European Commission v Kingdom of the Netherlands

In 2008, the Dutch province of North Holland announced in a tendering procedure that it wished to procure coffee machines and the products necessary to make them function (coffee, tea, sugar, milk, cups). It required that those products to be delivered to bear the Max Havelaar label, a private label that adheres to the rules of the Fairtrade Labelling Organisation. Considering that this tender was contrary to the public procurement directive (2004/18/EC). Specifically requiring products to bear only that label is contrary to EU public procurement law, as it is way too over specific and does not allow for any form of competition for the contract. The Court found that by requiring specific fairtrade and eco-labels in a contract notice, the Netherlands did not meet its obligations under the public procurement directive (2004-18-EC). The Commission started proceedings against the Netherlands since it considered the fair trade label requirement in a contract notice for the supply and management of tea and coffee dispensing machines a technical specification incompatible with the directive. In 2008, the Dutch province of North Holland had published such a contract notice specifying that the tenderers should use ingredients certified with the fair-trade label “Max Havelaar” and eco-label “EKO”. The Court recognized that member states are allowed to base the award criteria on environmental and social considerations. With respect to the fair-trade label, the province did not violate the directive since its awarding criteria referred only to the product whose supply conditions are a part of the contract’s subject matter, rather than to the general purchasing policy of the tenderers. As concerns the eco-label, its underlying criteria can be used by the contracting authorities to specify some of the sought characteristics of a product. However, under the directive, a concrete eco-label must not constitute a technical specification. Therefore, by considering only those products that use a specific label instead of allowing for other certifications that satisfy the same underlying conditions, the province formulated an award criterion incompatible with the directive. Further, the Court determined that the requirements for the tenderers to demonstrate (1) their compliance with ‘the criteria of sustainable purchasing and socially responsible business’, and (2) their contribution ‘to improving the sustainability of the coffee market and to environmentally, socially and economically responsible coffee production’ are not sufficiently clear and precise. Accordingly, the province did not comply with the obligation of transparency set out in Article 2 of the directive.