Volume 8 | Number 1 EPPPL 1|2013

berlinbrussels

Facing severe and deepening budgetary restraints, the modern State has tobalance the rising demands for transparency and accountability with anefficient and effective delivery of public services at European and nationallevels.

Procurement procedures and Public-Private Partnerships are two major legaland policy instruments of public sector management, which link the publicand private sectors and provide for the procedural and substantive interactionsnecessary for the effective and efficient delivery of public services.

The European Procurement & Public Private Partnership Law Review isan international quarterly peer-reviewed journal that provides the reader withdetailed coverage of all significant legal and policy developments in theProcurement and PPP areas across the European Union and beyond, in theform of articles, case-law annotations and country reports.

Within the quarterly EPPPL, leading authorities from the private practiceand academia authors report, observe, discuss, analyse and criticise legal andpolicy developments in the EU, its Member States as well as the countries andregions of the world that have adopted these legal and policy instruments.

Through their voice, EPPPL offers impulses, suggestions, updated referencesand information about developments and new approaches to Public PrivatePartnership delivery and Public Procurement across the world.

www.epppl.eu

ISSN 2194-7376

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SPECIAL ISSUE: SUSTAINABLE PROCUREMENT

ArticlesThe Power of Purchase:Addressing Sustainability through Public ProcurementEleanor Fisher

The Link to the Subject-Matter of the Contract in Green and Social ProcurementMarc Martens and Stanislas de Margerie

Sustainable Public Procurement: Life-Cycle Costing in the New EU DirectiveProposalDacian Dragos and Bogdana Neamtu

Sustainable Public Procurement and the Single Market – Is There a Conflict of Interest?Jörgen Hettne

The Impact of the Revised WTO Government Procurement Agreement on the EU Procurement Rules from a Sustainability PerspectiveLuca Tosoni

Helping Public Procurement Go Green:The Role of International OrganisationsRoberto Caranta

Case LawEvolving CJEU Jurisprudence: Balancing Sustainability Considerations with the Requirements of the Internal MarketCatherine Weller and Janet Meissner Pritchard

Country ReportsDenmark · Estonia · France · Germany · Hungary · Latvia · Lithuania · Norway · The Netherlands

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ContentsEPPPL 1|2013 I

Contents

SPECIAL ISSUE: SUSTAINABLE PROCUREMENT

Editorial 1Sergi Corbalán

articlesThe Power of Purchase: Addressing Sustainability through Public Procurement 2Eleanor Fisher

The Link to the Subject-Matter of the Contract in Green and Social Procurement 8Marc Martens and Stanislas de Margerie

Sustainable Public Procurement: Life-Cycle Costing in the New EU Directive Proposal 19Dacian Dragos and Bogdana Neamtu

Sustainable Public Procurement and the Single Market – Is There a Conflict of Interest? 31Jörgen Hettne

The Impact of the Revised WTO Government Procurement Agreement on the EU Procurement Rules from a Sustainability Perspective 41Luca Tosoni

Helping Public Procurement Go Green: The Role of International Organisations 49Roberto Caranta

case lawEvolving CJEU Jurisprudence: Balancing Sustainability Considerations with the Requirements of the Internal Market 55Catherine Weller and Janet Meissner Pritchard

reportsSustainable Public Procurement in Portugal – State of the Art and Future Prospects 60Manuel da Silva Gomes

Is there a Swiss Approach towards Sustainable Public Procurement? 73Marc Steiner

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ContentsII EPPPL 1|2013

country reportsDenmark 79

Increased Focus on Social Clauses in Danish Public Procurement ContractsMartin André Dittmer and Camilla Christiansen

Estonia 82Sustainable Procurement: Regulation under Estonian LawKristo Kallas

France 89Fair Trade Procurement in FranceGaelle Giffard

Germany 93Green Public Procurement (GPP) in GermanySusanne Lottermoser

Hungary 98Sustainable Public Procurement in HungaryTünde Tátrai

Latvia 100Sustainable Procurement in LatviaPavels Tjusevs

Lithuania 106Sustainable Procurement Regulation under Lithuanian lawDeividas Soloveiãikas

