Local authorities are responsible for and have decision power to public procurement planning. According to the Finnish Environment Institute, the environmental matters are taken into account in only 20 % of the public procurement processes in Finland.353 It means that at local level there is a lot of potential when it comes to environment improvements and the climate change actions. The subject-matters local authorities procure are such as green power, transport systems and vehicles, IT-equipment and construction works and building materials. For example, buildings built by public authorities, are value of 7 billion on yearly basis in Finland.354 The low-carbon solutions are calculated and planned before the project starts. The Ministry of Environment in Environment Guide (2017) procurement criteria for carbon building, suggests that, all materials and equipment used are selected by low-carbon basis. Also, the maintenance of the building should be carried out energy-efficiently.355
According to CF (731/1999) section 20 § nature and its biodiversity, everyone is responsible for the environment and the national heritage. Also, it states that, the public authorities must make efforts to guarantee everyone the “right to a healthy environment.” In addition, the possibility to influence the decisions concerning own living environment must be ensured.356 These responsibilities, however, are completed via substantive legislation. The CF 731/1999 supports interpretation of regular legislation. In addition, the CF (731/1999) guarantees that
349 C-448/01 The Wienstrom -case (2003) ECR I-14527.
350 C-448/01 The Wienstrom -case (2003) ECR I-14527.
351 C-368/10 The Dutch Coffee -case.
352 Romera – Caranta EPPP 2007, p. 288.
353 Finnish Association for Nature Conservation 2016.
354 Ministry of Environment 2017.
355 Ibid.
356 The CF (731/1999) section 20.
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government should secure healthy environment and access to decision-making having im-pact on environment. It means that public entities have a special responsibility to promote the protection of environment and citizen`s possibilities to take part in decision-making, both at administrative level as well as in developing new legislation. National legislation needs to be interpreted also in the light of EU Treaties, since the legal system needs to be coher-ent.357
Finland has ratified international environmental agreements as a member state of the EU.
The Finnish authorities are obliged to follow the EU environmental regulations and princi-ples. The most important regulation of the EU is Art. 3(3) of the TEU358 claiming that “the EU shall work for the sustainable development based on economic growth,” but at the same time “a high level of protection and improvement of the quality of the environment.” Envi-ronmental policy is, however, under the shared competence.359 According to subsidiarity principle measures should be done as grass-root-level as possible.
During the implementation process of the reformed public procurement directive to the na-tional legislation, environmental aspects were discussed. The environmental impact of pub-lic purchasing was noticed, especially its role in promoting sustainable and more climate-friendly policy.360 Also, it was pointed out that the government has engaged to carbon free solutions.361 It was also claimed that the proposal in the public procurement law includes the risk to be remained only empty words without strategic guidance.362 Also nongovernmental organizations, such as the Finnish Association for Nature Conservation, criticized the lack of obligation in environmental criteria.363 It was also stated that if the targets for Cleantech -solutions are intended to be achieved the environmental criteria should be compulsory for the public entities to take into consideration during the procurement process.364 However, this was not succeeded.
357 Sjåfjell 2015, p. 67.
358 OJ 26.10.2012 C 326, p. 13–390.
359 Art. 4 (2)(e) of the TFEU. OJ 26.10.2012 C 326, p. 47–390.
360 YmVL 20/2016 vp., p. 2.
361 YmVL 20/2016 vp., p. 3.
362 Ibid.
363 Finnish Association for Nature Conservation, 2016
364 Ibid.
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The proposal did not present any alternative regulation possibilities considering environ-mental aspects. It seems that the aim of the government was to focus environenviron-mental measures only via governance instruments, the focus being on administrative and informative super-vision and self-regulation of the public entities themselves.365 As a result of the governance aspect, the Competence Centre for sustainable and innovative public procurement was es-tablished on the first of March in 2018 to promote and support the Finnish public contracting authorities with the development of greener public procurement. 366
According to the APPCC (1397/2016) section 2, the aim of the law is to promote “optimal economy, quality” and regularity and “taking into account of existing competitive conditions”
by using existing competitivie conditions. It also allows environmental and social367 aspects to be considered. The environmental aspects are not compulsory, but optional.368 However, there is other binding legislation about the use of environmental measures, which the mu-nicipal authorities need to follow.
