Strasbourg, 27 April 2004

Dear Mr X.,

On 10 October 2003, you made a complaint to the European Ombudsman concerning your call to the European Commission to make it a condition of eligibility to apply for Community funding that the recipients of such funding should have an internal structure which offers protection against discrimination and intolerance in the area of human resources.

On 4 November 2003, I forwarded the complaint to the President of the Commission. The Commission sent its opinion on 21 January 2004. I forwarded it to you with an invitation to make observations, which you sent on 15 March 2004.

I am writing now to let you know the results of the inquiries that have been made.

THE COMPLAINT

In October 2003, a complaint was made to the Ombudsman against the European Commission concerning its conditions of eligibility to apply for Community funding.

According to the complainant, the relevant facts are, in summary, as follows:

He used to work for an organisation (hereafter "the Organisation"), which unjustly dismissed him, exposing a structurally designed managerial crisis. He turned to the Commission several times regarding the matter, as the Commission is the Organisation's biggest financial contributor, mainly through the framework programme. By letter of 28 August 2003, he asked the Commission to extend its funding policy from being concerned strictly with "fiscal" aspects to involve also an explicit concern about the human aspect. He concluded his letter by requiring that the Commission should suspend its financial contribution to the Organisation until a mechanism ensuring adherence to law and morality was incorporated into the Organisation's management system. In reply, the Commission explained that it is indeed funding the Organisation's projects, but that it has absolutely no responsibility for the way in which the Organisation manages its staff.

In his complaint to the Ombudsman, the complainant explains that he acknowledges that the Commission has no direct responsibility for what is going on in the area of human resources in the Organisation. However, the Commission's response to his letter was unsatisfactory because he did not ask for it to intervene directly into the internal matters of the Organisation. What he asked for was an "auto-intervention" from the Commission through its funding policy, in other words, that it should require its contracting parties, through the eligibility criteria for funding, to meet basic ethical standards and to obey principles of law and humanity in the area of human resources.

In substance, the complainant alleges that the Commission has not answered all the points made in his letter to the Commission of 28 August 2003.

The complainant claims that the Commission should establish as a condition of eligibility to apply for Community funding the requirement that the recipients of such funding should have an internal structure which offers protection against discrimination and intolerance in the area of human resources.

THE INQUIRY

The Commission's opinion

In its opinion, the Commission makes the following comments:

Contrary to what the complainant alleges, the Commission did reply to the points made by the complainant in his letter of 28 August 2003. This was done already by letter of 4 August 2003, which was a reply to a letter sent by the complainant prior to his letter of 28 August 2003. By letters of 2 and 30 October 2003, the Commission provided further clarifications. The letter of 4 August 2004 informed the complainant of the following: The award of financial support under the framework programme is governed by the principles of transparency, impartiality and equal treatment. Proposals are submitted in response to published calls for proposals and are evaluated by independent experts on the basis of the criteria applicable to a given call. These criteria, which provide a tool for evaluating a given proposal against the objectives and priorities of the relevant programme, are also listed in the work programme, which itself is publicly accessible. Once the Commission has decided to finance a proposal, a contract is signed between the Commission and the beneficiary. While this contract specifies the rights and obligations of the parties with regard to the subject of the contract (i.e. the project), it does not cover the contractor's internal relationships, including employment relationships, which are governed by national legislation.

In addition, the Commission would like to restate that the eligibility criteria for applicants for indirect actions under the Community framework programme are laid down in the basic acts governing the Community framework programme(1), in the Community Financial Regulation(2) and the rules for its implementation(3). The Commission confirms that the indirect actions submitted by the Organisation fully satisfied these eligibility criteria.

The eligibility criteria, which are laid down in Community Regulations, do not cover the complainant's claim. The same applies for the evaluation criteria laid down in the Regulation of the Council and of the European Parliament concerning the Rules for participation and dissemination of results, and particularly Article 10 of that Regulation(4). The regulatory framework currently applicable to the field of indirect actions under the framework programme does not, therefore, empower the Commission to intervene in a dispute involving a (future) beneficiary of its indirect actions and one of the employees of that beneficiary.

