AJCE and its Activities, 2009 Akihiko Hirotani 01

Promotion of Qualified Dispute Adjudication Board (DAB) Membersin the Asian Region Dr. Toshihiko Omoto 02

Consulting and Cross Cultural Communication Masayoshi Takeuchi 04

Activities of ASPAC Sub-Committee in AJCE in the year of 2008 Masakazu Maeda 05

AJCE Activity 2008 08FIDIC President Visited Japan 10AJCE Annual Seminar 2008 12Young Professionals Exchange Programme 2008 14Inauguration of MOU between AJCE and KENCA 31Dialogues with Richard Stump 32

Project Accomplishments by AJCE Members 33

Editor's note 50

AJCE Members

CONTENTS

IllustrationMasatoshi Tsutsui, Tsumiki Kobo

NEWS LETTER 2009

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The Association of Japanese Consulting Engineers (AJCE)was established in 1974 and was approved as a legalentity by the Science and Technology Agency of Japan(currently, Ministry of Education, Culture, Sports, Scienceand Technology) in 1977. AJCE is a member of theInternational Federation of Consulting Engineers (FIDIC)representing the interests and views of Japaneseconsulting industry.

Our issueAJCE is promoting Quality-Based Selection (QBS) for theemployment of consultants by central governments andinternational financiers such as Japan InternationalCooperation Agency (JICA). Four years have passedsince the Act for Promoting Quality Assurance in PublicWorks came into force in Japan. This law emphasizes thatconsiderations other than cost must be taken to secureproduct quality. It also specifies that designers play acrucial role in determining the quality of the product.Consultants must therefore ensure that their professionalskills are of the highest standard and should pay attentionto upgrading them as required.

Our activity in 2008Every year, AJCE membersparticipate in the FIDIC annualconference and contribute tothe conference in various roles,demonstrating that AJCE is oneof the major active memberassociations of FIDIC.

� In September, FIDIC conference

was held at Quebéc, Canada

on ”A Strong Industry Serving

Society”. AJCE members, Dr.

Omoto, Professor, Kyoto

University, and Mr. Nakagawa,

Advisor of JBIC (now JICA)

attended the conference and

contributed in nine seminars

and three workshops. Action Plan to promote

adjudicators in Asian region was introduced in ASPAC

GAM.

AJCE encourages its members to develop the relationshipwith other FIDIC member associations.� In April, several members of AJCE, including myself,

concurrently serving as the chair of ASPAC, participated

at the FIDIC/ASPAC annual conference held in Seoul.

ASPAC is a regional group of FIDIC member associations

in the Asia-Pacific Region. About 500 people from Asia

and the Pacific attended the conference. AJCE

contributed in the three themes, namely, Solving the

Disparity in Engineering Techniques, Outsourcing

Human Resources, and Public Private Partnership & the

Procurement of International Funding.

� In July, AJCE and Korea Engineering & ConsultingAssociation (KENCA) conclude the memorandum of

understanding to cooperate and enhance each other's

resources for mutual business opportunities that will

contribute signif icantly for the development of

engineering industries in both countries.

� In October, seven young Japanese engineers visitedAustralia for three weeks under the Young Professionals

Exchange Program. This program has been continuing

for more than 10 years to foster relationships between

AJCE, ACEA (Australia) and ACENZ (New Zealand)

aiming at nurturing global minded professionals.AJCE carries out activities that enhance the professionalcapability of Consultants.� In July, annual seminar was held, entitled as “Risk

Management in consulting Practices”.Four speakers gave different perspectives on riskmanagement. Many members from AJCE as well asnon-members participated in the seminar anddeepened their knowledge of the role of consultants in

risk management.� In July and August,

Dispute Adjudication

Board (DAB) seminars

were held in Tokyo,

Kyoto, Manila and Delhi

in cooperation with JBIC,

CECOPHIL (Philippines)

and CEAI (India). AJCE is

promoting DAB together

with FIDIC, JBIC and

Kyoto University.� In November, seminar on

energy, railways and

safety management was

held in Tokyo.

