As Pedro has already discussed (here), reg.43 of the Public Contracts Regulations 2015 (PCR2015) transposes the rules on the use of labels contained in Art 43 of Directive 2014/24. I agree with his general skepticism about the advantages that contracting authorities can actually derive from the use of labels, particularly in view of the need to always accept equivalents (as discussed at length regarding technical specifications, by Pedro as well).
The following are my comments on Art 43 of Dir 2014/24 in my Public Procurement and the EU Competition Rules, 2nd edn (Oxford, Hart, 2015) 332-334, which has been published today.
The Appropriate Use of
Eco-Labels and other Labels Certifying Social or Other Product Characteristics.[1] On a related note, it is
important to stress that Directive 2014/24 has gone beyond the limited rules of
article 23(6) of Directive 2004/18 and put a clear emphasis on the possibility
to use eco labels and labels certifying certain social aspects of products and
services (such as fair trade, or sustainability)[2] as part of the process of
detailing technical specifications and, generally, with the goal of creating
some clear space for the introduction of environmental and social
considerations in the drafting of technical specifications.[3] This was a highly
contentious issue under the rules of Directive 2014/24 and required the
intervention of the ECJ in order to interpret the limits in the incorporation
of label-related requirements in procurement procedures.[4] Directive 2014/24 now aims
at consolidating the guidance provided by the ECJ. As clearly stressed in
recital (75),
Contracting
authorities that wish to purchase works, supplies or services with specific environmental, social or other
characteristics should be able to refer to particular labels, such as the
European Eco-label, (multi-)national eco-labels or any other label provided that the requirements for the
label are linked to the subject-matter of the contract, such as the
description of the product and its presentation, including packaging
requirements. It is furthermore essential that those requirements are drawn up
and adopted on the basis of objectively verifiable criteria, using a procedure
in which stakeholders, such as government bodies, consumers, manufacturers,
distributors and environmental organisations, can participate, and that the
label is accessible and available to all interested parties. … References to labels should not have the
effect of restricting innovation (emphasis added).[5]
This
general approach is later implemented in article 43 of Directive 2014/24, which
sets clear restrictions on the types of labels that can be used by contracting
authorities. From a competition perspective and particularly bearing in mind
the general requirement of technical neutrality, it is important to
stress that the label requirements can only concern criteria which are linked
to the subject-matter of the contract and are appropriate to define
characteristics of the works, supplies or services that are the subject-matter
of the contract (art 43(1)(a) dir 2014/24)[6]
and, more importantly, that ‘contracting authorities requiring a specific
label shall accept all labels that confirm that the works, supplies or services
meet equivalent label requirements’ (art 43(1)III dir 2014/24). This is in line with the position of the ECJ, which
had clearly indicated that contracting authorities are banned from imposing
compliance with a specific (eco)label rather than using the detailed
specifications defined by that (eco)label[7]
and, consequently, accepting all functional equivalents—as requested by the
general rules controlling the setting of technical specifications and, more
generally, the principles of non-discrimination, equal treatment and
competition. This has now prompted the new rule under article 43(3) of
Directive 2014/24, in virtue of which
Where a label … sets out requirements not linked to
the subject-matter of the contract, contracting authorities shall not require the label as such but
may define the technical specification by reference to those of the detailed
specifications of that label, or, where necessary, parts thereof, that are
linked to the subject-matter of the contract and are appropriate to define
characteristics of this subject-matter (emphasis added).
Consequently,
the rules on (eco)labels clearly follow the general criteria that regulate the
establishment of technical specifications and particularly the prohibition of
references to a specific make or source, or a particular process which
characterises the products or services provided by a specific economic
operator, or to trade marks, patents, types or a specific origin or production
with the effect of favouring or eliminating certain undertakings or certain
products of article 42(4) of Directive 2014/24. Moreover, as will happen
with any other sorts of technical specifications (as discussed immediately
below), contracting authorities are bound to adopt a possibilistic approach to
the assessment of compliance with (eco)label requirements. This is particularly
clear from the provision that, in cases where the tenderer has not been able to
obtain the specific label indicated by the contracting authority or an
equivalent label within the relevant time limits for reasons that are not
attributable to that economic operator, requires contracting authorities to
accept other appropriate means of proof, which may include a technical dossier
from the manufacturer, provided that the economic operator concerned proves
that the works, supplies or services to be provided by it fulfil the
requirements of the specific label or the specific requirements indicated by
the contracting authority (art 43(1) in fine dir 2014/24). In our view,
this provision encapsulates the ultimate requirement of the principle of
technical neutrality.
