The APCC (1397/2016) applies to all the state, local and joint municipal authorities.405 It also applies to legal persons, which are regarded as part of the public administration.406 A
403 The United Nations Economic Commission for Europe (UNECE) Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Enviromental Matters, (adopted on the 25th of June 1998, entered into force on the 30th of October 2001), regulates the right to gain environmental infor-mation from public authorities, the right to participate environmental decision-making and the right to legal procedures, if access is not permitted. The Act on Environmental Impact Assessment Procedure (AEIAP 1812/2009) section 8a sets the procedure of the hearings. The coordinating authority is responsible for the hearings about the assessment programme. According to section 11, another hearing possibility is included to assessment report. Also according to Environment Protection Act (EPA 527/2014) section 43 opportunity to express opinion about the environmental permit requirement must be guaranteed.
404 Section 65 of the APPCC (1397/2016).
405 The APPCC (1379/2016) section 5.
406 Entities, which operate in the water and energy supply, transport or telecommunications sectors the legis-lation applies to the extent that is provided by the Decree (1523/1994). The public procurement law also ap-plies to State enterprises, which are regulated more detailed in the State Enterprise Act (SEA 627/87). The
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legal person is regarded as part of public administration if the legal person is mainly financed by public entities or the management supervision is run by public entities and at least half of the members of the administrative supervisory body are appointed by the public entities.407
The municipal authorities and municipal enterprises are covered by the APPCC (1397/2016) meaning that all city authorities need to follow this regulation when they purchase anything.
Climate change challenges authorities who work in land use and construction, technical ser-vices, education, social and healthcare and environmental protection. Knowledge of the local environment and conditions is crucial while combating climate change via public purchasing.
The preparations of public procurement gives a variety of possibilities to address climate criteria in different parts of the tendering process.408 The public procurement is a procedural law, meaning that it gives possibilities to use climate knowledge as an evaluation criteria. In the next chapter, I will focus on the legal framework of climate criteria, but also the non-legal aspects, which can be taken into consideration.
The role of local authorities is crucial due to the public purchasing concept in general. The purchasing authority has the power to set the criteria, which the tenderers need to fulfil. The private company, the tenderer, needs to answer and fulfil only the questions and the qualification criteria demanded by the contracting authority in their tender documents. If it sets its own criteria or offers products, services of works, not explicitly asked for, the tender must be rejected according to the APPCC (1397/2016) section 104.409 This principle and legal obligation, in other words, delimits tenderer´s possibilities to offer greener solutions than demanded or avoid environmentally more harmful methods, if the procurement entity uses the most common procurement methods such as open tender or restricted tender methods. In that case, the offer needs to be explicit and final. Neither the tender entity nor the offeror can change the criteria during the tendering process. This means that in order to get more climate or environmentally friendly criteria included to the tender process, the
pre-public procurement legislation applies also to any contractor when the aid is granted by state or local authori-ties or legal persons regarded as part of the public administration and when the public aid of the procurement exceeds half of the value of the procurement (1247/1997).
407 The APPCC (1397/2016) section 5.
408 Pekkala – Pohjonen – Huikko – Ukkola 2019, p. 57.
409 Since the principle of equal treatment of tenderers based on Art. 18 para. 1 of the Directive 2014/24/EU.
OJ 28.3.2014 L 94/143
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marketing and preliminary preparation of the procurement are crucial for offerors. However, the criteria used in the procedure should not be exclusive are, meaning that they should be open410, comparable411 and non-discriminative.412
The local authorities may modify tendering criteria and take environmental matters into consideration in various ways and in all parts of the procedure.413 Climate criteria can be used in the selection of raw materials, production methods, transport methods, maintenance, recycling possibilities, 414 and via contracts including sanctions and bonuses. The environment criteria, i.e. the prize or value for the environment, is totally considered by the local authorities. It depends on their will, how and to what direction the markets are guided.
They can restrict emissions and promote circular economy in their municipalities using the GPP. They can also ask how companies have organized their environmental management.415 If the environmental management plan is mandatory part of the procurement documents, at least, the companies need to generate one and to think how they could work in a more environment-friendly way in their businesses.
The existing legal framework, including international treaties and national legislation, gives authorities fairly free hands to include any kind of criteria, that includes also environmental and climate criteria, in the public procurement processes. In Finland, state authorities need to consider climate criteria in their purchasing procedure,416 but legally autonomous municipalities individually and separately can decide to what extent they put effort into planning the purchasing process in environment-friendly way.
