fidic model representative agreement

Fédération Internationale des Ingénieurs-ConseilsInternational Federation of Consulting EngineersInternationale Vereinigung Beratender IngenieureFederación Internacional de Ingenieros Consultores

ModelRepresentative Agreement

AGREEMENTPARTICULAR CONDITIONSGENERAL CONDITIONSNOTES FOR GUIDANCE

TEST EDITION 2004

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Licensed copy: heriotwatt, Heriot Watt University, 07/02/2012, Uncontrolled Copy, ®FIDIC

FEDERATION INTERNATIONALE DES INGENIEURS-CONSEILSINTERNATIONAL FEDERATION OF CONSULTING ENGINEERSINTERNATIONALE VEREINIGUNG BERATENDER INGENIEUREFEDERACION INTERNACIONAL DE INGENIEROS CONSULTORES

AGREEMENT

PARTICULAR CONDITIONS

GENERAL CONDITIONS

NOTES FOR GUIDANCE

ModelREPRESENTATIVE AGREEMENT

Test Edition 2004

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COPYRIGHTCopyright © 2004 FIDIC, World Trade Center II, 29 route de Prés-Bois, Geneva Airport, CH-1215Geneva, Switzerland. All rights reserved.

FIDIC is the only Copyright owner of FIDIC publications, which are protected by the Berne

Convention for the Protection of Literary and Artistic Works, international conventions such asTRIPS and the WIPO copyright treaty and national intellectual property laws. No part of a FIDICpublication can be reproduced, translated, adapted, stored in a retrieval system or communicated,in any form or by any means, mechanical, electronic, magnetic, photocopying, recording orotherwise, without prior permission in writing from FIDIC. The version in English is considered byFIDIC as the official and authentic text for the purposes of translation.

TERMS AND CONDITIONSThe widespread dissemination, acceptance and use of FIDIC publications and their translations areimportant means for accomplishing FIDIC’s mission and are therefore actively promoted by FIDIC.The sale of FIDIC publications and their translations is an important source of revenue for FIDIC andits Member Associations. It creates resources for providing a wide range of services meeting thebusiness needs of member firms. All steps, starting with the initial drafting of publications, oftenrequire considerable effort and expense.FIDIC regularly updates and reissues publications so that users can profit from the state-of-the-art.By supplying publications, FIDIC does not grant any intellectual property rights. The purchase orsupply of a FIDIC publication, including forms for completion by a purchaser or authorised user,does not confer author’s rights under any circumstances. Users rely on the contents of FIDIC publications, especially FIDIC contracts and agreements, forimportant business transactions. The use of authentic publications is therefore essential forsafeguarding their interests. FIDIC discourages modification of its publications, and only inexceptional circumstances will it authorise modification, reproduction or incorporation elsewhere.Permission to quote from, incorporate, reproduce or copy all or part of a FIDIC publication shouldbe addressed to the FIDIC Secretariat, which will decide upon appropriate terms.A license to prepare a modified or adapted publication will be agreed to under certain conditions.Specifically the modified or adapted publication must be for internal purposes, and not bepublished or distributed commercially. In the case of FIDIC contracts and agreements, FIDIC aims to provide balanced and equitableconditions of contract by ensuring the integrity of its publications. A purchaser or authorised userof a FIDIC contract or agreement is thus granted the right to:- make a single copy of the purchased document, for personal and private use;- incorporate in other documents (or electronic files) either the original printed document (or

electronic file) or pages printed from an electronic file supplied by FIDIC for this purpose;- draw up and distribute internally and/or among partners clearly identified Particular Conditions

or their equivalent using text provided in the FIDIC publication specifically for this purpose;- reproduce, complete and distribute internally and/or among partners any forms, in both printed

and electronic formats, provided for completion by the purchaser or user.

DISCLAIMERWhile FIDIC aims to ensure that its publications represent the best in business practice, theFederation accepts or assumes no liability or responsibilty for any events or the consequencesthereof that derive from the use of its publications. FIDIC publications are provided “as is”, withoutwarranty of any kind, either express or implied, including, without limitation, warranties ofmerchantability, fitness for a particular purpose and non-infringement. FIDIC publications are notexhaustive and are only intended to provide general guidance. They should not be relied upon in aspecific situation or issue. Expert legal advice should be obtained whenever appropriate, andparticularly before entering into or terminating a contract.

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ACKNOWLEDGEMENTS

The Fédération Internationale des Ingénieurs-Conseils (FIDIC) extends specialthanks to the following members of its Representative Agreeement TaskForce: Eigil Steen Pedersen (Chair), COWI A/S, Denmark; Dr Jorge DíazPadilla, Systec, Mexico; Mahendra Raj, Mahendra Raj Consultants, India; JohnRitchie, Acres International, Canada; Simon Warmerdam, Arcadis, TheNetherlands; with Secretariat coordination provided by Dr Peter Boswell.

The preparation of the FIDIC Model Representative Agreement was carriedout by the task force under the general direction of the Executive Committee.

Drafts were commented on by the following persons: Professor Mark Pieth, BaselInstitute of Governance, University of Basel, Switzerland; Jermyn Brooks,Transparency International, Berlin, Germany. Acknowledgement of reviewers does notmean that such persons or organizations approve the wording of all clauses.

FIDIC wishes to record its appreciation of the time and effort devoted by all the above.

The ultimate decision on the form and content of the publication Model RepresentativeAgreement rests with FIDIC.

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FOREWORD

The terms of the FIDIC Model Representative Agreement have been prepared by theFédération Intenationale des Ingénieurs-Conseils (FIDIC) and are intended forConsultants wishing to enter into a contract with a Representative for the provision ofservices in a foreign country.

Following the Agreement, the clauses of general application have been groupedtogether in this publication and are referred to as General Conditions. They areintended for incorporation as printed in the documents comprising the Agreement.

The General Conditions are linked with data given in the Particular Conditions,identified by the corresponding numbering of the sub-clauses, and Appendices, sothat General Conditions and Particular Conditions (with Appendices) togethercomprise the conditions governing the rights and obligations of the Parties. Given asAppendices to the Particular Conditions are Scope of Services, Basis forRemuneration, Consultant’s Code of Conduct and Consultant’s Business IntegrityPolicy Statement.

To assist in the preparation of an Agreement, Notes for Guidance are included. TheseNotes will not become one of the documents forming an Agreement.

Each of the titles of the clauses of the General Conditions is followed by the phrase“PC: [ ] consult [ ] amended”, where users are able to indicate if a) the ParticularConditions (“PC”) should be consulted for data relating to the clause; or b) one ormore sub-clauses have been amended by an entry in the Particular Conditions.

