International Federation of Consulting Engineers

FIDIC News

December 2010
Online at FIDIC.org/news
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FIDIC
Activities
The first-ever MDB Harmonized Construction Contract Conference
A unique opportunity to understand the provisions of the MultilateralDevelopment Bank Harmonized Edition of the FIDIC Construction Contract has
participation by all stakeholder organisations
FIDIC-ASPAC 2011 Regional Conference
The FIDIC ASPAC-TCDPAP Regional Conference takes place in Kuala Lumpur on
7-8 March 2011.
Business
Development
European report identified drivers for competitiveness
While inertia along national lines persists, increased diversification andspecialisation offer European firms opportunities.
Practice
Accredited adjudicator assessment workshops
FIDIC can arrange accredited adjudicator assessment workshops for Member
Associations aiming to establish national dispute adjudicator lists.
Contracts
EU agency urged to adopt bank harmonised contract
European associations call upon EuropeAid to consider adopting the MDB
Harmonised Construction Contract.

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Industry
Representation
FIDIC to develop cooperation with Gulf Engineering Union
The 2010 Gulf Engineering Forum on Intelligent Transport Systems provided an
opportunity to discuss cooperation with the Gulf region.
Image
Sweden's consulting engineers celebrated their association's 100th anniversary
A roadshow and a jubilee celebration looked both forwards and backwards to arich record of achievements.

Contracts
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1-3 Mar11

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23-24 Feb10

Principles
Quality
Quality management standard to consider incorporating risk management
ISO is promoting the discussion of introducing risk management as a key
feature of a revised 9001 Quality Management standard.
EthicsChinese authorities applaud FIDIC policies
Speaking on integrity and ethics at the CNAEC-China Member Association
annual conference the FIDIC President reminded participants of the risks
stemming from corruption.
Anticorruption summit identified emerging trends
The 14th IACC reported on the shift to third-generation local tools to measurecorruption and the need to address climate change funding.
Building a business case for integrity management
The OECD Anti-Bribery Convention continues to help build an environment foreffective integrity management.
Sustainability
Performance Standards based sustainability assessment
Updating of the IFC's Environmental and Social Review Procedure may herald agreater harmonisation of sustainability assessment between banks.

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CourseSponsorCourseSponsorAnnouncements
FIDIC Conferences and Events
Consolidating regional activities
Members' announcements
FIDIC - Activities
The first-ever MDB Harmonized Construction Contract Conference[full item: 119Ac]

Info

MDB
Contract
Conference
Brussels
27-28 Jan11
ORDER NOWThe Multilateral Development Bank (MDB) Harmonized
Edition of the FIDIC Construction Contract, see
wwww.fidic.org/mdb, widely acknowledged to be one of
the most successful examples of cooperation forstandardised procurement procedures, is used for bankClaims
financed projects around the world, including the USD
Workshop
60 million Rijeka Port regional container port upgrade in Croatia (see photo). So
Jo'burg
14-15 Mar11
that the contract continues to serve as one of the main vehicles for ensuring
environmentally and socially responsible procurement, the MDB Harmonized Major ORDER NOW
Works (Construction) Contract Conference (Brussels; 27-28 February 2011;www.fidic.org/mdb2011) that is being organised by FIDIC, European International
Contractors (EIC) and the Building and Woodworkers International will analyse
Contracts
the rationale behind the contract's provisions and how the provisions are
Courseimplemented, user experience for the first five years, and future developments.
Abu Dhabi
Representatives of all stakeholder organisations have agreed to present. These
21-22 Mar11
organisations include the World Bank and all the MDB's that are licensees, theConfederation of International Contractors' Associations (CICA), International
Labour Organisation, OECD, UNOPS, ISO, International Council for Research andInnovation in Building, and Transparency International. To encourageContracts
participation, the registration fee has been kept to the absolute minimum and a
Coursediscount is available for participants coming from FIDIC and CICA/EIC member
Qatar
1-3 Mar11
firms.
FIDIC-ASPAC 2011 Regional Conference [full item: 120Ac]
The FIDIC ASPAC Asia-Pacific regional group has reached agreement tocollaborate more closely with the regional semi-governmental technicaldevelopment programme TCDPAP, especially with regard to the TCDPAP annual
regional conference. The next FIDIC ASPAC-TCDPAP Regional Conference (Kuala
Lumpur; 7-8 March 2011) that is hosted by Malaysia's Professional Services
Development Corp., www.mypsdc.com, will focus on sustainable infrastructure,see draft brochure PDF.
Business - Development