Most of the municipal authorities who exercise public procurement in various municipal sectors as a part of their daily work are not always legal experts and do not necessarily have
410 The APPCC (1397/2016) section 2.
411 The APPCC (1397/2016) section 67.
412 The APPCC (1397/2016) section 2.
413 Pekkala – Pohjonen – Huikko – Ukkola 2019, p. 57.
414 Pekkala – Pohjonen – Huikko – Ukkola 2019, p. 63. For example, with the help of life-cycle costs. The APPCC (1397/2016) section 4 subsection 18.
415 Pekkala – Pohjonen – Huikko – Ukkola 2019, p. 58; APPCC (1397/2016) section 90 subsection 1.
416 There exists also guidelines binding state authorities such as: Valtioneuvoston periaatepäätös kestävien ympäristö- ja energiaratkaisujen (Cleantech-ratkaisut) edistämisestä julkisissa hankinnoissa Valtioneuvosto 2013; Valtion periaatepäätös julkisten elintarvike- ja ruokahankintojen arviointiperusteista. Valtioneuvosto 2016.
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special legal expertise regarding EU or international environmental law. Due to the dualist system and the fact that international law is not automatically part of national legislation in Finland, but needs to be adequately implemented and ratified by the parliament through national law, and if it has not been done, the current legislation does not oblige to take the most environment-friendy criteria or international targets set into consideration. Since the CCA (609/2015) is not applied to municipal authorities, climate actions are based on soft law instruments i.e. recommendations, guidelines and on the basis of discretion of the single authority. How and to what extent the authority takes the climate criteria into consideration in the public procurement process depends on the authoritiy’s ambitiousness. It could be said that one of the weaknesses of the public procurement processes is the lack of time used on preparations, lack of knowledge on how to use environmental and climate criteria in a certain purchasing procedure and lack of open access to public procurement documents and hearings by local stakeholders. It has also been concluded that authorities are not cautious enough.417 The reason is the fear of mistakes and the will to avoid market court proceedings.418 If new criteria is applied, it is always risky and may lead to mistakes.
Next I will explain the possibilities the current legislative framework offers for municipal authorities to include climate criteria to their purchasing processes. The most economically advantageous tender can be selected based on the price or by cost-effectiveness approach, for example, based on life-cycle cost defined in section 95 of the APPCC (1397/2016). This may include environmental criteria, if linked to the subject matter of the public contract.419 These environmental criteria can be connected to consumption i.e. pollution, maintenance, disposal, externalities linked to production, life-cycle cost (including acquisition) and use (such as consumption of energy).420 It also covers environmental externality costs, if they are linked to product and the value of the cost can be calculated. These kinds of costs may cover the costs of emissions of GHG or climate change mitigation costs.421 However, the costs should be objectively verifiable and non-discriminatory. In addition, the data should be accessible with reasonable effort, not only in the EU area, but also for the countries under
417 Alhola – Kaljonen 2017, p. 29.
418 Ibid.
419 Pekkala – Pohjonen – Huikko – Ukkola 2019, p. 61.
420 Dragos – Neamtu, European Procurement Law Series 2014, p. 318; Pekkala – Pohjonen – Huikko – Uk-kola 2019, p. 62.
421 Dragos – Neamtu European Procurement Law Series 2014, p. 323; Pekkala – Pohjonen – Huikko – Uk-kola 2019, p. 62.
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the GPA.422 The environmental life-cycle costs take the external impact on the environment into consideration.423 The environmental life-cycle analysis in procurement has been used in new energy-efficient buildings, refurbishment of existing buildings heat, light and ventilation and building management systems, solar thermal and PV applications, office equipment, computers, printers and photocopy machines.424
Labels according to section 72 of the APPCC (1397/2016) are also useful tools where functional requirements may be defined by reference to the specifications of an eco-label.