All of AJCE's eight standingcommittees continueworking enthusiastically.

They are Ethics, Policy and Planning, General Affairs &Finance, Membership, International Activities, ProfessionalDevelopment, Interchange of Technology; and Publicity& Relations committees.AJCE will continue these activities in the coming year. We willalso continuously support FIDIC activities such as a Kathmandu2009 Conference in March supported by FIDIC/ASPAC and2009 FIDIC London conference in September.AJCE endeavors to be recognized as trusted advisor tosociety and enhances activit ies for quality-basedselection. Based on the initiatives as mentioned above,AJCE will contribute to the advancement of science andtechnology, the development of industry, the well-beingand sustainability of the natural and built environment,and the enhancement of people's safety and welfare.

Thank you.

Akihiko HirotaniPresident, AJCE

President, Oriental Consultants Co., Ltd.

AJCE and Its Activity,2009

NEWS LETTER 2009

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1. BackgroundJapan Bank for International Cooperation (JBIC)1

issued the “Sample Bidding Documents on CivilWorks under JBIC ODA Loans (hereinafterreferred to as “the Sample Documents”)” in 1999,which are based on the “Conditions of Contractfor Works of Civil Engineering and Construction,1987 (revised 1988 and 1992) (hereinafter referred toas “the Red Book”)” issued by the InternationalFederation of Consulting Engineers (FIDIC). While theSample Documents have been widely used for thecontracts on civil works under JBIC ODA Loan, FIDICpublished a new edition of the Red Book in 1999.The World Bank (WB) and other MultilateralDevelopment Banks such as Asian DevelopmentBank (ADB) in cooperation with FIDIC published“MDB Harmonized Edition” in 2005 based on theFIDIC Conditions of Contract, 1999. The MDBHarmonized Edition is widely used for the projectsunder those banks' finances. Therefore, JBIC wasconsidering revising the Sample Documents toreflect the FIDIC MDB harmonized Edition, taking theopportunity of consolidation with JapanInternational Cooperation Agency (JICA) October2008.One of the biggest differences between the RedBook 1987 (which is currently used for JBIC SampleBidding Documents) and 2005 (MDB HarmonizedEdition) is the DAB clauses; in 2005 Edition, DAB ismandatory while it is an option in 1987 version.However, DAB is considered as expensiveespecially for their travel expense, because mostof the adjudicators are living in those countries farapart from JICA ODA loan project countries:mostly located in Asian region.After revising the Sample Documents, the numberof projects with DAB is expected to increase

hence it is essential to promote training andqualifying DAB adjudicators for smoothimplementation of the projects in Asian regionwhere most JICA ODA loan projects are to beperformed. At the same time, those stakeholdersof the projects such as implementation agencies,counterparts, contractors and consultants arerequired to become familiar with DAB process.Because of the situation described above, JBICconducted this study on, among other things:

(1) Holding the seminars in and out of Japanincluding preparation of the materials.

(2) Studying the promoting scheme of DABAdjudicators in Asian region.

2. Concept of a DABThe Construction contracts are one of the typicalincomplete contracts because it is not possible todescribe all contingencies which may, or may not,occur during the course of construction. To copewith those contingencies, most standard forms ofconstruction contracts provide for 1) Risk SharingRules, 2) Variation (Change) Rules and 3) DisputeResolution Rules. Nevertheless, a mere differenceof opinions of the parties in the interpretation ofthe contract documents often develops to aserious dispute. If the parties fail to settle thedispute by negotiation, they may go to arbitrationor litigation. Every party wants to avoid arbitrationor litigation because they know how arbitration orlitigation takes time and needs substantialexpenses. Moreover, in the dispute situation, therelationship between the parties gets worse andthe project cannot be complete successfully (andsomeone will loose face in the end).

Dr. Toshihiko OmotoProfessor

Graduate School of Management (MBA)Kyoto University

Promotion of Qualified Dispute Adjudication Board (DAB) Members in the Asian Region

1 JBIC was consolidated with JICA (Japan International Cooperation Agency) in October 2008.

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NEWS LETTER 2009

The best way to resolve dispute is not to give rise toa serious dispute in the first place. Although theprimary task of a DAB is to give a decision on thematter of dispute between the parties, a DAB helpsthe parties avoiding disputes from escalating.

