IMCA Releases Renewables Contracting Principles

The International Marine Contractors Association (IMCA) has published a ‘IMCA Renewables Contracting Principles’ document as part of variety of guides, templates and discussion documents aimed at raising awareness on contracting issues, promoting discussion and providing tools.

“Each of our Contracting Principles’ documents is published as an aide to clients and contractors alongside their in-house standard contracts and other industry publications,” explains IMCA Technical Director and Acting Chief Executive, Jane Bugler.

“As the international trade association representing offshore, marine and underwater engineering companies (over a thousand member companies in more than 60 countries) we have several roles, but view a key one as promoting dialogue amongst the various companies, both clients and contractors, for the benefit of the whole industry.

“The ‘IMCA General Contracting Principles’ were published in May 2011, followed by the ‘IMCA Decommissioning Contracting Principles’. The renewables sector is a relatively new one in the industry and consists mainly of offshore wind farm construction and cable laying.

“Whilst the ‘IMCA General Contracting Principles’ could be applied to this new sector, a number of issues in the renewables sector differ from general offshore activities and it was felt that these needed to be addressed in the contracts made.

“In our newly published document, IMCA presents the Renewables Contracting Principles, which are to a large extent similar to the other contracting principles published and are also based on the FAIR acronym:

FAIR, IMCA’s risk allocation goals, are as follows:

• Fair (not equal) and realistic distribution of risk in proportion to relative rewards
• Allocation of risk – to the party best placed to assume
• Insure – sufficient scope of cover
• Reasonable – avoid ‘duplicate’ assumptions of risk and minimise potential for dispute”

Jane Bugler adds: “The Principles are not intended to represent a complete analysis of all risks which are covered by contracts in the offshore renewables industry. In general, they reflect well established industry custom and practice of addressing certain risks such as the knock for knock indemnity regime.

“In addition, the Principles are not contractual clauses. They do not in any way form a standard contract nor is their adoption in any way mandatory. They are published as a discussion document and an aide for clients and contractors alongside their in-house standard contracts and industry published standard contracts, such as LOGIC and FIDIC. Each IMCA member is free to negotiate its own terms, qualify such contracts and to make use of the Principles should it wish to do so in order to achieve a contract satisfactory to both parties.”