Use of Fair Trade labels in procurement decisions – Court of Justice of the EU in Max Havelaar

The Court of Justice of the EU has further completed its views on the use of criteria linked to sustainable development. These are criteria which do not simply refer to environmental characteristics of the product itself. Rather, they convey a message as to the overall ‘process and production methods’, known in jargon as ‘PPMs’, of a particular product or service.

In Max Havelaar, Case C-368/10, the Court had to decide on the use of specific labels in decisions awarding government purchases (‘procurement’) to a particular supplier.The province of North Holland had

–        inserted in the technical specifications a condition requiring the Max Havelaar and EKO labels or in any event labels based on similar or the same criteria;

–        included, for appraising the ability of operators, criteria and evidence concerning sustainable purchasing and socially responsible business, and

–        included, when formulating award criteria, a reference to the Max Havelaar and/or EKO labels, or in any event labels based on the same criteria.

The judgment is quite complex for those unfamiliar with (EU) procurement law In particular, the Court distinguishes in the exact room for manoeuvre between various stages of a procurement decision. Leaving detailed breakdown aside (reference is made to the judgment), the Court’s finding is basically that authorities must make use of descriptive conditions for such criteria, rather than solely referring to specific labels. However they may identify certain labels as leading to a presumption of these criteria having been met, provided of course they allow other proof to be submitted.

For WTO lawyers, judgments like these are not irrelevant. Arguably, adoption of private labels in procurement decisions, may well bring these labels within WTO, in particular, TBT (Agreement on Technical Barriers to Trade), discipline.


2 Replies to “Use of Fair Trade labels in procurement decisions – Court of Justice of the EU in Max Havelaar”

  1. Hello Geert,

    Relatively clear EU PP-law case. From procures point of view it would be practical to exclude others and in some of the cases this could be reasonable from environmental point of view as well, but from legal standpoint it can not be done.
    I think that there still some interesting issues related to green public procurement unsolved. One of them concerns “distance”, how much it is possible to put weight on transport related environmental burden. I know that it can be done by good argumentation in pp-criteriadocuments, but how much.

    Best regards,

    Ari Ekroos

    1. Dear Ari,
      I indeed tend to believe that an awful lot can be done in these tender documents, provided the scientific back-up is available, which supports the identification of criteria as being objectively relevant and identifiable. The Court is far less pre-occupied with ‘like product’ analysis than, in particular, the WTO. Due process and non-discrimination are key.
      Drafting such nifty criteria can be time-consuming, though, as (witness the judgment), one cannot simply push one label forward as being the only acceptable proof of the criteria being met.

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