EIC GENERAL ASSEMBLY ROTTERDAM, 09 OCTOBER 2015

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1 EIC GENERAL ASSEMBLY ROTTERDAM, 09 OCTOBER 2015

2 OVERVIEW OF RECENT EIC ACTIVITES Working Group Contract Conditions Meeting with EBRD s Director of Procurement to discuss MDB policy on Abnormally Low Tenders Meeting with Task Force Leader for new FIDIC Conditions of Contract for Underground Works 2 Working Group World Bank Procurement EIC comments on the World Bank s New Procurement Framework Working Group Africa Meeting with EU Development Commissioner on EIC proposal for revised Blending 2.0 instrument Preparation for Joint CICA/EIC Mission to the African Development Bank FIDIC Annual Conference 2015 EIC presentation on Integrity Management & Reputational Risk Joint FIEC/EIC Working Group Poland FIEC/EIC participation at Parliamentary Hearing of the Sejm s Road Sub-Committee New ISO Anti-Bribery Management System FIEC/EIC participation at latest meeting of the ISO Project Committee end of September 2015

3 MEMBERSHIP ISSUES EIC is still missing a U.K. Member Federation Talks over a dinner hosted by Pinsent Masons in February in London with several British international contractors have not yet led to the desired effect 3 Number of Associate Member Companies remains at 8 companies: Aecom, Cybarco, EY, Langan International, Pilosio, Pinsent Masons, Rambøll, Thales Italy

4 EIC INTL CONTRACT STATISTICS 2014 TURNOVER Volume of Turnover of European international contractors in 2014 (in million ) 4 4

5 EIC INTL CONTRACT STATISTICS 2014 TURNOVER Volume of EIC countries ODA in 2013 (in million US$) 5 EIC General Assembly in Porto 5

6 PR ACTIVITIES The EIC Pocket Guide shall provide 6 readers with a quick and concise overview on the EIC history, membership, structure, mission and activities

7 WORKING GROUP CONTRACT CONDITIONS : FIDIC-ITA TASK GROUP ON UNDERGROUND WORKS 7

8 WORKING GROUP CONTRACT CONDITIONS : FIDIC-ITA TASK GROUP ON UNDERGROUND WORKS 8

9 WORKING GROUP CONTRACT CONDITIONS : FIDIC-ITA TASK GROUP ON UNDERGROUND WORKS 9

10 WORKING GROUP CONTRACT CONDITIONS : MDB WORKING GROUP ON ABNORMALLY LOW TENDERS EBRD proposes use of arithmetic formula of Standard Deviation 10 Country: Project: Contract: Bosnia and Herzegovina Construction of Sarajevo Bypass Construction of Josanica-Butila Procurement method: EBRD Open international tender Cost estimates: EUR 70,200, ,746,728 59,301,721 66,241,207 67,955,354 69,968, ,270,844 78,208, ,576, ,295,563 MEAN = 77,507,145 STAND.DEV. = 20,206,178 ALT RISK = NO. 1

11 WORKING GROUP AFRICA : JOINT CICA-EIC MISSION TO AFDB DRAFT PROGRAMME Date: November 2015 Heads of Mission: Emre Aykar (CICA President) & Philippe Dessoy (EIC President) 11 Topics to be discussed: Reform of the AfDB Procurement Rules - Implementation of the new Procurement Policy and related challenges Public Private Partnerships - The Use of the International Center of Excellence on Concessions and PPP How can CICA-EIC contribute to capacity-building in the national private sector Development of Infrastructure in Africa, including topics such as professional training and co-financing with Multilateral Development Banks and Development Finance Institutions; Participants up to date: Companies from BE, FR, NL and TR + 1 ACM If you like to join, please contact the EIC Secretariat

12 WORKING GROUP WB PROCUREMENT GENERAL Final approval of New Procurement Framework by WB Executive Directors on 21 July and implementation of the new rules and regulations is planned for 1 st January Main changes of the new Procurement policy (see also EIC commentary on our Homepage) TOPIC POSITIVE NEGATIVE ALTERNATIVE PROCUREMENT SYSTEMS (APA) SUSTAINABLE PROCUREMENT ABNORMALLY LOW BIDS INTERNATIONAL COMPETITIVE BIDDING VALUE FOR MONEY COMPLAINTS & OVERSIGHT APA instead of Country Procurement Systems APA need to run through rigid Bank assessment Bank remains responsible for complaints handling Borrower may include sustainability requirements Borrower has the possibility to reject an ALT following a clarification procedure ICB is the preferred option for complex, highrisk and/or high-value contracts, also under APA Bank has established ICB thresholds by country Value for Money is a core principle Award criteria are EMAT and lowest price Contract-related complaints are admissible Mandatory thresholds for Prior Review based on procurement risk level No exception for high-risk/-value projects Yardstick is acceptable (not equivalent ) Bank has a wide discretion to proceed SP is not a mandatory requirement Related Annex VII is very general Borrower is not obliged to reject ALT Borrower may also increase the Perf. Sec. ICB is not an obligation for complex, high-risk and/or high-value contracts under APA ICB thresholds are subject to review by APM Related Annex I is very general and provides no methodology to implement VfM Related Annex II displays some rather vague language ( as appropriate )