In view of the above, the contract between the Commission and the Organisation could not extend beyond laying down the rights and obligations of the parties with regard to the implementation of the project. The complainant's relationship with the Organisation is therefore a matter for national legislation.

The complainant's observations

In his observations, the complainant makes, in summary, the following remarks:

The Commission continues to misinterpret the problems within the Organisation as irrelevant for its funding policy. It uses its existing procedural rules as an excuse for not intervening and it diagnoses the problem as being an internal matter of the Organisation, remaining beyond its interest. However, this diagnosis only brings confusion to the problem, which is that there exist loopholes in the Commission's funding policy. These loopholes consist of the narrowing down of the notion of "corruption" to maladministration in the financial domain only.

Furthermore, the Commission's opinion contradicts one of its own rules, namely Article 10(5) of the rules for participation and dissemination of results. This article provides that an organisation that "contravenes fundamental ethical principles" should be excluded from funding.

At the same time, the Commission tries to distract attention from its mission as the chief executive body responsible for the protection of fundamental rights of European citizens. The Commission has to respect the fundamental right to human dignity (Article 1 of the Charter of Fundamental Rights), the right to protection in the event of unjustified dismissal (Article 30 of the Charter of Fundamental Rights) and the right to seek employment and to work (Article 15 of the Charter of Fundamental Rights).

By supporting the Organisation, which is run without an internal ethical code or legal framework, the Commission refuses the right of the Organisation's employees to be protected against the Organisation's management. This kind of injustice cannot be prevented by any national court, which can deal with the consequences of a wrongdoing only after the wrong has been done. Community rules therefore grant a priori impunity to the wrongdoers.

Even if none of the procedural rules quoted by the Commission prohibited funding to such institutions as the Organisation, the Ombudsman should start an investigation into the exposed loopholes in the funding policy.

THE DECISION

1 Allegedly unanswered points

1.1 The complaint concerns the Commission's conditions of eligibility to apply for Community funding. The complainant alleges that the Commission has not answered all the points made in his letter to the Commission of 28 August 2003, concerning the eligibility criteria governing applications for Community funding. According to the complainant, the Commission explained that it has no direct responsibility for a contractor's internal relationships in the area of human resources. However, this response was unsatisfactory, since the complainant had asked not for direct intervention, but for intervention through the Commission's funding policy, i.e. that the Commission should require its contracting parties, through the eligibility criteria for funding, to meet basic ethical standards and to obey principles of law and humanity in the area of human resources.

1.2 The Commission argues that it did reply to the points made by the complainant. By letter of 4 August 2003, which was a reply to a letter sent by the complainant prior to his letter of 28 August 2003, it explained the process of awarding financial support under the framework programme. All proposals are evaluated on the basis of certain criteria and the final contract specifies the rights and obligations of the parties with regard to the project concerned, but does not cover the contractor's internal relationships.

1.3 The Ombudsman notes that the Commission's position regarding the eligibility criteria for funding has been further clarified in its opinion (see 2.2 below), which was forwarded to the complainant for observations. In view thereof, the Ombudsman does not consider it necessary to inquiry further into this aspect of the complaint.

2 The complainant's claim

2.1 The complainant claims that the Commission should establish as a condition of eligibility to apply for Community funding the requirement that the recipients of such funding should have an internal structure which offers protection against discrimination and intolerance in the area of human resources.

2.2 The Commission points out that the eligibility criteria for applicants for indirect actions under the Community framework programme are laid down in the basic acts governing the Community framework programme(5), in the Community Financial Regulation(6) and the rules for its implementation(7). This regulatory framework does not cover the complainant's claim, meaning that it does not allow the Commission to intervene in a dispute involving a (future) beneficiary of its indirect actions and one of the employees of that beneficiary. The contract between the Commission and the Organisation, which is the complainant's former employer, could not extend beyond laying down the rights and obligations of the parties with regard to the implementation of the project. The contractor's internal relationships, including employment relationships, are governed by national legislation.

