Czech Republic

By Daniel Morris | 25. April 2018

Pillar I. The State Duty to Protect

Supply chain and conflict minerals [pages 21-22]

Implements Principles 6 and 7

Increasing attention is being paid to safety conditions at work (e.g. the use of slave and child labour in mining). Risks of this type are particularly serious in areas plagued by armed conflict, which can be attributed to the absence of state authority here. Raw materials imported from geopolitically unstable regions and flashpoints may be used as a source of funding to reconstruct the country and improve the conditions in which its inhabitants live. On the other hand, various groups may exploit slave or child labour in mining operations or in factories, and the proceeds from sales could then be used to pay for weapons and soldiers. The raw materials they have mined and the products they have made are then sold on the global market, often without the buyers knowing their provenance.

This is a problem that needs to be tackled internationally. One solution lies in certification schemes proving the origin of raw materials. The certification authority guarantees that workers’ rights have not been infringed during mining or production. These certificates are issued by state and international organisations on the one hand, and private issuers on the other. Current legislation allows the public sector to take into account or to demand this certification in the course of procurement, in which case it is only necessary to comply with the conditions of transparency, equal treatment and non-discrimination.

Current state of play:

  • At EU level, a regulation on “conflict minerals” has been adopted in order to standardise procedure in all EU Member States.
  • European Commission is working with the OECD to establish criteria for internal control and regulatory mechanisms at businesses.
  • Numerous voluntary certification schemes run by states and international organisations on the one hand and the private sector on the other attempt to map out the origin of raw materials and supply chains.
  • The Dodd-Frank Act in the US requires a certificate of origin for certain raw materials. This is also relevant to the Czech Republic inasmuch as it also applies to foreign subcontractors.
  • Under the new European rules on non-financial reporting, companies will also publish information on their supply chains.
  • The Czech Republic was involved in the consultation and approval of the OECD-FAO Guidance for Responsible Agricultural Supply Chains. The Ministry of Industry and Trade and the Ministry of Agriculture will arrange for this Guidance to be published and publicised at their seminars and workshops.
  • The Czech Republic was involved in the consultation and approval of OECD recommendations on the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector. The Ministry of Industry and Trade IS now considering how they can best be implemented in the Czech Republic.

Tasks:

  • Establish one or more competent bodies responsible for the application, in the Czech Republic, of Regulation (EU) 2017/821 of the European Parliament and of the Council laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas, and notify that body (those bodies) to the European Commission.

Coordinator: Ministry of Trade and Industry

Deadline: 9 December 2017

  • In the public sector’s procurement of high-risk products and raw materials, consider giving preference to suppliers participating in recognised certification schemes.

Coordinators: All ministries

Deadline: Running

Trade in military equipment [pages 18-20]

Implements Principles 5, 6 and 7

Trade in military equipment is one of the riskier sectors from the perspective of human rights. While the manufacture of military equipment and arms is a traditional segment of Czech industry, these are goods that are susceptible to abuse, so they must be subject to regulation. A legislative act establishes procedures for the authorisation of trade, conditions for the granting and use of licences, and general inspections of trade in military equipment, including penalties.

In the Czech Republic, there are two stages to checks on external trade in military equipment. The first stage is authorisation to engage in external trade in military equipment. The authorisation specifies specific items of equipment in which the holder can trade, and lists the countries where trade is permitted. Authorisation is issued by the Ministry of Industry and Trade on the strength of opinions submitted by the Ministry of Foreign Affairs (encompassing foreign-policy interests, commitments under international treaties and membership of international organisations, including the protection of human rights), the Ministry of the Interior (encompassing public policy, security and protection of the population), and the Ministry of Defence (covering the provision of national defence).

The second stage is the licence for external trade in military equipment, which is required to carry out specific deals. The decision on whether to issue or refuse a licence rests with the Ministry of Industry and Trade, again in response to binding opinions from the Ministry of Foreign Affairs (other than applications for transfer licenses for EU Member States), the Ministry of the Interior and, where the military equipment is significant, the Ministry of Defence (these opinions cover the same areas as those addressed for authorisation to engage in foreign trade in military equipment).

Checks on the use of exported arms rely, in part, on information in the end-user certificate (EUC). If doubts have arisen or if there are reasons for heightened prudence, the state may reserve the right to conduct a subsequent spot check via its embassy, and/or to make the delivery of military equipment conditional on the presence of state representatives at the destination.

Although this process is consistent with standards within the European Union, it is occasionally castigated on grounds of transparency, the amount of information released by the state, and the timeliness of access to such information. Every year, the Ministry of Industry and Trade publishes an Annual Report on Checks on the Export of Military Equipment, Small Arms for Civilian Use and Dual-use Items and Technology. In view of the sensitivity of this whole issue, these reports are consulted with the National Security Council and are subsequently approved by the Government ahead of publication. The annual reports are relatively lengthy, respect the methodology for drawing up common annual reports of the European Union, and mainly contain summaries and statistics. So much data is processed, and it is so taxing, that these annual reports tend not to be approved by the Government until July of the following year. The EU’s summary annual reports are published with a time lag of more than a year, which has also been criticised.

