Guiding Principle 6
States should promote respect for human rights by business enterprises with which they conduct commercial transactions.
States conduct a variety of commercial transactions with business enterprises, not least through their procurement activities. This provides States – individually and collectively – with unique opportunities to promote awareness of and respect for human rights by those enterprises, including through the terms of contracts, with due regard to States’ relevant obligations under national and international law.
What National Action Plans say on Guiding Principle 6
The principle is mainly covered in one action point, Action point 13 on public procurement.
Action point 13, Renforcer et contrôler le respect des droits de l’Homme dans les marchés publics [Strengthen and monitor the respect for human rights in public procurement], covers specific plans for the federal governments as well as all three Belgian regions.
- The federal government engagements include:
- An examination by the Working Group on Sustainable Public Procurement of the Interdepartmental Commission for Sustainable Development on how to strengthen and optimize the integration of respect for human rights into the purchasing policy of the public authorities. This will include stakeholder consultations.
- The transposition of the EU public procurement directives (Directives 2014/24/EU and 2014/25/EU). Monitoring activities will pay particular attention to the application of award criteria, in particular to the application of price as the sole award criterion.
- The government will analyze the best way to verify and monitor compliance with the criteria set out in the procurement procedure for products and services in several sensitive sectors, some of which are produced in so-called “risk” countries, in order to ensure that the requirements relating to respect for human rights set out in the specifications have been complied with. Existing best practice in European countries will be used as sources of inspiration.
- The Working Group on Sustainable Public Procurement analyzed various case studies on monitoring compliance with ILO clauses and human rights in supply chains in order to test, through pilot projects, whether such an initiative is feasible in Belgium. Implementation and follow-up of this initiative will be carried out in cooperation with the relevant federal, regional and local administrations.
- The Wallonia engagements include:
- As participant of the Working Group on Sustainable Public Procurement the public service of Wallonia will also be part of above-mentioned research with the aim of identifying optimization processes for the integration of human rights in public procurement policy.
- Moreover, the Wallonia and Bruxelles regions have established a portal for public procurement in 2009. A series of tools have been developed and/or gathered into the portal to favour the inclusion of environmental, social and ethical criteria in public procurement.
- In 2013, the government of Wallonia decided to set up a purchasing policy on
sustainable public procurement, in which Wallonian contracting entities are invited to register for their purchases of supplies, services and works.
- Reflections and workshops are conducted to strengthen the environmental, social and ethical clauses in public procurement relating to certain product categories. This includes human rights.
- By the end of 2016 the public procurement plan will be renewed for the period 2017-2019 and will include several actions to make purchases more sustainable in Wallonia.
- Additionnally, Wallonia will organize a competition to promoting public procurement contracts that incorporate ambitious environmental, social and/or ethical criteria, rewarding public purchasers and companies that have concluded such contracts.
- The government of Bruxelles’ engagements include:
- In 2014, the region adopted an order on the inclusion of environmental and ethical clauses in public procurement by regional and local authorities. The aim of including such ethical clauses is the respect for the fundamental rights of persons or social impartiality. Within each contracting authority there shall also be appointed at least one contact person responsible for ensuring the implementation of this order; the implementation of which shall be assessed every 3 years.
- The Flemish engagements include:
- In 2016, the 2016-2020 Plan on Flemish Public Procurement was approved, a plan that emphasizes innovation, sustainability, reduction of human rights violations in supply chains, professionalization and access of SMEs.
- Pilot projects (related to plan mentined above) in this context the political fields of “Employment and Social Economy” and “Chancellery and Public Governance” will, together with the buyers of the various contracting authorities, monitor the credibility of the supporting documents (concerning the respect for human rights, etc.) and the respect for ILO core Conventions. This is necessary in order to verify that the human rights criteria included in the conditions are also effectively complied with. In this respect, the Flemish Authority will concentrate primarily on the procurement of textile products.
Support buyers in the integration of social criteria in public procurement contracts. It especially includes diversity, accessibility, and the inclusion of people from vulnerable groups. The pilot project aims at giving a practical benchmark instrument to buyers, which can be used systematically in each part of the public contract.
It is also briefly mentioned in the Action point 16, Promouvoir les rapports sociétaux, droits de l’Homme inclus [Promote social reporting, including human rights], “Regarding reporting by public services, the federal public services will have to draw up a social report every second year, with the objective of cross-cutting sustainable development in management of contracts. This report should be prepared in accordance with the guidelines of the Global Reporting Initiative. The reports will be published, inter alia, through the website: http://www.rs.belgium.be/en/”
Pillar I. The State Duty to Protect Human Rights
Strand 5: Public Contracts [pages 42-44]
During activities with citizens’ participation, it was repeatedly said, as highlighted by the Guiding Principles, that the State must lead by example and include human rights standards in the purchase or goods and services. Thus, the State not only integrates these standards in their own operations, but it also influences the actions and mechanisms of business enterprises celebrating contracts with the State.
