If a contractor proposes to increase concrete cover beyond contractual specification (i.e. 40mm to 70mm), shall engineers accept the proposal?

away from Codes, concrete cover is to protect the reinforcement from corrosion and also provide fire resistance to bars embedded in concrete.

every element in structure has it's own limit for concrete cover, in order if you increase the cover from 40 to 70 mm which is almost 80% you will have critical issues with corrosion and fire resistance.

i would never except that if the structural element was exposed to earth or weather.

No, that is not accepted because for each code there is a certain tolernace for increase or decrease cover which about 5mm.

I would say that the Structural Engineer being asked must go back to the basic reasoning of how to concrete cover specification was achieved.  Aside from Fire Rating, Corrosion of Rebar and Spalling of cover consideration, it must be noted that that it is part of the structural calculation (remember the "d" in your balance steel ratio calculation?) which could significantly change the  behavior of concrete structure.  Also, you must ask how the increase of cover will be achieved, is it monlotically poured or just increase after pouring? construction method could also be a role so you need to get all the facts first before deciding.