It may be helpful for users to refer to the other FIDIC publications, details of which canbe found in the Bookshop of FIDIC’s website at www.fidic.org.

Specific mention is made of FIDIC’s Client/Consultant Model Services Agreement, 3rdEd 1998, Joint Venture Agreement, 1st Ed 1992, and Sub-Consultancy Agreement,1st Ed 1992, which together with this Model Representative Agreement form FIDIC’scollection of agreements for consulting services.

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CONTENTS

Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Particular Conditions . . . . . . . . . . . . . . . . . . . . . . . . . a

A References from Clauses in the General Conditions

B References from Appendices 3 and 4

C Appendices

1 Scope of Services2 Basis of Remuneration3 Consultant’s Code of Conduct4 Consultant’s Business Integrity Policy Statement

General Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2 INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

3 SCOPE OF REPRESENTATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

4 LIMITS OF REPRESENTATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

5 WARRANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

6 REMUNERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

7 CONSULTANT’S RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

8 CURRENCY, EXCHANGE AND TAXES . . . . . . . . . . . . . . . . . . . . . . . . . 4

9 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

10 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

11 REGISTRATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

12 LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

13 ARBITRATION AND GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . 6

14 CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

15 CORRUPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

16 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

INDEX OF SUB-CLAUSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Notes for Guidance . . . . . . . . . . . . . . . . . . . . . . . . . . . I

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SIGNED BY THE CONSULTANT

Signature

Name

Title

Date

Seal

SIGNED BY THE REPRESENTATIVE

Signature

Name

Title

Date

Seal

Agreement

AgreementThis Agreement dated this . . . . . . . . . . . . . . . . . . . . . . .day of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

between . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .[Name and address of Consultant]

hereinafter known as “the Consultant"

and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .[Name and address of company or Representative]

a corporation incorporated under the laws of . . . . . . . . . .[Country]

If the Representative (hereinafter referred to as “theRepresentative”) is an individual, or acting as a soleproprietor state accordingly . . . . . . . . . . . . . . . . . . . . . .[Individual/Sole proprietor]

hereinafter collectively referred to as “Parties” and individually as “Party”.

WHEREAS, the Consultant provides engineering, procurement, project and constructionmanagement and associated services; and

WHEREAS, the Consultant wishes to establish arelationship with the Representative for the purpose of . . .

WHEREAS, the Representative is in the position to facilitate

WHEREAS, the Parties wish to record the terms and conditions of their relationship;

NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the mutualcovenants and agreements hereinafter set forth, the Parties covenant and agree as follows:

The Representative shall be the Consultant’sRepresentative for the Projects for a term in years of . . . .commencing this . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .day of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The term shall be renewable upon mutual agreement of the Parties. The term shall expire if thisAgreement is terminated in accordance with Sub-Clause 9.1 of the General Conditions.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their dulyauthorized officers and their corporate seals to be hereunto affixed.

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aParticular Conditions

Particular Conditions

A References from Clauses in the General Conditions

Name of Consultant . . . . . . . . . . . . . . . . . . . . . . .

Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Home base country . . . . . . . . . . . . . . . . . . . . . . .

Email . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Telephone number . . . . . . . . . . . . . . . . . . . . . . . .

Fax number . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Attention: Name . . . . . . . . . . . . . . . . . . . . . . . . .

Position . . . . . . . . . . . . . . . . . . . . . . . .

Name of Representative . . . . . . . . . . . . . . . . . . . .

Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Email . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Telephone number . . . . . . . . . . . . . . . . . . . . . . . .

Fax number . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Attention: Name . . . . . . . . . . . . . . . . . . . . . . . . .

Position . . . . . . . . . . . . . . . . . . . . . . . .

B References from Appendix 3 (Consultant’s Code of Conduct) andAppendix 4 (Consultant’s Business Integrity Policy Statement)

I confirm that I have read the Consultant’s Code of Conduct and Business Integrity PolicyStatement and will comply with them.

Signed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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b Model Representative Agreement

1 Scope of Services

A Normal Services

The Representative services shall be those normally performed by a reputableindependent Representative including but not necessarily limited to those specifiedhereunder.

Country where Services performed . . . . . . . .

The Representative shall provide the following services in connection with seekingproject opportunities on behalf of the Consultant:

A1 Act as an information source in identifying and advising the Consultant on behalf ofthe business in the Country where Services performed, based on the Representative’sexperience and information supplied by the Consultant, the Representative believesthe services of the Consultant could be used for the purpose of securing andimplementing satisfactory projects between the Consultant and client organizations.

A2 Inform the Consultant in a timely manner of potential opportunities for providingconsulting, project management, and construction management services in theCountry where Services performed.

A3 Establish and maintain, on behalf of the Consultant, contact with the appropriategovernment and industry authorities to ensure early and adequate notice of availableopportunities and to keep the Consultant promptly informed of the Representative’sactivities and contacts made on its behalf.

A4 Collect and forward to the Consultant information on sources, costs, methods andother relevant matters concerning proposals and cost estimates requiring a countrycomponent, including advice on the relevant laws and business conditions in theCountry where Services performed.

A5 Identify and recommend a local firm and obtain qualifications and other material tosubmit to the Consultant when participation is required to undertake a proposal for afirm from the Country where Services performed.

A6 Undertake routine administrative functions including, but not limited to, obtainingtender documents, approvals, licenses, permits and visas, etc., which the Consultantmay request the Representative to obtain to enable the Consultant to pursueappropriate opportunities.

A7 Provide liaison activities in bringing to a successful conclusion those negotiations inwhich the Consultant agrees to participate. The Representative’s support shallinclude, for example, identification of key personnel in client organisations, advice onproposal presentation and assistance during negotiations as requested by theConsultant.

APPENDICES

These Appendices form part of the Agreement.

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cParticular Conditions

A8 Keep the Consultant informed of general conditions and developments in the Countrywhere Services performed which might affect the Consultant’s interest in undertakingprojects.

A9 The Representative shall also register the Consultant with such appropriate authoritiesin the Country where Services performed as may from time to time be required inaccordance with the Consultant’s instructions.

A10 Submit monthly activity reports to the Consultant. Such reports will contain overallmarket movement, general activities of potential clients, the potential roles of theConsultant, the probability of projects going ahead, and the probability of theConsultant winning such projects, key decision makers, project status, the Client’saccessibility, etc.

