Strasbourg, 5 June 2007

Dear Mr X,

On 23 April 2006, you submitted a complaint to the European Ombudsman concerning the European Commission's lack of control over the actions taken by private companies responsible for monitoring the implementation of projects co-financed by the LIFE programme.

On 7 June 2006, you contacted my services by telephone and provided further information.

On 22 June 2006, I informed the President of the Commission of your complaint and asked him to submit an opinion by 30 September 2006.

On 14 September 2006, the Commission sent its opinion in English. On 25 September 2006, the Commission sent a translation of its opinion, which I forwarded to you on 29 September 2006, with an invitation to make observations.

On 30 October 2006, you sent me further information. On 11 December 2006, my services contacted you by telephone, in order to ascertain whether you were satisfied with the outcome of the investigation.

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

THE COMPLAINT

The facts of the case, according to the complainant are, in summary, as follows:

The complainant explained that, between September 2003 and January 2006, he had been part of a team of two consortiums which had entered into contractual agreements with the Commission's Directorate-General for Environment ("DG ENV") in order to monitor, follow-up, and evaluate projects co-financed by the LIFE programme(1).

According to the complainant, from September 2003 to June 2005, he had worked for the company W, which was a part of former consortium X. X's contract with the Commission was to expire in June 2005. The complainant stressed that, in spite of the fact that the Commission had already paid the whole EU contribution to the consortium, company W owed him wages to an important amount.

From July 2005 to January 2006, the complainant worked on the LIFE Environment programme for another company, Y(2), which belonged to consortium Z(3). In July 2005, consortium Z had concluded a new contract with the Commission. In January 2006, the complainant was dismissed from company Y. He argued that this company owed him a certain amount for wages, and a further amount in compensation for unfair dismissal.

On 25 January 2006, the complainant sent a letter to the Commission, in which he clarified that it had never been his intention to leave his job at company Y, explaining that, on 4 January 2006, Y had terminated his contract because of its financial problems. The complainant argued that the company had given a different explanation to him and to other members of the team to justify their dismissal. On 10 January 2006, company Y admitted that the redundancies had been unwarranted. The complainant also informed the Commission that the companies W and Y owed him money for the work carried out in 2005 under contracts related to the LIFE programme, and that company Y owed him compensation for his dismissal. He explained that his former colleagues were in a similar situation. According to the complainant, the leaders of consortium Z were aware of the problem, as it lasted for several months, but they had taken the view that the problem did not concern the consortium, but rather the individual companies which were part of it. The complainant stressed that delays in payment were frequent. In his letter, the complainant thanked the Commission for the seriousness and professionalism of the work carried out during the contract with the consortiums and offered his help to reply to any questions on the projects he had monitored.

In the Commission's reply of 31 January 2006, the Head of Unit responsible for LIFE projects at DG ENV (hereinafter, the "responsible Head of Unit") explained that he was aware of the situation and that he had addressed a letter to the management of consortium Z, expressing his concern and urging them to take all necessary steps to address the problems faced by the complainant and his former colleagues. The responsible Head of Unit agreed to monitor the situation, as he considered that it was in the interest of the Commission to have a good working relationship with both the consortium and its members.

In his complaint to the Ombudsman, the complainant alleged, in summary, that the Commission had failed to ensure that companies W and Y, members of consortiums X and Z respectively, which had concluded contracts with the Commission in order to monitor and evaluate projects co-financed by the LIFE programme, paid him the amounts due for work he had performed between June 2005 and January 2006.

He claimed that the Commission should adopt the necessary measures to have the due amounts paid to him.

THE INQUIRY

The Commission’s opinion

In its opinion, the Commission first described the background of the case and explained that, on 1 July 2005, it had concluded a one-year technical assistance contract with consortium Z for the outsourcing of technical and administrative assistance(4). These tasks included technical monitoring, assistance and support of the LIFE programme, including LIFE nature, LIFE environment and LIFE third countries. The Commission explained that consortium Z was composed of 11 companies, including company Y(5). The Commission then noted that, prior to its contract with consortium Z, its services had concluded a similar technical assistance contract with Group B(6). Company W was one of the experts retained by Group B to deliver services to the Commission.