5.1 The Chilean System of Public Purchases, (Chilecompra), has the mission to facilitate the contracting of goods and services by the State through a public market web platform, in the different purchase procedures. Chilecompra will:
o Incorporate an “Integrity Agreement” clause38, where the supplier bounds himself/herself to respect human rights in accordance with the Guiding Principles. Through the integrity agreement, suppliers commit, inter alia, to act with transparency, probity and truthfulness regarding the information and details submitted in the tender papers. This clause will be included in all terms and conditions of the Framework Agreement, and use thereof will be encouraged in the terms and conditions of public tenders. For the correct understanding of this clause, Chilecompra will train suppliers in its contents, including the issues of business and human rights.
o Assess the possibility to gather, through a relevant guideline, recommendations for buyers aimed at safeguarding the respect for human rights in the process of acquiring goods and services.
o Carry out initiatives allowing to strengthen the information tool of the public purchase system. This will be made possible by adhering to SEGPRES Open Government Plan, under the commitment to create a set of Guidelines and a Policy of open date promoting and developing the use of open data in public purchase procedures to strengthen transparency of the Chilean System of Public Purchases and foster probity and efficiency in this area.
o Strengthen the inclusion of sustainability considerations in public purchase procedures, specifically though the following:
- Development of a joint project with the Ministry for the Environment aimed at drafting policies for institutional purchases that take sustainability aspects into consideration.
- Framework agreements including sustainability considerations relevant for the industry.
- Online shop of the framework agreement including identifiable sustainability seals.
- An Action Plan aimed at encouraging the participation of women in the system of public purchasing, through certain actions including a campaign to encourage the use the Sello Empresa Mujer seal developed in 2016, which identify companies that are owned or led by women; an intensive work with purchaser to encourage the use of the Sello Empresa Mujer seal as a criterion in their purchases; training workshops for women that supply the State.
- Commitment with the initiative “She Trades” led by the United Nations, which seeks to link business women with the marketplace, thus strengthening the economic actor role of women.
5.2 The Ministry of Foreign Affairs will gather information about the criteria used in purchases and tenders carried out by the institution with the purpose of identifying potential gaps and proposing improvement to the system
5.3 The INDH will adopt a human rights and environmental policy for the purchase of goods and services.
5.4 The Ministry of Social Development will:
o Organise training, through the Division of Public-Private Cooperation, to be given to the Procurement Department of the Administration and Finance Division of the UnderSecretariat of Social Assessment, about the United Nations Guiding Principles on Business and Human Rights, releasing Chilecompras guidelines from their direct impact on human rights.
o The National Disability Service will review the operation of Guideline 17 about inclusive public purchases that promote equal opportunities in the public marketplace, with the purpose to improve its enforcement in line with the Guiding Principles.
II. The State as an economic actor
Including human rights in the State’s business activity [pages 12-13]
To this end:
2.1 Within the following year of the Plan being launched, the Task Force will list the basic criteria applicable to decision making in the selection and awarding public procurement processes. They will then assess and analyse, jointly with such State entities with the highest procurement weight, the inclusion of such criteria in their awarding processes.
2.2 The Colombia Compra Eficiente agency will adjust the current public procurement system to comply with such criteria as for respect for human rights, by including them in their objectives and including measures to make sure that suppliers execute the human rights due diligence.
2.3 The Ministry of Commerce, Industry and Tourism emphasizes the inclusion, in the business negotiations with other States, of clauses or criteria on human rights; this will be considered in the negotiation of future agreements, review of current agreements, and/or unilateral or joint statements with the business partners.
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.
- 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
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.
- 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
- 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
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.
- 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
2. State Duty to Protect
2.3 Actions Taken
Promotion of human rights in commercial transactions [page 13]
The Government has committed itself to promoting responsibility in public procurement through several initiatives among other:
– By publishing a set of common guidelines for responsible procurement in the public sector in collaboration with municipalities and other relevant parties. The guidelines will serve as a practical tool to determine when and how the UNGPs can be applied in connection with public procurement (GP 6). The tool is available in Danish: www.csr-indkob.dk.