A DAB (or DB) is made up of three (or onedepending on the size of a project) members whoare absolutely independent and impartial. DB is partof the construction team who assists the parties inavoiding claims and settling disputes by amicablenegotiations. If the parties fail to settle disputes, theyare to be referred to the DAB for recommendationor decision. Since the DAB members are familiarwith the contract documents and the site operationand progress of the project, it will not take muchtime to judge the dispute. Even if the decision (orthe informal opinion/recommendation) is rejectedby one or both parties, it will be the basis for furthernegotiation in an amicable manner. Thus, thebenefit of DB is prevention of disputes and earlysettlement of disputes without adversarial attitudes.

3. The Promotion Plan of DAB Adjudicators in Asia Region1) The training of adjudicator candidates will be

implemented based of the following policies.� The Candidates of the TrainingIn Japan and Asia, the persons who are interest inDB and can meet the minimum requirement canbe screened and considered as the candidates ofthe Training. The screening criteria would be 1)experience in overseas project, 2) language abilityof English, and 3) qualifications or experiences incontract management, dispute resolution,arbitration etc.� Facilities and Places of TrainingIn order to underline the leadership of Asian regionin the training program, it is preferable to establisha new institution like a training center to supporttraining, qualification certification, disseminationand other activities in the Asian region. TheGraduate School of Management of KyotoUniversity has a sub organization named theManagement Research Center which performsvarious researching activities. At present, theestablishment of “Construction Law & EconomicsConference in Asian &. Pacific Rim” is beingplanned by this center. Therefore, by making thisconference the mother body of the adjudicatorpromotion organization, it is possible to executethe adjudicator promotion program (seminar) andthe qualification certification workshop.

� ProgramsFor the training and continuous education ofqualified adjudicators, development andimplementation of three kinds of programs, i.e. “theadjudicator training program”, “continuouseducation program”, and “DB popularizationprogram” is required. Furthermore, “the adjudicatortraining program” would be composed of threesub-programs, i.e. “introduction program”, “basicprogram” and “practical program”.� Qualification Requirements &. Certification SystemAbout the Qualification screening, on account ofusing referees and other resources efficiently andkeeping the screening’s neutrality, the screening ispreferable to be held by the above-mentionedtraining organization. Approving the screening,under the leadership of AJCE, FIDIC’s MemberAssociation in each country should take charge ofthe qualification registration and the maintenanceof the name lists.� Training LecturersCandidates for lecturers can be DB adjudicators,lawyers, arbitrators, experts (researchers) etc. Thelectures should be familiar with FIDIC’s contractdocument and have abundant practicalexperiences in contract management and disputeresolution under the FIDIC contract document.Based on practical experiences, the employment ofexperienced talents of DB should be promoted. Inaddition, it will be desirable to recruit the lecturers inthe Asian region from economical aspect.� Training FeesTo implement training activities, such cost for 1)establishment and maintenance of the traininginstitutions, 2) development of the materials for theeducation, and 3) holding seminars and trainingcourses are thought to be necessary. If we try tocover all these costs by the incomes from thestudents such as lecture fees and qualificationscreening/registering fees, the students’ burdenmight be so heavy that they may lose incentive ofseminar attendance and the screening. Therefore,it can be said that the most practical way offinancial support is to expect from JICA and otherdevelopment finance organizations. Based on theabove-mentioned policy, an Action Plan wasmade for i)establishment of new trainingorganizations that aim at the training andqualification & certification of adjudicators andii)maintenance of National List by AJCE and FIDICMember Association.

