Does the EU violate public procurement law in its external migration policy?
Thomas Spijkerboer & Elies Steyger
Elies Steyger is professor of European administrative law at the Vrije Universiteit Amsterdam. Thomas Spijkerboer is professor of migration law at the Vrije Universiteit Amsterdam and Raoul Wallenberg visiting professor of human rights and humanitarian law at Lund University; his research for this article was funded by the Marianne and Marcus Wallenberg Foundation
The Spanish translated version of this blog can be found here.
In 2014-2015, the European Union adopted three financial measures in order to cooperate with neighbouring countries in the field of migration policy. By July 2019, the Trust Fund in response to the Syrian crisis, also called the Madad Fund, was worth a total of €1.8 billion; the European Union Emergency Trust Fund for stability and addressing root causes of irregular migration and displaced persons in Africa was worth €4.6 billion; and the Facility for Refugees in Turkey €5.6 billion. The European external migration funds are subject to the ordinary public procurement rules to which both the member states and EU institutions themselves are subject. This requires open, transparent and objective procedures so as to open up markets for public contracts, stimulating competition and therefore quality of contractors and the proper spending of public money.
However, for the projects implemented through these financial measures, there is often no open competition. Instead, potential implementing partners bring their projects to the attention of EU delegations in the country concerned and the European Commission. These carry out a first scrutiny of potential projects. Subsequently, an informal expert group carries out an examination of the project proposals. In the background, there is an on-going negotiation between the Commission, the EU Member States, the third country involved and sometimes the potential implementing partner. In the words of the European Court of Auditors, the selection of projects is “not fully consistent and clear.” Others have called it “opaque.”
In light of these concerns about the transparency of the way in which public funds are spent, we have analysed in an article published in European Papers how expenditure under the migration funds relates to European public procurement law.
Public procurement law
Public procurement law aims to make the award of public contracts conform to the principles of the TFEU, in particular with the free movement of goods, the freedom of establishment and the freedom to provide services, as well as the principles deriving thereof, such as equal treatment, non-discrimination, mutual recognition, proportionality and transparency. It stimulates competition and the proper spending of public money. In the following, we will interchangeably refer both to procurement Directives (addressed to Member States) and to Regulations (applicable to EU institutions), for reasons which we explain in the full article.
There are a number of specific exceptions to the duty to use full-fledged public procurement procedures. The following exceptions are relevant for our context:
- For emergency situations: Article 32(2) under c, of Directive 2014/24 and article 90 and 154 of Regulation 1268/2012 allow for simplified procurement procedures if this is necessary for reasons of urgency.
- Article 190(4) of Regulation 966/2012 exempts civil protection operations and humanitarian operations in the field of external action.
- If the contracting authority awards a contract to another contracting authority on the basis of an exclusive right which it enjoys pursuant to a law no procurement has to take place (Article 11 Directive 2014/24). Those public contracts are only allowed if and when the contracting authority exercises over the legal person concerned a control which is similar to that which it exercises over its own departments, and more than 80 % of the activities of the controlled legal person are carried out in the performance of tasks entrusted to it by the controlling contracting authority (Article 12 Directive 2014/24).
- When the works, supplies or services can be supplied only by a particular economic operator for a restricted number of reasons, among others when competition is absent for technical reasons, it is not required to follow a public procurement procedure (article 32(2) under b of Directive 2014/24).
The crisis exception in the Trust Fund for Africa
Article 3 Decision C(2015) 7293 of 20 October 2015 declares a crisis in all countries covered by the EUTF Africa for the duration of the Trust Fund in the sense of Article 190(2) Regulation 1268/2012. Article 10 of the Constitutive Agreement establishing the EUTF Africa stipulates that “given the Trust Fund’s objective in a crisis and post-crisis situation, flexible procedures appropriate to the local environment will be used to ensure that the Fund is effective and responsive.”
Article 10 of the Constitutive Agreement establishing the Madad Fund for Syria contains the same provision. There is no doubt about the existence of a crisis in that context; in addition, projects funded through the Madad Fund are also covered by the humanitarian exception to public procurement.