Appendix 1. Overview of the implementation of the state duty to protect
Status in Denmark (initiatives implemented before the UN ratification of the Guiding Principles)[page 29]
— As part of the 2008 national action plan, a requirement that all future joint state supply contracts systematically should embed social responsibility as articulated in the conventions that provide the foundation for the UN Global Compact.
— All state procurement officers have access to guidelines for embedding social responsibility.
Initiatives taken or planned as a dedicated measure to implement the UNGPs (after the UN ratification of the Guiding Principles)
— To promote responsibility in public procurement, the Government has developed common public sector guidelines for responsible procurement in collaboration with municipalities and other relevant parties. The guidelines are a practical tool to determine when and how Corporate Social Responsibility can be applied in connection with public procurement. The tool is available in Danish: www.csr-indkob.dk.
Government covering note on the UN Guiding Principles on Business and Human Rights National Action Plan [page 6]
Social criteria in public procurement
The EU Procurement Directive better allows social issues to be more effectively taken into consideration in public procurement. The possibilities for emphasising quality factors and social responsibility afforded by the Directive are being used in the comprehensive amendment of the Act on Public Contracts. Amendment of the Act on Public Contracts is being carried out under the Ministry of Employment and the Economy in cooperation with stakeholders.
2.The state and companies
2.1 The state as an economic operator [page 20]
Socially Responsible Procurement
The value of public procurement in relation to EU gross domestic product is approximately 17 per cent. It is likely that such a large amount includes procurement that may have significant impacts on human rights. In its Resolution on Corporate Social Responsibility, the Finnish Government encourages public procurers to take social aspects into consideration. For the promotion of human rights, the procurement act allows consideration of aspects related to employment, working conditions, the position of vulnerable individuals and corporate social responsibility in connection with public procurement. The Ministry of Employment and the Economy has published a guide to socially responsible procurement, with practical examples gathered from procurement units, explaining how social aspects can be taken into consideration in each stage of the procurement process. In addition, the Ministry maintains the CSRkompassi.fi website (available in Finnish and Swedish, same material also in English), with information and material for taking social aspects into consideration in long production chains related to public procurement. In connection with the consultations organised by the working group, the idea of a statutory obligation to take social aspects into consideration in public procurement was presented. For instance, there is a federal obligation in the United States to include terms on the prohibition of the worst forms of forced labour and child labour in public procurement. In Finland, procurement legislation is procedural in nature, and it makes no statement on what is procured or on what terms. It provides guidelines for the types of procedures that should be used in order for the procurement process to meet the legal principles related to transparency, non discrimination and equality. There are approximately 30,000 to 40,000 procurement objects, which means that setting a categorical obligation for all procurement may lead to significant challenges in an individual procurement. A categorical obligation would produce the need to allocate monitoring resources to procurement with only a small risk related to human rights impacts. The third challenge related to the proposal is the functionality of the compelling guiding methods. Same of the state procurement is made through Hansel Ltd., and same directly from agencies and ministries. Except for procurement legislation, the state has no other power to guide municipal procurement.
The Act on Public Contracts is currently being amended on EU directives so that social aspects can be taken into consideration mare easily in the future.
As a follow-up measure, the working group proposes that:
- references to Section 49 of the Act on Public Contracts and to the Guide to socially responsible procurement be added to the procurement guidelines for ministries; and
- the responsibility themes in the state procurement manual be updated;
- in connection with the reform of the public procurement online notification service “Hilma”, a field be added to the sections containing procurement data to indicate whether social aspects have been taken into consideration in the procurement. This would improve statistics related to social procurement and encourage the consideration of social aspects in the future.
- A report will be made on the product groups that pose the highest risk for human rights violations. The report would increase the awareness related to responsible procurement and help target the consideration of the social aspect for the product groups that pose the highest risk.
- Finland promotes socially responsible public procurement in the EU by distributing information and experiences of Finnish practices.
Principal responsible parties: Ministry of Finance, Ministry of Employment and the Economy, schedule by the end of 2015.
I. The Obligation of the State to Protect Human Rights
Public procurement policy [pages 25-26]
Under Article 15 of Decree 2016-360 of 25 March 2016, contracting authorities may choose to include general administrative terms and conditions in public contracts. These terms and conditions cover general rather than specific provisions (performance of services, payment, auditing of services, presentation of subcontractors, deadlines, penalties, general conditions, etc.). Article 6 of these terms covers the protection of labour and working conditions, and states that contract holders must respect the working conditions set down in the labour laws and regulations of the country in which workers are hired or, otherwise, ILO’s eight fundamental conventions where these have not been incorporated into the country’s laws and regulations.
