Towards Deforestation-Free Public Procurement?
Reflections on the Interplay between the Deforestation Regulation (EUDR) and Public Procurement in the EU

Our ESRs Chiara Falvo and Federica Muscaritoli have recently published an Open Access article on the topic of deforestation and EU public procurement law in the latest issue of the European Procurement & Public Private Partnership Law Review. The article has undergone several improvements following its presentation at the Fourth International Conference of Public Procurement Law Africa in September 2023 and at Eco-Talk of the Faculty of Law of the University of Alcalá de Henares in April 2024. The authors would like to express their gratitude to Professor Roberto Caranta and Associate Professor Marta Andhov for their invaluable feedback during the early stages of this article’s development.

This article examines the impact of the new public procurement rules introduced in Regulation 2023/1115 on deforestation and forest degradation (EUDR) on the EU’s public procurement regime, in particular in light of Directive 2014/24 (the Public Sector Directive, or PSD).

In particular, Article 25(2)(d) of the EUDR, titled ‘Penalties’, states:

 

“1.   Without prejudice to the obligations of Member States under Directive 2008/99/EC of the European Parliament and of the Council, Member States shall lay down rules on penalties applicable to infringements of this Regulation by operators and traders and shall take all measures necessary to ensure that they are implemented. Member States shall notify the Commission of those rules and of those measures and shall notify it, without delay, of any subsequent amendments affecting them.

2.   The penalties provided for in paragraph 1 shall be effective, proportionate and dissuasive. Those penalties shall include: […]
(d) temporary exclusion for a maximum period of 12 months from public procurement processes and from access to public funding, including tendering procedures, grants and concessions; […]”

 

The authors argue that the EUDR is creating an EU-wide public procurement debarment system for violations of its obligations and a new mandatory ground of exclusion. Indeed, from the combined reading of the Regulation 2023/1115 and Directive 2014/24, three scenarios seem possible:

1. An infringement of the EUDR by an economic operator is ascertained in a Member State, sanctioned with exclusion from public procurement for up to 12 months and the judgment becomes final. The economic operator is then included in a list published on the European Commission’s website and will be excluded from all public procurement procedures in the EU (i.e. debarment system)
2. An economic operator sanctioned with exclusion from public procurement by a final judgment participates in a procurement procedure. In this case, the contracting authorities must verify the existence of the ground for exclusion and are then obliged to exclude the candidate for the period of time decided by the court, or for a maximum of 12 months from the date on which the judgment became final.
3. Finally, under the exclusion regime outlined in Directive 2014/24, contracting authorities retain the discretion to exclude an economic operator for deforestation-related violations based on certain discretionary grounds. These include grave professional misconduct (Article 57(4)(c) Directive), or per Article 57(4)(a) Directive, which allows exclusion if a contracting authority can demonstrate that the economic operator does not comply with applicable obligations mentioned in Article 18.2, which include, inter alia, EU environmental laws.

Read the full article in Open Access below.