Public procurement directives David Hansom, Partner, London International Learning Lab on Public Procurement and Human Rights Geneva, 17 November 2016

Recap on EU Directives EU law aims for promotion of single market and non-discrimination Procurement Directives aim to ensure level playing field for €425 billion EU wide public sector spend Latest Directives 2007/66/EC, 2009/81/EC; 2014/23/EC; 2014/24/EC and 2014/25/EC cover: Public services, supplies and works contracts Public services and works concession contracts Regulated procurement activity by utilities Defence procurement Remedies All link to EU guidance and the UNGPs

Recap on EU Directives Directives historically concerned with lowest cost Newer directives and case law expressly permit wider criteria Nothing express on human rights: a “conviction by final judgment” of child labour and other forms of trafficking under Art 2 of Directive 2011/36/EU member state discretion (e.g limited Modern Slavery Act/ Asylum Act offences as grounds of exclusion in UK) Discretionary – “guilty of grave professional misconduct, which renders its integrity questionable” – broad and hard to enforce

Common practical issues Procurement practitioners raise the same issues: Can we exclude a supplier on human rights grounds? Who is the bidder? How do we deal with supply chain visibility and human rights? What offences can lead to exclusion? Is a hunch enough – or do we need a judgment? What about the “self cleaning” regime? How do time limits on exclusion link into human rights? Can we put contractual protections in place? What is the risk of getting this wrong?

Challenges and opportunities Tension between economic policy and human rights Grounds of exclusion are very limited - who is ever excluded? Need to link evaluation criteria to subject matter of contract Need a conviction to exclude (subsidiaries and non state actors). Risk of legal challenge, especially if market exclusion Impact of Brexit? BUT Directives do give more flexibility Can look at relevant supply chain issues at selection & award Build into contract terms? Lower value contracts less regulated Legal challenge under Directives generally time limited

David Hansom Partner dhansom@vwv.co.uk (+44) (0) 207 665 0808