However, other instruments of proof must be accepted. The label must fulfil strictly defined conditions, for example, as the requirements must concern criteria “linked to the subject-matter of the contract” and they need to be appropriate to “define characteristics of the works, supplies or services,” that are the object of the contract.425 Furthermore, the label requirements must be “based on objectively verifiable” criteria and they must be “non-discriminatory.”426 The labels used must have been established in a procedure, which has been open and transparent.427 The labels must be accessible to all parties and the label requirements must have been set by a third party, which the parties cannot influence.428 The eco-label is regulated at the EU level by Regulation (EC) No 66/2010 of the European Parliament and of the Council of 25 November 2009 on the EU Ecolabel.429
During the implementation process of public procurement law in Finland, the environmental committee stated that the new regulations such as section 72 considering eco-labels and, section 93 evaluation criteria and section 95 considering life-cycle costs clarify environmen-tal criteria in public procurement processes.430 It also stated that without increasing climate,
422 Dragos – Neamtu European Procurement Law Series 2014, p. 323.
423 Environmental costs can be calculated related to acidification including grams of SO2, NOX and NH3, eutrophication including grams of NOX and NH3, land use square meter per year. The SMART-SPP project developed tools for public authorities to assess CO2 emissions to compare the bids Dragos – Neamtu Euro-pean Procurement Law Series 2014, p. 325.
424 Dragos – Neamtu European Procurement Law Series 2014, p. 326.
425 The APPCC (1397/2016) section 72 subsection 1.
426 The APPCC (1397/2016) section 72 subsection 2.
427 The APPCC (1397/2016) section 72 subsection 3.
428 Dragos – Neamtu European Procurement Law Series 2014, p. 329–330; The APPCC (1397/2016) section 72 subsections 4-5.
429 OJ 30.1.2010 L 27, p. 1–19.
430 YmVL 20/2016 vp., p. 2.
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environment and innovative solutions or cleantech solutions by public local entities, the tar-gets set by the government are not reached. 431 In addition to this, the problems and obstacles were discussed. Especially the lack of information regarding which product groups the eco-labels are covered, were discussed.432 The expenses to gain ecolabels were also noticed.
433This is a challenge especially to the small-to medium-size (SMS) companies.434 The need of different kind of new metrics were debated. Also, the Environmental Committee pro-moted that environmental criteria considerations should be compulsory in public procure-ment processes, where environprocure-mental impacts are considered relevant.435
Public procurement legislation includes several different procedures and methods to choose from. The most commonly used is the so called open procedure, defined in section 32 of the APPCC (1397/2016), meaning that anyone who fulfils the criteria can leave an offer.
Restricted procedure regulated in section 33 of the APPCC (1397/2016) means that the procurement unit first defines selection criteria and suitable tender candidates. Selected minimum 5 candidates will deliver the final offer.436 In these procedures all procurement documents and criteria need to be defined before publishing the tendering notice, since the procurement material must be available to all the tenderers from the very beginning of the procedure.
The open procedure and restricted procedure are the most commonly used procedures.437 The weakness of these procedures from the point of view of climate criteria is that the procurement entity has the monopoly to define the selection criteria. It means that those authorities who prepare the documents need to now the newest innovations and standards used in the certain business field in order to include them to the procedure. Furthermore, the criteria used in these procedures are usually minimum criteria, meaning that if any offeror has a better product or service, it cannot get extra points on the bases of better solution. The procedure is not flexible and does not aloud any negotiations during the process between the
431 YmVL 20/2016 vp., p. 3.
432 Ibid.
433 YmVL 20/2016 vp., p. 2–3.
434 SMEs often work as actors, which provide for public purhasers understanding about their wider responsi-bility to the localities. Preuss – Walker Public Administration 2011, p. 493–521.
435 YmVL 20/2016 vp., p. 5.
436 Under 5 candidates if suitable candidates are fewer.
437 Open procedure in the APPCC (1397/2016) section 32 and restricted procedure in section 33.
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Negotiated procedure regulated in section 34 of the APPCC (1397/2016) gives wider possibilities for tenderers to present their new technical and environment-friendly solutions.
The negotiating procedure can be used when the subject of the procurement is complex, there are legal or financial risks or special needs, and the contract cannot be finished without negotiations. These procurements can include, for example, life-cycle aspects, partnership or alliance design or it can be a combination of services and construction project.438
According to section 34 subsection 4 of the APPCC (1397/2016) it is also possible to use negotiated procedure if the description of the procurement target is not possible to form by referring to certain standards or technical specifications. These standards and specifications are done in order to facilitate the definition. If these standards or specifications do not exist, it means that the target of the procurement is such that the solutions existing in the markets need to be modified. This leads to the conditions of complexity of the procurement, which is requirement for the use of this procedure. 439 It is also possible to switch to negotiated procedure after failed open and restricted procedures. The condition in that case is that any offers which fulfill the standards are not delivered. However, in that case the climate criteria is not relevant since in that case the purpose of the negotiations is only to get an offer which fulfils the offer request.440 However, if the offeror has given alternative solutions, even if the tender has not given this possibility, or if there has been no enquiry as to how the offeror provides its environmental protection duties, it is possible to switch to negotiated procedure.