Norway 112Using Tax Money in a Decent WayJenny Ählström

The Netherlands 113Coffee ConflictsJan M. Hebly and Paul Heijnsbroek

miscellaneous

Editors and Country Correspondents III

Imprint IV

Upcoming Conferences and Events VI

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managing editorChristopher BovisUniversity of HullUnited Kingdomc.bovis@hull.ac.uk

editorial boardAnne van AakenUniversity of St. GallenSwitzerland

Hans Wilhelm AlfenBauhaus University, WeimarGermany

Andrea BiondiKing’s College LondonUnited Kingdom

Martin BurgiLudwig Maximilian University of MunichGermany

Michael BurnettEuropean PPP Forum, MaastrichtThe Netherlands

Dacian C. DragosBabes Bolyai University, Cluj-NapocaRomania

Steven van GarssePPP Knowledge Center of the Flemish GovernmentBelgium

Alberto GermaniPPP Advisor of UAE, Member of UNECE PPPTeam of Specialists, United Arab Emirates

Friedrich Ludwig HausmannK&L Gates LLP, BerlinGermany

Herwig HofmannUniversity of LuxembourgLuxembourg

Christian KoenigUniversity of BonnCentre for European Integration ResearchGermany

Matthias PetschkeEuropean Commission, Head of RepresentationBerlin, Germany

Stephan RechtenBeiten Burkhardt Rechtsanwaltsgesellschaft mbHBerlin, Germany

Piet Jan SlotLeiden UniversityThe Netherlands

Tobias TraupelMinistry of Economic Affairs and Energy of the State of North Rhine-WestphaliaDüsseldorf, Germany

Christopher R. Yukins George Washington University Law SchoolUSA

executive editorMarie WalterLexxion Publisher, Berlinwalter@lexxion.de

country correspondentsBaltic CountriesDeividas SoloveicikasVilnius University, Faculty of Law

BelgiumConstant De KoninckSenior Auditor, Belgian Court of Audit

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ImprintIV EPPPL 1|2013

PublisherLexxion Verlagsgesellschaft mbHGüntzelstraße 63 · 10717 BerlinTel.: +49 30/81 45 06-0Fax: +49 30/81 45 06-22 www.lexxion.de

Typesettypossatz GmbH Berlin

EPPPL annual subscription* rates 2013 (4 issues)printed version only 378,00 €printed version + online edition (incl. archive)** 425,00 €online edition only (incl. archive)** 378,00 €* Prices include Postage and Handling. EU Member States:

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Contributionsare welcome and should be sent to the Publisher at the above address.Any such contribution is accepted on the understanding that the authoris responsible for the opinions expressed in it.

PhotocopyingAll rights reserved. No part of this journal may be reproduced in anyform whatsoever, e.g. by photoprint, microfilm, or any other means,without prior permission of the publisher. This journal was carefullyproduced in all its parts. Nevertheless, authors, editors and publisherdo not warrant the information contained therein to be free of errors.Readers are advised to keep in mind that statements, data, illustrations,procedural details or other items my inadvertently be inaccurate.

This journal may/should be cited as [2013] EPPPL.

Ownership and shareholdings pursuant to Section 7 lit. a No. 2 andSection 2 No. 6 of the Berlin Press Act: Shareholder of LexxionVerlagsgesellschaft mbH is Dr. Wolfgang Andreae, Publisher, Berlin.

ISSN Print 2194-7376 · ISSN Online 2194-7384

CyprusDemetris SavvidesBlars Ltd

Czech RepublicRobert KrcUniversity of West Bohemia, Plzen

DenmarkMartin André DittmerGorrissen Federspiel, Copenhagen

FranceJérôme Grand d’EsnonCarlara International Paris

GreeceSpyros PanagopoulosPanagopoulos & Partners – Law Firm

HungaryTünde TátraiCorvinus University of Budapest

ItalyLuca PardiAdjunct Professor, School of Law, University of Salerno

LuxembourgQuentin HubeauSedlo Jimenez Lunz Law Firm

PolandDariusz OkolskiOkolski Kancelaria Radcowska, Warsaw

PortugalPedro Melo PLMJ – A. M. Pereira, Sáragga Leal, Oliveira Martins, Júdice e Associados, Lisbon

SloveniaPetra FerkUniversity of Ljubljana, Slovenia

SwedenTobias IndénUmeå University, Umeå

SwitzerlandPeter HettichUniversity of St Gallen

The NetherlandsJan Michiel HeblyHouthoff Buruma

The United KingdomNick MaltbyLawyer

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Is there a Swiss Approach towards Sustainable Public Procurement?