NEWS LETTER 2009

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I have been engaged in the engineeringconsulting business for over 30 years or so. Duringthose years I have seen how the engineeringconsultancy industry has grown and expandedits sphere of operations to reach out to newclients. The phenomenon of globalization, whichkicked off the advent of the informationrevolution, coupled with the advancement ofinformation technology, has enabled us to teardown geo-political barriers and gain more clientsas more and more countries open up theirmarkets to l iberal trade. With this, businessorganizations, such as our own, have forgedstrategic partnerships with other firms to takeadvantage of opportunities in local and foreignmarket in order to attain our envisionedobjectives, which is to gain a wider and firmerfoothold in the ever expanding global market inthe consultancy industry.

Breaking down Barriers through Cross Cultural CommunicationIt is without a doubt that globalization, together withthe internet, has changed the business environmentthat our consultancy firm operates in. As the industryexpands to various geographic locations and spansnumerous cultures, organizations have found itdifficult to understand how to communicateeffectively with people who come from differentsocio-cultural backgrounds and have differentvalue systems. However, in our experience,partnering with foreign firms has brought somedifficulties because of differences in culture,particularly in the way we communicate. It wouldtherefore be important to practice cross culturalcommunication in order to facilitate or establishmore stable ties with foreign firms. With cross culturalcommunication, the consulting business shouldbe able to ensure smooth transactions and avoid

conflicts brought about by miscommunications andmisunderstandings. According to Geoff French(2008), “if quality depends upon the ability tounderstand and meet our clients’ needs, thencommunication is the key to quality” (French,2008). Practicing cross cultural communicationamong organizations would enable the peoplewithin the business to recognize, interpret andcorrectly react to people, and situations that areopen to misunderstandings due to culturaldifferences.

PartnershipsEffective cross cultural communication betweenfirms develops trust and harmony. Harmoniousties could lead to partnerships and suchpartnerships would be essential to businessesespecially in this age of rapid market expansions.Developing strategic partnerships with other firmswould give each access opportunities todevelop professionally and grow networks.Moreover, it would also help develop competitiveadvantage over other rivals in the industry.To conclude, I believe that the key for firms toeffectively take advantage of opportunities ofthe ever growing global market, the best tool isknowledge. Why? It is imperative that peopleknow and understand the problems of crosscultural communication and then make aconscious effort to resolve these problems.Businesses and organizations should respond carefullyin cross cultural exchanges in order to preventconflicts that may arise from miscommunications andor misunderstandings. When these tasks have beenaccomplished, then we have taken a stepfurther to achieve global cultural competence.References: French,G.,(2008). “Communication:

ACore Competency”

Masayoshi TakeuchiDirector, AJCE

President, NJS Consultants Co., Ltd.

Consulting and Cross Cultural Communication

NEWS LETTER 2009

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1. IntroductionASPAC (FIDIC Asia-Pacific Member Associations)continued the activities based on our Action Planand other new issues, such as the capacitydevelopment program and the youngprofessional forum, in the year of 2008. Also, wehad several meetings in the FIDIC/ASPACConference at Seoul, Korea and FIDIC AnnualConference at Quebec, Canada. This articlereviews our last year’s activities and presentsactivities of this year that is remaining as our termof the ASPAC Secretariat until coming September.

2. FIDIC/ASPAC Seoul ConferenceThe FIDIC/ASPAC Seoul Conference was held atSeoul, Korea in 22-25 April 2008, hosted by KoreaEngineering and Consulting Association (KENCA),and the theme of the conference was “Role ofEngineering in the Globalization Era.”Approximately, 500 people participated fromAsia and Pacific region to discuss the role ofengineers in respect of design, construction andenvironmental issues and could share ourexperience and the knowledge.Technical sessions were conducted in thefollowing three themes:• Solving the Disparity in Engineering Techniques;• Outsourcing: Human Resources; and• PPP & Procurement of

International Funding.Mr. Akihiko Hirotani,President of AJCE andChairman of ASPACchaired the IntroductorySession and presented“Infrastructure ProjectDelivery Systems andRole of ConsultingEngineers in Japan”, inthe same Session. In the

first two Technical Sessions, Mr. Kaoru Kariya ofTokyo Engineering Consultants Co. and Miss EikoWatatsu of Oriental Consultants Co., Ltd. madepresentations. It was remarkable that Mr.Takayuki Ogai, Director General of Japan Bankfor International Cooperation (JBIC; presentlyreorganized as Japan International CooperationAgency: JICA), attended the Conference andaddressed “Selection Methods of Consultants inJapan and Other Countries - JBIC’ Observation.” The ASPAC Extra Meeting was held during theConference on 24th April 2008. We discussed ouractivities in 2007 and our future plan in terms of openwebsite, young professionals forum (YPF) of ASPACversion, training of trainers by FIDIC, and participationin FIDIC Conference 2008 Quebec, etc.