If the substance of the procurement changes, the procurement unit has a duty to publish a new tender notice and give other tenderers a possibility to give alternative offer as well.441
According to the APPCC (1397/2016) section 35, when starting negotiation procedure, the public entity needs to present in tender notice, tender documents or negotiation invitation its needs and quality standards of the service, work or goods and the most economically advantageous tender criteria. This procedure gives a possibility to change the procurement
438 Pekkala – Pohjonen – Huikko – Ukkola 2019, p. 219.
439 Pekkala – Pohjonen – Huikko – Ukkola 2019, p. 221.
440 Ibid.
441 Ibid.
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criteria during the negotiation, if new information is gained. However, it is not possible to negotiate according to the public procurement law the minimum requirements, the most economically advantageous tender criteria or value for evaluation criteria.442 Even if the public entity has the negotiation power, it cannot change the compulsory criteria it has set in the beginning of the procedure. The public authorities are entitled to inform the offerors which are the unnegotiable criteria and which are those negotiable criteria. However, selection criteria and the weight of chosen criteria does not need to be informed as exactly compared to other procurement methods. It means that compulsory comparison criteria can also be modified and focused during the negotiation procedure.443 These include, for example, the criteria considering energy efficiency, which has not been the subject of procurement, but can later be part of the final invitation to tender.
In competitive negotiated procedure according to section 36 of the APPCC (1397/2016) tenderer negotiates with the offerors regarding the conditions of the procurement with the selected offerors. The aim of this procedure is to map and define the best means and solutions in order to solve the need of procurement entity.444 With the help of competitive negotiated procedure, it is possible to delimit the solution possibilities to one or few, based on the final invitation to tender. The aim is to get a new solution. It means that the focus is to find suitable solution model.445 How this solution is implemented, is not on the focus of this procedure.
The competitive negotiated procedure needs to fulfill the same conditions as the negotiated procedure. However, it cannot be used if open procedure or restricted procedures have failed on the contrary to negotiated procedure. The most economically advantageous tender criteria in competitive negotiated procedure needs to be based on the price of quality, not only on price.446 The procurement procedure is mainly used when the procurement unit cannot simply, on the basis of normal market mapping, define how the best solution would be executed. This method is also used when there is a lack of possibilities to define what kind of technical, economical or legal solutions the markets have to offer. The procedure is especially useful in situations, when the solution wanted does not exist in the market or if the description of the procurement target is not possible to define with the help of existing
442 Pekkala – Pohjonen – Huikko – Ukkola 2019, p. 233.
443 Ibid.
444 Pekkala – Pohjonen – Huikko – Ukkola 2019, p. 237.
445 Ibid.
446 Ibid.
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standards or technical specification. Also, negotiated procedure is possible when the procurement includes innovativeness and planning, or if there are no suitable standards and technical specifications.447 Since it is not always possible to define climate criteria exactly, the climate criteria can be promoted using competitive negotiated procedure. The selection of suitable procedure is crucial in order to gain efficient climate-friendly impact via public procurement procedure.
The newest procurement method taken to the the APPCC (1397/2016) is innovation partnership regulated in sections 38 and 39. The aim of this method is to promote the strategical use of public procurements.448 Another aim is that SMSs will benefit of this procurement method. With the innovation partnership it is possible to combine research- and service developing. The separate tender procedure is not needed and the purchasing can be made straight from the development partner. The development work can be targeted to developing a new product or service. It can also be targeted to modification of the product
The newest procurement method taken to the the APPCC (1397/2016) is innovation partnership regulated in sections 38 and 39. The aim of this method is to promote the strategical use of public procurements.448 Another aim is that SMSs will benefit of this procurement method. With the innovation partnership it is possible to combine research- and service developing. The separate tender procedure is not needed and the purchasing can be made straight from the development partner. The development work can be targeted to developing a new product or service. It can also be targeted to modification of the product