EIC was invited in September 2018 by the EBRD to present its views on the FIDIC 2017 edition at an Industry Conference organised in London titled “Changes to the FIDIC Forms of Contract – Red, Yellow and Silver Books”. The event brought together more than 100 representatives of EIC, FIDIC, EBRD clients, EBRD and other MDBs to exchange opinions on the FIDIC 2017 suite. Whilst there was not yet much practical experience with regard to the revised FIDIC new forms, EIC used the opportunity to share its concern that the regressions regrettably outweighed the progressions in the light of the complex and burdensome drafting, structure and language. If, however, the FIDIC 2017 edition were to become the new international standard, EIC called upon Multilateral Development Banks to embrace FIDIC’s new “Golden Principles” and to implement them in their daily operations. The Working Group “Contract Conditions” also undertook a “friendly review” of a proposed new FIDIC standard form for “DBO Projects for Upgrading Existing Facilities”. After scrutiny of the draft, the group concluded that such combined contract format was not sensitive enough to cater for all the differences between the Design-Build and the Operation & Maintenance phases of a DBO project and thus might not be able to compete with bespoke contracts.
EIC Annual Report Excerpt
European International Contractors (EIC) represents the international interests of the European construction industry vis-à-vis European policy makers, international financial institutions and society. Its full members are construction federations from 15 European countries, which are directly or indirectly affiliated to FIEC and have internationally active member firms.
EIC was founded in 1970 and is registered since 1984 as a legally independent business association under German law. Its mandate is to promote the interests of the European construction industry in relation to its international business activities. EIC advocates fair international competition based on sustainable, quality-based procurement and fair contract conditions, promotes effective development and export finance schemes for construction services and provides a unique networking forum between the industry and other stakeholders.
At the end of 2018, the composition of the EIC Board was as follows:
- President: Philippe Dessoy (Besix, Belgium)
- Vice President: Wouter Remmelts (BAM International, The Netherlands)
- Treasurer: Juha Kostiainen (YIT Corporation, Finland)
- Luis Ballester Surroca (OHL, Spain)
- Nils Bjelm (NCC, Sweden)
- Selim Bora (Summa, Turkey)
- Lars M. Carlsen (Per Aarsleff, Denmark)
- Benoît Chauvin (Colas, France)
- José Pedro Freitas (Mota Engil Group, Portugal)
- German Grueniger (Implenia, Switzerland)
- Zoe Lysaridou (J&P Avax, Greece)
- Gianni Porta (Itinera, Italy)
- Karl-Heinz Strauss (PORR, Austria)
- Jörg Wellmeyer (Strabag International, Germany)
President Dessoy also represents EIC as Vice-President on the FIEC Steering Committee and as Vice President on the CICA Board.
FIDIC Standard Forms of Contract
In order to better understand the distortion of competition between European and Chinese construction companies, EIC commissioned a comprehensive study on China's Official Finance Practices, with a particular focus on Africa. The study, which has been published for download on the EIC website (download here), illustrates that China, unlike OECD countries, does not make a clear distinction between official development finance, on the one hand, and officially supported export credits, on the other hand, and that the unregulated Chinese official finance practices outside of the rules-based multilateral system create an unfair competitive advantage for Chinese financiers and successively for Chinese contractors, most of which are state-owned entities. EIC will feed the findings of this study and its corresponding lobbying messages into its dialogue with the European Commission. DG DEVCO has selected EIC as a stakeholder for the private sector in the Transport Connectivity Task Force under the new EU-Africa Alliance, which has the goal to unlock private investment and explore opportunities that produce benefits for African and European economies alike.
In spring 2018, the World Bank introduced Environmental, Social, Health and Safety (ESHS) enhancements to its Standard Procurement Documents for Works, including strengthened employer’s specifications and requirements, workers' ESHS Code of Conduct, contractors' ESHS Management Strategy and Implementation Plans, an ESHS Performance Security and the ability to withhold interim payments. EIC, jointly with CICA, supported the Bank’s measures to enhance project performance and outcomes through increased focus on ESHS and suggested that the ILO Declaration on Fundamental Principles and Rights at Work should be incorporated as well in the Bank’s new sustainability policy. The ILO core labour standards commit Member States to respect and promote principles and rights in four categories, whether or not they have ratified the relevant Conventions. These categories are: freedom of association and the effective recognition of the right to collective bargaining, the elimination of forced or compulsory labour, the abolition of child labour and the elimination of discrimination in respect of employment and occupation.
OECD Local Costs rule in relation to Construction Services
In November 2018, EIC participated to a Consultation Meeting at the OECD headquarters in Paris and explained to OECD governments and their export credit agencies why the restriction of official support for local costs to 30% of the export contract value was no longer appropriate. In unison with BIAC, the Business and Industry Advisory Council to the OECD, EIC called upon the OECD to quickly change the so-called “OECD Consensus” in order to enable export credit agencies to provide insurance for local costs up to the same amount as the export contract value across all sectors. Moreover, EIC suggested a new Sector Understanding on large construction and engineering (including EPC) projects, which recognises the fact that the export of engineering and construction services require a much higher amount of local costs then of other goods and services. The proposal to increase the coverage of local cost from 30 % to 50% of the export contract value has meanwhile become an EU Position. The next step is to find support for such amendment within the OECD.
Corporate Responsibility (CR)
EIC President Philippe Dessoy presented on 24 March 2018 EIC’s new Corporate Responsibility Report at the African Union headquarters in Addis Ababa. At a Workshop titled “Construction Industry Transformation Programme”, held in the African Union’s Nelson prestigious Mandela Hall in the presence of Ethiopia’s Minister of Construction, H.E. Engineer Aisha Mohammed Mussa, the EIC President assured the African audience the interest of European international contractors to remain present in Africa. He advocated that African contracting authorities choose more often a tender procedure that aims at the selection of the best-value offer rather than the lowest price. EIC acknowledged the steps taken by the World Bank and some bilateral development banks, such as AFD and KfW, to introduce Value for Money Procurement as a core procurement principle. Still, Value for Money Procurement is an option offered by the international financiers, which has to be implemented by each individual Borrower and Contracting Authority.
On 20 April 2018, EIC held its Spring Conference in Vienna. Workshop discussions circulated around “A Preview on the European international contractor of the Year 2025”. On 05 October 2018, EIC held its Autumn Conference in Çeşme/Izmir with a Workshop on “Alternative Financing Options for Infrastructure Development in the Developing World”.