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European Ombudsman contribution to the revision of the EIB Group Complaints Mechanism Policy

Further to the Ombudsman's comments, the EIB made changes to the Preamble and Annex 1 of the draft revised Policy, as well as to articles 3.1, 3.3, 4.1, 4.3 and 5.3 of the draft Policy and articles 1.1 and 1.4 of the draft Procedures.

 

 

Mr Klaus Trömel
Secretary General
European Investment Bank
98‐100, boulevard Konrad Adenauer
2950 LUXEMBOURG
LUXEMBOURG

Strasbourg, 16/02/2017

Dear Mr Trömel,

Thank you for your letter of 13 December 2016 enclosing a copy of the draft revised EIB Group Complaints Mechanism Policy and Procedures as well as the note on the establishment of a Procurement Complaints Committee to handle project procurement complaints. Since we received these documents, we met with EIB staff on 17 January, 30 January and 1 February 2017. These meetings have helped us to further understand the rationale for the changes you propose.

I am pleased to enclose our comments on the drafts, both in this letter and in the attached table containing some suggested changes. Please note that the comments are limited to certain important matters that directly concern the relationship between the Bank and the Ombudsman. They should not be seen as the Ombudsman’s endorsement of the newly proposed policy, responsibility for which remains with the Bank.

Our comments are focused in particular on elements of the new policy that might impinge on our Memorandum of Understanding (MoU) which provides that “before turning to the EO, complainants should have recourse to an effective internal EIB complaints procedure”. The EIB Complaints Mechanism (EIB-CM) can only be effective if it remains credible in the eyes of European citizens. The conditions for effectiveness include operational independence, transparency, accessibility, timeliness and adequate resources. Further essential conditions of effectiveness are support from the leadership of the Bank and good cooperation from its operational services. Any new policy must be implemented with these conditions firmly in place at the Bank. When any of these conditions are missing, complaints risk being escalated to the European Ombudsman. 

0. Introduction

We would first like to welcome the EIB’s efforts to make the Policy and Procedures easier to understand and more coherent, taking better account of the role of the European Investment Fund. We also welcome the fact that the EIB-CM will meet annually with the EIB Management Committee and the EIF Chief Executive and will inform the EIB/EIF’s Board of Directors about the status of complaints against the EIB Group which have been submitted to the Ombudsman. This change was recommended during the External Quality Review, which the Ombudsman’s office contributed to.

Our main concerns relate to modifications in four areas, which we believe could have an impact on the EIB-CM’s independence and effectiveness and thus on the MoU signed between the EIB and the European Ombudsman, with the support of the European Parliament. Although we are aware of the pressures on the Bank that flow from the enhanced responsibilities with which it has been entrusted, our view is that changes that would risk undermining the independence and effectiveness of the EIB-CM are unnecessary and likely to prove counter-productive.

1. Section 3 of the Policy: Definition of maladministration

The definition of maladministration has been reformulated in the new draft Policy. Sections 3.1, 3.3 and 3.4 narrow the definition of maladministration compared to the definition used by the Ombudsman and endorsed by the European Parliament. This risks complaints being deemed inadmissible by the EIB-CM and escalated to the Ombudsman’s office.

In order to obtain the clarity that the EIB is striving for, the EIB could complement the existing definition by giving some examples of maladministration relating to the EIB context.

2. Section 4.3 of the Policy: Admissibility criteria

The expectation when the MoU was signed, confirmed by subsequent experience, was that the EIB-CM’s criteria of admissibility would be at least as wide as those of the Ombudsman. Cases in which the EIB-CM rejected a complaint against the EIB that the Ombudsman would regard as admissible were thus not expected to arise and no arrangements were made to deal with them.

However, sections 4.3.6, 4.3.7 and 4.3.8 of the draft Policy introduce criteria of admissibility that do not apply to complaints to the Ombudsman [1].

Specifically, on section 4.3.7, the new Policy considers complaints that challenge the legality of policies decided by the EIB’s Governing Bodies as inadmissible. As such, they cannot be dealt with by the EIB-CM. For the avoidance of doubt, the Ombudsman can and will deal with such cases, without the EIB-CM having had the opportunity to review the matter internally.

We also suggest that the EIB avoids the term “discretionary decisions” (section 4.3.6), which is misleading in this context.