As regards the complainant’s allegation, the Commission argued that, although it had entered into a contract with consortium Z and, previously, with Group B, it had not concluded contracts with either company Y or W or with the complainant directly. Therefore it stressed that it did not have any direct contractual relationship with the complainant or his former employers and maintained that it could not be held responsible for the non-payment of the salary of a former employee of company Y or company W.

In support of its arguments, the Commission referred to Article 8.6 of its contracts both with consortium Z and Group B, according to which they shal l be solely responsible for the staff which performs the tasks and shall include, in employment or service contracts with their staff, clauses specifying that (i) the staff executing the tasks may not be given orders directly by the Commission, (ii) the Commission may not, under any circumstances, be considered to be the employer of such staff, and (iii) the staff undertakes not to invoke, against the Commission, any right arising from the working relationship between the Commission and the contractor. The Commission stated that it did not, and it should not enter into the contractor’s day-to-day management and that it would not investigate whether the contractor’s staff was paid.

The Commission pointed out that , according to the provisions of the contracts, the only possibility for taking action in respect of one of the companies belonging to the consortiums would have been within the context of a potential failure, by company Y or company W, to provide the contracted service during the complainant’s time as a member of their staff. If the required tasks had not been undertaken or the deadlines had not been respected, the Commission might have been able to address this issue directly with the contractor and might have had the possibility to take action(7). However, the Commission clarified that, in the present case, there was no evidence available suggesting that monitoring activities had not been carried out by company Y or company W, or that deadlines for reporting had been missed. The Commission stressed that the complainant had not provided any evidence in this respect but, on the contrary, as he had stated in his letter of 25 January 2006, both the Commission and consortium Z were satisfied with the quality of his work.

The Commission therefore concluded that, in the present case, it was difficult to figure out how the contracts would have allowed its services to become involved in the internal management of one of the members of the consortiums. Accordingly, the Commission considered that it had acted properly and within the context of its contractual obligations in calling the contractor’s attention to the lack of payment by company Y.

The Commission included, with its opinion, a copy of the correspondence with the Director of consortium Z as regards the monitoring of the (relevant) LIFE Environment project. It included a copy of a letter dated 11 January 2006, from the responsible Head of Unit to the Director of consortium Z, in which the former expressed concern over a risk of staff turnover in the (relevant) LIFE environment monitoring team at company Y, due to the fact that staff appeared not to have been paid for work delivered during recent months. Although the responsible Head of Unit recognised that the management of consortium member companies was an internal issue for the consortium, he underlined that he was concerned about the situation, and urged the Director to look into this matter and to inform him of the situation. He also pointed out that an appropriate mechanism to ensure that the Commission continued to receive adequate monitoring information on a timely basis should be put in place.

In his reply of 7 February 2006, the Director of consortium Z explained that the (relevant) team of the LIFE Environment programme had reduced its staff due to the significant decrease in the number of projects in the previous two years and that, following internal arrangements, two experts had left the team in July 2005 and January 2006, respectively. He acknowledged that the complainant had been the last expert to leave the team, but asserted that the quality of the monitoring information received by the Commission and the required deadlines would not be altered. The Director stressed that the financial turmoils faced by company Y in 2005 had been the consequence of the new arrangements but that these difficulties were being resolved and that the company had agreed with its employees a plan to settle all pending payments within a short delay. He acknowledged that there had been a constant flow of information between consortium Z and company Y and stressed that, in early December 2006, the experts had received part of the salaries that were overdue. Finally, the Director committed himself to monitoring the evolution of company Y's situation.

In a further letter of 1 March 2006 addressed to the Director of consortium Z , the Commission stressed the need to monitor the situation at company Y, to ensure that the quality of its services was not undermined and asked to be informed in case of potential further problems and staff changes.

The complainant’s observations

The complainant did not submit any written observations.

On 30 October 2006, the complainant informed the Ombudsman, by fax, that consortium Z was in the process of paying the amounts due to him and his former colleagues. He mentioned that a bank transfer had been made and that he was expecting to receive the payments shortly.

