The estimated impacts of climate change on cities are remarkable. Due to the consequences on their infrastructure mitigation and adaptation measures of cities are increasing. Cities are also crucial actors in combating climate change since they have a specific role in the production, distribution and consumption of public goods and services at multiple levels.195 Public procurement is one way to act and facilitate greener society. To conclude, there is potential at local level, when it comes to environmental criteria in public procurements, since
188 Alhola – Kaljonen 2017; Parviainen 2015, p. 37.
189 E.g. energy-efficiency for buildings, expanding public transport, pedestrian and cycling networks.
190 Mikkelin kaupunki 2015; Pääkaupunkiseudun ilmastostrategia 2030 2007.
191 Such as HINKU-municipalities 2019.
192 Ministry of Finance: Valtion hankintakäsikirja 2017.
193 Kuntahankinnat: vastuullisuus. 2019.
194 Ibid.
195 Toly 2011, p. 137.
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75 % of public purchasing is done on the local level and less than half of the municipalities take environmental criteria into consideration in their purchasing processes.196 Why is this potential not used? What are the obstacles and potential areas for exploration in the legal framework of public procurement? These are some of the areas that will be researched in the following chapter.
196 Motiva 2019; Alhola – Kaljonen 2017; Parviainen 2015, p. 37.
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3 THE LEGAL FRAMEWORK OF GREEN PUBLIC PROCUREMENT
3.1 Introduction
Public procurement is regulated at multiple levels. At international level, it is regulated by the WTO in the Agreement on Government Procurement (GPA).197 The GPA enables parties of the agreement to participate in each others’ government procurement activities.198 At the EU level the public procurement is regulated by three directives: Directive 2014/23/EU,199 Directive 2014/24/EU200 and Directive 2014/25/EU.201 The aim of the procurement directives is to promote the free movement of products and services in the EU area.202 Since the public procurement belongs to the shared competence of the EU, the implementation of the directives are regulated at the national level, i.e. in member states. In Finland, the directives are implemented by APPCC (1397/2016).
The first EU public directives were given in the beginning of the 1970s. They applied on item and construction procurements. Later on, the public procurement directive rooted and started to regulate also the service sector.203 The aim of the public procurement directives was to strengthen the EU internal market. When the first public procurement directive was given, the Council and the European Parliament took into consideration the Treaties of the EU. The latest reform aimed at efficient procurement systems at all levels at supranational, national and local levels.204 The current public procurement package was adopted by Parliament and the Council in 2014. Greater consideration to environmental criteria was ensured in this reform. The legislative framework includes Directive 2014/24/EU205 of 26
197 The Agreement on Government Procurement (GPA) was signed in 1994 in Marrakesh and entered into force in 1996. The GPA has been revised in 2012 and revised agreement entered into force 2014. (referenced as GPA) PE492.628 The EU Committee of International Trade, p. 3 pointed out the need of opening public procurement markets, since it is one of the most closed and least regulated industries of international trade during the reform process.
198 The GPA Art. IV.
199 OJ 28.3.2014 L 94/1
200 OJ 28.3.2014 L 94/134
201 OJ 28.3.2014 L 94/243
202 Directive 2014/24/EU preamble 1.
203 Ukkola, Defensor Legis 2013, p. 259. Commission Directive 70/32/EEC of 17 December 1969 on provi-sion of goods to the State, to local authorities and other official bodies OJ, 19.1.1970 L 13, p. 1–3 and Com-mission Directive 70/32/EEC of 17 December 1969 on provision of goods to the State, to local authorities and other official bodies OJ 19.1.1970 L 13, p. 1–3. Read more about history of public procurement. Bovis 2007, p. 95–117.
204 Brezovnik et al., Transylvanian Review of Administrative Science 2015, p. 50.
205 Repealing Directive 2004/18/EC. OJ 28.3.2014 L 94/143
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February 2014 on public procurement and Directive 2014/25/EU206 of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors.
The public procurement package included a new directive on concessions Directive 2014/23/EU207 of 26 February 2014 on the award of concession contracts, which sets the legal framework for the award of concessions ensuring that all economic actors have an entry to the EU market. The external component of public procurement was also considered by the Commission proposal for a Regulation of 21 March 2012. It established rules on the entry of third-country products and services to the EU’s internal market. In this thesis, the focus is to analyze the Directive 2014/24/EU.208
The public procurement directives are lex specialis belonging to the shared competences between the member states and the EU. The EU directives are the legal instrument used in areas, where existing national laws are complex and need to be adopted for the purposes for the Treaties. The directives are also used as an instrument for liberalization but also re-regulating the markets.209 The directive is binding as to the result, but leaves the choice of method and form, which are needed to gain the necessary changes in national law to the member states.210 The directives are integrated in the national legal systems.211 The new public procurement directive had to be implemented until the 17th of April 2016 in all the EU member states.
The first relevant legal question when starting public procurement process is the value of the project. The value of the procurement determines what legislation is applicable. EU thresholds are based on the GPA, which are revised regularly. From the beginning of 2018, EU threshold, according to Directive/24/EU section 26 concerning municipal authorities`
supply and service contracts and design contests, is 221 000 euros, excluding value-added tax, and concerning public work contracts the threshold is 5 548 000 euros, excluding value-added tax. The national threshold in Finland, according to APPCC (1397/2016) section 25 concerning supply and service contracts and design contests, is 60 000 euros, excluding
206 Repealing Directive 2004/17/EC. OJ 28.3.2014 L 94/243
207 OJ 28.3.2014 L 94/1
208 OJ 28.3.2014 L 94/143
209 Prechal 2005, p. 3.
210 Prechal 2005, p. 4.
211 Prechal 2005, p. 93.
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value-added tax, and for public work contracts 150 000 euros, excluding value-added tax.212 The thresholds are also regulated in other currencies besides euros, and they are easily found in the Communication from the Commission in EU web-pages.213 When these EU thresholds are surpassed, the procurement note needs to be published EU wide, so all the possible suppliers have an opportunity to give an offer. However, in procurements, where the value is under the thresholds defined by national and EU regualtion, a public organization may buy without using a time-consuming public procurement procedure, unless it has not self-regulated its own local thresholds.