13 WORKING GROUP WB PROCUREMENT CONTRACT CONDITIONS Annex IX: Contract Conditions in International Competitive Procurement 2.1: The contract conditions shall provide an appropriate allocation of responsibilities, risks and liabilities informed by an analysis of which party is better placed to manage the risks, cognizant of the costs and incentives of risk allocation. 2.2: For international competitive procurement for goods, works, non-consulting services and consulting services, the Borrower shall use the applicable Bank s Standard Bidding/Request for Proposals Document with minimum changes, acceptable to the Bank, as necessary to address project-specific conditions 2.3: For goods, works and non-consulting services, in cases where the Bank has not issued the applicable Standard Bidding/Request for Proposals Document, the Borrower shall use other internationally recognized standard conditions of contract and contract forms acceptable to the Bank. 2.19: All international competitive procurement contracts are required to include appropriate mechanisms for independent dispute resolution such as Dispute Review Experts or Dispute Review Boards. International commercial arbitration in a neutral venue shall be required unless the national regulations and arbitration procedures are acceptable to the Bank in terms of equivalence to international commercial arbitration and the venue is neutral, or the contract has been awarded to a bidder/consultant from the Borrower s country. 13

14 WORKING GROUP WB PROCUREMENT ICB THRESHOLDS Annex III of Bank Procedure lists current thresholds for ICB processes by country ICB thresholds are determined on the basis of (i) the size, depth, and conditions of specific markets, and the capacity of the local industry; (ii) the assessed level of interest of foreign providers to participate in domestic markets; (iii) the nature, complexity, and level of risk of procurement activity 14 Country (like) Open international / US$ Open national / US$ Cambodia, Djibouti, Lao 2 mil. 2 mil. Honduras, Liberia, Nepal 5 mil. 5 mil. Burundi, Ethiopia, Malawi 7 mil. 7 mil. Bangladesh, Benin, DRC 10 mil. 10 mil. Ghana, Kenya, Tanzania 15 mil. 15 mil. South Africa, Vietnam 20 mil. 20 mil. Argentina, Brazil, Mexico 25 mil. 25 mil. China & India 40 mil. 40 mil.

15 WORKING GROUP WB PROCUREMENT DRAFT PROCUREMENT REGULATIONS AIIB China-led Asian Infrastructure Investment Bank (AIIB) expected to begin operations by the end of Will AIIB Procurement be in line with World Bank Procurement? - Probably not. Integrity & Fairness are not a Core Procurement Principles Country Procurement Systems instead of Agency Procurement Arrangements Sanctions policy in relation to Fraud & Corruption not yet elaborated Bank has no obligation to facilitate a resolution under contract-related complaints No reference to Sustainable Procurement option No indication of legal consequences of an ALT, but reference to tender documents Lack of clear preference for ICB in case of complex, high-risk or high-value contracts Ambiguity with respect to the MEAT most economically advantageous offer No commitment to international arbitration in a neutral venue

16 ISO ON ANTI-BRIBERY STANDARD PROJECT COMMITTEE MEETING IN KL Report by Per Nielsen 16 Chairman Joint FIEC/EIC Working Group Ethics 4 th Meeting of the ISO Project Committee (ISO-PC) from 28/9 2/ in Kuala Lumpur FIEC and EIC were represented by Per Nielsen Future roadmap : Finalisation of Draft International Standard (DIS) by 30 October 2015 DIS ballot to be issued by ISO Central Secretariat by 07 January 2016 Next ISO-PC Meeting: Resolution of comments on DIS Agreement on new ISO standard???

17 ISO ON ANTI-BRIBERY STANDARD PROJECT COMMITTEE MEETING IN KL Report by Per Nielsen 17 Chairman Joint FIEC/EIC Working Group Ethics Countries and organizations participating in PC 278: Argentina Armenia Austria Australia Canada China Colombia Cote d Ivoire Czech Republic Denmark Egypt Finland France- Germany HongKong, China Hungary India Israel Japan Malaysia Mauritius Mexico Nigeria Norway Serbia Spain Sweden Switzerland Tunisia United Kingdom USA Zambia TI OECD FIEC/EIC

18 PROPOSED NEW EIC WORKING GROUP CSR Should EIC set up a new Working Group CSR / Responsible Business Conduct? 18 Proposed Terms of Reference: Publish benchmark or best practice examples from the EIC membership to show that European international contractors are the leaders in their sector Define an EIC CSR policy statement which Member Federations could refer on the national level Respond to the future EU Guidelines and Regulations

19 CONTACTS WITH THE EUROPEAN COMMISSION Meeting between EIC President and EU Development Commissioner on 7 September 2015 on EIC proposal for Blending DG DEVCO Director for Sustainable Growth also participated EU Commissioner confirmed that partnering with the private sector has become an integral part of EU development cooperation 8 billion EU grants shall generate 40 billion from public finance institutions which should mobilise over 100 billion in total investment by 2020 Positive result of the Meeting: EIC has been invited to present its proposal in the next Meting of the EU Platform for Blending in External Cooperation (EUBEC) on 16 October 2016 EIC shall be supported by two friendly ECAs (Credendo and EKF) and the European Banking Federation to validate our proposal Commissioner announced launch of a new EU Africa Investment Facility before end 2016

20 CONTACTS WITH THE EUROPEAN COMMISSION 20

21 EIC WORKSHOP AT SPRING 2016 CONFERENCE Date April 2016 Venue Berlin, InterContinental Hotel 21 Social Programme Guided walking tour around rooftop terrace and glass dome of German Bundestag and subsequent Reception & Dinner at Rooftop Restaurant Kaefer s Accompanying Persons Programme Guided tour of Royal Porcelain Factory, boat tour on Spree river and visit of Berlin TV tower Post-Conference Programme Guided tour to reconstructed Berlin Palace (Humboldt Forum) and dinner at Humboldt Terrassen

22 THANK YOU Frank Kehlenbach