The APPCC (1397/2016) section 72 regulates that the procurement entity can use and require certain labels in order to proof that the product fulfils environmental characteristics. How-ever, using labels is not totally free. The possibility to use labels is related to specific terms and conditions. The criteria are similar to the ones found in EU directives.369 According to section 72, the label may concern criteria i.e. “linked to the subject matter.” It also needs to be “appropriate for specifying the characteristics of the public” work contracts, products or services, “which compose the subject matter.”370 The label requirements must also be based on criteria, which are “objectively verifiable and non-discriminatory.”371 The labels used need to be established in an open and transparent procedure. Furthermore, accessability is
365 As was the case of CCA (609/2015) due to HE 82/2014 vp., p. 26.
366 Keino: Kestävien ja innovatiivisten julkisten hankintojen verkostomainen osaamiskeskus:
Etusivu: Julkisten hankintojen tila Suomessa 22.1.2019.
367 Public procurement is used in order to achieve social outcomes such as gender equality and the Corporate Social Responsibility. McCrudden Natural Resources Forum 2004, p. 264; COM (2001) 366 final; OJ C 192/1, p. 5.
368 Pekkala – Pohjonen – Huikko – Ukkola 2019, p. 57.
369 Art. 43 of Directive 2014/24/EU. OJ 28.3.2014 L 94/143.
370 The APPCC (1397/2016) section 72.
371 Ibid.
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important. The labels must be available to all parties and the label requirements must have been set by a third party. This prevents that the supplier, who wants to gain the label, from influencing on the process.
The section 79 of the APPCC (1397/2016) gives the contracting entity a possibility to ex-clude the tenderer, who has submitted the most economically advantageous tender, “if the tender fails to comply with the environmental law obligations.” Also, section 81 of the AP-PCC (1397/2016) regulates that the contracting entity can exclude a tenderer from competi-tive tendering, if it finds out that the environmental law obligations are infringed.372 How-ever, the contracting entity must prove that the infringement is committed. Also, if tenderer’s administration or management has infringed the law, exclusion can be done. The evaluation of the exclusion’s execution is based on the gravity of the error, the type of offence, its´
“connection to the procurement” and “the time that has elapsed.” However, tenderer cannot
“be excluded from competitive tendering” after three years of the event.373
In section 90 of the APPCC (1397/2016) the law sets to the contracting entity a possibility to request tenderers to report on environmental impact management measures during the implementation of “public works contract or performing a service.” The tenderer may use environmental management standards such as the EU EMAS or other recognised “environ-mental management standards” that “official institutions have certified“ or which are “based on international industry standards.” 374 Also, corresponding certificates are legitimate.
The APPCC (1397/2016) section 93 gives the contracting entity a permission to inflict
“price-quality ratio comparison criteria related to qualitative” such as environmental con-siderations or innovative characteristics. Also, in this case, the comparison criteria must be linked to the procurement. They must not give an unlimited freedom of choise to the con-tracting entity. The comparison criteria must be non-discriminatory and the possibility of
372 Listed in Annex C of the APPCC (1397/2016).
373 The APPCC (1397/2016) section 79.
374 The APPCC (1397/2016) section 90.
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legitimate competition has to be ensured. The contracting entity has to determine the com-parison criteria in a manner, which enables auditting the decision-making based on the cri-teria by tenderers.375
Section 95 of the APPCC (1397/2016) regulates about the life-cycle costs. The procurement entity can use life-cycle costs as a criteria in evaluation of the costs of a procurement. The life-cycle costs may include, for example, operating and the “maintenance costs and costs at the recycling.”376 In addition, a waste disposal stage can be included as well as other costs throughout “the life-cycle of the public works contracts,” products or services.377 Life-cycle costs may also include costs caused by “external environmental impacts” and in these cases same evaluation criteria needs to be fulfilled, objectivity, non-discrimination, accessi-bility.378 The cost calculations should, however, not require unreasonable effort from sup-pliers.379
What comes to “special terms and conditions of a procurement agreement,” according to section 98 of the APPCC (1397/2016), it is possible that the contracting entity may imple-ment them to procureimple-ment agreeimple-ment. However, it should be “provided that the terms and conditions” used are “linked to the procurement” subject.380 The terms and conditions may relate, for example, to environmental aspects. In the “contract notice, in the invitation to negotiate or in the documents of the call for tenders,” the special terms and conditions of the procurement agreement can be determinated, The Act does not cover “procurements of as-signed amount“ or “emission reduction units and certified emission reductions permitted under the Kyoto Protocol” to the UNFCCC.