The National Action Plan on Sustainable Public Procurement seeks to help the State, local government and hospitals make sustainable purchases as per Ordinance 2015-899 of 23 July 2015 and Decree 2016-360 of 25 March 2016 on public procurement.
This national action plan encourages those making purchases for the State or local government to introduce social and environmental clauses in public contracts. To this end, it sets specific targets for social and environmental provisions. These targets may be reflected in special requirements in the tender’s terms and conditions, specific criteria used to select suppliers’ bids and/or performance clauses supporting social and/or environmental progress that are applicable to successful tenderers. A register (of public procurement contracts worth over €90,000 with provisions) is kept by France’s Economic Observatory for Public Procurement, with the results being published annually.
The new legal framework for public procurement gives purchasers several ways of addressing social and environmental impacts. Having transposed Article 57 of Directive 2014/24/EU of 26 February 2014 on public procurement, French law now states that public contracts may not be awarded to economic operators that have been found guilty of fraud, corruption or the trafficking or exploitation of human beings (Article 45 of Ordinance 2015- 899). Article 59 of Decree 2016-360 obliges public purchasers to reject bids that do not comply with applicable laws, particularly in the social and environmental fields. Transposing Article 69 of the above mentioned directive, the decree also enables purchasers to reject tenders that are abnormally low because they do not respect applicable environmental, social and labour obligations established by French law, European law, collective agreements or by international environmental, social and labour law provisions (Article 53 of the above mentioned ordinance and Article 60 of the above mentioned decree). This also applies to subcontractors (Article 62 of the above mentioned ordinance and Article 133 of the above mentioned decree). Finally, over and above the analysis of tenders, Article 18 of Directive 2014/24 requires Member States to “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 (…) international environmental, social and labour law provisions.”
Proposal for Action No.4
- France ensures that the UN Guiding Principles and other established international texts are respected in public procurement guides, public procurement policies and training for purchasers.
1.The State Duty to Protect
1.2 Public procurement [page 21]
The total value of public procurement contracts amounts to about €280 billion a year. The federal, state, and local authorities bear particular responsibility in this domain, in that they must discharge the state duty to protect human rights and ensure that the use of public funds does not cause or foster any adverse impact on human rights. By placing greater emphasis on sustainability in their procurement transactions, public
authorities not only perform their function as role models but can also wield significant leverage in increasing the supply of sustainable products. The 2030 Agenda also makes explicit reference to sustainable public procurement as an instrument in the quest for sustainable development.
The current situation
Germany has fully transformed into domestic law its obligations to protect human rights under international agreements. This applies, for example, to the prohibitions of child labour and forced labour that are imposed by the ILO core conventions. If enterprises break the law in Germany in either of these respects, they can be disqualified from receiving public contracts. The Federal Government is already implementing a number of measures designed to promote sustainable public procurement by federal, state and local authorities and institutions:
- Since 2010, the federal, state and local authorities have been cooperating in the framework of the Alliance for Sustainable Procurement, chaired by the Federal Government. Its purpose is to contribute to a significant increase in the percentage of sustainable goods and services among the purchases made by public bodies. The Alliance enables the main public procuring bodies to share their experience and is intended to contribute to more widespread application of uniform national and international standards by all three tiers of government – federal, state and local.
- Since 2012, the Centre of Excellence for Sustainable Procurement at the Procurement Office of the Federal Ministry of the Interior has been assisting public contracting bodies in applying procurement criteria. The Centre of Excellence is available to assist procurers in situ, for example by providing advice in person or by telephone and by forwarding information material. In 2014, the Centre of Excellence, along with the BITKOM association of German digital goods and service firms, drew up an initial sectoral agreement in the form of a Declaration on Social Sustainability for IT, which provides for adherence to the ILO core labour standards in procurement procedures. Other sectoral agreements on critical product categories are planned.
- Other Federal Government initiatives and support measures are to be found in the Programme of Sustainability Measures, into which Federal Government targets for sustainable procurement have been incorporated.
- The Federal Government will examine whether and to what extent binding minimum requirements for the corporate exercise of human rights due diligence can be enshrined in procurement law in a future revision. It will draw up a phased plan indicating how this aim can be achieved.
- The expertise of the Centre of Excellence for Sustainable Procurement in matters of human rights, including the application of the ILO core conventions to procurement procedures, and in the implementation of the UN Guiding Principles will be used to expand the knowledge of procurement staff in the context of training courses.