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European report identified drivers for competitiveness [full item: 71De]
A very comprehensive 200-page European Commission
Sector Competitiveness Studies draft report PDF tounderstand the drivers for industrial competitiveness inthe construction sector, the European Union's largest
single economic activity and its biggest industrial
employer, has been released. Prepared in collaboration
with the European federation EFCA, it used NACE
statistical data for onsite construction and wherever
possible the manufacture of building materials and professional services within
the construction sector. Other professional services such as legal services,
accounting and information technology were seen as having a minor role indriving competitiveness. A number of general trends in the European Union (EU)engineering services market were highlighted, notably an emphasis on ecoefficiency, risk management and reducing project life-cycle costs, an increasingrole for the private sector in building control, with mergers and acquisitions
among larger firms. The chart shows that the percentage of turnover in the EU
has been decreasing for the top five European engineering firms owing toincreased activity elsewhere. The report concluded that the professional services
sector was currently not in a position to take full advantage of changes in markets
and client demands owing to high fragmentation along national borders with eachcountry having its own customs, regulations and culture. Nevertheless, in spite ofthis inertia in existing practices, innovation and the increased use of digitaltechniques would play an increasing role along with diversification into newservices and specialisation in high value-added services.

CourseSponsorCourseSponsorBusiness - PracticeAccredited adjudicator assessment workshops [full item: 87Pr]
Ensuring that the parties to a FIDIC contract appoint a Dispute Adjudication Board(DAB) when called upon to do so sometimes remains a challenge because
experienced dispute adjudicators having sufficient local knowledge, including
language skills, are unavailable. In parallel with the FIDIC President's List of
Approved Dispute Adjudicators, see www.fidic.org/dab, FIDIC encourages Member
Associations to establish national lists according to FIDIC guidelines and to takeadvantage of accredited training suppliers to organise accredited training courses.
To expand the training available for potential adjudicators, FIDIC recently reachedagreement with the Dispute Resolution Board Foundation to offer, for invited
participants, an advanced Contracts Module 3A training module to supplement theexisting DAB Module 3 which, like all FIDIC training modules, can be organised asa seminar, course or workshop. To address a bottleneck that still remained,
namely resources to establish a national list by organising assessment andmaintaining a list, FIDIC has arranged for an accredited supplier to offer
Adjudicator Assessment Workshops (AAW) modelled on the FIDIC assessment
workshop that is organised every two years by the FIDIC Assessment Panel for
Adjudicators. The first accredited AAW was supplied by Nestor for AJCE-Japan; it
was sponsored the Japanese development agency JICA. FIDIC organised the
supply of Module 3 and 3A courses immediately prior to the AAW, which led tosome 16 candidates qualifying for participation in the assessment workshop.
Other Member Associations needing to engage an accredited supplier for an
adjudicator assessment workshop should contact FIDIC.
Business - Contracts

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EU agency urged to adopt bank harmonised contract [full item: 90Co]
Following a roundtable in March 2010, the European federation EFCA entered into
a technical dialogue with the European Union's EuropeAid Co-operation Office(AIDCO) to exchange information on the conditions of contract for contained in
the Practical Guide used for EU external aid contracts (on 1 January 2011 AIDCO
merges with the EC Directorate-General for Development and Cooperation EuropeAid). In view of the call for harmonisation of donors' procedures made in
the 2005 Paris Declaration on Aid Effectiveness, the November 2010 updating of
the Practical Guide (in which EFCA has collaborated for more than a decade) andthe release of a new version the Multilateral Development Bank (MDB)
Harmonised Edition of the FIDIC Construction Contract, see www.fidic.org/mdb,
the Presidents of EFCA and the European International Contractors have called
upon AIDCO to review progress. The Presidents noted that the MDB Harmonised
Contract should be adopted by EuropeAid as it is "indispensable that the standard
form of contract used by a given recipient country ... should, as a minimum
standard, be the one with the largest coverage and support in the international
context". A conference to be held in Brussels on 27-28 January 2011, seewww.fidic.org/mdb2011, aims to make EuropeAid aware of the advantages ofusing the MDB harmonised contract.

