Construction News

Fri April 03 2020

EU urged to class Covid-19 as ‘force majeure’

24 Mar The European Commission needs to introduce three immediate measures to tackle the negative impact of Covid-19 on construction, industry body FIEC has said.

It is calling on the European Union's executive branch to ensure that Covid-19 is considered a force majeure, to eliminate penalties for companies that have to suspend work and to increase European funds to cover the increased costs of the work. FIEC, the European Construction Industry Federation, represents businesses of all sizes via its 32 national member federations in 28 countries.

The construction industry in Europe is essential for the major infrastructure works and projects that promote community wellbeing, said FIEC. It accounts for 9% of EU27 GDP and employs 16 million workers. “Therefore the negative effects of Covid-19 on the construction industry in Europe are considerable,” it said. “In these conditions the already complicated management of construction sites is becoming even more complex, if not impossible, when companies try to comply with the new and drastic health and safety measures. Construction companies will be heavily affected financially and projects, both private and public, will be delayed or even cancelled.”

FIEC said that it supports proposals put forward by the European Commission but also calls for three other measures to be taken:

  • Publicly announce, that the Covid-19 pandemic is a case of ‘force majeure’” and has to be treated accordingly by all construction employers and clients.
  • Warmly recommend to the members states that they allow the possibility of suspending or reducing ongoing construction, without penalties and taking into consideration damages, for the period necessary, if the responsible contractor is unable to comply with the requested health and safety measures for its workers and/or if he is unable to undertake activities because of disruption in the supply chain or because of the shortage/lack of personnel due to Covid-19. The possibility of waiving delay penalties in public procurement contracts is already mentioned in the Euro group statement of 16March 2020, said FIEC.
  • When ongoing construction projects are co-financed by the European Union, immediately allocate specific resources for covering the additional costs generated by the Covid-19 pandemic. FIEC pointed out that these could include extra security of sites, costs related to changes in organisation and new time schedules on site and overheads. FIEC said that the EU should encourage the member states to do the same at national level.

“These are the first urgent and indispensable actions that we ask the Commission to implement as quickly as possible," said FIEC. "They are the crucial measures that the construction sector needs to survive and continue its contribution to growth and employment in Europe in the coming months.”

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