B Project Specific Services

The Representative also agrees to provide the following services to the Consultant inconnection with the Projects following contract signature:

B1 Undertake routine administrative functions including, but not limited to assistance inobtaining documents, approvals, licenses, permits and visas, etc., which theConsultant may require to enable to execute its responsibilities under the Projects.

B2 Provide other periodic support to the personnel of the Consultant in the Countrywhere Services performed as requested, including but not limited to, obtainingreservations in hotels, local transport arrangements and logistics support related tostaff travel within the Country where Services performed and on arrival and departurefrom the Country where Services performed.

B3 Provide assistance with local procurement and related activities as well as withcustoms clearance of project equipment and personal effects of employees.

B4 Provide liaison with Clients related to the Projects and report to the Consultant inrespect of such liaison, to ensure that the Consultant is kept aware of the Client’sconcerns regarding the Consultant’s work on the Projects.

B5 Assist as requested with all matters related to submission and payment of theConsultant’s invoices and reconciliation statements to the Clients.

B6 Inform the Consultant in a timely manner of potential opportunities for providing furtherservices in the Country where Services performed related to the Projects.

B7 Provide any necessary liaison with the embassy of the Country where Servicesperformed in the country of the Consultant or with respect to the Projects near theCountry where Services performed.

B8 Keep the Consultant informed of general conditions and developments, includingpolitical and security developments in the Country where Services performed.

C Additional Services

[To be listed]

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d Model Representative Agreement

2 Remuneration

A Basis of Remuneration

A1 [The basis for remuneration will need to be specified in an Appendix to the ParticularConditions of the Agreement. They will have to suit the particular circumstances andactual services performed].

The Representative shall be entitled to payment for services rendered in accordancewith Services provided per Appendix 1 in the Particular Conditions, based on apercentage of the fees earned and received by the Consultant provided that:

- the Contract is signed after this Agreement is signed and before this Agreement isterminated subject to Sub-Clause 6.4 of the General Conditions; and

- the Representative provides services to the Consultant in accordance with theservices specified in Appendix 1.

Fees for engineering type projects are deemed to be net fees received by theConsultant from the Contracts, less that component related to direct expenses.

A2 The percentage of fees received by the Consultant per Section A1 above which shallbe payable to the Representative shall generally be in accordance with the followingpayment scale:

Consultant’s fees for engineering projects % payable

- Up to USD 1 million . . . . . . . . . . . . . . . .- Over USD 1 million up to USD 5 million . .- Over USD 5 million up to USD 10 million .- Over USD 10 million . . . . . . . . . . . . . . . .

A3 In addition, the Representative may be reimbursed for specific major out of pocketexpenses provided that they are approved in advance by the Consultant andsupported by receipts and other relevant documentation.

A4 In recognition of the need for theRepresentative to incur expenses in advanceof the award of any contract for a Project, theRepresentative shall be entitled to a monthlypayment of ...................................................

The total amount of such monthly paymentsshall be deducted from the Representative’sinvoices over .................................................months during which the Representativebecomes entitled to remuneration underSections A1 and A2 above, or as otherwiseagreed between the Parties.

A5 The Representative shall submit signed invoices to the Consultant for all amountsowing under the Agreement and on the statement prepared by the Consultant inaccordance with Sub-Clause 6.3 of the General Conditions. Such invoices shall clearlystate the banking particulars applicable to where the payment is to be made, and shallidentify and document ownership of the account.

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eParticular Conditions

A6 Payment due under the Agreement shall only be made to the Representative’s bankaccount in the country of residence, unless specific agreements to pay outside thecountry are obtained from relevant authorities. All banking fees in the Consultant'shome country or elsewhere associated with such transfers shall be at the expense ofthe Representative.

B Scope of Services

The Scope of Services is specified in Appendix 1 to the Particular Conditions of theAgreement. Services can be separated into Normal Services, Project SpecificServices and Additional Services.

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f Model Representative Agreement

3 Consultant’s Code of Conduct

[May be replaced by the Consultant’s own Code of Conduct]

A Social responsibility

The firm accepts continuing responsibility for its consulting services before its clientsand society.

The firm shall permanently contribute to the benefit of its clients and society, throughsustained personnel training and technology development aimed at improvingproductivity.

The firm will include sustainability as a permanent goal in every project.

B Quality of service

The firm shall only undertake project assignments in its areas of expertise, where it hasthe capabilities to deliver efficient and effective service to its clients.

The firm is committed to providing high quality services to clients. The firm will focuson Quality Management as a working methodology, and on permanent improvementas a means to improve the quality of service.

The firm is committed to the continuing improvement of its knowledge base, abilitiesand tools in its area of expertise. The firm will focus on technology management as aworking methodology, and shall extend to its clients the benefits of its professionalachievements.

C Objectivity of the firm

The firm will act with loyalty to its clients, and will maintain the confidentiality of anyinformation from the client that is obtained in the process of performing services. Thefirm will also keep confidential the documents and reports prepared for the client.

The firm shall avoid any conflict of interest, and will inform a client beforehand of anypotential conflict of interest that could emerge during the execution of consultingservices.

The firm will only offer its services under contracting terms that do not interfere withits independence, integrity and objectivity.

The firm will not accept any remuneration that could encourage the firm to offer abiased opinion.

D Corporate integrity

The firm will only solicit consulting work and participate in private or public competitivebidding under the highest standards of corporate ethics and competitive practices,and with total integrity in its transactions.

The firm will act at all times for the benefit of clients, and will carry out services withprofessional integrity, while not jeopardizing the interests of society.

The promotional activity of the firm and its services will uphold the dignity andreputation of the industry. Brochures and other formal documents describing

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gParticular Conditions

resources, experience, work and reputation, will affect the firm’s actual circumstancesin a truthful manner.

The firm shall manage with integrity its internal and external clients. The firm will focuson Business Integrity Management as a working methodology, consistent with thedignity of the knowledge-based consulting industry.

E Competition

The firm favours Quality Based Selection for the contracting of its services.

If solicited to review the work performed by another consultant, the firm will act inaccordance with its business integrity and objectivity policies.

The firm will not endorse compensation or contribution arrangements destined toinfluence or secure consulting work, nor seek commissions from suppliers ofequipment and services recommended to the client as part of the firm’s consultingservices.

The firm shall not take part in activities that could damage the reputation or thebusiness of others.

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h Model Representative Agreement

4 Consultant’s Business Integrity Policy Statement

[May be replaced by the Consultant’s own Business Integrity Policy Statement]

The company is committed to business integrity through the implementation of anassessed integrity management system, based on industry standards involving alllevels of management and every staff member, so as to:

A Actively develop and maintain processes to protect high ethical standards and codesof conduct.