3. Section 1.1.3 of the Procedures: Decision on admissibility

According to section 5.1.4 of the Policy “[t]he operational independence and effectiveness of the EIB-CM, as part of the Inspectorate General, are ensured by the responsibility of the Head of EIB-CM regarding (i) the admissibility of complaints, (ii) the type of mediation and/or investigation to be performed for a particular complaint and (iii) the decision on the final version of the EIB-CM Reports.”

Section 1.1.3 of the Procedures however foresees an automatic consultation of the services on admissibility and that, in case of disagreement, the Inspector General will decide on the admissibility of the complaint.

It will arguably be difficult to reassure stakeholders that the EIB-CM is, in fact, independent if the Head of the CM does not take the final decision on admissibility. Any deviation from this rule should therefore be exceptional and duly justified.

Formal consultation of the services on admissibility should, moreover, be possible but not mandatory. It is questionable whether mandatory consultation is conducive to making admissibility decisions within a reasonable time[2]. As set out above, one of the conditions for effectiveness is timeliness and you will be aware that the Ombudsman is currently dealing with a number of cases alleging excessive delays in the EIB-CM’s handling of complaints. Our inquiries should help uncover the reasons for the delays.

Sections 2.2.7 and 2.3.2 of the Procedures risk compounding the problem. In addition to the pre-registration appeal to the Inspector General, the operational services are given the right to appeal to the Management Committee against the initial assessment report. Furthermore, in any case where there is disagreement, the Management Committee must be consulted about any proposed mediation. These multiple layers of appeal and consultation before anything is done to address the substantive issues raised by the complaint, either through mediation or investigation, create the impression that their aim is to prevent the EIB-CM dealing with complaints except to the extent that the operational services concerned agree that it should do so. This risks seriously undermining the credibility of the EIB-CM. The relevant provisions of the Procedures should therefore be revised with a view to correcting this impression.

4. The creation of a new Project Procurement Complaints System

We understand that the proposed new procedure for dealing with project procurement complaints from tenderers has two stages:

  1. The first stage aims to deal rapidly with complaints, before the statement of non-objection is issued by the operational services. This stage is itself divided into two phases. When the EIB receives a project procurement complaint, it is immediately sent  to the responsible operational service and the promoter. The second phase consists of review by a Procurement Review Committee.
  2. The second stage is intended to deal with complaints that are received after the statement of non-objection has been issued. Such complaints will be dealt with by a Procurement Complaints Committee (PCC), comprising the Inspector General (as chair) and six other members at Director or Director-General level, four of whom will have voting rights.

While it is not possible for us to comment in detail on the proposals before they are fully developed, a number of remarks may assist the EIB as it reflects on the next steps as regards these proposals.

First, the “stage 1” arrangements for resolving complaints rapidly before the statement of non-objection are very welcome. In developing the detailed policy and procedures for this stage, it would be useful for the EIB to make clear how long it may delay a decision on the statement of non-objection in order to give time for problems to be resolved at this stage.

Second, the proposal to exclude project procurement complaints from the mandate of the EIB-CM and to establish a new, “stage 2”, high-level interdepartmental Procurement Complaints Committee (PCC) requires further reflection. While speeding up the handling of complaints at stage 2 would be welcome, it is important to examine whether the establishment of a new highlevel committee is the best way to deliver such improvements. As EIB operational services would be called upon to prepare the work of this Committee, it is also difficult to see how this would constitute a genuinely independent review. While we understand the specificities of project procurement complaints, our experience suggests that the EIB-CM has been well-placed to deal with them.

It is important to remember that the issue under discussion is not the EIB’s responsibility for its own procurement, but its capacity to influence procurement procedures carried out by the promoters of projects, usually in third countries where EU law does not apply directly and local institutions of governance and redress are of varying quality. As the Ombudsman’s Pizzarotti case[3] revealed, the EIB may provide the only effective avenue of redress for EUbased firms that are tendering in certain countries. As that case further highlighted, the EIB has an institutional responsibility to use its influence to promote clean and transparent procurement procedures in projects that it finances in third countries. We would therefore encourage the EIB to carefully consider this proposal and if it decides to proceed with it to provide more extensive justifications for why this change is necessary. In any scenario, it is important to continue to involve the EIB-CM in the handling of procurement complaints, at the very least to ensure that the necessary lessons are drawn from individual cases, in terms of systemic improvements for the future.