For the Trust Fund for Africa however, Article 3 Decision C(2015) 7293 of 20 October 2015 fails to substantiate why there would be a crisis situation throughout the 26 countries covered by the Fund. This alone is already sufficient reason to doubt the compatibility of this provision with the emergency exception.
It is conceivable that there is a crisis throughout a particular country, like South Sudan. Also, the presence of a UN Force in Mali could be grounds to argue there is, or was at a particular moment, a crisis situation in the north of Mali. In such situations, it is conceivable that the European Commission could establish that the situation is so urgent that public procurement would hinder an effective response to the situation. That would have to be substantiated in the relevant cases.
It is, however, far-fetched to claim that there is a crisis which makes procurement impossible in stable countries such as Ghana, Morocco or Kenya. Below, we will address two long-term projects in Mali. The provision from Article 3 Decision C(2015) 7293 of 20 October 2015 is therefore incompatible with European law for two reasons.
- First, no grounds are adduced to substantiate that there is a crisis in all 26 African countries for the entire duration of the Trust Fund.
- Second, the general nature of the exception makes the provision evidently overbroad. While it is conceivable that for particular projects it can be established that the situation is so urgent as to override the interests served with public procurement procedures, the general exception is disproportional.
In order to get an impression of the public procurement issues that are at stake in the European migration funds, we have looked at five individual projects.
1. Civil registries in Mali
A project concerning civil registries in Mali amounts to €25 million. The aim is to provide Mali with a digitalised civil registry which is linked to a biometric database, so as to secure the identity of the population and to be accessible for other governmental users. The project is implemented through a contract with Civipol (the consulting and service company of the French ministry of the interior), which signed a sub-contract with the Belgian development agency Enabel. They are to work in partnership with the Sant’Egidio Community (a Christian community of lay people). There is no evidence that these contracts have been subject to public procurement. Also, there are no indications that the acquisition of IT equipment and services in the project has been subject to procurement. There are no reasons to believe that the emergency exception applies because this is a long-term project. One exception that may well apply concerns the Malian public authorities involved in the project. They exercise an exclusive right which they enjoy pursuant to a law. For the rest, from the available information ,it seems that the implementation of the project was not in conformity with European public procurement law.
2. Cashews in Mali
A project aiming at improvement of the cashew sector in Mali amounts to €14 million. Its aim is to reduce the root causes of emigration by increasing economic and employment opportunities as well as food security, through improving the production, commercialisation and processing of cashew and its products. It is implemented through indirect management by the Spanish development agency AECID. AECID concluded a sub-contract with the Malian Ministry of Rural Development. AECID and the Ministry signed partnership agreements with other partners, most notably with TRAGSA (a Spanish public enterprise), international NGO’s and their local partners, and other public and private institutions. Procurement for sub-contracting is not mentioned in the document we have seen. The project is not covered by the emergency exception to public procurement, as it is a standard development aid project. However, since the Spanish development agency AECID is implementing the programme by indirect management, it can probably award contracts to TRAGSA on the basis of the exclusive right exception mentioned above. Furthermore, the sub-contract with the Malian Ministry of Rural Development may be subject to the same exception because of the exclusive right which the Ministry may well enjoy pursuant to a Malian law. For other contracts (those with international NGO’s and their local partners, professional organisations and other partners) normal public procurement law applies. Whether or not these have been followed in this project is not clear from the available information.
A project to support the protection and humanitarian repatriation of vulnerable migrants in Libya amounts to €20 million. The concrete activities are: equipping the Libyan Coast Guard and Port Security officials; improving the management capacity and the living standards in Libya migrant detention centres; the repatriation of detained migrants; the collection, reporting and dissemination of data on migrants in Libya. The project is to be implemented by indirect management by IOM for a €16.8 million component, and by direct management in the form of grants to civil society organisations for a €3 million Protection fund. IOM is argued to be well placed to manage the project, and for the repatriation component, it is said to be the only organisation able to perform this kind of interventions in Libya at that moment. For the grants to be awarded for the Protection fund, the action fiche sets out criteria.