B Actively fight corruption by associating with organizations which share similar highstandards.

C Prohibit bribery, extortion, fraud, collusion or any other undue business activity in thecompany’s services or in any other activity.

D Support and promote quality-based selection, competitive tendering procedures andlegislation that penalise corrupt practices in general, and reduce the opportunities forcorruption in the procurement of services in particular.

E Ensure that clients are recommended the most appropriate and objectiveprocurement process or delivery system for a specific project, consistent with thedemands of the project.

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FEDERATION INTERNATIONALE DES INGENIEURS-CONSEILSINTERNATIONAL FEDERATION OF CONSULTING ENGINEERSINTERNATIONALE VEREINIGUNG BERATENDER INGENIEUREFEDERACION INTERNACIONAL DE INGENIEROS CONSULTORES

ModelREPRESENTATIVE AGREEMENT

Test Edition 2004

General Conditions

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1General Conditions

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PC: [ ] consult [ ] amended

The following words and expressions shall have the meanings assigned to them except wherethe context requires otherwise:

“Services” means the services to be performed by the Representative in accordance with theAgreement and as specified in Appendix 1 to the Particular Conditions.

“Consultant” means the Party named in the Agreement, who is employed as an independentprofessional firm by a Client to perform the Services, and legal successors to the Consultant andpermitted assignees.

“Representative” means the Party named in the Agreement, who is engaged as an individual or acompany by the Consultant to perform the Services.

“Party” means either the Consultant or the Representative.

“Project” means any project that the Consultant wishes to pursue, and has been identified as suchto the Representative.

“Agreement” means the Conditions comprising the Formal Agreement and Conditions of theRepresentative Agreement comprising the General Conditions and Particular Conditions with theAppendices Scope of Services (Appendix 1), Basis for Remuneration (Appendix 2), Consultant’sCode of Conduct (Appendix 3) and Consultant’s Business Integrity Policy Statement (Appendix 4)or otherwise as specified in the Particular Conditions.

“day” means the period between any one midnight and the next.

“month” means a period of one month according to the Gregorian calendar commencing with anyday of the month.


The singular includes the plural, the masculine includes the feminine, and vice-versa where thecontext requires.

If there is conflict between provisions of the Agreement, the last to be written chronologically shallprevail, unless otherwise specified in the Particular Conditions.

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

2.1

2.2

1Definitions

General Conditions

2Interpretation

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2 Model Representative Agreement

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The Representative shall perform all reasonable services as the Consultant may request from timeto time as described in Appendix 1 of the Particular Conditions.

The Representative shall obtain the Consultant’s written approval before hiring any subcontractor,employee, etc. for the specific purpose of performing services for the Consultant.


The Representative shall not, directly or indirectly, solicit or participate, for its own benefit and/or inits own name, the sale of any services, materials, equipment, apparatus or other related items withrespect to any of the Projects.

The Representative shall neither represent nor perform any services enumerated herein for anyperson, firm or corporation that is, directly or indirectly, in any way in competition for the Projects.

The limitations stated in Sub-Clauses 4.1 and 4.2 may in specific cases be omitted, provided thatthe Consultant has approved this in writing.

The Representative shall not, under any circumstances whatsoever unless duly authorised in writingby an officer of the Consultant: be considered to be the Consultant’s agent; have any right orauthority to create any obligation of any kind on the Consultant’s behalf; attempt to enter intocontracts, agreements or commitments in the name of or on behalf of the Consultant; or bind theConsultant in any respect whatsoever

Without limiting the generality of Sub-Clause 4.4, in no event shall the Representative alter in anymanner whatsoever any offers, proposals, bids or tenders submitted by the Consultant to theCustomers without the Consultant’s prior written approval, and then only to the extent authorised.


The Representative warrants that:

a) no officer, director or major shareholder is a government employee or a direct relative of asenior government employee and has no official status or that if any such relationship exists,it has been clearly established by way of a written communication acknowledged by theConsultant, prior to the signature of this Agreement;

b) it will comply with local laws and regulations;c) it shall maintain accurate books and records related to all transactions under this Agreement;d) it shall accept and participate in briefings and training by the Consultant related to

anticorruption initiatives.

3.1

3.2

4.1

4.2

4.3

4.4

4.5

5.1

3Scope of Representation

4Limits of Representation

5Warrants

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3General Conditions

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The Representative warrants that it has not and shall not enter into any contract or arrangement,either directly or indirectly, with any person, firm or corporation that would create a potential conflictof interest, without the Consultant’s prior written approval. Furthermore, the Representative shallobtain the prior written approval of the Consultant before engaging the specific and significantservices of any person, firm or corporation to carry out the services contemplated herein. Suchapprovals shall not be unreasonably withheld.


Subject to the payment of amounts expressly specified in the Particular Conditions to thisAgreement, the Representative shall bear its own costs and expenses related to the performanceof services under this Agreement.

Provided the Representative shall have duly performed its obligations hereunder, the representativeshall be entitled to remuneration for services provided as specified in the Particular Conditions.

Remuneration shall become payable to the Representative only upon the Consultant’s receipt ofpayments from the respective clients. Payments to the Representative shall be made within 15 daysof receiving payments from the client or from the date of receipt of the signed invoices as specifiedin the Particular Conditions, whichever is later.

If the Consultant enters into a contract within thirty (30) days after the expiry of the term of thisAgreement, and if the signing of the Contract would have, during the term of this Agreement,resulted in the Representative earning remuneration, then such Contract shall be deemed to havebeen signed during the term of this Agreement such that the Representative shall be entitled toremuneration on such Contract; provided that this Sub-Clause 6.4 shall not apply if the expiry ofthe term of this Agreement occurred pursuant to Sub-Clause 9.1 or if the expiry was a result ofRepresentative’s default pursuant to Sub-Clause 9.2.


The Consultant reserves the right to reject any order or terminate any negotiations at any time priorto signing of the contracts for any reason whatsoever without incurring any responsibility or liabilityto the Representative.

The Consultant reserves the right to audit or inspect the books and records of the Representativethrough engagement of an accredited accounting firm in relation to the payments made under thisAgreement, if activities or events give rise to the suspicion of corrupt or illicit activities in connectionwith the services performed under this Agreement.

If an audit or inspection is requested, the extent of such activity shall be restricted to confirmationthat payments made under this Agreement do not appear to be used for corrupt or illicit purposes.No further details shall be provided by the accounting firm.