The Czech Republic also reports regularly to the UN on international transfers of conventional arms, small arms and light weapons. In accordance with Article 13 of the Arms Trade Treaty, the Czech Republic also submits a report to the Treaty Secretariat for the preceding calendar year concerning authorised or actual imports and exports of conventional arms. Information on specific transactions may be reported to the extent permitted by the protection of classified information and trade secrecy. However, non-profit organisations such as Amnesty International continue to criticise the Czech Republic for exporting weapons to “high-risk countries”.

Current state of play:

  • Trade in military equipment is regulated beyond the framework of national legislation and at EU level, in particular by Council Common Position 2008/944/CFSP defining common rules governing control of exports of military technology and equipment. That Common Position defines eight binding criteria for assessment of applications to export military equipment, including the need to consider the risk of potential violations of human rights.
  • The Czech Republic participates in a number of international schemes to regulate the arms trade. In particular, it is party to the Arms Trade Treaty (ATT), which provides that if there is a clear risk that the conventional arms to be exported might be used in the commission of serious violations of international humanitarian law, export will be denied.
  • The Ministry of Industry and Trade publishes annual reports on trade in military equipment. Some information is provided by the Ministry at half-yearly intervals outside of that process.
  • The Czech Republic regularly reports to international organisations or within the scope of international control regimes on the basis of binding international treaties.

Tasks:

  • Expand the half-yearly overviews issued by the Licensing Administration to include further information releasable in accordance with legislation and Government resolutions.

Coordinator: Ministry of Trade and Industry

Deadline: 30 June 2019

  • Hold regular meetings between the Ministry of Foreign Affairs, the Ministry of Industry and Trade and the non-governmental sector on issues of transparency and human rights in trade in military equipment.

Coordinators: Ministry of Industry and Trade, Ministry of Foreign Affairs

Deadline: Running

  • Offer all necessary cooperation and assistance to the Parliamentary Subcommittee on Acquisitions of the Ministry of Defence, Trade in Military Equipment and Innovations of the Armed Forces of the Czech Republic so that regular assessments can be carried out of the human rights risks posed by export licences and by military equipment exports that have been made.

Coordinators: Ministry of Industry and Trade, Ministry of Foreign Affairs

Deadline: Running

Public Procurement [pages 22-24]

Implements Principle 6

In OECD states alone, public procurement accounts for 12% of GDP. Worldwide, public contracts are estimated to be worth more than EUR 1,000 billion. On some markets, contracting authorities are so prominent that they can influence standards and practices throughout a sector by flexing their market strength. This is why numerous states have legislated the requirement of certain human rights standards among their suppliers. Other countries enable these standards to be incorporated into contracts. In addition, certain international standards, such as ISO 26000, contain criteria recommended for human rights risk assessments. EU law initially expressly refers to “labelling”, making it possible to incorporate labels and certificates attesting to the environmental, social and human rights properties of products or suppliers into procurement evaluations.

Aspects of human rights protection can be encouraged in public procurement after weighing up the nature of a public contract and the deliverable; specific human rights requirements must reflect these aspects accordingly. In practice, human rights protection requirements can be factored into the conditions for participation in award procedure or into rules for the evaluation of bids and must be verifiable, for example, in the form of a label. It is always advisable to reflect these requirements in the contract between the contracting authority and the supplier. The protection of and respect for human rights should also be taken into account in public procurement. In their public procurement, contracting authorities should know how to reflect and evaluate environmental and social requirements and the protection of human rights correctly in relation both to the supplier and, as far as practicable, the supplier’s subcontractors. In this respect, guidance should be drawn up for award procedure in accordance with human rights. This guidance should encompass specific practical examples, including model contractual provisions and/or a model tender dossier. The guidance should be accompanied by an overview of international platforms and initiatives sharing experience and information on socially responsible public contracts. This guidance should be preceded by consultations and should be produced in collaboration with business associations.

Current state of play:

  • The recitals of the Public Procurement Directive expressly provide that, when selecting the most appropriate participant in award procedure, it is not always necessary to limit the assessment to the price. Requirements concerning environmental protection and the support of sustainable development can be set, and social aspects can be incorporated. This forms a framework for the interpretation of Czech law.
  • ECJ case-law makes it possible (subject to compliance with the conditions of transparency, non-discrimination and equality) to demand, in public procurement, various certificates and labels attesting to the environmental, social, human rights and other similar impacts of the goods.
  • Under the Public Procurement Act, requirements relating to the environment and social consequences of a public contract may be applied to participants in the award procedure.
  • A number of local government authorities are involved in voluntary initiatives for socially responsible public contracts, such as Fairtrade Town.
  • Guidance on a responsible approach to public procurement and purchasing is being drawn up.

Tasks:

  • Incorporate human rights issues into the guidance that is being drawn up.

Coordinator: Ministry of Regional Development

Co-coordinators: Ministry of Labour and Social Affairs, Ministry of Human Rights

Deadline: 31 December 2017

  • Incorporate information on the social and human rights context of public contracts – and on basic opportunities to take these issues into account – into training courses for contracting authorities.

Coordinator: Ministry of Regional Development

Deadline: 31 December 2018