I. Introduction

On a general note, it is important to highlight thatthe existence of a bilateral agreement between theEuropean Union (at the time the European Commu-nity) and the Swiss Confederation on certainaspects of government procurement1 does notmean that EU Public Procurement Directives arerelevant for the legal framework of Swiss publicprocurement. Rather, the most significant interna-tional treaty for Switzerland is, by far, the WorldTrade Organization Agreement on GovernmentProcurement of 15 April 1994 (GPA).2 The bilateralagreement between the European Union and theSwiss Confederation broadens the scope of theirmutual commitments under the GPA rules toregions and municipalities and grant, for instance,mutual access to procurement tenders by railwayoperators and contracting entities operating on thebasis of special or exclusive rights granted by acompetent State authority active in sectors such asdrinking water, electricity, urban transport and air-ports.3 In this context it may also be mentionedthat, under Swiss law, the legal framework for theseindustries is in principle the same as for the publicauthorities.4

Additionally, when discussing the legal frame-work of public procurement in Switzerland, one

should be aware of its distinctly federalist govern-mental structures. Therefore, the most importantlaws and ordinances discussed in this article suchas the Federal Act on Public Procurement of15 December 1994 (FAPP)5 and the Ordinance onPublic Procurement of 11 December 1995 (revised18 November 2009; OPP)6 are exclusively applica-ble on the federal level. As a consequence, the GPAis implemented separately on the federal and onthe cantonal level. Switzerland has therefore 27procurement laws.7 For harmonization purposes,all cantons entered into the Intercantonal Agree-ment on Public Procurement of 25 November 1994(revised on 15 March 2001; IAPP).8 As an exampleto demonstrate how relevant the differencesbetween the cantonal and the federal levels are, itcan be mentioned that, under cantonal law, negotia-tions on tenders between the contracting authorityand the bidders are prohibited, but in contrast per-mitted under federal law if certain requirementsare met.9 There are also notable differences as faras remedies are concerned.

When implementing the revised GPA10 the Con-federation and the cantons aim to simultaneouslyrevise the FAPP and the IAPP. The initiallyintended complete revision of the federal publicprocurement statute with the aim to partiallyharmonize the Swiss legal framework11 was aban-

* Judge at the Swiss Federal Administrative Court, St. Gallen. Theviews expressed are those of the author and do not necessarilyreflect the views of the Court. He gratefully acknowledges thetime and efforts spent by Stephen Turley, attorney at law, Zurich,when revising the text from a lawyer’s linguistic perspective.

1 OJEU 2002 L 114/430 ss.; Swiss Classical Compilation of FederalLegislation – Systematische Sammlung des Bundesrechts (SR)0.172.052.68.

2 SR 0.632.231.422; see www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm.

3 Cf. Bernhard C. Lauterburg / Philipp Zurkinden, “Switzerland”,in: Hans-Joachim Priess (ed.), Getting the Deal Through – PublicProcurement 2012, London 2012, p. 237.

4 Cf. David Mamane / Sonja Stark-Traber / Michael Hess, “A Q&A guide to public procurement law in Switzerland”, 2012(http://uk.practicallaw.com/2-521-2557?q=public+procurement+switzerland).

5 SR 172.056.1.

6 SR.172.056.11.

7 Cf. Hubert Stöckli, “A Tender of Works at the Gotthard:Observations on a Complex Procedure and its Consequences”,in: The International Construction Law Review 2008, p. 4.

8 Cf. Lauterburg/Zurkinden (fn. 3), p. 237.

9 Cf. Peter Galli / Elisabeth Lang, “Switzerland”, in: Global LegalGroup (ed.), The International Comparative Legal Guide toPublic Procurement 2012, p. 189.

10 See www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htmand Robert Anderson, “The conclusion of the renegetiation ofthe World Trade Organization Agreement on Government Pro-curement: What it means for the Agreement and for the worldeconomy”, in: PPLR 2012, p. 83 ss.

