Three key contracting documents launched by IMCAOrganisations and Associations // June 2, 2011
Properly formulated contracts form the foundation of any commercial relationship, and better relationships help deliver safe and efficient projects through prevention of incidents.
With these essential principles in mind, the International Marine Contractors Association (IMCA) has published three key contracting documents – ‘IMCA Marine Construction Contract’; ‘IMCA Decommissioning Contracting Principles’; and an updated version of ‘IMCA General Marine Contracting Principles’.
“These three new standard ‘commercial’ documents produced through IMCA member workgroups show the strength of working together to produce better results,” explained IMCA’s Chief Executive, Hugh Williams.
“In launching them we are helping to avoid duplication, and seeking industry efficiency to support our thesis that IMCA is a ‘common language’ in marine construction. All are available for downloading in pdf format from our website at www.imca-int.com/documents/contracts/.
“All three were launched at a seminar held in London in late May attended by over 60 delegates from oil companies and legal/insurance organisations where they were roundly debated, but broadly well received.
‘IMCA Marine Construction Contract’ is a new, worldwide standard contract for use by any party as appropriate. It is based on the LOGIC contract ‘General conditions of contract (including guidance notes) for marine construction’, which was published for use in the UK. Now developed by the IMCA Contracts & Insurance workgroup it is for worldwide use. It is based on English law, but this can be varied to suit users.
“IMCA does not make its use in any way mandatory for either members or non-members,” said Mr Williams. “It is published for clients and contractors as an option alongside their in-house standard contracts, and other industry published standard contracts. Each party is free to negotiate its own terms, qualify and adapt it, should it wish to do so, in order to achieve a contract satisfactory to both parties.”
The second new publication ‘IMCA Decommissioning Contracting Principles’ is a discussion document that IMCA believes will serve the long-term interests of all participants in the oil and gas industry by encouraging an equitable contractual balance based on the parties’ respective risks and rewards.
“This, in turn, should improve relations, increase efficiency and reduce overall costs,” Mr Williams said. “Risk allocation goals, with the very apt acronym ‘FAIR’ lie at the heart of this new publication - ‘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’; and ‘Reasonable – avoid ‘duplicate’ assumptions of risk and minimise potential for dispute’.”
The nine-page document highlights twenty one principles with a legal definition being given, followed by a comment more easily understood by the layman, showing clearly how each principle measures up to IMCA’s ‘FAIR risk allocation goals’.
“At the same time we have also updated our existing ‘IMCA General Contracting Principles’ a discussion document, highlighting sixteen principles again both in legal and laymen’s terms. Like the decommissioning publication it is also based on the ‘FAIR risk allocation goals’ that we believe will serve the long-term interests of all industry parties by encouraging an equitable contractual balance based on the respective risks and rewards,” said Mr Williams.
“We believe that all three documents pave the way to greater levels of safety and efficiency and urge all in the marine contracting sector to make use of them to achieve a contract satisfactory to both parties. And, of course, we look forward to feedback from members and non-members alike.”