On 11 December 2006, the Ombudsman's services contacted the complainant by telephone in order to ascertain whether he was satisfied with the outcome of the case. The complainant confirmed his intention not to submit any written observations and stressed that the consortium had paid most of the outstanding amounts. Although he considered the Commission’s opinion incomplete, he expressed satisfaction with the Ombudsman inquiry, and thanked him for the important role he had played in the payment. He also pointed out that he did not wish to pursue the matter any further.

THE DECISION

1 Failure to ensure payment of due amounts

1.1 Between September 2003 and January 2006, the complainant worked for two companies belonging to consortiums which had concluded outsourcing contracts with the Commission in order to monitor, follow-up, and evaluate projects co-financed by the LIFE programme(8).

He alleges that the Commission failed to ensure that company W, a member of consortium X, and company Y, a member of consortium Z(9), paid him the amounts due for work he had performed between June 2005 and January 2006.

As shown by its reply of 31 January 2006, the Commission was, in the complainant's view, aware of the situation and had agreed to monitor it.

1.2 The Commission argues that it cannot be held responsible for the non-payment of the salary of a former Y or W employee since, although it entered into technical assistance contracts with consortium Z(10) and, previously, with Group B(11) it did not conclude contracts with either company Y or company W, or with the complainant directly.

In the Commission's view, as set out in Article 8.6 of the contracts concluded with consortium Z and Group B, contractors shall be solely responsible for staff executing tasks. Therefore, the Commission points out that it does not and should not enter into the contractor’s day-to-day management. Accordingly, the Commission takes the view that it acted properly and within the context of its contractual obligations, by calling the contractor’s attention to the lack of payment to the complainant and other employees.

1.3 The Ombudsman notes that, following his inquiry in this case, the complainant informed him that consortium Z was in the process of paying most of the amounts due to him and his former colleagues, and that he was expecting to receive the payments shortly.

The Ombudsman further notes that the complainant has thanked him for the important role played in the payment, and has pointed out that he did not wish to pursue the matter any further.

In view of the situation, and taking account of the fact that the complainant has requested that the investigation on his allegation be closed, the Ombudsman concludes that there is no need for further inquiries as regards the case.

2 Conclusion

On the basis of the Ombudsman's investigation into this case, the Ombudsman finds that no further inquiries are necessary and therefore closes the case.

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

Yours sincerely,

 

P. Nikiforos DIAMANDOUROS

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(1) Launched in 1992, LIFE (The Financial Instrument for the Environment) is one of the main instruments of Community environment policy. LIFE co-finances environmental initiatives in the European Union and certain third countries. In the framework of sustainable development, LIFE should contribute to the implementation, development and enhancement of Community environmental policy and legislation, as well as to the integration of the environment in other EU policies. LIFE consists of three thematic components: "LIFE-Nature", "LIFE-Environment" and "LIFE-Third countries".

(2) The complainant explained that company W owned 99.7% of company Y.

(3) The Ombudsman notes that, according to the website of consortium Z, X was a temporary association of nine companies led by Group B. X subsequently expanded and formed consortium Z, a European economic interest grouping.

(4) Contract Nº LIFE/ZZZ.

(5) The Commission mentioned that company Y had a minor role in the consortium, with about 7% of the overall workload. See note 2 above.

(6) Contract Nº YYY.

(7) The Commission referred to the possibility to take action envisaged in Article 8 of the contract, which refers to consortium Z’s performance, or to Article 18, regarding contract termination, if proportional.

(8) Launched in 1992, LIFE (The Financial Instrument for the Environment) is one of the main instruments of Community environment policy. LIFE co-finances environmental initiatives in the European Union and certain third countries. In the framework of sustainable development, LIFE should contribute to the implementation, development and enhancement of Community environmental policy and legislation, as well as to the integration of the environment in other EU policies. LIFE consists of three thematic components: "LIFE-Nature", "LIFE-Environment" and "LIFE-Third countries".

(9) The Ombudsman notes that, according to the website of consortium Z, X was a temporary association of nine companies led by Group B. X subsequently expanded and formed consortium Z, a European economic interest grouping.

(10) Contract Nº LIFE/ZZZ.

(11) Contract Nº YYY.