11 See Preliminary Draft of a FAPP of 30 Mai 2008 – Vorentwurfvom 30. Mai 2008 für ein Bundesgesetz über das öffentlicheBeschaffungswesen (VE BöB). The doctrine stated in this respectthat although a partial harmonisation of public procurementrules is long overdue, it is doubtful that the Cantons will followsuit (see Carole Gehrer, “Public Procurement Legislation, WhenPublic Entities go Shopping”, Walder Wyss & Partners NewsLetter No. 82, 2008).

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Is there a Swiss Approach towards SustainablePublic Procurement?

Marc Steiner*

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doned after the findings of the preliminary consul-tation process were reviewed.12 Subsequently, in afirst step, only the OPP was revised; the amendedtext came into force on 1 January 2010.13 Since therevised OPP text is crucial to Sustainable PublicProcurement (SPP), the following report will focuson the federal level. Shortly after the revision of theOPP, the Swiss Federal Procurement Commissionissued a brochure titled “Sustainable Procurement –Recommendations for the federal procurementoffices” (Recommendations).14 These recommenda-tions were considered to be a milestone, especiallyin regard to the implementation of the ILO CoreLabour Standards (publicly perceived as one of themost important tools to abolish the worst forms ofchild labour).15

II. Incorporating the sustainability objec-tive into the legal framework govern-ing (federal) public procurement

1. First steps

Much like in German legal thinking especially, theinitial and predominant position in the late ninetieswas that public procurement was only about theprice and market access; secondary policy goals(“vergabefremde Aspekte”) were considered to be“government by procurement” and hence to beavoided. At the same time other opinions werevoiced differentiating between environmental andsocial aspects pointing out that the link to the sub-ject-matter of the contract is easier to establishwhen discussing environmental features (“Umwel-teigenschaften”) understood as being part of thequality of the product.16 According to this under-standing, two main lines of argument allowed a cer-

tain inclusion of Green Public Procurement (GPP).Firstly, the definition of technical specifications – aspresupposed in Article VI GPA –, including the pro-duction processes and methods of the procuredproducts, are permitted as long as they do not cre-ate unnecessary obstacles to trade.17 Therefore,according to the initial Swiss approach, the techni-cal specifications were the easiest way to take intoaccount aspects of GPP.18 Secondly it was explicitlymentioned in Article 21 FAPP that when lookingfor the economically most advantageous offer,environmental impact aspects (“Umweltverträglich-keit”) could be taken into account. The Helsinki Buscase argument according to which the considera-tion of the environmental impact does not presup-pose a direct economic benefit for the contractingauthority19 was easier to make compared with leg-islative frameworks where sustainability concernswere not explicitly mentioned (at the time).

2. Constitutional provisions

A second important argument is to be seen in thenew Federal Constitution of the Swiss Confedera-tion of 18 April 1999.20 According to Article 2 ofthe Constititution, the Swiss Confederation is “com-mitted to the long-term preservation of naturalresources”. This purpose is the logical consequenceof what is said in the preamble, namely that theSwiss People and the Cantons shall adopt thenew Constitution “mindful of their responsibilitytowards creation” and conscious of their “responsi-bility towards future generations”. Furthermore, inArticle 73 of the Constitution it is stated that “theConfederation and the Cantons shall endeavour toachieve a balanced and sustainable relationshipbetween nature and its capacity to renew itself

Is there a Swiss Approach towards Sustainable Public Procurement? 74

12 Cf. the relevant press release of the Federal Council of 18 June2009 (www.admin.ch/aktuell/00089/index.html? lang=de&msg-id=27511) and Galli/Lang (fn. 9), p. 193.

13 Cf. the relevant press release of the Federal Council 18 Novem-ber 2009 (www.news.admin.ch./message/index.html?lang=de&msg-id=30179).

14 Cf. www.bbl.admin.ch/bkb/02617/02632/index.html?lang=de(Recommendations) and Eveline Venanzoni, “Implementing SPPpractice in Switzerland”, in: European Commission, GPP News-Alert, No. 10 March 2011.

