ECRI Sponsors Meeting Nassauer Hof Hotel – Wiesbaden Day 1 – Wednesday 5 th June 2019 WELCOME ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 27 September 2006 1
Session – 1 Introduction of Jon Nield, CEO Sara Peterson, Bechtel ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 2
Session – 1 Welcome, Safety Moment, New Introductions, Administration, Adoption of Previous Minutes and Review of Agenda Jon Nield, ECRI ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 3
Programme – Wednesday 5 th June 2019 Session Time Description Discussion Leader 08.00 - 08.30 Registration / Refreshments 1. 08.30 – 09.00 “ Introduction of Jon Nield, CEO ” Sara Peterson “ Welcome, Safety Moment, New Introductions, Administration, Adoption of Previous Minutes and Review of Agenda ” Jon Nield “ Dedication of Wiesbaden Meeting to Rod Kyle ” Sara Peterson “ Review and Update of Guidelines on Complying With Competition and Antitrust Laws “ Xanthe Larsen “ Company Introduction – ASE ” – Victoria Petrovskaya, Digital 2. 09.00 - 09.20 Transformation Project Office, ASE 3. 09.20 -10.00 “ ECRI SIG Meetings – Key Take- Aways “ John Ruckert 10.00 -10.20 Tea / Coffee Break “ New Trends in Project Risk Management “ – Eduardo Gamez, 4. 10.20 -11.10 Associate VP, Managing Director Risk Management Practice, AECOM 5. 11.10 -12.05 “ Positive Risks in E&C Industry: Identification & Treatment “ - Mayank Agarwal, Global Risk Management Director, Air Liquide “ EU Antitrust Considerations for Risk Management Cooperation ” – 6. 12.05 -13.00 Julian Ellison, Partner, and Déborah Faure, Associate, Mayer Brown LLP 13.00 - 14.00 Lunch “ Breakout Group Topic Introductions ” 7. 14.00 - 14.30 Jon Nield A. “ The Pitfalls & Risks of Entering New Geographic Regions/Countries ” B. “ Risk Group Man Hours. Are they Delivering Value? “ C. “ How Important is and What are Best Practices for Engaging our Clients and Building Relationships? “ “Breakout Work Sessions” 8. 14.30 -15.30 Groups 1,2 and 3 15.30 -15.50 Tea / Coffee Break 15.50 -16.50 “ Breakout Groups Feedback and Discussion ” All 9. -- Workshop Topic A, Group 1 Victoria Petrovskaya -- Workshop Topic B, Group 2 Mayank Agarwal -- Workshop Topic C, Group 3 Jamie Reekie ECRI 10. 16.50 - 17.00 Wrap-Up and Close Jon Nield ENGINEE RING & 17.00 End of Day 1 Session / Departure CONSTRUCTION RISK INSTITUT E 4
Session – 1 Dedication of Wiesbaden Meeting to Rod Kyle Sara Peterson, Bechtel ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 5
Session – 1 Review & Update of Guidelines on Complying with Competition & Antitrust Laws Xanthe Larsen, ECRI ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 6
ECRI GUIDELINES on COMPLYING WITH COMPETITION AND ANTITRUST LAWS ECRI and the companies which contribute financially to its operations and participate in its programs (“ the Companies ”) will avoid the following when engaging in ECRI events and meetings: Reaching agreements or concerted practices with competitors to: 1) • Fix selling and purchasing prices, discounts, any other price setting element, or contract terms • Divide customers or markets or engage in bid rigging • Limit or control production , markets or technical development • Collectively boycott a competitor, customer or supplier The notion of “agreement” is interpreted very broadly and encompasses any • “meeting of minds” which removes uncertainty when competing on the market ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 7
ECRI GUIDELINES on COMPLYING WITH COMPETITION AND ANTITRUST LAWS ECRI and the Companies who participate in ECRI shall avoid: Exchanging commercially sensitive information (“ CSI ”), i.e. information 2) which is not normally public and influences conduct on the market - pricing & discount information - production capacities - terms & conditions - production/sales volumes - costs & margins data - import volumes - other price setting factors - market shares - information on suppliers or - commercial strategy customers - product innovations - business/investment plans - technologies In principle, it is OK to share information which is aggregated and sufficiently historic, and does not allow the identification of individual competitors ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 8
