TÄLLÄ SIVULLA
Compliance with employment conditions must be strengthened by improving public procurement legislation
Public procurement accounts for a significant share of gross domestic product in Finland and in Europe as a whole.
Achieving the objective
- The Public Procurement Act should give greater consideration to quality, and to environmental, social and labour law aspects in public procurement projects.
- Legislation must mandate not only central government, but also municipalities to ensure that procurement contracts include a special condition on compliance with Finnish law and collective agreements.
- The competition and consumer authorities should be given regulatory control powers, including the power to monitor realisation of societal objectives, particularly in the sphere of social affairs and labour law.
- The scope of the statutory notification obligation of subcontractors should be broadened to give the client better opportunities to monitor the compliance of tenderers with contractual terms and conditions.
- European Union public procurement directives must be reformed, as they lack any effective means of addressing breaches of labour law. The Government must actively communicate the need to reform these directives to the Commission, Council and Parliament of the EU.
- The in-house external sales of a contracting entity must be increased to 10 per cent.
Why is this objective important?
Both in Finland and in Europe as a whole, public procurement accounts for a significant share of GDP. It is important for all public procurement to reinforce sustainable development and deal with businesses that meet their social obligations. The grey economy must be eradicated, and the project activities of central and local government must be exemplary in respect of responsibility.
Neither the principles of developing work life and ensuring decent working conditions, nor implementation of these principles are sufficiently enshrined in legislation. Even though the voluntary measures of contracting entities and tenderers are welcome, they do not suffice. Special terms and conditions on the use of a social clause must be clearly stipulated in a procurement contract. Monitoring of societal objectives in procurement, such as working conditions, suffers from a lack of resources, especially in municipalities.
A contracting entity may currently procure supplies, construction contracts or services from an affiliate with no competitive tendering procedure only if no more than five per cent or EUR 500,000 of that affiliate’s business is directed elsewhere than to the contracting entity that owns the said affiliate. This provision is not in line with the EU directive, which would allow up to 20 per cent in external sales of the affiliate. The current provision hampers meaningful cooperation between public entities.
Contractor liability must be expanded and subcontracting chains restricted
The customer is best placed to influence how subcontractors comply with their social obligations.
Achieving the objective
- A duty of care must be enacted requiring businesses to be responsible for the taxes, social security contributions and wages of their subcontractors. Subcontracting chains must be limited to a maximum of three entities, with the coverage of the subcontractor’s statutory notification obligation enlarged, so that the customer can more effectively monitor the performance of contract terms.
Why is this objective important?
The customer is best placed to influence how subcontractors comply with their social obligations. The grey economy and underpayment are most effectively prevented by enacting a duty of care for customers with respect to their subcontractors. Exploitation of employees and other irregularities are more likely to occur in long subcontracting chains.
Finland must enact ambitious legislation on corporate responsibility
Recommendations alone are insufficient to combat human rights violations.
Achieving the objective
- National corporate responsibility legislation must be enacted, based on a duty of care imposed on businesses with respect to both domestic and foreign operations. Effective corporate responsibility legislation will broadly cover various industries as well as small and medium-sized enterprises, imposing a due diligence obligation on businesses with respect to human rights and the environment, and including credible means of enforcement. The legislation must also strengthen access to justice for victims of human rights violations and enable victims to claim their rights in practice. Similar ambitious legislation must also be promoted at the European Union.
Why is this objective important?
Recommendations alone are insufficient. The UN has defined a duty of care related to human rights with a view to preventing human rights violations in the value chains of businesses of all sizes.
Societal responsibility must be global
Finland must give strong support to international work life standards, and to the International Labour Organisation (ILO) that defines them. Finland must support and advance European Union regulations that support human dignity, and the quality and safety of work life.
Achieving the objective
- Finland must strongly support international work life standards, and the International Labour Organisation (ILO) that defines them. Finland must support and advance European Union regulations that support human dignity, and the quality and safety of work life.
- Strengthening the binding character of basic rights at work as part of EU trade agreements will also promote implementation of these rights. Other important instruments include national and European corporate responsibility legislation and work to negotiate a corporate responsibility agreement at the UN, which Finland and the EU must support.
- Finland should increase its development cooperation funding to 0.7 per cent of GDP in line with international commitments. An adequate share of development funding should be earmarked for work done by civil society organisations.
Why is this objective important?
Evolving modes of working expose employees to new forms of exploitation and safety risks, so it is important for European minimum work life standards to keep pace with the times and prevent unfair competition at the expense of employees.
Effective implementation of work life norms is crucial for ensuring that international trade, global production chains and economic growth bring broad benefits to employees and their families. Such implementation may also curb inequality within and between countries.