FIDIC "Golden Principles"
EIC welcomes that FIDIC has formulated in the Guidance section of the 2017 edition its five "Golden Principles" that it deems necessary to ensure its contracts remain recognisable as "FIDIC".
FIDIC forms of contract progressively more risky for contractors
Since the publication of the first edition of the FIDIC Red Book back in 1957, the FIDIC forms of contract have progressively become more risky for contractors. The Contractor’s general obligation in the early editions of the FIDIC Red and Yellow Books to design, execute and complete the works with "due care and diligence" has been widely replaced by a “fitness for purpose” obligation, the “impartial” Engineer has turned into an agent of the Employer with usually limited authority and onerous time bars have been introduced to shield the Employer from Contractor’s claims.
In addition, FIDIC published – despite the objection of the international contractors’ community – the Silver Book which goes to the extreme in attempting to make the Contractor responsible for almost every eventuality however unforeseeable. Since then international contractors in all parts of the world have suffered from a disturbing trend of indiscriminately "dumping" risk on contractors by referring to provisions borrowed from the FIDIC Silver Book.
EIC welcomes corrective actions by FIDIC
In the light of this development, EIC welcomes that FIDIC have started to initiated corrective actions in order to prevent the systematic misuse of its standard forms of contract. In the Guidance for the Preparation of Particular Conditions of the 2017 suite of contracts, FIDIC has set out five "Golden Principles" which it deems necessary to ensure that modifications to the General Conditions are limited to those necessary for the particular features of the site and the project, and necessary to comply with the applicable law; do not change the essential fair and balanced character of the FIDIC contract, and the Contract remains recognisable as a FIDIC contract.
EIC remains sceptical that international clients, which are not seeking funds from international or European financing institutions, will be incentivised to comply with the new FIDIC recommendations. At the same time, EIC offers to collaborate with FIDIC to promote the concept of “Golden Principles” with the Multilateral Development Banks and with the EU Commission, which have the political clout and the legal authority to intervene should one of their clients use a "non-compliant" FIDIC contract.
FIDIC Golden Rules - Particular Conditions guidance