3.5 Summary
Legislation should be implemented in as environment-friendly way as possible also in
375 Already before recent public procurement legislation came into force, the Finnish Market court ruled that ecolabels can be used as a basis for comparison. MAO 410-411/12. However, the comparison should be im-plemented with clarity. MAO 412-413/12.
376 The APPCC (1397/2016) section 90.
377 The APPCC (1397/2016) section 95.
378 The APPCC (1397/2016) section 95 subsections 1-3.
379 The APPCC (1397/2016) section 95 subsection 4.
380 As defined in the APPCC (1397/2016) section 94.
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situations, when EU institutions have failed to do so. The Finnish public procurement legal framework gives a possibility to take environmental aspects into consideration, but it is optional. This means that the minimum criteria in purchasing processes comes from substantive laws and directives. This is not fulfilling the political targets set by the EU. The integration rule lines EU objectives and broadens the scope of environmental rules, and climate change obligations and restrictions.381 However, the possibilities are limited by economical resources and knowhow. Also, all criteria used should be related to the procurement subject-matter and be based on scientific information. Since new solutions are needed, the emphasis should be focused on innovative procurement processes, which means that local solutions are designed together between the stakeholders.
381 Sjöfjell 2016, p. 68.
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4 ASSESSING EXISTING ROOM FOR CLIMATE-FRIENDLY PUBLIC PROCUREMENT IN FINLAND
4.1 Introduction
As was pointed out in the Paris Agreement, non-Party stakeholders, such as local authorities are in a key role in influencing emissions382 in their municipalities both directly via purchas-ing measures, but also indirectly reducpurchas-ing emissions via their own energy use. Also, educat-ing and raiseducat-ing awareness in local communities and businesses and through exerciseducat-ing hous-ing, planning and logistical functions, are among the tasks of local authorities. In the Paris Agreement local communities were invited to make efforts, support actions to reduce emis-sions, promote regional and international cooperation and built resilience.383 They were also implemented to the international legal framework via the COP 21 decision, which institu-tionalized the role of sub-state and non-state actors in the UNFCCC regime.
Municipalities in Finland implement both EU and national laws. Due to emerging role of municipalities in environmental and climate issues, national governments have started to pay more attention to them, started dialogue with cities and ensured that local authorities are considered as a part of the decision-making processes.384 Structures between local commu-nities and states are supported and recommended.385 Local municipalities are also increas-ingly formulating their climate strategies,386 which is commonly the first step in climate ac-tion. A total of 114 municipalities have drafted or are drafting their climate strategy.387 How-ever, only third of strategies include monitoring, meaning that there is certain timetable, clear indicators to follow, operations which are accountable or reported results.388 It seems that more guidance to implementation of climate criteria is needed.
According to the Finland`s Seventh National Communication, under the UNCCC, more than one-third of the municipalities in Finland have in one way or another implemented climate
382 COP Decision 1/CP 21 para. 134.
383 Ibid.
384 McCarney Environment and Urbanization ASIA 2012, p. 14.
385 Lemos – Agrawal Environment 2007, p. 44.
386 Such as Climate change adaptation strategy for the Helsinki Metropolitan Area. Helsinki Region Environ-mental Services Authority 2012.
387 Mattson 2012, s. 8.
388 Mattson 2012, s. 20.
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change mitigation into their measures.389 How this implementation works in practice, and what are the possibilities of municipal governance to take them into consideration, is not studied. The municipal governance is sectoral based. There are sectors such as land use and planning, construction, technical services, educational and culture, social services, healthcare and environment protection. All these sectors include several subsectors. This chapter will examine the extent to which cities are obliged to include climate criteria to their measures under the existing legal framework, and what possibilities does the procurement framework offer. Also, some barriers set by the governance and public procurement legal framework are considered in the end.