New standard contract for offshore wind projects ensures a fairer distribution of ris

The International Marine Contractors Association (IMCA) has today published the industry’s first standard contract for transport and installation (T&I) works in offshore wind projects. The contract has been written to ensure a fairer allocation of risk.

Building on the release of IMCA’s Contracting Principles in January 2023, its publication comes on the heels of an IMCA-led campaign for an industry-wide discussion on sustainable contracting in offshore wind. The campaign was highlighted by the UK’s Offshore Wind Champion Tim Pick in his report to UK Government in March 2023 which noted that IMCA’s Contracting Principles, “is a helpful piece of thought-leadership”.

In recent months, several high-profile projects have been deferred in both the UK and the USA. For the offshore wind sector to be truly sustainable, there needs to be a fairer allocation of risk across the supply chain, including for offshore contractors, to avoid more projects potentially falling through.

IMCA’s standard T&I contract follows the ‘FAIR’ contracting principles, developed by IMCA’s Legal, Contracts, Insurance & Compliance (LCIC) Committee, which encourage an equitable allocation of risk. These propose that contracts should be:

• Fair – with a realistic allocation of risk in proportion to relative rewards.
• Appropriate – with a distribution of risk to the best placed party.
• Insured – have sufficient scope of cover.
• Reasonable – avoid duplicate risk assumptions and minimise the potential for disputes.

Commenting on the contract’s release, Iain Grainger, IMCA CEO said: “It’s not hyperbole to suggest that Net Zero targets around the globe are at risk if offshore wind projects continue to be delayed and cancelled.

“I also know from my discussions with Members how concerned they are with current market conditions and frustrated with having to deal with inappropriate contracts, which require lengthy and costly rounds of renegotiation.

“While we won’t have all the solutions for a complex and challenging marketplace, our new standardised T&I contract – written following extensive industry engagement – is a positive step in the right direction. With widespread adoption it can become the foundation for a fairer and more sustainable approach in offshore wind.

“We will now be engaging with developers and other trade bodies to encourage its adoption by the industry, including at Navigating offshore wind contracts, an industry Seminar we are organising in London on 6 December. I look forward to seeing you there.”

Nathalie Louys, Chair of IMCA’s Legal, Contracts, Insurance and Compliance (LCIC) Committee, and General Counsel at Subsea7, said: “This first contract with a limited scope recognises the current reality of offshore wind construction including the development of increasingly complex project solutions. With this document reflecting the FAIR allocation of risks, IMCA aims to set the tone so that the industry can move forward productively and collaboratively as we gear up to help meet global ambitions for offshore wind.”

The current challenges to contracting in offshore wind, alongside the new standardised contract, will be the focus of discussions at Navigating offshore wind contracts, IMCA’s upcoming Seminar in London on 6 December 2023. Attendees will hear from a range of industry speakers including representatives from Allseas, DEME Offshore, EnBW UK, Heerema, NARDAC, Seaway7, and Van Oord.

The first IMCA event of its kind since 2018, it is aimed at anyone with a working interest in this area, and registration is open now at: www.imca-int.com/events.

The IMCA contract is available to Members to download now at: www.imca-int.com/product/imca-marine-transport-installation-renewables-contract/