Brussels, 22/05/2002 (Agence Europe) - The Internal Market Council reached a political agreement on Tuesday on the "traditional" directive on the co-ordination of handover procedures for public contracts. Ministers reached an ambiguous compromise on the possibility of taking into account social considerations at the time of putting out to tender.
This agreement will soon become a common position but will not be submitted to the European Parliament until the Council arrives at a common position on the "sectoral" directive on public contracts in the water, energy and transport sectors. Discussion on the sectoral directive are being held up by the postal services issue. Parliament and Council positions on the issue are still miles apart and a conciliatory procedure will probably be needed.
The document for the agreement clearly takes into account environmental criteria at the time of tendering and classifies "environmental characteristics" as crucial for awarding contracts. Social criteria, such as compulsory work for the disabled or those excluded from the labour market for example, is too ambiguous. The list of the criteria for awarding contracts in the body of the text of the directive does not include social considerations. Ministers, nevertheless, outlined in the preliminary part of the document that although equality of treatment is guaranteed, "the power of the adjudicator can use criteria aimed at satisfying social requirements that respond to needs, defined in market specifications, relevant to categories of deprived sections of society to which those who benefit and those who use the work, provisions or services obtained on the market".
According to the Commission interpretation, this compromise confirms that public contracts are awarded on the basis of the most economically advantageous offer. The Belgian delegation, together with France, the Netherlands, Greece and Luxembourg, both want social and environmental criteria to be included, the compromise will allow for greater legal security in the application of these criteria. Several cases linked to the introduction of environmental and social criteria have been presented to the European Court of Justice. The Court is expected to reach a decision on the Helsinki buses, where the contract had been awarded to the less polluting and less noisy buses, although they were more expensive. The Solicitor General of the Court's conclusions decided that awarding contracts had to take into account environmental criteria on the principle of general interest. The United Kingdom, Ireland and Finland opposed the compromise, believing it to open the way to arbitrary awards and obstacles to competition.
By adopting the Zappala report at its first reading last January, the European Parliament had appealed for the introduction of environmental and social clauses in the body of the directive. A "social clause", bringing together around forty associations from the social sector, called on the Council to follow this line, believing that, "despite their possible economic importance and impact on jobs and integrating the victims of discrimination, the proposals made by the Commission do not take into any account at all the social dimension of public contracts."
The Council also reached an agreement on a formula for excluding the directive from certain financial services linked to state funding. Belgium finally agreed to the compromise on this point, after having insisted that the formulation be based more on WTO public contracts, which involve the exclusion of operations carried out by central state authorities. The Commission wanted the document to be more like that of the WTO as well, and outlined in a declaration that it considered that the public contract directives were submitted to Community rules within a multilateral framework. It also wanted loans for tenders, particulalrly for local communities to be included. The Parliament wanted a broader exemption for financial services.
Presented in May 2000 by the Commission, the public contract directives introduce rules for handing over contracts by e-mail and define the list of suitable companies. With the goal of introducing some "ethical" dimension to the sector, the Council has introduced a clause that outlines that persons with convictions for money laundering are unacceptable or those convicted for other criminal activities that have harmed EU interests. Member States can on the other hand, exclude in particular case people convicted for "minor" offences. "The rules will be a guarantee against corruption", claimed Commissioner Frits Bolkestein.