3. FIDIC Annual Conference2008 at QuebecThe FIDIC AnnualConference was held atQuebec, Canada in 7-10September 2008 underthe theme “A strongindustry serving society.”During the Conference,

Masakazu MaedaChief of Secretariat

ASPAC Sub-Committee of International Activity Committee, AJCECTI Engineering International Co., Ltd.

Activities of ASPAC Sub-Committee in AJCE in the yearof 2008

Opening Ceremony in FIDIC/ASPAC Conference at Seoul (22 April 2008)

President Hirotani speaks inIntroductory Session

ASPAC Extra Meeting (24 April 2008)

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the ASPAC Executive Committee Meeting andthe General Assembly Meeting were held todiscuss the following three issues:◆Capacity Development Program◆ASPAC YPF (Young Professionals Forum)◆Progress of the Action Plan

1) Capacity Development ProgramASPAC secretariat proposed a framework ofcapacity development program for consultingengineers and government officials in the zonesof most dynamic economic developments inASPAC that is composed of future goals, targetcountries, methodology and role of each actorrelated to the program. This concept actuallyinitiated by Dr. John Boyd, FIDIC President. Theprogram aimed at understanding of roles andresponsibil it ies of consulting engineers andgovernment officials, establishment of linkagebetween local governments at ASPAC countriesand FIDIC member associations, and establishmentof sub-regional groups at ASPAC for implementationof continuous capacity development programs.This framework was agreed in the ASPAC ExecutiveCommittee Meeting on 7 September 2008.The capacity development program wascontinuously discussed in the ASPAC Forum on the

following day, and representatives from India andAustralia informed that each association alreadyplanned or implemented a similar program by theirown resources in cooperation with FIDIC secretariat.In addition, members of India, Indonesia, Pakistanand Vietnam announced their candidacy for targetcountries that would carry out the program.Although the general direction of the programhad no objection, one of our proposals, i.e.establishment of sub-regional groups at ASPACfor implementation of continuous capacitydevelopment programs and support of the otherfuture activities in ASPAC, was not agreed in theASPAC General Assembly Meeting on 9 September2008. Also, it regrettably had not reached anagreement that the ASPAC secretariat woulddecide the target countries for implementationof the program by consultation with FIDIC.2) ASPAC YPF (Young Professionals Forum)ASPAC YPF is a kind of capacity developmentprogram for young consulting engineers. It wasproposed to set up the place for youngprofessionals particularly in ASPAC countries tocommunicate and enlighten each other. SinceFIDIC YPF has started their activities, ASPAC YPFwould be initiated based on that of FIDIC YPFconsidering different viewpoints from Europeancountries and the United States. It was alsoproposed that this forum would be managed bysub-regional groups because ASPAC coversbroad areas including a wide variety of races,rel igions and cultures; however, it was notagreed by participants.3) Progress of the Action PlanThe following events of ASPAC Action Plan 2007-2009 were reported in the Meetings:• Regular meetings are held twice a year.

NEWS LETTER 2009

ASPAC Executive Committee Meeting (7 September 2008)

ASPAC General Assembly Meeting (9 September 2008) Special Presentation by Prof. Omoto (9 September 2008)

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• There are two occasions: regular meetings atFIDIC annual conference and FIDIC/ASPACannual conference. The former was inSingapore, and the latter was in Pakistan in2007 and Seoul in 2008.

• Newsletter and Website are uti l ized forcommunication with member associations.

• ASPAC Region News is issued periodically.• The annual action plans and events of the

Member Associations (MAs) are reported by e-mail, newsletters and website.