If irregularities are observed they shall be communicated to the Representative by the accountingfirm and the Consultant shall only be advised that irregularities have been observed and that the

5.2

6.1

6.2

6.3

6.4

7.1

7.2

7.3

7.4

6Remuneration

7Consultant’s Rights

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Representative has been notified of the details. The Representative must disclose to theConsultant’s satisfaction that the irregularity has been clarified with the accounting firm. If theRepresentative does not or is not able to satisfy the Consultant’s concerns, the Agreement shall beterminated in accordance with Sub-Clause 9.2.


Unless otherwise agreed upon in writing by the Parties, all payments by the Consultant to theRepresentative under the Agreement shall be in the same currency as the payment terms of theapplicable contracts.

The Consultant shall not be liable for any taxes, duties, levies or other similar amounts whatsoeverlevied by any authority whatsoever on payments by the Consultant to the Representative pursuantto this Agreement. All such payments shall be deemed to include all such taxes, duties and levies.


If the Consultant or the Representative gives notice to the other Party indicating the other party’sdefault or failure to perform its obligations, and if such default or failure is not remedied within ten(10) days of the said notice, this Agreement shall terminate forthwith and automatically withoutfurther notice.

Notwithstanding the provisions in Sub-Clause 9.1, this Agreement shall terminate forthwith andautomatically without any notice whatever by the mere occurrence of any one or more of thefollowing events, unless the Consultant shall waive termination upon notification by theRepresentative of such occurrences:

a) the Representative files a petition in bankruptcy or is adjudicated and declared bankrupt orinsolvent; a receiver, trustee or custodian is appointed for the Representative’s assets for thewinding up or liquidation of any of the Representative’s business operations; theRepresentative seeks to make a compromise, arrangement or assignment with or for thebenefit of its creditors or is discharged from its liabilities;

b) the Representative seeks to assign or purports to have assigned this Agreement;c) any legal arrangement is made to change the structure of the Representative’s business; the

controlling interest in the Representative is altered or a change is made in its management;or the legal capacity or status of the Representative is altered;

d) the Representative fails to secure or renew any license or permit required by law for theRepresentative’s business operations or if that license or permit is revoked or suspended;

e) the Representative or any of its employees or agents carrying out its duties hereunderbecomes for whatever reason persona non grata in the applicable territory:

f) the Representative or any of its employees or agents carrying out its duties hereunderbecomes unable to carry out the responsibilities under this Agreement or becomes unableto carry on business in the applicable territory for any reason whatsoever, for a periodexceeding ten (10) days;

g) the Representative is in default of its obligations under Clause 4, Clause 14 or Sub-Clauses15.1 or 15.2 or Appendix 3 of the Particular Conditions of this Agreement.

8Currency, Exchange and Taxes

8.1

8.2

9.1

9.2

9Termination

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Notwithstanding the provisions in Sub-Clause 9.1, this Agreement shall terminate forthwith andautomatically without any notice whatever by the mere occurrence of any one or more of thefollowing events, unless the Representative shall waive termination upon notification by theConsultant of such occurrences:

a) The Consultant files a petition in bankruptcy or is adjudicated and declared bankrupt orinsolvent; a receiver, trustee or custodian is appointed for the Consultant’s assets for thewinding up or liquidation of any of the Consultant’s business operations; the Consultantseeks to make a compromise, arrangement or assignment with or for the benefit of itscreditors or is discharged from its liabilities;

b) the Consultant seeks to assign or purports to have assigned this Agreement;c) the Consultant fails to secure or renew any license or permit required by law for the

Consultant’s business operations or if that license or permit is revoked or suspended.


Any and all notices, invoices, statements and other information to be given or forwarded by theRepresentative to the Consultant or by the Consultant to the Representative shall be deemed tohave been properly and adequately given if sent to the addresses detailed in the ParticularConditions by telefascimile or letters signed by the party, postage prepaid or by registered airmail.


The Representative shall register this Agreement in accordance with any laws or regulations of theapplicable territory now existing or hereinafter enacted and which require such registration.


The Consultant shall not accept responsibility nor indemnify the Representative for any claims,liability, or damages resulting from any acts or omissions of the Representative in the performanceof its duties under this Agreement.

The Representative shall not accept responsibility nor indemnify the Consultant for any claims,liability or damages resulting from any acts or omissions of the Consultant in the performance of itsduties under this Agreement.

11Registrations

12Liability

10Notices

9.3

10.1

11.1

12.1

12.2

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This Agreement shall be governed by the laws of the home base country of the Consultant statedin the Particular Conditions. Disputes shall be settled under the Rules of Arbitration of theInternational Chamber of Commerce by one or more arbitrators appointed in accordance with thesaid Rules and venue shall be agreed upon between the Parties.


The Representative shall, during and after the term of this Agreement, keep in strict confidence andconsider as proprietary, all information disclosed by the Consultant of a commercial nature andtechnical nature, including business and financial information, agreements and arrangementsbetween the parties (patents, know-how, designs, copyrights, licenses or sub-licenses, trademarks and trade secrets) except such technical information which is in or becomes part of thepublic domain, or which the Representative already had in its possession.


In the performance of obligations under this Agreement, the Representative and agents andemployees shall comply with all applicable laws, rules, regulations and orders of any applicablejurisdiction, including the OECD Convention on Combating Bribery of Foreign Public Officials inInternational Business Transactions. The Representative hereby represents, warrants andcovenants that it will neither receive nor offer, pay or promise to pay either directly or indirectly,anything of value to a “public official” (as defined below) in connection with any businessopportunities which are the subject of this contract. Furthermore, the Representative shall notify theconsultant immediately in writing with full particulars, in the event that the Representative receivesa request from any public official requesting illicit payments.

A public official is:

a) any official or employee of any government agency or government-owned or controlledenterprise;

b) any person performing a public function;c) any official or employee of a public international organization, such as The World Bank;d) any candidate for political office; ore) any political party or an official of a political party.

Notwithstanding any other provision of this Agreement, the Representative shall indemnify, defendand hold harmless the Consultant from and against any claim, loss, damage, penalty, liability,expense, attorney’s fees and costs of whatever nature arising out of, or related to, or connectedwith the Representative’s failure to comply with the provisions of this Sub-Clause 15.1, to the fullestextent permitted by law.