- “Kompass Nachhaltigkeit” (sustainability compass), an information platform funded by the Federal Government, provides an overview of sustainability standard systems and supplementary requirements and assists public contracting bodies in incorporating a sustainability dimension into their procurement procedures.
- The “Fair Procurement Network“ of municipalities, which is part of the service agency Communities in One World, provides advice to municipalities, among other things, and familiarises local authorities with the issue of sustainable procurement through specialised promoters. An information and dialogue campaign entitled “Deutschland Fairgleicht “ informs municipal decision-makers and contracting bodies and raises their awareness of sustainable procurement. Following the reform of procurement law in 2016, with which three new EU procurement directives were transposed into German law, the new Part IV of the Restraints of Competition Act lays particular emphasis on observance of the law, especially taxation, labour and social legislation (sections 97(3) and 128(1) of the Act). The new legal framework enables procurement bodies to make greater use of public contracting to underpin the pursuit of strategic goals such as social standards, environmental protection and innovation.
Section 2. Current legislative and regulatory framework
Procurement [page 14]
Public procurement in Ireland is governed by EU and national law and national guidelines. The office of government Procurement is committed to ensuring that human rights related matters are reflected in public procurement and embedded in national public procurement policy. The EU treaty principles of equal treatment and non-discrimination, transparency, mutual recognition, proportionality, free movement of goods and services and the right of establishment must be observed in all tenders. Most recently, the 2014 EU directives on Public Procurement, which have been transposed into Irish law contain specific provisions excluding tenderers who are guilty of certain human rights infringements from participation in public procurement. Extensive general guidance on legal procurement requirements is available to public authorities on the Irish portal for public procurement.
IV. Government responses
Current Activities and Future Commitments [page 21]
B. Operational Principles
The State-business nexus
Guiding Principle 6
Italy is committed to ensure that business enterprises that: …i iii) contract and conduct commercial transactions with the State, operate in full compliance with human rights enshrined in domestic legislation, international regulations and standards, and soft law instruments.
Italy fully adheres to the principles of enforcement of socially responsible procurement and is engaged in ensuring that the respect for human rights is taken into consideration in all procurement stages. The Italian Anti-Corruption Authority (A.N.AC.) supervises and regulates the entire public procurement market in order to ensure compliance with: i) the principles of legitimacy and transparency; ii) the effective performance of contracts; iii) anti-corruption rules. In this regard A.N.AC. and the Italian Competition Authority signed a MoU in December 2014 to establish new criteria for the assignment of the legality rating to companies. In its procurement guidelines, A.N.AC. advises the contracting authorities to include the legality rating among the criteria used to select the most economically advantageous offer.
Italy has adopted the Legislative decree 19 April 2016, n.50, implementing the EU Directives, introducing a framework of a “socially responsible public procurement policy” and reputational requirements in public procurement awarding. With regard to companies directly or indirectly owned by the State, and following a joint effort with the Minister of Economy and Finance, in 2015 A.N.AC. issued guidelines on: i) public disclosure of corporate decision-making processes on the rotation of managers and executives; ii) establishment of new conflict of interest rules; iii) definition of risk areas and protection of whistle-blowers; iv) respect of the rights of workers involved.
Export Credit Agencies and Investment Insurance Agencies (ECAs) provide government-backed loans, insurance and guarantees to support business enterprises industrial projects abroad, especially with regard to complex and risky environment. The strategic role of these public agencies (SACE and SIMEST) make them more exposed to the risk of being associated or linked with human rights infringement: they both apply the OECD Recommendation on Common Approaches and Environmental Due Diligence and conduct risk analysis on environmental and social impact in their operations.
Planned Measures [page 22]
To achieve the goals set in Principles 4, 5 and 6, and within the overall framework of the implementation of EU directives, the Italian Government will conduct the following activities to be jointly developed and monitored by CIDU and A.N.AC:
Strengthen the implementation of socially responsible public procurement rules by adopting a comprehensive framework of reference for bidders coordinated by A.N.AC and covering: anticorruption, non-financial disclosure, supply chain, environment, labour, equal opportunities and non-discrimination.
The Lithuanian NAP does not contain a reference to GP6.
3. Results of the consultations and government response
3.2 Policy Coherence [page 18]
Sustainable procurement policy
Under the social conditions of national sustainable procurement policy, companies supplying the government with goods and services are require to respect human rights. These social conditions have been included in all central government EU contract award procedures since 1 January 2013, and the municipal, provincial and water authorities are being encouraged to apply them, too. Suppliers can fulfil these conditions in various ways – by joining a reliable multi-stakeholder supply chain initiative (quality mark or certification institute) or, if they have any doubts, carrying out a risk analysis.