2.3 The complainant argues that the Commission uses its existing procedural rules as an excuse for not intervening into the area of human resources of its beneficiaries. However, the real problem is that there are loopholes in the Commission's funding policy, consisting of the narrowing down of the notion of "corruption" to maladministration in the financial domain only.

The complainant further argues that the Commission's position that it cannot intervene contradicts Article 10(5) of the rules for participation and dissemination of results. In addition, by taking this position, the Commission fails to fulfil its mission as the chief executive body responsible for the protection of human rights of European citizens, in particular the respect of Articles 1, 15 and 30 of the Charter of Fundamental Rights. According to the complainant, the Commission's lack of intervention also implies that the employees of those of its beneficiaries that lack an internal ethical code or a legal framework are refused protection, since national courts can only deal with the consequences of a wrongdoing after the wrong has been done. Community rules therefore grant a priori impunity to the wrongdoers.

Finally, the complainant argues that the Ombudsman should start an investigation into the exposed loopholes in the Commission's funding policy.

2.4 The Ombudsman recalls that Article 114 of the Financial Regulation(8) prescribes that to be eligible for Community grants, an applicant cannot be in one of the situations referred to in Articles 93 and 94 of that Regulation, e.g. being bankrupt, convicted of an offence concerning one's professional conduct or having failed to pay social security contributions or taxes. The Ombudsman also notes that, pursuant to Article 167 of the Treaty establishing the European Community (hereafter "the EC Treaty"), the rules governing participation in the multiannual framework programme of undertakings, research centres and universities, are to be adopted by the European Parliament and the Council subject to the procedure provided for in Article 251 of the same Treaty. These rules are to cover, for example, criteria for evaluation and selection of actions within the area of research and technological development(9). In accordance therewith, the European Parliament and the Council have laid down criteria for evaluation in Article 10 of Regulation 2321/2002(10), which provide that proposals for indirect actions shall be evaluated according to the criteria stipulated in that Article. These criteria focus solely on the actual proposals and the ability to carry out the indirect actions.

In light of the above, the Ombudsman finds that the rules governing the award of grants and the participation in the framework programme are strictly defined through the decision- and law-making procedures laid down in the EC Treaty. Nothing in these rules appears to stipulate any requirements as regards the beneficiaries' management of their human resources. The Commission's position that it is not empowered to intervene in human resources issues through the award procedure therefore appears reasonable.

2.5 The Ombudsman does not consider the above findings to be rebutted by the arguments put forward by the complainant in his observations. As regards the complainant's reference to Article 10(5) of Regulation 2321/2002, the Ombudsman notes that that article stipulates that a proposal for an indirect action which contravenes fundamental ethical principles shall not be selected. Article 10(5) does not, however, appear to lay down any requirements pertaining to the internal management of the applicant submitting the proposal.

As regards the complainant's argument that, by not intervening into the area of human resources of its beneficiaries, the Commission fails to respect the Charter of Fundamental Rights, the Ombudsman recalls that the Commission pointed out in its opinion that beneficiaries' relations with employees are governed by national legislation. The Ombudsman notes that, under the EC Treaty, the Community has only limited competence in relation to matters of labour law and working conditions and that Article 51 of the Charter of Fundamental Rights provides that the provisions of the Charter are addressed to the institutions and bodies of the Union “with due regard for the principle of subsidiarity”. The Ombudsman therefore considers the Commission’s reference to national law in this context to be justifiable.

2.6 In view of the above, the Ombudsman considers the Commission's response to the complainant's claim to be reasonable. The Ombudsman therefore finds no maladministration by the Commission as regards this aspect of the complaint.