14Confidentiality

13.1

14.1

15.1

15Corruption

13Arbitration and Governing Law

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7General Conditions

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In conjunction of the requirements under Sub-Clause 15.1, the Representative shall demonstrateto the satisfaction of the Consultant, that it adheres to a documented Code of Conduct andassociated compliance programme or alternatively, shall annually confirm its specific agreement tothe principles of the Consultant’s Code of Conduct (Appendix 3 of the Particular Conditions) andthe Consultant’s Business Integrity Policy Statement (Appendix 4 of the Particular Conditions) byexecuting the Particular Conditions. This document may be executed annually throughout theduration of this Agreement.


No waiver, alteration or modification of any of the provisions hereof shall be binding on either partyunless the same be in writing and signed by the parties hereto or confirmed by telefacsimile by bothparties.

This Agreement supercedes and cancels any and all previous understandings, agreements andcommitments as may have been reached by the parties. This Agreement is the entire agreementbetween the parties and there are no collateral, oral or written terms of any kind.

The Agreement shall not be deemed to be effective or binding upon the Consultant until signed onits behalf by an Officer of the Company.

This Agreement is made with the Consultant and is not applicable in any manner to any of itsaffiliated or associated companies.

The Representative hereby waives any right it had or has under any prior agreement be itcontractual or at law.

The Representative undertakes to bind, for its own benefit and for the benefit of the Consultant, allof its employees and agents that may participate in the Representative’s efforts pursuant to thisAgreement, such that all such persons shall have the same obligations to the Consultant that theRepresentative has to the Consultant hereunder. The Representative further agrees to indemnify theConsultant for all losses and damages suffered by the Consultant as a result of any breach of suchobligations by such persons.

16Miscellaneous

15.2

16.1

16.2

16.3

16.4

16.5

16.6

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INDEX OF SUB-CLAUSES

Clause/Sub-Clause Page

Agent 4.4 2Agents 9.2 4

16.6 7Agreement 1.6 1Attorney, fees 15.1 6Assigned 9.3 5Audit 7.3 3

Bankruptcy 9.2 49.3 5

Business integrity 15.2 7

Claims 12 5Code of conduct 15.2 7Companies, associated 16.4 7Compliance 15.2 7Confidentiality 14 6Conflict of interest 5.2 3Consultant 1.1 1Consultant’s, rights 7 3Convention, OECD 15.1 6Corruption 15 6Costs 6.1 3Currency 8.1 4

Damages 12 5Disputes 13 6Duties 8.2 4

Employees 9.2 416.6 7

Expenses 6.1 3

Interpretation 2 1Irregularities 7.3 3

Laws, local 5.1 2Laws, home country 13 6Liability 12 5License 9.2 4

Notices 10 5Notification 9.3 5Obligation 4.4 2Official, public 15.1 6

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9General Conditions

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Payment 6.3 3Payments 7.3 3Payments, illict 15.1 6Performance 12 5Permit 8.1 4

9.2 4Project 1.5 1

Records 5.1 2Registrations 11 5Regulations 5.1 2Remuneration 6 3Representation, scope of 3 2Representation, limits of 4 2Representative 1.3 1

Services 1.1 1Signed 16.3 7Solicit 4.1 2

Taxes 8.2 4Territory, applicable 9.2 4Terminate 7.1 3Termination 9 4

Waiver 16.1 7Waives 16.5 7

Warrants 5 2

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Introduction

Contracting principles

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Consulting engineering firms often seek affiliation with a foreign firm based in a countryin which opportunities exist on the basis of an agent, representative, sub-consultantor joint venture relationship. This is because in the direct exporting of professionalservices, an indigenous services firm should fully understand the local marketplaceand client requirements, including relevant regulations and restrictions, and possessknowledge of the main interested parties, potential clients, competitors, etc. Theindigenous firm should also have, or have access to, market research, exposure andcontacts that can be used to the advantage by the consulting engineering firm,designated “the Consultant” in these guidance notes.

A Representative that is selected and engaged to use the Consultant’s marketingmaterials to present the Consultant to potential clients, to develop business, to assistin obtaining and executing contracts, and to undertake or monitor project activities inforeign countries should not be confused with an Agent. The general practice indeveloped countries is to use the term “Representative” and to stop using the term“Agent” which can imply more than is intended. For instance, an Agent normally hasauthority, perhaps even a power of attorney, to make commitments on behalf of theConsultant. Thus, a Consultant’s agreement with Representative should make it clearwhether and to what extent the Representative has legal authority to makecommitments on behalf of the Consultant.

Consultants that operate internationally are generally familiar with the measuresneeded to protect their commercial interests when engaging a Representative.However, many are often unfamiliar with relevant international best practices related tobribery and corruption that are recognised by the courts. Following the passage in1997 of the OECD Convention Combating Bribery of Foreign Public Officials inInternational Business Transactions, countries that signed the Convention haveintroduced legislation that makes it a crime in the home country to commit an offenceas defined in the OECD Convention.

The US Foreign Corrupt Practices Act (FCPA), which has been in force since 1977, hasserved as a legislative model for the OECD Convention. Experience in courts in theUnited States with the FCPA provides the best available guidance to firms that are nowoperating under their country’s legislation passed in response to the OECD Convention.

An Agreement for a definite period of time (renewable by mutual agreement) is usuallyexecuted between the Consultant and the Representative following procedures thatshould not eliminate any requirements related to contracting processes, as set out, forinstance, in the Consultant’s risk management manual and in its commercial policiesand procedures. The Agreement defines territory, terms of sale, method ofcompensation, reasons and procedures for terminating the Agreement and otherdetails. Under the Agreement, a Representative will generally be able to handlecomplementary services that do not conflict, and assume risk and responsibility.

Carefully scrutinizing potential Representatives is always a wise investment as anyproblems that arise are often more difficult to address owing to barriers caused by

Notes for Guidance

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II Model Represenative Agreement

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distance, language, culture and legal differences. In addition, non-performingRepresentatives can be costly to terminate and replace. Unless specified otherwise,the ability to terminate an Agreement will be subject to local country laws, which areoften different from those in the Consultant’s country. These may restrict terminationoptions or provide for substantial payments of compensation, and failure to followlocal termination laws may result in complete denial of future import privileges by ahost country.

FIDIC Model Representative Agreement contracting principles

A Recommended anti-corruption principles

A1 Representation that the Representative (or officers, directors, shareholders,key employees) is not a government official and has no official status, or afamily relation of senior government official, and that a change in status withrespect to the Representative will be grounds for termination of theAgreement.

