(25 November 2020) Together with 90 other organisations EPSU highlighted the conflict of interest in the awarding of a public policy contract to BlackRock Investment Management in April this year. The European Ombudsman Ms. O’Reilly agrees with the group of organisations. The Commission guidelines need to be strengthened to asses bidders for contracts related to public policy. This to prevent that the Commission awards contracts to companies that have a financial or regulatory interest in the area of the contract.
“An application by a company to carry out a study meant to feed into policy that will regulate that company’s business interests should have resulted in significantly more critical scrutiny by the Commission,” said the Ombudsman. She sees this as a problem with the procurement rules and as such it should be a guide for procurement rules at local, national and European level. “One cannot adopt a tick box approach to the awarding of certain contracts. Treating contract bidders equally is important, but not taking other critical factors appropriately into account when assessing bids does not ultimately serve the public interest.” The Ombudsman’s inquiry drew attention to the fact that BlackRock optimised its chances of getting the contract by making an exceptionally low financial offer, which could be perceived as an attempt to assert influence over an investment area of relevance to its clients
This is an important decision that we welcome. First as the Ombudsman states: “The EU is set for unprecedented levels of spending and investment in the coming years with significant links to the private sector - citizens need to be sure that contracts involving EU funds are awarded only after a strong vetting process. The current rules fall short of providing this guarantee.” This vetting process is important. Trade unions have made clear that the public funding should support the Green deal and companies that win contracts should respect reporting on their tax obligations (public country by country reporting) their environmental commitments to reduce CO2emissions and to adhere to the relevant collective agreements.
Second, we often see companies or consultancies getting contracts from the European Commission while they have significant stakes in the area they explore. EPSU together with Corporate Europe Observatory raised similar concerns in 2017. The Commission gave a contract to consultancy KPMG to asset public assets in the EU. The same company advises around privatisations. The subsequent study was found to have serious methodological flaws. Most importantly the work of KPMG failed to realistically capture the contribution of publicly owned companies to the economy and to society.
It would be better for the European Commission to strengthen public research rather than rely on private companies. These do bring conflicts of interest to the table and including that these companies want to make profits out of the public money.
For the decision of the European Ombudsman
For the letter of the unions and civil society to cancel the contract to Blackrock
For the report of EPSU and complaint on the KPMG study on public assets.
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