15 See point IV. below.

16 Partly underlying a comparable understanding by GerhardKunnert, WTO-Vergaberecht, Baden-Baden 1998, p. 43.

17 Cf. with very convincing arguments Peter Kunzlik, InternationalProcurement Regimes and the Scope for the Inclusion of Envi-ronmental Factors in Public Procurement, in: OECD (ed.), TheEnvironmental Performance of Public Procurement, Paris 2003,p. 157 ss.

18 Cf. Marc Steiner, Die Umweltfreundliche Beschaffung – ver-gaberechtliche Möglichkeiten und Grenzen, vergaberechtlicheStudie (Expertise on GPP), erstellt im Auftrag der Beschaffungs-kommission des Bundes (BKB, the Federal ProcurementCommission), Aarau 2006, p. 69 ss.

19 ECJ [2002] ECR p. I-7213 Concordia Bus Finland Oy Ab ./.Helsingin kaupunki and HKL-Bussiliikenne, para. 69.

20 SR 101.

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under consideration of the demands placed on it bythe people”. This idea also influences Swiss foreignpolicy. Article 54 paragraph 2 states: The Confeder-ation shall “promote [inter alia] the conservation ofnatural resources”.

What is interesting in this context is that theConstitution of April 1999 was only intendedto be a update of the old constititution without sig-nificant material changes (“mise-à-jour”/“Nachfüh-rung”). This intention, however, does not applywhen dealing with its Article 2. This so-calledupdate, when discussing the aims and purposesof the Confederation in the context of our time,acknowledges the preservation of the naturalresources as indispensable.21 Such statement ofintent goes beyond the concept of a mere update.22

Obvious similarities exist with EU primary lawallowing for comparisons to be drawn. Therefore,the reasoning of the European Court of Justice inthe Helsinki Bus Case – naturally discussed in aEuropean context – can apply per analogiam. If theenvironmental protection requirements must beintegrated into the definition and implementationof “Community policies and activities”, it must – asstated by the Court – be concluded that the rulesgoverning award criteria in the procurement direc-tives must be interpreted in such a way so as not toexclude the possibility for the contracting authorityto consider criteria relating to the preservation ofthe environment when assessing the economicallymost advantageous tender.23 The same rule can beconsidered to hold for Switzerland.24 A balance

must therefore be struck between primary (i.e. con-stitutional) law forming the economic constitutionon the one hand and the primary law dispositionsconsidered to form an environmental constitutionon the other hand.

This balancing exercise has been acknowledgedlong ago by the government when formulating theSustainable Development Strategy,25 and the com-mitment of the government was reaffirmed whenreframing Article 27 of the OPP.26 This was signifi-cant for procurers of the Federal Office on Build-ings and Logistics, because the OPP was drafted intheir own department. Even more significant wasthe commitment voiced by the director of thisdepartment, the most important procurer of theConfederation, when writing the preface to theRecommendations for sustainable procurementdescribed above. The most relevant statement readsas follows: “The Federal Constitution of 18 April1999 makes sustainable development a long-termobjective of the national policy: The Swiss Confed-eration strives to promote sustainable developmentand to secure the long-term preservation of naturalresources and a just and peaceful internationalorder. In order to implement its constitutional taskof sustainable development the federal governmenthas adopted the ‘Sustainable Development Strat-egy’. The federal government should set an examplein its own consumer behaviour by respecting social,economic, health and environmental factors inmeeting its needs for goods, services and construc-tion works. Therefore it needs to procure goods,services and construction works meeting a highstandard of social, economic and environmentaldemands throughout their entire lifetime.”27

III. The Economically most advantageousoffer: Must life-cycle costing bydefinition include the calculation ofexternal costs?

From a Swiss perspective it is important to statethat the Helsinki Bus Case and the Wienstrom Caseare expressing thoughts which, from a comparativelaw point of view, are meaningful when interpret-ing Swiss public procurement law.28 This view wassupported by the Swiss use of the concept “econom-ically most advantageous offer” when defining theawards criteria. Carl Baudenbacher has argued thatSwiss people are usually sensitive to quality which

21 Dispatch of the Federal Council on a new Federal Constitutionof 14 January 1997, Federal Gazette – Bundesblatt (BBl) 1997 Ip. 127 s.