A2 Covenant that the Representative will comply with local laws. A3 Covenant that the Representative will comply with applicable substantive

provisions of the Consultant’s national laws.A4 Covenant each year that the Representative will comply with the relevant

portions of the Consultant’s Code of Conduct.A5 Warranty that the Representative has and will not either directly or indirectly

give, pay, offer, receive or authorize any improper payments to governmentofficials in connection with a Project, as defined in the General Conditions ofthe FIDIC Model Representative Agreement.

A6 Covenant that the Representative will notify the Consultant if a governmentofficial requests payment from a third party.

A7 Provisions regulating the Representative’s interaction with governmentofficials in connection with the Project.

A8 Covenant that the Representative will obtain the Consultant’s writtenapproval before hiring any subcontractor, employee, etc for the specificpurposes of performing services for the Consultant.

A9 Contract provision that any direct reimbursement for expenses is limited toreasonable and legitimate documented expenses (include guidelines).

A10 Covenant that the Representative will maintain accurate and completebooks and records.

A11 Depending on the specific circumstances of the Agreement, contractprovision that the Consultant will maintain the right to audit or inspect thebooks of the Representative in the event of events or circumstances thatwould give rise to suspicion of corruption, through an accredited firm toensure payments are not used for illicit purposes.

A12 Provisions that the Consultant has the right to terminate the Agreementupon unilateral, good faith concern that there has been a violation of itsterms.

A13 Provisions describing the scope of the candidate’s activities, wherecompensation should be commensurate with activities and scope of work.

A14 Provisions requiring the Representative to submit written reportsdocumenting work performed as well as invoices for services rendered.

A15 Covenant that the Representative will not exceed its prescribed authority.A16 Covenant that the Representative will accept and participate in briefing and

training related to anti-corruption initiatives.

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IIINotes for Guidance

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General Conditions

B Recommended commercial provisions

B1 To ensure a conscientious effort from the Representative, the Agreementshould include a requirement that it apply the utmost skill and ability to theservices provided for the remuneration named in the Agreement.

B2 An escape clause in the agreement, allowing the Consultant to end theAgreement safely and cleanly if the Representative does not fulfil theConsultant’s expectations.

B3 Provisions to safeguard the Consultant’s interests in cases where theRepresentative proves less than satisfactory.

B4 Escape clauses and other provisions to safeguard the Consultant may belimited by the laws of the country in which the Representative is located.

B5 Provisions to ensure that the Consultant meets national laws that governRepresentative Agreements.

B6 Definition of the laws that apply to the Agreement.B7 Provisions not to have business dealings with competing firms.B8 Provisions not to reveal any confidential information in a way that would

prove injurious, detrimental, or competitive to the Consultant.B9 Provisions that require all inquiries received from outside the designated or

applicable territory to be referred to the Consultant for action.

4.1, 4.2 Soliciting and CompetitionProjects are limited to those which the Consultant wishes to pursue, asopposed to those with a large scope such as projects in which theConsultants may have a general interest. The Representative may thereforework for other parties on projects which are of no interest to the Consultant,are not being pursued by the Consultant, and are outside the scope ofConsultant’s projects. Specifically, the Representative is not contraveningSub-Clauses 4.1 (soliciting) and 4.2 (competition) in undertaking work forother clients on other projects.

5.2 Conflict of interestThe Consultant’s approval in writing is required if the Representative entersinto an arrangement with another party that generates a potential conflict ofinterest. This is because the Consultant may find it acceptable for theRepresentative to enter into the arrangement under certain circumstances(e.g., when the Consultant has pulled out of a project). Such eventualitiesare catered for by requiring the Consultant’s and Representative’s mutualagreement to be stated in writing.

Furthermore, the phrase “the Representative shall obtain the prior writtenapproval of the Consultant before engaging the specific and significantservices of any person, firm or corporation to carry out the servicescontemplated herein” is not unnecessarily restrictive, because the writtenapproval only refers to “specific and significant” services. For these it isreasonable to obtain the Consultant’s approval. There will of course beservices that are less crucial (e.g., obtaining licenses, permits and visas;identifying technical personnel; administrative functions). Here, theRepresentative may not necessarily need to obtain the Consultant’s priorpermission in writing.

6.2 Remuneration levelGiving precise guidance as to what constitutes a reasonable level ofremuneration is extremely difficult. Some argue that a Representative’s fees,expressed as a percentage of the contract value for an engineering project

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(see Model Representative Agreement, Particular Conditions, Appendix 2)are excessive and an indication of potential bribery if they exceed 3%.However, the accumulation of tasks in both pre- and post-contract phasesmay justify a more substantial remuneration. It is important that theConsultant be prepared to demonstrate that the Representative’sremuneration is reasonable compensation for services actually provided.This justification can include consideration of the risks incurred by theRepresentative in pursuing projects on behalf of the Consultant without anycertainty of winning.

6.3 RemunerationSub-Clause 6.3 (remuneration) focuses on remuneration to theRepresentative linked to payments from the Client to the Consultant (that is,after a contract is executed) and once an invoice is paid by the Client. Somewould argue that the Sub-Clause 6.3 should recognize payments to theRepresentative in the case of services not directly related to theprocurement of specific projects, in order to make the Agreement morecommercially attractive to the Representative (specially for individuals asopposed to firms). In particular, the Agreement should allow a minimumretainer to be paid, regardless of the schedule of payments from the Client,together with an additional amount once an invoice is settled. This wouldalso encourage the Representative to assist the Consultant with securingtimely payment of its invoices.

Special cases may justify advance payments and the like. However,generally speaking, for Representatives as opposed to Agents, it is advisedto use the basic arrangement whereby a Representative’s fee is only paidwhen the Consultant is paid by a Client. Of course, this does not excludethe Representative from receiving payments for out of pocket outlays, travelexpenses etc., as and when they are incurred. In the Particular Conditions,the Consultant may also agree to pay a retainer fee to the Representative tocover basic, out-of-pocket expenses together with another component ofpayment related to procurement of a project (see Model RepresentativeAgreement, Particular Conditions, Appendix 2, Schedule A4).

7.1 Consultant’s rightsIn general, Sub-Clause 7.1 allowing the Consultant to terminate theagreement unilaterally may seem to put too much power in the hands of theConsultant. Moreover, it may be difficult to motivate a Representative undersuch terms, and courts of law may judge Sub-Clause 7.1 to be unbalanced.However, experience has shown that a clear and unambiguous statementof the Consultant’s rights is necessary in order to avoid disputes. If they havesolid evidence, Representatives will often be able to negotiate differentterms that are introduced in the Particular Conditions.