[1]
Generally, see C Nouira, G Grolleau, and N Mzoughi, ‘Public Purchasing and
Eco-labelling Schemes: Making the Connection and Reinforcing Policy Coherence’
(2004) 15(2) Journal of Interdisciplinary
Economics 131–51.
[2]
See E Fisher and S Corbalán, ‘Fair trade and European public procurement: legal
principles and governance dynamics’ (2013) 9(1) Social Enterprise Journal 11–27; C Weller and JM Pritchard,
‘Evolving ECJ Jurisprudence: Balancing Sustainability Considerations with the
Requirements of the Internal Market’ (2013) European
Procurement & Public Private Partnership Law Review 55; D Dragos and B
Neamtu, ‘Sustainable Public Procurement in the EU: Experiences and Prospects’, in F Lichere, R Caranta and S
Treumer (eds) Novelties in the 2014
Directive on Public Procurement, vol. 6 European Procurement Law Series,
(Copenhagen, Djøf Publishing, 2014) forthcoming.
[3]
For a recent case concerned with the balanve between environmental requirements
and compliance with the rules on technical neutrality of technical
specifications, see Case T-402/06 Spain v
Commission [2013] pub. electr.
EU:T:2013:445. Generally, for discussion, see R Caranta, ‘Sustainable Public
Procurement in the EU’, in R Caranta and M Trybus (eds), The Law of Green and Social Procurements In Europe, vol. 2 European
Procurement Law Series (Copenhagen, DJØF Publishing, 2011) 15–51;J Hettne, Legal Analysis of the Possibilities of Imposing
Requirements in Public Procurement that Go beyond the Requirements of EU Law
(2012) available at http://www.regeringen.se/content/1/c6/21/03/99/c9f52838.pdf;
P Kunzlik, ‘Green Public Procurement—European Law, Environmental Standards and
‘What to Buy’ Decisions’ (2013) 25(2) Journal
of Environmental Law 173–202; and A Wiesbrock, ‘An Obligation for
Sustainable Procurement? Gauging the Potential Impact of Article 11 TFEU on Public
Contracting in the EU’ (2013) 40(2) Legal
Issues of Economic Integration 105–32.
[4] Case
C-368/10 Commission v Netherlands
[2012] pub. electr. EU:C:2012:284.
For discussion, see T Kotsonis, ‘Commission v Netherlands (C-368/10):
environmental and fair trade considerations in the context of a contract award
procedure’ (2012) 21 Public Procurement
Law Review NA234–NA244; A Semple, ‘Grounds for change: ECJ judgment in
Dutch coffee case points to need for reform of procurement rules. Case C-368/10
Commission v Netherlands’ (2012) available
at http://www.procurementanalysis.eu/resources/Grounds+for+change+-+Case+368+of+2010.pdf;
and M Muller-Wrede, ‘Sustainable Purchasing in the Aftermath of the ECJ's Max
Havelaar Judgment’ (2012) European
Procurement & Public Private Partnership Law Review 110.
[5]
For discussion on the last point, concerning innovation, see M Burgi, ‘Can
Secondary Considerations in Procurement Contracts be a Tool for Increasing
Innovative Solutions?’, in C Tvarnø, GS Ølykke &
C Risvig Hansen, EU Public Procurement:
Modernisation, Growth and Innovation (Copenhagen, DJØF Publishing, 2012)
275–90.
[6] M
Martens and S de Margerie, ‘The Link to the Subject-Matter of the Contract in
Green and Social Procurement’ (2013) European
Procurement & Public Private Partnership Law Review 8.