22 Cf. Luzius Mader, “Die Umwelt in neuer Verfassung? Anmer-kungen zu umweltschutzrelevanten Bestimmungen der neuenBundesverfassung”, in: URP 2002, S. 105 ff., S: 119 f. Thegovernment considered this “breach” with the concept ofupdate to be legitimate considering the broad support for thenewly proposed aim (BBl 1997 I p. 128).

23 ECJ [2002] ECR p. I-7213 Concordia Bus Finland Oy Ab ./.Helsingin kaupunki and HKL-Bussiliikenne, para. 57.

24 Cf. Steiner, Expertise on GPP (fn. 18), p. 103.

25 Cf. concerning the lastest action plan 2012–2015:www.are.admin.ch/themen/nachhaltig/index.html?lang=en.

26 Cf. Marc Steiner, “Sekundärziele im öffentlichen Beschaf-fungswesen: In welche Richtung schwingt das rechtspolitischePendel? Ein Blick nach Europa und zurück in die Schweiz”(Sekundärziele), in: European Law Reporter 2011, p. 380 ss.,p. 384.

27 Recommendations, p. 4.

28 Cf. Steiner, Expertise on GPP (fn. 18), 42 ss.

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means that price is not the only parameter to betaken into account.29 What is clear is that theunderlying concept behind Article 21 FAPP is thatthe award is typically based on the “economicallymost advantageous offer” and that the award basedsolely on the basis of the lowest price is the excep-tion when considering broadly standardizedgoods.30 The commentary of the Federal Councilconcerning this Article 21 FAPP elaborates on thenotion of quality which can include aspects ofusability, safety, availability, reliability, cost-effec-tiveness and ecology.31 It cannot be establishedwhether the European Parliament was influencedby this same concept when drafting the resolutionof 25 October 2011 on the modernization of publicprocurement.32 But it expressed the same idea“that, in order to develop the full potential of publicprocurement, the criterion of lowest price shouldno longer be the determining one for the award ofcontracts, and that it should, in general, be replacedby the criterion of most economically advantageoustender, in terms of economic, social and environ-mental benefits – taking into account the entire life-cycle costs of the relevant goods, services or works”and stressed “that this would not exclude the lowestprice as a decisive criterion in the case of highlystandardized goods or services”.33

In Switzerland, however, life-cycle costs are typi-cally not used to internalize external costs, insteadthe successful means to avoid unwanted external(environmental) costs is to grant extra points whenevaluating the quality of the purchased product.34

This also corresponds with the concept of theHelsinki Bus Case; granting points for lower emis-sions means de facto the internalization of externalcosts but under the quality aspect.35 Higher quality(in terms of less external environmental costs) justi-fies a higher price when assessing the most advan-tageous tender. In 2004 the European Parliamentalready tried to adopt the internalization of externalcosts directly in the monetary calculation.36 Theproposal of the European Commission of 20 De-cember 2011 aimed for a compromise, stating thatonly “external environmental costs, directly linkedto the life-cycle, provided their monetary valuecan be determined and verified”, should be con-sidered.37 In order to reconcile the understandingof life-cycle costs with the concept of a directive,which is by definition not a full-fledged codifica-tion, it should preferably be made clear that thecontracting authority can choose whether to calcu-

late the life-cycle costs on the basis of the actualexpected costs during the use (and the disposal) ofthe product (like energy consumption and mainte-nance costs) or whether life-cycle costing shouldalso contain – without too much difficulty – sometraceable external costs.38 This would also help theCommission, were it to be called upon to developa methodology on the calculation of life-cycle cost-ing, to propose as an initial step a more narrowinterpretation of the life-cycle costs and then, in asubsequent step, to tackle the more ambitious andtherefore optional concept of including the inter-nalization of external costs.

IV. Recent Developments in Switzerland– ILO Core Labour Standards

In Article 7 para. 2 OPP (version of 18 November2009), it is stated that if the subject-matter of thecontract is a task to be performed abroad, the bid-der has to ensure at least that the ILO Core LabourStandards are respected. These standards (includ-ing guarantees especially with regard to forced orcompulsory labour and the worst forms of childlabour) are listed in an Annex 2(a) to the revisedOPP.39 This is a fairly spectacular development,considered that social aspects were rather neglectedin the past when looking at the Swiss SPP concept.Even more astonishing was the lack of resistance

Is there a Swiss Approach towards Sustainable Public Procurement? 76

29 Cf. Carl Baudenbacher, “Swiss Economic Law Facing theChallenges of International and European Law” (Swiss EconomicLaw), in: Report to the Swiss Jurists Day 2012, ZSR 2012 II,p. 419 ss., p. 454.

