On 8-10 August 2024, a three-day international seminar about “Promoting quality and innovation in public procurement: social aspects and collective bargaining”, organised by the Lithuanian trade union Solidarumas, together with the European Centre for Workers' Issues (EZA) and funded by the European Union, took place in Vilnius/Lithuania. The 53 representatives of workers’ organisations from Lithuania, Latvia, Poland, Montenegro and Germany were welcomed by Ms Kristina Krupavičienė, President of the Lithuanian trade union Solidarumas, and Ms Jovita Pretzsch, Deputy Chair of LTU Solidarumas and EZA Council Member.
The introductory theme of the seminar on Welfare State Models was presented by Prof. Dr. Daiva Skučienė, Head of the Department of Social Policy at the Institute of Sociology and Social Work of Vilnius University. In her presentation, she listed all the most popular definitions of a welfare state. She introduced the four most commonly identified welfare state regimes such as conservative-corporate, social democratic, Mediterranean and Anglo-Saxon. She talked about the way these models work with different political systems and the trends of the welfare state development in post-communist Eastern European countries. In the case of the Eastern European/post-communist welfare state regime, neoliberal ideas had a huge impact on political elites who believed that the communist past had discredited ideas of solidarity and social justice.
The following speaker, Ms Anna Lupi from the European Commission's Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, presented the broad legal framework governing transparency in public procurement across the Community. She explained how this translates into national regulation and introduced the guiding principles for public procurement. According to the speaker, the levers of public procurement are fair competition, better working conditions in the workplace, and socially responsible procurement, which helps to bridge the gap between different groups in society.
Ms Tea Jarc’s presentation, Confederal Secretary of the ETUC, gave an overview of the different practices in different countries and the weaknesses of public procurement. She sent the message that the Public Procurement Directive needed to be reviewed, its impact on companies assessed and the best working conditions guaranteed through collective agreements.
The next speaker of the seminar, Mr Kęstutis Kazulis from the Public Procurement Service, presented the State's efforts to review existing procedures related to public procurement. He pointed out that in 2022 the status of social enterprise ceased to exist. As a result, attempts are made to move social issues into public procurement, and soon a new model is likely to emerge.
The above presentations were followed by a panel discussion entitled "Are Socially Responsible Purchases Attractive to Employers?" The discussion focused on the following issues: to what extent public procurement fits in with social responsibility, and whether a socially responsible company can compete in an unregulated market and win public procurement contracts. How could and should social dialogue be promoted through public procurement? The development of a standard procurement contract was proposed, a catalogue of criteria, and a catalogue of qualifications so that contracting authorities could not develop special criteria for their relatives and prevent nepotism. The criteria should be well thought out, approved and discussed in the community between the contracting authorities and contracting entities.
Another session of the seminar was dedicated to socially responsible procurement and the benefits of such procurement for employees. In Lithuania, Guidelines for Socially Responsible Public Procurement has been prepared. Socially Responsible Procurement (SRP) aims to take into account the impact of the goods, services and works purchased on society, contributing to the solution of social issues. Contributing to social issues can be achieved by setting various social criteria in procurement, such as asking suppliers to employ persons with disabilities, persons raising a child with a disability under 18, persons caring for family members or persons living with family members having permanent nursing or care needs, persons aged over 55, etc. Suppliers can also be asked to provide measures aimed at reconciling family and work commitments, such as flexible working hours, teleworking, the possibility of bringing a child to the workplace or compensation for childcare, etc. It was stated that trade unions should cooperate more actively with Public Procurement Services to improve and supplement Guidelines for Socially Responsible Public Procurement to include criteria for social dialogue and collective agreements.
The session focused on the costs incurred by a company with a collective agreement, i.e. more obligations to employees, compared to a company with fewer obligations to employees and no collective agreements. Companies with lower social costs are more likely to win tenders using the lowest price criterion.
A roundtable discussion shared an opinion about the issue of social dumping, the influence of the lowest price in Lithuania, and a disregard for labour and social standards established in the market. The German representative shared his experience and revealed that Germany was already talking about possible ways to tackle low wages. The importance of a collective agreement cannot be undermined. For example, in the famous Tesla car factory, there is no collective agreement, which is wrong. Young people think they can stand up for themselves, but that is not true. The only right thing to do under the circumstances is to join a trade union.
Ms Regina Jarošienė, Chairperson of the Trade Union of Medical Establishment Workers Solidarumas, and Ms Lina Urbonovičienė, Chairperson of the Trade Union of Veterinary Doctors, spoke about collective bargaining from the workers' point of view and their practical experience of daily work. Awareness of the importance of public procurement has to be promoted among trade union members. Ms Regina Jarošienė shared the experience of the Trade Union of Medical Establishment Workers Solidarumas. A few years ago, this trade union was an observer in the collective agreement negotiations and now is a leading party to the negotiations.
The seminar concluded that trade unions need to be involved in the processes related to public procurement and that public procurement is a way to address many of the social problems of work, through which decent labour and social standards are maintained. It is necessary to make use of the existing legal framework. Article 9 of the Directive on Adequate Minimum Wage in the European Union, 'Public Procurement', provides that '...Member States shall take appropriate measures to ensure that, in the performance of public procurement or concession contracts, economic operators comply with the wages laid down in collective agreements for the sector and geographical area concerned and with the minimum wage, if any, established".
It is important to work with the European Trade Union Confederation, to take part in the public consultation to update the 2014 EU Directive on Public Procurement and to review the criteria. In addition, the social criteria should be mandatory rather than prescriptive. Employers who violate workers' rights should not participate in public procurement, let alone win public tenders.
It was stated that socially responsible public procurement is a matter for policymakers and that socially responsible procurement should therefore become a strategic objective of the State, but that, for the time being, the price criterion is still the predominant criterion, accounting for 80% of all public procurement. Attention should also be paid to climate change and green procurement.