Debate: The role of social award criteria in public procurement in strengthening social rights, good working conditions and inclusive labour markets
Date: MONDAY, 15 JANUARY 2024
Speaker: Nicolas Schmit
Language: EN

This economic significance also means that public procurement is a powerful leveraging tool for spurring innovation and developing social and environmentally friendly solutions. Public procurement is also increasingly recognised as an important strategic economic policy tool to pursue policies, including in the sphere of social responsibility, and to shape our internal market and make it more efficient but also fair. The EU Public Procurement Directive, adopted in 2014, aimed at transforming public procurement from a process driven legalistic exercise to a genuinely relevant physical for delivering change in Europe. Our procurement rules do provide public buyers with greater flexibility to use public procurement as a strategic tool. Yet it is a reality that more contracts could be awarded based on quality criteria, supporting the green and social transition, and not only based on the lowest price. And recently, by the way, the Commission has recommended that in the field of green technologies, in the face of foreign competition that does not always respect all the rules, this is precisely the approach that has to be applied. This underlines not only the social aspect, but also the industrial and strategic aspect that has to be fully taken into account. Now, on your first question, the current EU public procurement directives do allow public authorities to ensure decent working conditions for the staff executing the contract in line with EU labour law. They also require economic operators to comply with all applicable EU or national labour obligations, including on collective agreements and bargaining during the performance of the contracts. The Commission has also developed several actions to provide guidance to the public authorities, in particular the Commission’s Buying Social Guide, published in May 2021, provides public buyers with clear and concrete guidance on how to make their procurement more socially responsible and to ensure compliance with labour law. And this also applies, by the way, to social enterprises, to give social enterprises also the possibility to be part of public procurement. The Commission has also launched the Big Buyers Working Together project to support collaboration between public buyers and to promote the wider use of strategic public procurement. This new project includes, inter alia, activities specifically relating to social procurement. It aims to build better understanding of the social, labour and ethical impact of public contracts, and how to use public procurement to achieve a positive impact in these areas. As to your second question, the ILO Convention No 94 is indeed not yet added to the list of ILO conventions in Annex X of Directive 2014/24 on public procurement. The reason for this is that the ILO conventions listed in this annex are part of the ILO Declaration on Fundamental Principles and Rights at Work, and they have already been ratified by all EU Member States. The fundamental principles and rights at work have to be realised, respected and promoted by all members of the ILO. Grounds for amending the list in the annex are set out in Article 56 of the directive to add new international agreements that have been ratified by all Member States. However, as mentioned, Convention No 94 is not yet, hopefully, currently ratified by all Member States. In relation to measures to ensure compliance with the fundamental ILO conventions, the Directive on Public Procurement sets out that Member States shall take appropriate measures to ensure that in the performance of public contracts economic operators comply with applicable obligations in the fields of environmental, social and labour law established by Union law, national law, collective agreements or by the international environmental, social and labour law provisions listed in Annex X. I also want to refer that finally, it’s due to the European Parliament that there is a social clause in the Procurement Directive, and that also when we discussed about the Adequate Minimum Wage Directive, Parliament insisted on an as strong as possible Article 9 on the linkage between collective bargaining and especially adequate minimum wages and public procurement as a leverage finally to respect these provisions, but also to create a fair and level playing field because if some respect minimum wages or collective bargaining and others not, this is also finally falsifying competition when we are talking about public procurement. As to your third question on joint and several liability in subcontracting chains, the public procurement directives are not the sole legal framework relevant to the issue of strengthening social rights, good working conditions and inclusive labour markets. The proposal for a directive on corporate sustainability, due diligence, on which co-legislators recently achieved a political agreement, is relevant here. It will set obligations for large companies to address the actual and potentially adverse impacts on human rights and the environment, also with respect to the operations of their subsidiaries and those carried out by their business partners. The directive will also lay down conditions for triggering on penalties and civil liability for infringing those obligations. With regard to your fourth question on funding, the Commission has taken steps to ensure that Union funding promotes socially responsible procurement procedures. The financial regulation provides for a number of measures that secure the promotion of socially responsible public procurement by EU institutions. On this basis, social aspects, for example, related to social and professional inclusion and equality and gender-related considerations are taken into account in procurement procedures. As far as question five is concerned, public authorities have several means to support the upskilling and reskilling of workers. They can ask in the clauses related to contract execution to require upskilling and reskilling of workers when it is related to the subject matter of the contract. They can also include upskilling and reskilling of workers as a key performance indicator as part of the award criteria. The bid of the economic operator offering higher upskilling or reskilling would get a higher score and better position to win the tender.  Finally, it is important to mention the ability of the Commission to monitor the procurement with social impact and to disseminate best practices to establish peer-to-peer learning. The Commission has launched important projects in this context. The new standard forms for uploading public procurement notices in the tender daily database will allow for better collection of procurement data on social procurement. With the public procurement data space, which will be operational this year, national governments will share information on procurement of lower value that are currently registered at a national level only. This will no doubt improve the quality of the data available. To conclude, public procurement in general is a powerful tool that can foster a more inclusive and equitable society and safeguard the rights of workers in public contracts. By using public procurement in a strategic way, public authorities can incentivise economic operators to adopt practices that preserve fundamental rights, enhance working conditions, promote upskilling, and foster inclusivity in the labour market. The European Commission has therefore supported and promoted this strategic approach to socially responsible public procurement through several initiatives that emphasise the integration of social considerations within public procurement practices across Member States.