30 Cf. Steiner, Sekundärziele (fn. 26), p. 381.

31 Cf. Baudenbacher, Swiss Economic Law (fn. 29), p. 455.

32 Cf. Baudenbacher, Swiss Economic Law (fn. 29), p. 651.

33 2011/2048[INI]; P7_TA(2011)0454.

34 Cf. Steiner, Expertise on GPP (fn. 18), p. 79 s.

35 Cf. Steiner, Expertise on GPP (fn. 18), p. 44 with references.

36 Cf. Angela Dageförde, Umweltschutz durch öffentliche Auf-tragsvergabe, Berlin 2004, p. 123.

37 COM(2011) 869 final, Art. 67.

38 Whereas the European Parliament would like to see a concepteven including the internalisation of external social costs (seereport Marc Tarabella of 11 January 2013, p. 109 ss.).

39 See Recommendations, p. 10; see also Art. 55 of the Commissionproposal and Annex XI thereof (COM[2011] 896 final, alsoconsidering a violation of the ILO Core Labour Standards as apossible exclusion ground; so ILO Core Labour Standards wouldin the future not need to be dealt with in the context of contractperformance conditions any more.

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against a comparable norm when discussing a har-monized procurement law.40 The Swiss textileindustry’s position was especially noteworthy, argu-ing that because of their reputational risks whenselling textiles, they have become more and morecompelled to control their supply chain, meaningthat it was in their own interest that a rule shouldbe set according to which competitors wouldequally have to respect the ILO Core Labour Stan-dards.41 The disregard of these standards offersgrounds for exclusion based on Article 8(1)(b)FAPP, which states that the contracting authoritywill only award a contract for services in Switzer-land to a tenderer who will guarantee compliancewith [inter alia] the terms and conditions of theemployment of workers.42 In addition to this norm,the law additionally stipulates a punitive damageclaim (“Konventionalstrafe”). Pursuant to Article6(1) OPP, the bidder must not only abide by therules as stated in Article 8(1)(b) FAPP, but is obligedto contractually bind their third parties contractors(subcontractors and suppliers) to follow the sameprocedural rules. The bidder is liable for its thirdparties, and it will be subject to sanctions if any keythird parties are found to be in breach of the mini-mum social standards. In this respect, the procur-ing entity shall observe the principle of proportion-ality.43 The notion of “key third parties” is a com-promise, as the legislature is aware that in some sec-tors it is difficult to control the whole supply chain.This compromise also limits the transaction costson both sides. A key party is therfore considered tobe a subcontractor or supplier delivering an impor-tant componant, or fulfilling an important partialservice or a party operating in a particularly high-risk area (from an ILO perspective).44 Last but notleast, the Recommendations voice the idea thatthere must be more than just a self-declarationassuring compliance. The contracting authority can

rely on earlier audits guaranteeing observance ofthe required standards, but if there is a risk of thebidder breaching the minimum social standards,then generally an audit is required.45 The underly-ing message is that on the federal level ILO CoreLabour standards must be taken seriously.

V. Latest Developments in Switzerland –Controlling and Reporting in theImplementation of Sustainable PublicProcurement

There are basically two possibilities of assuring thatthe departments and agencies make the step fromforming a strategic target and formal communica-tion to real implementation of Sustainable PublicProcurement. One is to make SPP mandatory bylegislation or via internal instructions issued by thedepartments or – in the case of public procurement– by the Federal Procurement Conference. Anotherway would be to establish a controlling and report-ing structure in order to make the efforts of eachdepartment and agency transparent and traceable.Switzerland has to date been reluctant to imple-ment rules on “what to buy” within the public pro-curement sector, and has therefore opted for thelatter option. Given that, when exchanging viewswith other governments collecting procurementstatistics is often described as a rather difficult taskand the data received may not be meaningful, letalone accurate, one must say that from a compara-tive perspective this is an interesting choice.