ECRI GUIDELINES on COMPLYING WITH COMPETITION AND ANTITRUST LAWS Additional Guidelines of Conduct ➢ Demonstrate that ECRI and its Sponsors are committed to strict compliance with Competition Laws and ECRI’s Guidelines ➢ Refreshers, careful communications, professionalism among Sponsor Representatives ➢ Prior review and approval of Sponsor presentations by/with internal counsel, as dictated by the Company’s internal policies ➢ Consider if the information being shared would be contrary to, or could make misleading or incomplete, the information that the Company has publicly disclosed ➢ Our goal is to discuss: • General issues in the industry related to risk • Best practices for creating a safe and risk-reduced work environment • Historical analysis that is instructive to risk management • Industry innovations that are in the public domain and general trends • Lessons learned • Risk management challenges and general methods that may or may not have worked to address such challenges ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 9
Session - 2 Company Introduction – ASE Victoria Petrovskaya Risk Manager, Methodology Department ASE ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 10
Session - 3 ECRI Special Interest Group Meetings Key Take-Aways John Ruckert ECRI ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 11
SIG Meeting – Key Takeaways Seven (7) Core Work Fronts and Strategic Initiatives as Focus Areas: Secondary Stakeholder Engagement Client / Industry Outreach Website & Data Bank Risk Based Review / Audit Special Secondary Interest Data Bank Groups Education & Training Programme Best Practices ECRI ECRI ENGINEE RING & CONST CO CONSTRUCTION STRU RUCTI CTION RISK INSTITUT E
SIG Meeting – Key Takeaways Seven (7) Core Work Fronts and Strategic Initiatives as Focus Areas: Secondary Stakeholder Engagement Client / Industry Outreach Website & Data Bank Risk Based Review / Audit Secondary Special Data Bank Interest Groups Education & Training Programme Best Practices ECRI ECRI ENGINEE RING & CONST CO CONSTRUCTION STRU RUCTI CTION RISK INSTITUT E
SIG Meeting – Key Takeaways SPECIAL INTEREST GROUPS (“SIG”) – OVERVIEW ➢ Established In 2010 to facilitate more informal discussions of common and emerging risk issues among ECRI Sponsors in a similar sector of the E&C industry ➢ Existing SIGs are: Mega Projects; Development, Civil Building, Power & Infrastructure Projects; Onshore/Offshore Oil & Gas and European Major Projects ➢ Members with a common interest can address their specific issues rather than trying to deal with all matters within one meeting involving all of the Sponsors of ECRI ➢ Important issues identified in SIG meetings are often slated for presentations at Sponsors Meetings and development of ECRI Best Practices ➢ Excellent Feedback from Sponsors regarding usefulness and ECRI value-added by SIG concept ENGINEE RING & CONSTRUCTION RISK INSTITUT E 14
SIG Meeting – Key Takeaways THE BACKDROP New geographies More difficult clients New type clients Govts Political v Economic Focus Trends in T&Cs Skill / expertise leaving ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 15
SIG Meeting – Key Takeaways THE BACKDROP New geographies More difficult clients New type clients Govts Political v Economic Focus Trends in T&Cs Skill / expertise leaving >>>converging risks? ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 16
SIG Meeting – Key Takeaways Knowledge Transfer and Resource Retention ➢ Step Change in Experience Loss ➢ Not a transitional process ➢ Losing to clients, retirement and consultants ➢ Lasting impact of market downturn ➢ Industry image – not green ➢ Less traditional focus on “career” ➢ Expectations of Millennials – 5 to 6 years and move on ➢ Resources needed for Mega Projects ➢ Mitigation ➢ Employee engagement ➢ Improve E&C marketing ➢ “Invest” for the future ➢ “Small” project training ground ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 17
SIG Meeting – Key Takeaways Trends in Contract Terms ➢ Elevated Risk Profile ➢ Proposals – “no exceptions” to terms ➢ Reimbursable Work with LS Contract T & C’s ➢ Consequential damages – Waivers // Carve-outs ➢ LD caps increasing ➢ Overall limits of liability increasing ➢ Extended payment terms (use of contractor’s cash) ➢ Change Order terms – “must execute” ➢ Penalties for removing key people - excessive #s ( e.g. 70 ) ➢ Insurance companies seem to be giving reductions in rates to clients if they can push off risk – incentive to push to E&C ➢ Far East Contractors more willing to accept ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 18
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