FIDIC Conference 2023: Key Takeaways from the 110 Year Anniversary Conference

The run up to Christmas means many things to many people. For us lucky construction lawyers it heralds FIDIC Conference season. A chance to swat up with our peers and get the latest on what we will see next in the FIDIC pipeline. FIDIC’s 110 year anniversary conference did not disappoint.

With a notable shift of conference attention away from the 2017 suite, we saw informative discussion on lessons learnt from the drivers of existing mega projects, working groups and conference sessions on FIDIC’s Green and Emerald books, a deeper delve into some of the keys issues that all FIDIC users will be well versed in (design and covid being good examples) and some great insight into what FIDIC has in store for future publications. 

But what were the key takeaways? Our top handful:

• Green Book – many FIDIC users will be well acquainted with the Green Book and particularly its revamped second addition launched in 2021.The second edition brought some much-welcomed changes to the 1999 first, which itself omitted to address some key contracting concerns (for example indemnities, limitation of liability and termination for convenience). Whilst these omissions were intended in a contract designed for small and minor works, the Green Book has been somewhat of a victim of its own success and has been used internationally more widely that it was design to have been.  FIDIC recommend that it is particularly useful where the burden of contract administration for its related project is not particularly great and where capex is less than $110million.  However, it is being used on larger projects worldwide.  FIDIC have therefore re-positioned the form providing an alternative design and build option to be used where the full extent of the mechanisms set out in the Yellow Book are not required. The resulting new edition received much praise, not just for its ability to plug the gaps in the first edition, but also for its clarity, ease of use and for its move towards the introduction more user-friendly visual aids, making the form more easily digestible than reading clauses set out in extensive text. There was the suggestion that this approach could be applied to updates to the Red, Yellow and Silver Books going forwards. 
• The FIDIC Pipeline (Net Zero, Collaborative Contracting and Offshore Wind) – FIDIC’s Task Groups working on these initiatives had much to say on their progress and the approaches being taken to advancing these well awaited forms. Whilst nothing is imminent in any of these fields (and the absence of discussion on the much anticipated but delayed FIDIC EPCM form was noted) it was clear that much work is being done and the focus on clarity, reflection of the Green Book approach to drafting and a solution-based ease of use approach was all welcomed. We are particularly looking forward to seeing FIDIC’s proposed net zero and ESG clauses – maybe next year.
• Mega Projects – on the ever-evolving topic of the delivery of mega projects the conference staged some informative talks from leaders in the field. The messages were clear and reflective of our experience. Define and keep focused on the end goal and work backwards from there; create a procurement strategy which reduces package numbers, interface and integration risk; client capability is key and requires both leadership and the incentivisation of inclusive and collaborative practices.
• Emerald Book – the talk on Emerald Book was hotly awaited. This FIDIC form was a joint initiative between FIDIC and the International Tunneling Association, developed to service the growing pipeline of underground works whose enhanced risk profile and risk management requirements were not catered for in the non-specialist forms of standard form contract on the market. The form uses the Yellow Book as a base and incorporates modifications (for example Red Book style remeasurement provisions and the key Emerald Book tools of the Geotechnical Baseline Report and Schedule of Baselines) to set out FIDIC’s view of a balanced risk allocation. The conference saw FIDIC launch its new guide to the Emerald book, which on first read will be an incredibly useful tool for parties who are either (a) familiar with Yellow Book but have less experience of Emerald to get to know the form or (b) who are looking to incorporate Emerald Book tools and provisions into other forms of contract. There are many projects that will benefit from this. Whilst FIDIC don’t have reliable stats on take up, (it did, however, note that UK projects and others in Australia, Estonia  and even Nepal have taken on Emerald Book usage), comments around this being strong reflect Burges Salmon’s experience. The contract is endorsed (or at least well received with endorsement anticipated) by significant players in the funding community and the UK projects on which we are advising clients on aspects of this form are notable against the backdrop of other UK and international projects utilising either the form or concepts from it. 

I could go on but we will follow up with a dedicated post on the Emerald Book. Watch this space.