• Directory of MAs are displayed on FIDIC website gradually.

The ASPAC Secretary additionally reported thatthey had received country reports from six MAsbefore the Conference, and all members wereasked again to send back complete report toASPAC Secretariat. While this report has somequestionnaires about activity plans, policy issues,demands for training program, and activities foryoung engineers in each member association, itwould be quite important for ASPAC to improveand promote their actions. Members agreed topromote the ASPAC Action Plan continuouslyand activate communication among memberassociations.It should make special attention in the ASPACGeneral Assembly Meeting that Professor Omotofrom Kyoto University had the presentation about“Promotion of adjudicators in Asian region and itsaction plan.” He is a sole Japanese adjudicatorapproved by FIDIC.JBIC, Kyoto University and AJCE are promotingtraining of adjudicators in Asian region. They hadseminars in Tokyo, Kyoto, Manila and Delhi, andin future they would have seminars in Hanoi,Vietnam; Bangkok, Thailand and Denpasar,Indonesia. A delegate from Pakistan requestedProf. Omoto to have a seminar in his country, andanother delegate suggested that the plan orinformation on this matter should be circulated inASPAC region. All members declared to supportthe program for promotion of adjudicators inAsian region.

4. Current Status and Prospects of the Issues Related toASPAC Activities

With regard to the Capacity DevelopmentProgram, it was finally judged that demand forimplementation of the program was little amongASPAC member associations. Because severalcountries in ASPAC already started the similarprograms, ASPAC Secretariat received a few

requests for the program implementation.Therefore, it was determined that the programwould be proceeded by each memberassociation who is interested in the program.On the other hand, some of the steeringcommittee members of FIDIC YPF, such asmember from Iran, India, China and Japan, haveplayed a key role of ASPAC YPF activities. Theymade an activity paper that describesbackground, general direction, mission andobjectives, function and organization of ASPACYPF, and clearly states their required actions andtime schedule in the year of 2008 and 2009. Mr.Takashi Nakajima, Steering Committee memberof FIDIC YPF, CTI Engineering International Co.,Ltd., has joined in ASPAC Secretariat sinceOctober 2008 and strengthened our activities toaccelerate the YPF actions.The year of 2009 is the last year of our ActionPlan, and therefore the achievements in threeyears will be reviewed and general directions ofthe follow up actions of ASPAC will be proposed.Additionally, problems on the establishment of anASPAC permanent secretariat will be identifiedand sorted out, and solutions to these problemswill be suggested accordingly.

5. AcknowledgementThrough the discussions in the Meetings, I trulyrealized that it was extremely diff icult toformulate a common policy or purpose in theregion on the same ground. Under these toughcircumstances, the ASPAC Sub Committee shallconclude our mission in the present term toachieve the targets of the Action Plan incooperation with the secretariats of FIDIC andAJCE. Finally, any advice and assistance for theSub Committee will be appreciated.

NEWS LETTER 2009

FIDIC-YPF News Letter Introduces ASPAC-YPF

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NEWS LETTER 2009

AJCE Activity 2008 at a glance

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NEWS LETTER 2009

AJCE Activity 2008

FIDIC President Visited Japan

To respond AJCE’s request since 2007, FIDICpresident, Dr. John Boyd and managing director,Enrico Vink visited Japan from 28th February to 1th

March, 2008. On behalf of AJCE, I would like tothank Dr. Boyd and Enrico for their kind andconsiderate response to AJCE’s request.Prior to the visit, they and Aki Hirotani, ASPACchair and AJCE president had meetings with ADBas a part of meetings with MDBs. Agenda of themeeting were Government Procurement IntegrityManagement System, sustainability considerations inprojects, capacity building and training program forADB staffs.They firstly discussed with AJCE to exchangeviews about activities of FIDIC and AJCE andmutual collaboration. Following the meeting withAJCE, Dr. Boyd, Enrico, Aki Hirotani, vicepresidents Mr. Hatao & Mr. Uchimura and Yoshivisited Ministry of Land, Infrastructure, Transportand Tourism (MLIT), Ministry of Education, Culture,Sport and Technology (MEXT) and Japan Bankfor International Cooperation (JBIC). Briefsummary of the meetings were as follows:

