By Krzysztof Herbst



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THE APPLICATION OF SOCIALLY RESPONSIBLE PUBLIC PROCUREMENT

AND PUBLIC SOCIAL PARTNERSHIP

IN SUPPORT TO SOCIAL ECONOMY DEVELOPMENT


by Krzysztof Herbst


Warsaw, April 2012



Project is co-financed from the resources of the European Union

within the framework of the European Social Fund
Table of Contents

by Krzysztof Herbst 1

1. Introduction 3

2.Specific instruments 9

3.Concluding remarks 46




1. Introduction


The Better Future of Social Economy (BFSE) Project is intended to work out recommendations for managing institutions of the European Social Fund, line ministries/agencies and the European Commission, on how to use different legislative, financial and institutional instruments, including the European Funds, and encourage social economy development in the forthcoming financial perspective for the years 2014 - 2020.

The recommendation is based on the policy of the European Union and its planned update, as specified by the following key documents:



  • Directive 2004/17/EC of the European Parliament and of the Council on coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors, 31 March 2004

  • Directive 2004/18/EC, of the European Parliament and of the Council on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts, 31 March 2004

  • COM(2010) 2020 Communication From The Commission EUROPE 2020 A strategy for smart, sustainable and inclusive growth,

  • GREEN PAPER on the modernisation of European Union public procurement policy. Towards a more efficient European Procurement Market” (2011) including social actors` views (PASE report),

  • Buying Social a Guide to Taking Account of Social Considerations in Public Procurement,

  • COM(2011) 682 Communication from the Commission Social Business Initiative: Creating a favourable eco-system for social enterprises, key stakeholders in the social economy and innovation

  • COM(2011) 896 Proposal for a Directive of the European Parliament and of the Council on Public Procurement (2011)

  • COM/2004/0327 Green Paper On Public-Private Partnerships And Community Law On Public Contracts And Concessions

  • COM(2005) 569 Communication From The Commission To The European Parliament, The Council, The European Economic And Social Committee And The Committee Of The Regions on Public-Private Partnerships and Community Law on Public Procurement and Concessions

  • COM(2007)6661 Commission Interpretative Communication on the application of Community law on Public Procurement and Concessions to Institutionalised Public-Private Partnerships (IPPP)

  • COM(2011) 897 Proposal for a Directive of the European Parliament And of the Council on the Award of Concession Contracts

This analysis is primarily based on the studies made under the BFSE Project on social clauses in public procurement and on public- private partnerships. The study contains in-depth analyses of social clause application which are based on available case studies. In addition, an appreciable amount of material published at the Ekonomiaspoleczna.pl website was considered. The study is also based on recently published papers by European Commission and national authorities.

Available case studies have a number of specific traits and in most cases a direct contact with those involved is required in order to understand the intricacies and draw wider conclusions. However, only a few cases allowed for this approach. Therefore, discussions held with the community, publications, statements and articles proved much more important than initially planned.


    1. The notion of social economy: its operational scope


Social economy has a long history. It emerged in response to specific risks faced by the employees and small producers from the growth of a market-oriented economy and large-scale business organisations1. As new problems and challenges occurred, various initiatives and organisations with specific missions, structures and target problems were established.

Rather than quoting definitions, we will focus here on how different instruments address the needs of the Social Economy universe. The range of various notions is presented graphically in the following figure2:



Both traditional and recent social economy forms are presented in the figure:



Traditional forms3

  1. Cooperatives – organisations focusing on inclusion of a closed-ended group of members. They are potential competitive market players.

  2. Consumers' cooperative enables small consumers to control price and quality of good and services they purchase. A group of consumers plays according to free market rules. Like previous form, it does not require any dedicated support measures.

  3. Mutual assistance organisation unites those willing to offer their work (skills, time, etc.) so as to help their members.

  4. Loan and guarantee funds, mutual insurance institutions (not for profit).

In principle, these organisations do not require any support or procurement procedures other than those available to commercial companies. The case of Italian cooperatives is worth quoting in this context. Social cooperative, the most common form of social enterprise in Italy, is subjected to the same regulations as commercial entities, as they compete with the latter for customers, including public institutions4.

Recent forms

The consequences of economy transformation are not limited to the unemployment. The term “social exclusion” is often applied. Local employment markets collapsing as a result of winding up or relocation of large employers represent a huge problem.

In response to this challenge, special programs (including those under EFS) have been launched. As a result, a whole new branch of public, non-government or even commercial organisations has emerged to offer a wide range of services in the area of inclusion, human capital development, etc. Only some of them emanated solely from civic initiatives associated with a specific community and its problems.


  1. Social enterprises (social cooperatives, etc.) offer support to the inclusion into community's activity and its stimulation. They are established by the public sector, non-government organisations or as a partnership of the two sectors.

As a general rule, their revenues fall short of expenses associated with their operations.

  1. Commercial businesses which operate according to CSR rules may participate in tenders for publicly-funded contracts and offer services carrying a social added value in addition to commercial benefits. Moreover, they may undertake socially-minded tasks or commit expenses out of calls for proposals by purchasing goods and services. This may involve outsourcing while keeping their own structures as lean as possible.

  2. Organisations from the system of support to newly established social economy organisations may offer consulting, training and financial services. They may submit proposals for publicly-funded projects. Implementation of business projects seems to be (most often) out of purpose5.

  3. Mutual assistance and reciprocity organisations established with contributions from public funds and programs. They often rely on volunteers.

This new social economy sector heavily relies on public social policy programs and it is uncertain whether it would be able to survive on its own. New trends in social program funding, which call for return funding, give rise to questions about its ability to survive under the changing rules of play.

Social economy, Czech Republic

These new entities lost many features typical of social economy, such as independence or autonomy of action. During this period dominated, except productive cooperatives of handicapped, mainly agricultural cooperatives and residential ones. The tradition of social economy was interrupted for 50 years. After Velvet revolution democratic regime was not able to take up old tradition6.




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