The consultations showed that sustainable procurement policy is not regarded as effective in implementing social and human rights criteria.
Companies are often unaware of risks. Government suppliers should perform a risk analysis to show that they respect human rights in accordance with the UN Guiding Principles. In its 2014 evaluation of the sustainable procurement policy social conditions, the Ministry of the Interior and Kingdom Relations will examine whether this policy is in line with the OECD Guidelines and the UN Guiding Principles, and whether central government policy can also be applied by the municipal, provincial and water authorities.
4. Action Points
Policy coherence [page 41]
In its 2014 evaluation of the social conditions of sustainable procurement policy, the Ministry of the Interior and Kingdom Relations will examine whether this policy is in line with the OECD Guidelines and the UN Guiding Principles, and whether central government policy can also be applied by the municipal, provincial and water authorities.
2. The State duty to protect human rights
2.5 Public procurement [page 25]
“(…) Since the UN Guiding Principles and the OECD Guidelines do not distinguish between public-sector and private-sector business conduct, it is important that the state should have high standards. It is not logical to have high expectations of private companies if the state does not set the same expectations for itself. The state is also Norway’s largest purchaser, a fact that was emphasised by companies and organisations in their input t o the action plan. For example, in 2013 the public sector purchased goods and services worth NOK 432 billion. The state’s procurement practices should therefore reflect the UN Guiding Principles.
The Government has held a public consultation on a proposed amendment to section 6 of the Procurement Act to include a provision stating that contracting authorities should have adequate procedures for ensuring social responsibility in connection with public procurement. The Agency for Public Management and eGovernment (DIFI) provides guidance on such matters.
continue the efforts to develop measures to promote respect for international human rights in public contracts.
Pillar I. The State’s duty to protect human rights
2. Public procurement [page 17]
On 28 July 2016, an amendment to the Public Procurement Law (PPL) came into force, introducing a number of changes related to the implementation of new EU directives in the field of public procurement in the Polish legal system.3 One of the objectives of the new regulation is to enable contracting institutions to make better use of public procurement to support social policy objectives, for instance, by introducing a requirement to hire contractors and subcontractors under employment contracts. Recognising the problems of contracting authorities with the practical application of Article 29(3)(a) of the PPL, and intending to ensure the most effective application of employment requirements, the Public Procurement Office drafted and published on its website a legal opinion on the application of Article 29(3)(a) of the PPL. The opinion takes into consideration the position of the Inspector-General for the Protection of Personal Data and, while providing guidance regarding the ability of contracting authorities to verify the fulfilment by contractors and subcontractors of the requirement to employ personnel performing activities envisioned in the contract, together with the sample provisions referred to in Article 36(2)(8)(a) of the Public Procurement Law.
According to Recommendations of the Council of Ministers on the consideration of social aspects in public procurement by the government administration, the heads of government administration units are obliged to analyse the possibility of applying social clauses to all public procurement proceedings, including contracts that do not comply with the provisions of the Public Procurement Law.
Successful implementation of social goals through public procurement requires educational activities among public procurement market participants. The Public Procurement Office carries out educational activities aimed at promoting social issues in public procurement primarily on the basis of the National Action Plans for Sustainable Public Procurement. The National Action Plan for Sustainable Public Procurement 2017-2020 calls for educational activities such as conferences, training, or the preparation of relevant publications.
Plans are in store to identify and publish a catalogue of good practices and to develop specimen documents. As part of the planned educational activities, the Public Procurement Office intends to present to the Polish contracting authorities, among other things, the possibility of including public symbols of a social nature based on the criteria of respecting human rights in the production of goods subject to a public contract in the procurement procedure.4 With respect to reporting information on sustainable public procurement, the contracting authority will, under the new rules for drawing up annual reports on contracts awarded, include detailed information on social aspects in the new Part VIII of the annual report form (Contracts to which the provisions of the law taking into account social aspects apply). This will help obtain comprehensive data about the social aspects incorporated into public procurement.
III. Areas of Actions and Measures
Pillar I. The State Duty to Protect Human Rights
Operational Principles [page 18]
Guiding Principle 6
- The Government will examine how to apply criteria aligned with the Guiding Principles in relation to Royal Legislative Decree 3/2011, of November 14, which approves the revised text of the Public Sector Contracts Law, the Law 16 24/2011, of 1 August, of contracts of the public sector in the fields of defense and security, and other regulations in force in the same field.