We would also like to signal six other paragraphs, which in our view require clarification:

  • The use of the term “allegations” instead of “concerns”: If the term “allegation” replaces the term “concerns”, we suggest that the Policy makes clear that the EIB-CM can identify the relevant allegations and claims inside a complaint, by reformulating the complainant’s concerns if necessary. In addition, the term “resolve allegations” in section 5.3.2 of the draft Policy does not seem appropriate in the context of mediation.
  • Section 1.4.4 of the Procedures foresee that “[i]n case EIB-CM identifies issues which merit the attention of the MC and the services, but which (a) are not directly related to the allegation, (b) fall outside the admissible scope of an otherwise admissible complaint, or (c) generally concern matters for which the Bank was not responsible, or actions of third parties, the EIB-CM will address its concerns internally to the appropriate EIB services and the MC, as part of its advisory function”. Our view, which is in line with the External Quality Review, is that the EIB-CM should, where necessary, be in a position to extend its investigation beyond the original allegations if the identified issues fall under the Bank’s responsibility. As regards issues that are inadmissible or for which the EIB is not responsible, we suggest that the EIB refers to them in the “admissibility” section of the Procedures. The use of the term “third parties” may also be confusing since it could be interpreted as preventing the EIB-CM from reviewing compliance with the Bank’s own responsibilities as regards the actions or omissions of third parties.
  • Section 1.6.2 of the Procedures, Draft Conclusions Report: as mentioned in the contribution made by the Ombudsman’s Office to the drafting of the EIB-CM Operating Procedures in 2011, it is still not clear what purpose is served by the formal involvement of the Management Committee at the draft conclusions phase, given that the Management Committee plays a role in the adoption of the final Conclusions Report.
  • Section 5.3.3 of the Policy foresees that “[t]he EIB-CM reviews the Bank’s activities with a view to determining whether maladministration has taken place which is attributable to the Bank. To this end, the EIB-CM reviews whether the EIB services have provided a consistent and reasonable explanation of their position, and whether it is based on complete, accurate, and reliable information identifiable at the time. Using technical expertise when necessary, the EIB-CM reviews the facts in order to establish an independent opinion on whether there has been a manifest error in the Bank’s position or a manifest breach of the rules that applied to the services at the time. Maladministration review by the EIB-CM is not intended to substitute the services’ professional judgement.” In our understanding, the function of the EIB-CM is to provide the Bank and its relevant stakeholders with an opportunity to resolve disputes, so that a complaint to the Ombudsman becomes unnecessary. To avoid any confusion, we would suggest that the purpose of this section could be served by simplifying it as follows: “[t]he EIB-CM reviews whether the EIB services have provided a consistent and reasonable explanation of their position, and whether it is based on complete, accurate, and reliable information available at the relevant time. Review by the EIB-CM is not intended to substitute the services’ professional judgement.”
  • Section 4.6 of the Policy, Disclosure and Publication regime: the EIB should be careful not to be seen as discouraging complaints in the event complainants would like their complaint to be dealt with confidentially.
  • Annex 1 to the Policy on the European Ombudsman: we suggest changes to the annex in order to take into account the Ombudsman’s new Implementing Provisions which entered into force on 1 September 2016 (see annex).

Finally, we encourage the EIB to include the Policy and Procedures as a whole in the upcoming public consultation and to provide an explanation of the proposed changes, as well as relevant background documents (such as the report of the External Quality Review). If the EIB maintains its proposal to create a new Procurement Complaints System distinct from the EIB-CM, this proposal would also need to be included in the public consultation along with the relevant explanations and documents.

I hope that you find this input useful and have no doubt that the Bank will receive further constructive feedback during the public consultation it intends to launch in the coming months. Please let me reiterate that we reserve our judgment on the need to review our Memorandum of Understanding, in consultation with the European Parliament, pending the outcome of this review process and developments in the context of our handling of inquiries.

Yours sincerely, 

Beate Gminder
Secretary-General

cc:

  • Ms Marjut Santoni, Deputy Secretary General
  • Mr Jan Willem van der Kaaij, Inspector General
  • Mr Felismino Alcarpe, Head of Division, Complaints Mechanism

Enclosure:

  • Table containing, where possible, suggested changes to the draft Policy and Procedures

[1] Section 4.3.6 excludes discretionary decisions; section 4.3.7 excludes challenges to the legality of policies decided by EIB Governing Bodies; section 4.3.8 concerns procurement and is examined below.

[2] This provision also conflates the question of whether a complaint is admissible with the logically prior question of whether it is a complaint at all.

[3] Case 178/2014/AN, Decision of 23 October 2014.