2.7 The Ombudsman notes that the complainant's observations call on the Ombudsman to investigate alleged existing loopholes in the Commission's funding policy and contain a new allegation that Community rules grant a priori impunity to those recipients of Community funding that lack an internal ethical code or a legal framework in the area of human resources. Since these points raise different issues from the original complaint, and taking into account the findings above, the Ombudsman does not consider it justified to inquire into them. Furthermore, since these points suggest a problem that might concern the merits of Community legislation as well as possible instances of maladministration, the Ombudsman points out that the complainant could consider submitting a petition to the European Parliament regarding these matters.

3 Conclusion

On the basis of the Ombudsman's inquiries into this complaint, there appears to have been no maladministration by the Commission. The Ombudsman therefore closes the case.

The President of the Commission will also be informed of this decision.

Yours sincerely,

 

P. Nikiforos DIAMANDOUROS

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(1) Decision No 1513/2002/EC of the European Parliament and of the Council of 27 June 2002 concerning the Sixth Framework Programme of the European Community for research, technological development and demonstration activities, contributing to the European Research Area and to innovation (2002 to 2006), OJ L 232, 29.8.2002, p. 1;

Council Decision of 30 September 2002 adopting a specific programme for research, technological development and demonstration: "Integrating and strengthening the European Research Area" (2002-2006), OJ L 294, 29.10.2002, p. 1;

Council Decision of 30 September 2002 adopting a specific programme for research, technological development and demonstration: "Structuring the European Research Area" (2002-2006), OJ L 294, 29.10.2002, p. 44;

Regulation (EC) No 2321/2002 of 16 December 2002 of the European Parliament and of the Council concerning the rules for the participation of undertakings, research centres and universities in, and for the dissemination of research results for, the implementation of the European Community Sixth Framework Programme (2002-2006), OJ L 355, 30.12.2002, p. 23.

(2) Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities, OJ L 248, 16.9.2002, p. 1.

(3) Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities, OJ L 357, 31.12.2002, p.1.

(4) Regulation (EC) No 2321/2002 of 16 December 2002 of the European Parliament and of the Council concerning the rules for the participation of undertakings, research centres and universities in, and for the dissemination of research results for, the implementation of the European Community Sixth Framework Programme (2002-2006), OJ L 355, 30.12.2002, p. 23.

(5) Decision No 1513/2002/EC of the European Parliament and of the Council of 27 June 2002 concerning the Sixth Framework Programme of the European Community for research, technological development and demonstration activities, contributing to the European Research Area and to innovation (2002 to 2006), OJ L 232, 29.8.2002, p. 1;

Council Decision of 30 September 2002 adopting a specific programme for research, technological development and demonstration: "Integrating and strengthening the European Research Area" (2002-2006), OJ L 294, 29.10.2002, p. 1;

Council Decision of 30 September 2002 adopting a specific programme for research, technological development and demonstration: "Structuring the European Research Area" (2002-2006), OJ L 294, 29.10.2002, p. 44;

Regulation (EC) No 2321/2002 of 16 December 2002 of the European Parliament and of the Council concerning the rules for the participation of undertakings, research centres and universities in, and for the dissemination of research results for, the implementation of the European Community Sixth Framework Programme (2002-2006), OJ L 355, 30.12.2002, p. 23.

(6) Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities, OJ L 248, 16.9.2002, p. 1.

(7) Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities, OJ L 357, 31.12.2002, p.1.

(8) Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities, OJ L 248, 16.9.2002, p. 1.

(9) See Annex III, point 2, footnote 2 of Decision No 1513/2002/EC of the European Parliament and of the Council of 27 June 2002 concerning the Sixth Framework Programme of the European Community for research, technological development and demonstration activities, contributing to the European Research Area and to innovation (2002 to 2006), OJ L 232, 29.8.2002, p. 1.

(10) Regulation (EC) No 2321/2002 of 16 December 2002 of the European Parliament and of the Council concerning the rules for the participation of undertakings, research centres and universities in, and for the dissemination of research results for, the implementation of the European Community Sixth Framework Programme (2002-2006), OJ L 355, 30.12.2002, p. 23.