- The Government will ensure strict respect for human rights by companies in commercial transactions with other companies, establishing the necessary measures so as to: not discriminate against SMEs; respect the provisions of the Treaty of the EU on nondiscrimination; equal treatment and transparency: and no administrative charges are to be added to contracting authorities or companies.
Annex: Measures planned
Regulations and legislation [page 27]
The EU has adopted new procurement directives: a Directive on public procurement, a Directive on procurement by entities operating in the water, energy, transport and postal services sectors, and a Directive on the award of concession contracts. The recitals of the Directives expressly state that the contracting authorities or entities in their contracts can require suppliers, in the performance of the contract, to comply in substance with the provisions of the basic International Labour Organisation (ILO) Conventions. Such conditions might also be intended to favour the implementation of measures for the promotion of equality of women and men at work, the increased participation of women in the labour market and the reconciliation of work and private life, the protection of the environment or the recruitment of more disadvantaged persons than are required under national legislation. Furthermore, the new directives prescribe that the contracting authorities or entities exclude tenderers who have been found guilty in a definitive judgment of crimes including child labour and other forms of human trafficking in accordance with Directive 2011/36/EU. The Directives are to be transposed into national law by April 2016. (…)
5. National Action Plan on Business and Human Rights
5.7 Pillar 1: state duty to protect
5.7.3 The State-business nexus [page 24]
Guiding Principle 6
The federal government is committed to ensuring that the value chains of goods purchased by the public sector are free of human rights abuses. The federal government will employ the following policy instrument (PI) to implement Guiding Principle 6:
PI21 Human rights criteria in public procurement at federal level
Public procurement practices in Switzerland are governed by the Federal Act on Public Procurement (PPA, SR 172.056.1) and the related Ordinance69 . Article 8 para. 1 PPA states that the federal government awards contracts for goods and services in Switzerland on the following conditions: business enterprises must respect the usual health and safety regulations and working conditions at the location where the good or service is provided, and also ensure that men and women receive equal pay for equal work. Furthermore, procurement processes that are not subject to WTO requirements must take into account the training places offered by competing Swiss bidders which have submitted bids of equal value. Where goods and services are provided abroad, providers must comply at a minimum with the eight core conventions of the International Labour Organization (ILO).
The federal government’s public procurement legislation is currently in revision in response to the changes made to the WTO Agreement on Government Procurement (GPA) in 2012. Sustainability aspects (economic, environmental and social) are now to be codified in law, rather than being governed at ordinance level, as is currently the case (Art. 2a draft PPA).
The federal government’s purchasing offices ensure sustainable procurement practices while awarding contracts according to the principles of equal treatment, transparency, competition and the economic use of public funds71. The Federal Procurement Conference addressed the consideration of social and environmental factors in detail in its recommendation on sustainable procurement. It recommends applying sustainability criteria in procurement procedures. Sustainability factors may be included as award criteria. A tool for country-specific risk assessment permits an evaluation of the credibility of independent declarations.
Furthermore, the Sustainable Procurement monitoring programme was introduced as part of the federal government’s procurement audit in 2013.
The federal government is also looking into creating a national platform for sustainable public procurement. The aim of this platform would be to promote sustainable public procurement and ensure an exchange of information on this issue between the different levels of government.
The Federal Council attaches great importance to sustainable procurement practices and will continue its current activities in this field during the reporting period.
The UK 2013 NAP
The State’s Duty to Protect Human Rights
The existing UK legal and policy framework
(ii) sought and are committed to ensuring that in UK Government procurement human rights related matters are reflected appropriately when purchasing goods, works and services. Under the public procurement rules public bodies may exclude tenderers from bidding for a contract opportunity in certain circumstances, including where there is information showing grave misconduct by a company in the course of its business or profession. Such misconduct might arise in cases where there are breaches of human rights. In addition, UK public bodies are required to have due regard for equality-related issues in their procurement activity.
The UK 2016 updated NAP
2. The State’s Duty to Protect Human Rights
Government commitments [page 10]
18. The Government will do the following to reinforce its implementation of its commitments under Pillar 1 of the UNGPs:
(iii) Continue to ensure that UK Government procurement rules allow for human rights-related matters to be reflected in the procurement of public goods, works and services, taking into account the 2014 EU Public Procurement Directives and Crown Commercial Service guidance on compliance with wider international obligations when letting public contracts. In addition, UK public bodies are required to have due regard for equality-related issues in their procurement activity.