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CourseSponsorIndustry - Representation
FIDIC to develop cooperation with Gulf Engineering Union [full item: 71Re]
Opportunities for further collaboration with the Gulf Engineering Union (GEU) that
represents Gulf Cooperation Council societies of engineers were discussed with
Dr. Khaleel E. Al-Hosani, GEU General Secretary, at the union's annual Gulf
Engineering Forum in December 2010 in Dubai. FIDIC will explore with the GEU
the possibility of organising a regional conference while continuing discussion on
an overall approach for each of the GEU members to become FIDIC members.
The conference provided a platform for the region's top engineers to exchange
ideas and critical insights on developing intelligent and sustainable transportation
systems. FIDIC was represented by Dr Peter Boswell, General Manager, who
made a presentation on the use of FIDIC contracts in Intelligent Transport
Systems (ITS) for roads. He described how these complex, integrated systems
are increasingly privately financed, with concessions and long-term service
contracts being subdivided into several works packages that often use FIDIC
contracts. For instance, the ITS for the new Forth Replacement Crossing in the UK
involved two amended versions of the FIDIC EPC/Turnkey Contract, where
amendment was licensed by FIDIC to "create a contract with an equivalent rigour
to those of the current Transport Scotland model, but which will be both familiar
to domestic contractors and more familiar to international bidders".

CourseSponsorIndustry - Image
Sweden's consulting engineers celebrated their association's 100th
anniversary [full item: 53Im]
A special focus on the significant contributions made by consulting engineers over
100 years highlighted the celebrations in Sweden of the FIDIC Member
Association STD in October 2010. In the lead up to the anniversary celebration, a
travelling road show organised by STD depicted the evolution of the industry andSweden's remarkable growth and development. There were highly visual, decadeby-decade snapshots that looked at significant projects during each of the tenyear periods and how the projects related to world events of the time. The best
known recent civil engineering achievement is the 16-km long Oresund Bridge
linking Sweden to Denmark. The celebration itself focussed on the future for
infrastructure and the urban environment. A video of a group of children giving
their thoughts was produced, and young professionals, government agencies andleading consulting engineering firms shared their visions and ideas. Examples ofconsulting engineers acting as trusted advisors augured well for the future of theindustry.
STD, with 740 member firms employing some 25,000 staff, represents Sweden'sarchitects and building and engineering consultancies. It is organised within aservice organisation called Almega Business Service Associations. The association
published recently its Sector Review 2010 focussing on industry developments in
the Nordic countries but having useful statistical and business information for theentire consulting engineering industry.
Principles - Quality
Quality management standard to consider incorporating risk
management [full item: 6Qu]
The International Standards Organization (ISO) has released Quality Management
Concepts: An Analysis of Concepts for Consideration in Future SC2 Work(available from FIDIC upon request) to promote the discussion of concepts thatwould form the basis for designing the future revision of the ISO 9001 Quality
Management standard for publication before 2015. Possibly the most importantnew feature being considered was the need to integrate risk management.
Building upon Quality Risk Management as used in the pharmaceutical industry, it
was necessary to clarify that risk-based thinking, specifically the control of thepossibilities of not meeting quality characteristics, was a basic aspect of anorganisation's various management systems, including quality management. It
had become evident to consulting engineers that providing quality services in amarket that expected innovation to meet global challenges such as climatechange implied an increased risk (see FIDIC 2010 New Delhi Conference
presentation PDF). The FIDIC Quality Management Committee will be working toensure that the incorporation of risk in the ISO standard will benefit the industry
by increasing the confidence of clients, and by improving the management of subconsultants and organisational processes.

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CourseSponsorPrinciples - Ethics
Chinese authorities applaud FIDIC policies [full item: 55Et]

CourseGregs Thomopulos, FIDIC President, for his opening address "Integrity and Ethics Sponsor
in Global Infrastructure" at the CNAEC-China annual conference in Guangzhou in
early-December 2010 reminded the some 700 participants that corruption had asignificant impact on all aspects of infrastructure investment. Moreover, no
company was immune to the risks stemming from the corrupt practices that
hampered the ability of consulting engineers to offer sustainable, quality advice toclients (see PDF). He argued that the more widespread implementation of the
FIDIC Integrity Management System by FIDIC member firms would go a long way
to preventing corruption in global infrastructure development. Mr Mu Hong, ViceChair of China's powerful National Development and Reform Commission, praised
FIDIC for speaking openly about such issues. He acknowledged that consulting
engineers played a vital role in economic development, and outlined the country's
next five-year plan, which again envisaged significant investment in infrastructureand support for the engineering sector. The average urban disposable income andthe per-capita net income of rural residents were set to increase at 7% each year
and sustainable development will be enhanced, notably resource utilisation (forinstance, energy consumption per unit of GDP unit will decrease by 20%).

