of drafting subcontract terms suitable for the wide range of subcontract conditions was noted. This subcontract is as "back to back" with the Red Book as possible, as well as being based on the balanced risk principle which is part of all FIDIC contracts.
An important function of this conference was providing an opportunity for users to share their experiences of the use of FIDIC contracts, and to express their views on desirable changes to the contracts in the next editions. The new edition of the rainbow suite is anticipated in 2011.
The 2010 edition of the MDB Harmonised Edition of the Red Book was distributed at the conference. The MDB Edition was drafted by the Multilateral Development Banks and approved and published by FIDIC. MDBs such as the World Bank and the Asian Development Bank mandate the use of the MDB Edition to avoid the constant use of extensive Particular Conditions for the specific requirements of the banks for projects funded by them.
MTECC member Donald Charrett chaired the conference session on the FIDIC MDB Harmonised Edition. He briefly described the changes between the MDB Edition and the Red Book, and the nature of the changes from the 2006 Edition to the 2010 Edition. Two speakers from The Asian Development Bank discussed the Bank's mandatory use of the MDB Edition for all internationally competitively bid projects it funds. These speakers were followed by a Japanese consulting engineer who described the use of the MDB Edition for all development projects funded by the Japan International Cooperation Agency (JICA). Of particular interest was his brief introduction to JICA's "Checklist for One Sided Contracts" for use with its sample bidding documents [available on JICA's website: http://www.jica.go.jp/english/operations/schemes/oda_loans/oda_op_info/guide/]. JICA, like FIDIC, believes that risk allocation in construction contracts should be balanced, and not one-sided.
Toby Shnookal of MTECC recently presented a paper on FIDIC contracts in the Australian context at the inaugural Society of Construction Law Australia's conference in Perth. This paper, available on this website under the Resources tab, summarises the current FIDIC contracts, and discusses the potential future amendments.