The National Action Plan
Leading by example
Outcome 1.3: Leverage U.S. Government Purchasing Power to Promote High Standards [pages 10-11]
Research and Tools on Preventing Trafficking in Global Supply Chains: The State Department funded research on “Strengthening Protections Against Trafficking in Persons in Federal and Corporate Supply Chains” to develop a set of online tools and resources to help federal contractors and corporations analyse, prevent, and address human trafficking risks in their global supply chains. In 2016, State and non-governmental organisations launched ResponsibleSourcingTool.org. This online platform focuses on the sectors and commodities at greatest risk for trafficking and provides guidance on developing effective management systems. State anticipates funding the development of additional sector-specific tools and the maintenance of the site over the next five years. In addition, DOL is funding research on forced labor in specific industries’ global supply chains and an ILO-led Global Business Network on Forced Labor. Implementing Department or Agency: State, DOL
SFTool Social Sustainability Procurement Best Practices: Through the Sustainable Facilities (SF)Tool, the General Services Administration (GSA) makes available recently released content providing best practices for addressing social sustainability impacts, including human rights and labor rights impacts, on high risk procurements. These best practices provide a detailed framework for how social sustainability risks should be assessed by USG procurement personnel at the pre-award and post-award stages of a federal procurement. The SFTool also references associated tools and provides sample contract language that can be used by organisations wanting to address their social sustainability risks on procurements. Implementing Department or Agency: GSA
Enhanced Information Sharing Among State and Local Governments on Public Procurement Best Practices: The White House Office of Intergovernmental Affairs (IGA) will coordinate a dialogue among selected state and local government officials and the federal government on ways to better protect human rights in public procurement. State and local governments represent significant purchasing power through procurement policies. Implementing Department or Agency: IGA
Compliance with Procurement Regulations: Pursuant to E.O. 13673, DOL and OMB will work with other agencies to designate agency Labor Compliance Advisors who will build greater awareness and understanding of RBC by contractors with whom those agencies do business. For example, a labor compliance advisor could support agency review efforts in the event a contractor, in accordance with requirements of the End Trafficking in Government Contracting Act (22 U.S.C. 7104c), reports a trafficking violation in its supply chain to the government. Implementing Department or Agency: DOL, OMB
Responsible Retirement Plans: DOL’s Employee Benefits Security Administration clarified in October 2015 that plan fiduciaries under the Employee Retirement Income Security Act may under the proper conditions invest in economically targeted investments (investments selected for the environmental, social, and governance benefits they create), enhancing the investment return to the employee benefit plan investor. Implementing Department or Agency: DOL
Ongoing commitments and initiatives
State and Department of Defense (DOD) Contracting with Private Security Providers: DOD requires private security companies (PSCs) with which it contracts to demonstrate conformance with standards consistent with the International Code of Conduct for Private Security Service Providers (ICOC), a set of human rights and humanitarian principles agreed upon by certain states, PSCs, and NGOs. Similarly, State requires PSCs servicing its Worldwide Protective Services II contract to confirm their conformance with the same standards and has incorporated membership-in-good-standing in the ICOC Association as a requirement for bidding on that contract. State will also review if and how such approaches may be applied to their local guard force contracts. Implementing Department or Agency: State, DOD
“Prohibition of Acquisition of Products Produced by Forced or Indentured Child Labor,” (E.O. 13126), signed on June 12, 1999 and in effect since 2001, is intended to ensure that U.S. federal agencies do not procure goods made by forced or indentured child labor. The U.S. government will seek to review the status and effectiveness of implementation of these requirements and take steps to improve implementation, as feasible and appropriate. Implementing Department or Agency: DOL
“Strengthening Protections against Trafficking in Persons in Federal Contracts,” (E.O. 13627), signed on September 25, 2012, and its associated regulatory changes, created new prohibitions on trafficking and trafficking-related activities in federal supply chains that are designed to help identify and prevent human trafficking in global supply chains. On December 8, 2016, the U.S. government published draft guidance on anti-trafficking risk management best practices and mitigation considerations for public comment. This guidance is designed to help an agency determine if a contractor is taking adequate steps to meet its anti-trafficking responsibilities under the Federal Acquisition Regulation (FAR) and the FAR Council’s regulations implementing E.O. 13627 and the National Defense Authorisation Act for Fiscal Year 2013. This guidance, coordinated by OMB in partnership with DOL and State, and other agencies, will assist agencies in developing appropriate internal procedures and controls for awarding and administering Federal contracts to improve monitoring of and compliance with actions to prevent human trafficking. In addition, the Council intends to amend the regulations to provide a definition for “recruitment fees,” which is a critical component to help prevent trafficking in federal supply chains. Implementing Department or Agency: OMB, State, DOL