1) Japan Bank for International Cooperation (JBIC)JBIC has been in charge of loan assistance inJapan Official Development Assistance (ODA)since its establishment. They introduce FIDICConditions of Contract (Red Book, 1987) in theirSample Bidding Document. They have been astrong advocate of QBS and FIDIC is counting ontheir continuous initiatives. FIDIC invited director-general of JBIC, Mr. Ogai and director, Mr. Miyaoto FIDIC Singapore conference. Mr. Ogaipresented policy on QBS in their loan agreementwith borrower countries. On Oct.1, 2008 JBICmerged with Japan International CooperationAgency (JICA) and operating as new JICA.Deputy governor of JBIC, Mr. Morita welcomedand thanked Dr. Boyd and Enrico for visiting JBICand invit ing JBIC staffs to FIDIC Singaporeconference. He stressed the importance ofcollaboration between FIDIC, JBIC and AJCE. Heinformed that JBIC will introduce FIDIC’s redbook, MDB version in their new sample biddingdocuments. A half year after the meeting,

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From the left, Enrico Vink, FIDIC Managing Director, John Boyd, FIDIC President,Yoshi Yamashita, AJCE Secretary General Hiroaki Taniguchi, MLIT Vice-minister for Engineering Affairs

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l icense agreement of MDB version wasconcluded.Dr. Boyd responded to Mr. Morita’s address thatFIDIC has been preparing best practices tointegrate these results in FIDIC’s trainingprograms. He further explained FIDIC’s review onquality in relation to quality of deliverables,integrity and sustainability. Outcomes of thesestudies will d respond to requests by MDBs andJBIC as well. Dr. Boyd concluded by inviting JBICfor FIDIC Quebec conference.

2) Ministry of Education, Culture, Sport and Technology(MEXT)

The ministry of Education, Culture, Sport andTechnology (MEXT) is in charge of policiesrelating education, culture, sports, anddevelopment of Science and technology suchas nuclear, space, DNA related research,physics, PE qualification and consulting practices.AJCE has registered under MEXT in 1977.Dr. Boyd introduced that over the half ofinfrastructure development in the world dependon contributions by consulting engineers. In orderto provide good quality products, FIDIC has beenproviding guidelines and manuals for qualityassurance, integrity management, capacitybuilding and sustainability consideration onprojects. These products are applied in FIDIC’straining programs.Mr. Iwase, Deputy director-general of MEXTintroduced government policy for promotion andmanagement on P.E. qualification, and APECEngineers which promotes mutual accreditationof engineering qualification among Asia andPacific countries.

3) Ministry of Land, Infrastructure, Transport andTourism (MLIT)

Vice-minister for Engineering Affairs, Mr. Taniguchiwelcomed Dr. Boyd and Enrico and thanked visitof FIDIC president. MLIT is a major governmentbody for planning, implementing andmanagement of infrastructure in Japan. Mr.Taniguchi mentioned visit of former FIDICpresidents, Eigil Pedersen and Bill Lewis. Heexplained that MLIT has been assist ingdevelopment of infrastructure in developingcountries in Asia to cope with ever increasingneeds. They dispatched 195 engineers tooverseas and invited 921 trainees in 2006.Consulting engineers have important role in thisrespect. He expects FIDIC’s initiative on capacitybuilding and training in such a manner that itraise standard of engineering capability.Dr. Boyd explained FIDIC’s activit ies asintroduced at JBIC and MEXT. He stressedcontribution of FIDIC through BIMILACI, periodicmeetings with MDBs and training programsoffered for developing countries in Asia andPacific countries.Opinions were exchanged as to how Japaneseconsulting engineers successfully compete inoversea CE market. Dr. Boyd suggested that thekey to success depends on what you can give,then able to take fruits. Before closing Dr. Boydpresented FIDIC’s major contract documents fortheir reference.

