Raising Awareness on Public Procurement Impact on Human Rights in Serbia

August 18, 2017 •

js 5By Jovana Stopic
Jovana Stopic is a human rights expert, she has been working with Belgrade Centre for Human Rights on establishing human rights and business footprint in Serbia since 2013

As a candidate country for EU membership, Serbia has been in the process of accession negotiations since 2014. Negotiations were initiated on a number of chapters including Chapter 5 on public procurement and Chapter 23 covering fundamental rights. To enter into EU membership, amongst other requirements, Serbia is expected to ensure that EU legislation has been transposed across the board into Serbian law and that it is effectively implemented. This means that the accession process is currently the main reform engine in the country in all spheres of political and economic life. It also entails that the success of any advocacy activity is conditioned on its proximity to the priorities set for the EU integration agenda.

In its 2016 Progress Report, the European Commission assessed that Serbia was “moderately prepared” for EU accession in the area of public procurement, but in order to close the negotiations under Chapter 5 on Public Procurement Serbia is expected to reach three major benchmarks.

First, it should fully align its legislation with the EU acquis. Secondly, it should put in place adequate administrative and institutional capacity at all levels and take appropriate measures to ensure the proper implementation and enforcement of national legislation in this area in good time before accession. Third, it needs to demonstrate a track record of a fair and transparent public procurement system, which provides value for money, competition, and strong safeguards against corruption.

Serbia’s Public Procurement Law, last amended in 2015, contains some human rights-related provisions. These include, for instance, mandatory exclusions of bidders found to have breached some specific labour rights, and an option of taking environmental and social considerations into consideration across all stages of the public procurement procedure. It also includes scope to prioritise bids by companies that have employed and rehabilitated persons with disabilities. In this respect, the Serbian Public Procurement Law is largely in line with EU standards, namely the 2014/24/EU Public Procurement Directive.

However, the provision of our Public Procurement Law that enables the introduction of social criteria into various stages of the procurement procedure is not actually implemented in practice.  This should not come as much of a surprise.  Public procurement officers in practice most often favour the “cheapest bid”. This is clearly illustrated in statistics from past years.

For example, in 2013, the most economically advantageous tender was chosen in 45% of the cases, which is to say that the lowest price offer was chosen in 55% of the cases. In 2014, the usage of lowest price criteria rose to 74%, and 88% in 2016.

In many instances, public procurement officers are probably unaware of the potential human rights risks involved with public procurement and the potentially positive influence that public spending could have on current human rights challenges in Serbia, such as the position of vulnerable groups in the labour market or labour rights of persons employed through recruiting agencies, for example.

Even if familiar with some human rights risks, procurement officers are not aware of the role they could play in mitigating them. Finally, they have never been provided with any guidance on how social criteria can be integrated into the tender process, for instance, detailing how specific demands should be formulated and at which stage of the procurement procedure.

Probably in order to comply as quickly as possible with EU accession requirements, the Serbian Government made the promotion of “green” and social aspects of public procurement one of the main goals of the latest Strategy for the Development of Public Procurement in Serbia for the period 2015-2018.

Aware of the need to lower the proportion of tenders decided on the lowest price offered quickly to align with the practice of EU countries, the Serbian Public Procurement Office plans to provide some capacity-building for buyers in the upcoming years. The Action Plan for the implementation of the Strategy envisages two workshops for the promotion of the most economically advantageous selection criterion to be held by the Office in 2017.

But there is no indication that anything has so far been or will be done to promote the inclusion of social criteria in Serbian public procurements. In the 2016 Progress Report cited above, the European Commission urged the Government to “swiftly implement the public procurement strategy”, but made no mention of the need to promote human rights considerations. This opens little space for civil society in Serbia to advocate their promotion and implementation with national institutions.

As a further reform of the Public Procurement Law is underway and new provisions are to be adopted by the end of 2017, now is the moment to advocate with both EU and national institutions for inclusion of this issue on the integration agenda.

This is an important opportunity to argue for improvements to the current legal framework, for instance, by broadening the mandatory exclusions to include human trafficking.

In addition, it is a critical moment to push for practical implementation of existing legal provisions. The momentum provided by public debate around the new draft procurement law should be used to create pressure on Serbia’s procurement authorities to pursue achievement of the goals of the Public Procurement Strategy relating to social procurement.

In particular, they should be urged to develop practical guidance for procurement officers on how to formulate criteria at different stages of the procurement procedure related to social and environmental considerations in a manner that would meaningfully contribute to improving human rights, for instance, minorities and other vulnerable groups.

Such guidance should be supplemented with training for public procurement officials and suppliers, particularly SMEs (as they are a major part of the economy in Serbia) to enable them to recognise the potential positive and negative impacts that public procurement could have on the enjoyment of human rights.

Attempts by local human rights advocacy organisations like ours to put this issue on the agenda of Serbian authorities is weakened by the fact that inclusion of human rights criteria in public procurement is not yet a high accession priority for the European Commission.  Still, the EU integration process remains the best and the only chance to get traction on this topic nationally at the present time.