Anticorruption summit identified emerging trends [full item: 56Et]
The International Anti-Corruption Conference (IACC) aims to be the premierforum for identifying strategies to tackle the increasingly sophisticated challenges
posed by corruption in all areas of business. With the aftermath of the global
financial crisis seeing efforts to reduce poverty and to deliver sustainable
development and climate control fading, the 14th IACC (Bangkok; 10-13
November 2010) highlighted the urgent need to restore trust and to rebuild thecredibility of institutions, with anticorruption initiatives playing a key role. Enrico
Vink, FIDIC Managing Director, presented FIDIC's anticorruption initiatives at a
special session on construction sector transparency. The issue of agents for firms
working overseas arose (see workshop report), with FIDIC able to demonstrate
the benefits of its Model Representative Agreement which, together with therobust FIDIC Integrity Management System (FIMS), represented one of the very
few business practice tools for curbing corruption.
In an alternative approach the 14th IACC declaration called upon firms to disclose
how they managed corruption risk using the UN Global Compact reporting
corruption guide. The declaration went on to welcome the G20 Corruption Action
Plan to increase integrity in global financial markets and the UN Convention
against Corruption, which remained the only global instrument to address
corruption, albeit weakened by the fact that it has yet to be implemented or
ratified by many countries and a robust self-reporting was still lacking (see Newsitem). The declaration noted that first-generation composite measurement tools
such as the World Bank Governance Indicators and Transparency International's
Corruption Perceptions Index and second-generation actionable tools such as the
Global Integrity Index and the National Integrity System had brought corruption
to the global agenda. But there has been a shift to third-generation local
measurement tools such as the Local Governance Barometer that addressed
specific problems by measuring the capacity to act with integrity instead of
focussing on corruption. This more constructive approach, which lies at the heartof the FIDIC's FIMS for government procurement agencies (the so-called GPIMS,
see News item), is an important evolution since it is better able to monitor
corruption that constantly changes form (see workshop report). New tools arealso emerging to ensure accountability in the complex, multi-billion USD world offinancing adaptation to climate change, where current governance structures areunclear, driven by the prospect of funding rather than needs, and have low levels
of investment in capacity development (see workshop report).
Building a business case for integrity management [full item: 57Et]
The OECD released in 2009 good practice guidance on internal controls, ethics
and compliance as an annexe PDF to its Recommendation for Further Combating
Bribery of Foreign Public Officials in International Business Transactions to help
firms implement the landmark OECD Anti-Bribery Convention. A working group
met in December 2010 to review how firms can develop and implement antibribery compliance measures. There was considerable interest in FIDIC's
collective action in the area of integrity management, as opposed to individual
actions by large firms. In recognising the time and cost required to implement
integrity management, as in most standard's based management systems,
implementation needed to scale according to the size of the firm. FIDIC's
Managing Director, Enrico Vink, noted that most professional services firms do
indeed act with integrity but many have declined to operate in certain countries
because of the risks, thereby reducing the availability of quality professional
advice. It was therefore not sufficient to merely sanction firms caught up in
corrupt activities, but to acknowledge the efforts being made to mitigate the risksof corruption, and thus build the business case for integrity management.
Principles - Sustainability
Performance Standards based sustainability assessment [full item: 12Su]
A new World Bank environmental strategy, due in 2011 (see concept note PDF),
will aim to improve the sustainability of the bank's entire project portfolio. During
a visit by a FIDIC delegation in November 2010 the World Bank indicated that it
was seeking help to update the International Finance Corporation (IFC)
Environmental and Social Review Procedure (ESRP) that guides the actions
needed to meet the requirements of the eight IFC Performance Standards (seereport PDF). The IFC envisaged strengthening some measures such as those forclimate change, biodiversity offsets and stakeholder engagement. IFC
Performance Standards based assessment is used by several bilateral agencies forinternational projects and in the banking sector's Equator Principles for non-OECD
countries (see presentation PDF). It is unclear if more multilateral developmentbanks would also adopt the IFC approach for assessing project sustainability.