AJCE owes many thanks to Dr. Boyd and Enricofor sparing their precious time for promotion ofCE industry to influential government entities inJapan. They hear voice of FIDIC andacknowledge contribution of AJCE in this regard.

NEWS LETTER 2009

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AJCE Activity 2008

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The annual seminar was planned and carried outas how CEs can reduce or avoid risks havingunderstanding various risk factors. AJCE invitedexperts from outside of CE industry and requestedpresentations regarding i) Check points in riskmanagement from lawyers standpoint, ii) Updateof Professional Indemnity insurance - views frominsurance expert, iii) How CEs cope with risks.At the outset of the seminar, president of AJCE,

Mr. Akihiko Hirotani addressed that riskmanagement (or lawsuit) and professionalindemnity insurance are not familiar withJapanese consulting engineers. However, they arebecoming inevitable and important matter inoversea projects. Circumstances observed outsideof Japan will affect domestic market in nearfuture. Mr. Hirotani urged experts to disclose theirvaluable experience in the seminar.

Outline of the SeminarThe seminar was composed of 4 presentationsand discussions with the floor followed.1) Necessity of Risk Management

Mr. Keisuke Sumikawa, Senior engineer fromNippon Koei presented necessity of riskmanagement from the view point ofmanagement of a firm and business profit. Inthis context, he explained importance in theprocess of risk management and administrativestructure in a firm and concluded that properrisk management results in higher business profit.

AJCE Annual Seminar 2008

Annual seminar is one of the most importantevents of AJCE for Continued ProfessionalDevelopment of members. Annual seminar 2008was held on 15 July, 2008 entitled as “RiskManagement in Consulting Practices”. The maintheme was selected under the circumstances thatmore employers tend to impose larger amount of

liability on consulting engineers in overseaprojects. In addition, new type of risks has startedarising in the increased number of newprocurement methods. In particular, procurementof infrastructure development projects by PPP orDesign- Build methods.

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2) FIDIC’s Undertaking on Risk ManagementMr. Toshio Kurashige, vice chair of InternationalActivity Committee, AJCE and correspondingmember of FIDIC’s Risk and Liability Committee(RLC) presented undertakings of riskmanagement in FIDIC RLC. Mr. Kurashigeexplained scope of responsibility and limit ofliability in the light of FIDIC’s Condition ofContracts. He also introduced concept ofInformed Purchaser which directly affects qualityof deliverables, thus reduces risk.

3) Risk Management from Lawyer’s StandpointLawyer, Ms. Yoshiko Koizumi presented riskmanagement in oversea consulting projects fromlawyer’s standpoint. She introduced risks not onlyin subject countries but also risk factors onconsultants. She showed important check pointssuch as i) writing down the clause on Wavier ofSovereign Immunity in contract document, ii)condition of arbitration (location, regulation,name of arbitrator), iii) confirmation of thegoverning law. To reduce risks, she pointed out toi) understand contents of contract documents, ii)share information and experience about risks, iii)strengthen capacity of persons in charge of legalmatters.

4) Practice in Professional Indemnity InsuranceMr. Tamotsu Sato, Senior vice president, MarshJapan, Inc. introduced Professional Indemnity (PI)insurance as an expert of providing insuranceservice. He explained outline of the insurance,reasons for buying the insurance, contents ofguarantee and immunity reason. To facilitateunderstandings of PI insurance, he explainedcasualties which are retained or hedged (dumpon insurance). As examples, he disclosed someclaim cases and introduced recent trend ofinsurance in relation to limited cost, insurancecharge and out-of-pocket expense.

RemarksVice president of AJCE, Mr. Miyamoto concludedthe seminar by addressing following remarks.Though risk management is considered as animportant matter for consulting practice, majority ofparticipants were not aware of risk management onlegal and insurance aspects.We found some of participants’ surprise as theywere informed of various risks through the seminar.As can be seen in CE industry in other developedcountries, we have to start integrating legal andinsurance considerations in domestic and overseaprojects. It seemed that the seminar could providea chance to realize various risks and usefulcountermeasures.