However, the Swiss case is also remarkablebecause a general effort to improve procurementcontrol under the aspect of implementing certaingovernance standards has also lead to standardsbeing implemented in regard to Sustainable PublicProcurement. What sounds like a relatively modestchange is in fact a paradigm shift and will probablyprove to be a very ambitious course of action.According to Article 2 of the fully revised Ordi-nance on the Organization of Public Procurement(on the federal level) dated 24 October 2012(OOPP),46 procurement must be economically effi-cent, legally compliant procurement and sustain-able.

The OOPP foresees the gradual establishmentof a procurement controlling scheme with theobjective (inter alia) to steer federal procurementtowards economically, environmentally and socially

40 Art. 25(3) VE BöB.

41 Cf. Steiner, Sekundärziele (fn. 26), p. 386.

42 The legal basis for the exclusion itself can be found in Art. 11FAPP.

43 Cf. Recommendations, p. 14.

44 Cf. Recommendations, p. 10.

45 Cf. Recommendations, p. 13 s.

46 SR 172.056.15, entered into force 1 January 2013; cf the relevantpress release www.news.admin.ch/message/index.html?lang=de&msg-id=46443.

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sustainable procurement.47 Specific monitoring onSPP is foreseen, comprising all key data allowingreporting on whether and how far economical,environmental and social aspects of sustainabilityhave been taken into account in the procurementprocedure. These key data shall be gathered elec-tronically by all procuring entities.48 The entitiesresponsible for centralised procurement shall alsotake the necessary measures in order to enable anefficient procurement controlling including themonitoring on SPP.49 The Federal ProcurementConference is established as the strategic body qual-ified for the procurement of goods and services (onfederal level). It adopts strategies and guidelinesand has the special task to promote SPP in its threedimensions.50 For the future, this could mean thatthere will more guidelines issued on sustainableprocurement of specific product categories.51 If allthis is taken seriously, then the organisation of theconcerned agencies needs to be revised; it is proba-ble that additional manpower specialising on SPPwill be necessary, not – or at least not only – for theFederal Office for the Environment (FOEN), butalso inside the Federal Office of Buildings andLogistics itself.

VI. Concluding Remarks:A paradigm change

The author remembers an extraordinary situationin 2001, when attending a class on the basics ofpublic procurement led by the Federal Office ofBuildings and Logistics. An official of the FOENwanted to present her (rather moderate) views onlife-cycle costing as a concept to be taken intoaccount in the public tender process. By way of anintroduction to her presentation, a high-ranked offi-cial of the Federal Office of Buildings and Logisticsstated that what the audience was about to hear wasin no way supported by the management of his

administration. The participants were thereby cate-gorised as what would be called “passengers at theirown peril” in air travel. Much has changed sincethen, especially on federal level.

How to deal with the federalist aspects of theSwiss system when trying to achieve a broadconsensus on SPP remains to be seen. One of themethods to improve professionalism could be coop-erations between smaller municipalities assuringjoint procurement and the ability to appoint jointprocurement officials with the relevant know-how.This would assure – at least to a certain extent –minimum standards of governance and good prac-tice on SPP at the same time. Fair trade issues arestarting to gain attention after the Max Havelaarcase,52 but since the category of contract perform-ance conditions does not exist in Switzerland, thediscussion will probably focus on technical specifi-cations and award criteria when discussing fairtrade,53 if not on the introduction of contract per-fomance conditions. However, concerning GreenPublic Procurement, it is literally in the air that thedecisive steps towards a credible implementationare now about to be made.

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47 Art. 4(b) OOPP.

48 Art. 8 OOPP.

49 Art. 12(1) OOPP.

50 Art. 24(a) and (i) OOPP.

51 See concerning the recommendations on the procurement of(certified) woodwww.bbl.admin.ch/kbob/00493/00495/index.html?lang=de.

52 ECJ judgment C-368/10 of 10 May 2010; see also Marc Steiner,„Gütesiegel für ökologische Produktion und Max Havelaar-Labelfür Fortgeschrittene: Der EuGH und die nachhaltige Beschaf-fung“, European Law Reporter 2012, p. 130 ss.

53 Cf. Martin Beyeler, “Kaffee: Bio und Fair Trade”, Baurecht 2012,p. 262 ss.

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