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CourseSponsorCourseSponsorAnnouncements - Events
FIDIC Conferences and Events [full item: 63Ev]
FIDIC-CRCICA-ESCONE Regional FIDIC Contracts Conference, Cairo, 9-10 Jan 11
Saudi Construction Contracts Conference, Riyadh, 15-17 Jan 11
FIDIC Young Professionals Management Training Programme, mid-Jan 11
FIDIC-ECV Contracts Course (Contracts), Paris, 26-27 Jan 11
The FIDIC MDB Harmonized Contract Conference, Brussels, 27-28 Jan 11
FDIC-Cornerstone Contracts Workshop, (Contracts), Bahrain, 8-9 Feb 11
FIDIC-Nestor Contracts Seminar (Contracts), Copenhagen, 21-22 Feb 11
Mid-East Contracts Users Conference, Abu Dhabi, 23-24 Feb 11
FIDIC-UQPM Contracts Course (Contracts), Doha, 1-3 Mar 11
FIDIC-DBT DAB Intensive Course Dubai, 28-29 Mar 11
FIDIC TCDPAP - ASPAC Asia-Pacific 2011 Conference, Kuala Lumpur, 7-8 Mar 11
ICC-FIDIC Contracts & Dispute Resolution Conference, Sao Paolo, 12-13 Apr 11
Announcements - Notices
Consolidating regional activities [full item: 22No]
The FIDIC ASPAC Asia-Pacific regional group has reached agreement for the
ASPAC-TCDPAP annual regional conference (Kuala Lumpur; 7-8 March 2011), seeNews item. For the GAMA-Africa Group of Member Associations, new options arebeing explored to support regional activities with a outsourced secretariat(members have been canvassed for their support). GAMA has agreed to forgo its
2011 annual conference in order to strengthen Africa's input to the FIDIC 2011
Hammamet (Tunisia) Conference.
Further discussion with senior officials of the European federation EFCA has
confirmed the enhanced collaboration through joint participation in committee
activities. FIDIC representatives have been appointed for all EFCA working
committees, and visa versa, to ensure that all activities are complementary. Alsoplanned are some specific issues to be addressed by EFCA and FIDIC, such as
engaging with the European Commission in enhanced discussions on procurement
policies and procedures, as well as on the use of FIDIC contracts for European
Union funded projects. EFCA is participating in, and hosting, the MDB Harmonized
Major Works (Construction) Contract Conference that takes place in Brussels on
27-28 January 2011 (see www.fidic.org/mdb2011). Longer term it is aimed topromote vigorously the benefits of using internationally accepted standards forboth the selection of consultants and the implementation of projects.
In the case of the South American federation FEPAC, with the readmission of
ABCE-Brazil as a FIDIC member and visits by Enrico Vink, FIDIC Managing
Director, to Argentina and Chile in October 2010, the growing interest in FIDIC
and the benefits of international best practice have been confirmed. There was asense of urgency owing to the significant infrastructure development in the region
which called for greater international collaboration. Although regional
development funding was limited mainly to the less-developed countries, the useof FIDIC contracts was expanding as a result of internationally focussed
investments and projects. The FIDIC MDB Harmonized Construction Contract wasused by the Inter-American Development Bank and Spanish andPortuguese/Brazilian translations of the other FIDIC works contracts are available.
FIDIC envisaged closer collaboration with a number of South American countries,
and with FEPAC. For instance, FIDIC accredited training courses and workshops
now took place in several countries and a regional FIDIC-FEPAC contracts
conference is being considered. In the meantime, the FIDIC-ICC 2011
International Contracts Conference will be held in Sao Paolo on 12-13 April 2011.

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CourseSponsorCourseSponsorMembers' announcements [full item: 5No]
Executive Committee Meeting; Hawaii, 17-19 Jan 2011
Contracts Committee Meeting; Brussels, 26 Jan 2011
YPMTP 2011 Management Training Registration Brochure
MDB Harmonized Contract Conference, Brussels, 27-28 Jan 2011 BrochureThis email edition of FIDIC News is sent to FIDIC Member Associations, contacts and committee members ofcommittees, as a multipart formatted email message with an attached PDF file. If difficulties arise, please
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