The Representative is compensated for the effort and time spent only if theConsultant procures a contract with the Representative’s help. It is arguedthat this is an unfair, balanced situation because the Representative risksheavy losses if a project is not procured or the Consultant chooses to rejectan order or terminate negotiation without obtaining the Representative’sagreement. In particular, it is argued that the Consultant should only be ableexercise the right of rejection or termination without consulting theRepresentative if the Representative is properly compensated for the timeand effort spent.

FIDIC recommends a “no cure-no pay” system, since the agreement is

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VNotes for Guidance

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between two independent parties and not between an employer (theConsultant) and an employee (the Representative), where a differentagreement would be used. If the agreement does not lead to a fruitfulcollaboration, it has to be terminated. Until then both parties run a risk. Oneshould note nevertheless, that under these circumstances, it is important tomaintain an open dialogue about the strategies to be used to pursueprojects and submit proposals.

7.2 AuditingSub-Clause 7.2 requires the Representative to allow independentlyconducted audits of its financial records, since this level of transparency isexpected for most internationally funded contracts. If the Representativehas several activities and does not work exclusively for the Consultant, Sub-Clause 7.2 may be difficult to implement because it may require theRepresentative to maintain separate accounts of its dealings with theConsultant. Fortunately, accounts need not involve highly complexprocesses: simple ledgers are often adequate and within the reach of mostfirms in countries that do not require audits.

7.4 DisclosureSub-Clause 7.4 refers to the outcome of an audit and should be self-explanatory.

8.1 CurrencyAlthough remuneration is specified according to the schedule in Appendix 2of the Particular Conditions on the basis of the value of the signed contract,Representatives may have legitimate reasons for wanting to be paid offshore(e.g., business operations outside the country, currency instability, etc.), andsome of the Representative’s services may not be related to a specificproject for which payment may have to be made by the Consultant in thecurrency of Consultant’s own country. Sub-Clause 8.1 specifies that allpayments by the Consultant to the Representative under the agreementshall be in the same currency as the payment terms of the applicablecontracts. However, payment in another currency can be agreed upon inwriting by the parties.

Payments can only be made to bank accounts outside the Representative’scountry of residence if the Representative has specific agreements with allrelevant authorities.

8.2 LiabilityTaxes are the responsibility of each party, and a party cannot transfer thisresponsibility to the other party. Hence, the Representative must beresponsible as stated in Sub-Clause 8.2 for any tax liabilities arising frompayments received from the Consultant. For example, taxes or levies whichare imposed by a statutory authority on the Representative followingsignature of an agreement should be paid by the Representative and notseparately by the Consultant.

9 TerminationAlthough this clause may appear to be biased in favour of the Consultant, itshould be noted that Sub-Clause 9.1 gives the Representative the right toterminate upon giving ten days notice.

13 ArbitrationAny agreement requires some basis for resolving disputes. Clause 13 states

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Agreement

that disputes shall be settled under the Rules of Arbitration of theInternational Chamber of Commerce (that came into effect on 1 January1998, with costs scales effective as of 1 July 2003) by one or morearbitrators appointed in accordance with the rules, where the venue forarbitration is decided by both parties. This wording is balanced and realistic,and should be useful in most cases.

15.2 Code of conductSub-Clause 15.2 requires the Representative to confirm adherence to theConsultant’s Code of Conduct at the time of signature of the agreement,and annually (using the sign-off form given in the Model RepresentativeAgreement, Particular Conditions, Section B: References from Appendix 3 -Consultant’s Code of Conduct). Since some Representative agreements willlast for several years, an annual signature ensures that the Representativesigns off on the most recent Code, and is reminded of it every year.

15.7 CorruptionSub-Clause 15.7 requires the Representative to notify the Consultantimmediately in writing with full particulars, in the event that theRepresentative receives a request from any public official requesting illicitpayments. FIDIC strongly recommends this provision in Representativeagreements, since the courts, multilateral development banks and similaragencies will seek these details in the event of an inquiry.

To keep the necessary “arms length” distance between the Representativeand the Consultant, the Representative should ideally be a company with awell-defined legal status, and should not hold a status that would allow himor her to be perceived to be an employee of the Consultant. If theRepresentative is an individual or sole proprietor, this must be specified inthe Agreement.

Regarding the form given as the Agreement to the FIDIC ModelRepresentative Agreement:

a) For the article: “WHEREAS the Consultant wishes to establish arelationship with the Representative for the purpose …”: the“purpose”, for instance, acquiring and/or executing Project(s) shouldbe described briefly and, if necessary, detailed in an Appendix to theAgreement. If the purposes are technical in nature, the FIDIC Client-Consultant, Sub-Consultant or Joint-Venture agreements (see thesection “Further reading”) should be used, depending on the context.

b) For the article: “WHEREAS the Representative is in the position tofacilitate….”: a Consultant offering a broad range of services toseveral types of clients may not necessarily wish to designate onlyone Representative for a country, and for large countries, may evenwish to have regional delineation. To allow for a specific delineation ofscope, the facilitation of say the acquisition and/or execution ofprojects usually needs to specify a territorial delineation, and possiblya sectoral delineation. Note also that Clause 9.2 of the GeneralConditions refers to the “applicable territory” which will be the territoryspecified in the Agreement.

c) It is envisaged that the Agreement may be established for a singleproject or for several years. In both cases, there should be a “sunset

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VIINotes for Guidance

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Further reading

clause” that specifies the (renewable) term of the representation andthe starting date.

The following FIDIC agreements for consulting services, and their accompanyingguides, relate directly to the FIDIC Model Representative Agreement:

Client/Consultant Model Services Agreement (“The White Book”), 3rd Ed1998The White Book Guide with other Notes on Documents for ConsultancyAgreements, 2nd Ed 2001Joint Venture Agreement, 1st Ed 1992Sub-Consultancy Agreement, 1st Ed 1992Guide to the Joint Venture and Sub-Consultancy Agreement, 1st Ed 1994

Business Integrity Management and procedures for implementing a Business IntegrityManagement System are detailed in:

Guidelines for Business Integrity Management in the consulting industry,FIDIC, Test Ed 2001Business Integrity Management System training manual, FIDIC, 1st Ed 2002

International Chamber of Commerce rules of arbitration:

Rules of arbitration, International Chamber of Commerce, Paris, France,effective as of 1 January 1998 with costs scales effective as of 1 July 2003,http://www.iccwbo.org/court/english/arbitration/rules.asp

Quality Based Selection and the selection of consultants are covered in:

Guidelines for the selection of consultants, FIDIC, 1st Ed 2003Quality Based Selection for procurement of consulting services, FIDIC, 1stEd 1997

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