Whether the emergency or humanitarian exception to public procurement applies to equip the Libyan Coast Guard is intertwined with one’s evaluation of these activities. If one agrees that this is a humanitarian activity, it is thereby urgent. If one agrees with the critique holding that these activities constitute externalised European border control aiding and assisting inhuman treatment by the Libyan Coast guard and others, they cannot benefit from the humanitarian exception to procurement; and the activities cannot benefit from the emergency exception either because activities that should not be undertaken at all do not have to be undertaken urgently either.
For the repatriation activities, if we accept the factual claim that currently only IOM can carry out this project, then the exception concerned applies. Also, the emergency exception may be applied because the conditions to which migrants are exposed in Libya are so dire that getting people out of the country is urgent. For the data collection activities, it seems very hard to argue that no public procurement is required, as no exception seems applicable. An obvious approach would seem to split the contract and use a public procurement procedure for the data collection activities.
4. Turkish Coast Guard boats
A fourth project aims to enhance the capacity of the Turkish Coast Guard to carry out search and rescue operations and has a budget of €20 million. Its main component has been the provision of six coast guard boats built by the Dutch owned defence shipyard Damen Antalya, while other forms of training and support were given as well. The project has been implemented through indirect management by IOM. The documents about this project do not invoke any exception to public procurement law, and such exceptions also seem not to be applicable.
IOM Ankara has informed us that IOM sent a proposal with the project and was chosen to implement the project. IOM stated it has applied its normal procurement procedures, and opted for Damen Antalya because it made the right boats and its location made cooperation with the Turkish Coast Guard and IOM Ankara easy. Our written request to be shown the call for tenders for the boats remained without response. It therefore looks like public procurement law was presumed to be applicable and was applied, but this is not transparent.
5. Syrian refugees
The project “Improving school conditions, access to economic opportunities, local administration, social cohesion and dialogue facilitation for refugee, IDP and host communities”, targeting Iraq, Lebanon, Jordan and Turkey amounts to €74.6 million, of which in October 2018 €49.7 million had been disbursed. The project has been approved as part of a multi-project Action fiche with a total budget of €128 million. The main project partner is GIZ (the German development agency), in partnership with Expertise France (the French public international cooperation agency) and AECID. The project consists of improving basic social services for internally displaced persons (in Iraq), refugees and local populations. There is an emphasis on education, including acquiring school buses. An important characteristic is assisting refugees and local communities together, and to facilitate their integration through, i.a., community centres offering training, advice and counselling.
Evidently, this project is exempted from public procurement on the basis of the exception for humanitarian operations in the field of external action. We have no information on whether public procurement procedures were used nonetheless. A supply contract concerning providing school buses, or a services contract for trainings, could result in better outcomes as well as in transparency. In all situations, it remains to be seen whether the value of the individual contracts would necessitate public procurement.
When looking at the compatibility of expenditure under the three funds with public procurement law, a mixed picture emerges. The wholesale exemption of expenditure under the EU Trust Fund for Africa from public procurement law is incompatible with EU law, both because no grounds are given for declaring a crisis in the 26 African countries involved, and because for most of these countries this is far-fetched. On the other hand, humanitarian aid projects are exempted from public procurement law (as in the Madad Fund project). Furthermore, the more specific exceptions for public undertakings, for exclusive rights (the two projects in Mali) and for organisations with unique capacities (IOM in Libya) seem to apply in some cases. Whether public procurement has taken place, and if so how is not always transparent.
From a migration law perspective, the cursory reliance of the notion of emergency fits with a more general tendency in the field to consider ordinary rules, standards and procedures inapplicable because of an assumed emergency. From a public procurement law perspective, it is remarkable that European public procurement law is not well integrated into external migration policy. This leads to a situation where the expenditure of billions of Euros is vulnerable to political challenges, as well as to legal challenges from parties whose interests may have been harmed by the failure to apply public procurement procedures.