made in accordance with Article 2(10) of the Statute of the European Ombudsman^[1]

Background to the complaint

1. EU funding is generally managed by the European Commission (‘direct management’). Depending on the nature of the funding, the management may also be carried out jointly, together with national authorities (‘shared management’), or indirectly, by private entities (‘indirect management).[2] Large parts of the EU budget allocated to humanitarian aid and international development are implemented under indirect management.

2. Irrespective of the management mode, the Commission remains ultimately responsible for the proper implementation of the EU budget. If it intends to rely on indirect management, the Commission has to verify that the entity concerned has appropriate systems, rules and procedures in place to ensure that the financial interests of the EU are protected in the same way as when the Commission implements the budget under direct management.[3]

3. The relevant assessment (‘pillar assessment’) is regularly carried out by an external auditor, based on a set of ‘terms of reference’[4] established by the Commission.

4. Due to the revision of the Financial Regulation[5] in 2013 and 2018, the Commission had to ask ‘partner organisations’ that had already been assessed to undergo renewed pillar assessments, based on the revised rules.

5. The complainant, a journalist, sought public access[6] to all documents and correspondence related to the pillar assessment of an international organisation that is implementing EU funds in the area of migration under indirect management.

6. The Commission identified 16 documents as falling within the scope of the complainant’s access request, including two pillar assessment reports dated 3 December 2014 and 5 October 2020 and drawn up by an external auditor. The Commission gave full or wide partial access to fourteen documents containing correspondence with the international organisation concerned. As regards the two remaining documents, that is, the two reports, the Commission refused to give access, relying on the need to protect personal data[7] and commercial interests[8].

7. The complainant is dissatisfied with the Commission’s refusal to give access to the two assessment reports, to the extent that it relied on the need to protect commercial interests. Having received a negative reply to his confirmatory application, the complainant turned to the Ombudsman in September 2022.

The inquiry

8. The Ombudsman opened an inquiry into the Commission’s refusal to grant public access to the two pillar assessment reports at issue, based on the need to protect commercial interests.

9. In the course of the inquiry, the Ombudsman inquiry team inspected the two reports as well as the Commission’s exchanges with the international organisation concerned, which it had consulted on the complainant’s access request.

Arguments presented

10. The Commission argued that disclosure of the reports would undermine the intellectual property rights of the external auditor concerned. It said that the auditor had assessed the design and effectiveness of the relevant systems, controls, procedures and rules of the international organisation and that parts of the reports can be regarded as sufficiently creative to qualify as original work. The Commission added that the reports had been paid for and that they were intended for use by itself and the international organisation concerned only.

11. The Commission also argued that the reports contain commercially sensitive information on the international organisation concerned, such as information on specific methodology and know-how, expertise, training, and research and development, as well as the auditor’s findings and recommendations. The Commission concluded that disclosure of this information would undermine the commercial interests of both entities concerned.

12. Finally, the Commission found that there was no overriding public interest in disclosure and that the complainant’s arguments in that regard were too general in nature.

13. The complainant contended that the structure and form of pillar assessment reports are heavily standardised, as they are based on a template provided by the Commission.

14. The complainant also argued that the intended audience of the documents was irrelevant. He said that, given that most documents the Commission holds were produced for internal or inter-institutional use, accepting this argument would mean that the majority of the documents the Commission holds cannot be disclosed. 

15. In addition, the complainant considered the risk of disclosure established by the Commission to be purely hypothetical, including in light of the international organisation’s well-established position as partner organisation of the Commission.

16. The complainant also stated that transparency was required due to the international organisation’s central role in implementing the EU’s migration policy and the significant scale of funding it receives from the EU each year.

The Ombudsman's assessment

17. Commercial information, including intellectual property, can be protected under the EU’s legislation on public access to documents (Regulation 1049/2001).[9] However, EU institutions cannot rely on the need to protect commercial interests simply because information relates to a company or its work. The relevant exception serves to protect commercially sensitive information, that is, information that, if disclosed, would undermine legitimate commercial interests of the entity concerned. This can be the case where information relates to a company’s business strategy or its expertise (for example, a specific methodology unique to an entity and unknown to competitors).

18. When applying this exception, EU institutions thus have to explain how disclosure would specifically and actually undermine the legitimate commercial interests at stake. In addition, the risk that the suspected damage would occur must be reasonably foreseeable and not purely hypothetical.[10]

19. Having reviewed the two reports at issue as well as the 14 documents to which the Commission gave the complainant wide partial access, the Ombudsman is not convinced that the Commission’s arguments are such as to justify the non-disclosure of the reports in their entirety.

20. Specifically, as regards the commercial interest of the external auditor [...]. It is therefore unlikely that disclosure of these parts could undermine the auditor’s intellectual property rights. The fact that the reports were addressed to a specific audience and that the auditor provided its service in return for payment is not relevant to the question whether the reports should be disclosed under Regulation 1049/2001.

21. Concerning the commercial interests of the international organisation [...]. It is therefore not clear to the Ombudsman how disclosure of these parts of the reports could have any negative implications for the international organisation in question.

22. As regards those parts of the reports that contain detailed comments, findings and recommendations, it is difficult to see how these could be regarded as sensitive as such. [...] It is therefore unclear how disclosure of this information could possibly undermine the international organisation’s commercial interests. [...]

23. In light of all this, the Ombudsman considers that only limited parts of the reports can reasonably be regarded as containing business secrets that deserve protection under Article 4(2), first indent, of Regulation 1049/2001. [...]

24. The exception for the protection of commercial interests can be set aside if there is a public interest in disclosure that is deemed more important. However, while the arguments put forward by the complainantdo support the existence of a strong public interest in transparency of the reports, they do not seem such as to establish an overriding public interest. This would be the case only if there was something to suggest that the pillar assessments had been flawed in some way.

25. In view of the above, the Ombudsman finds that, to the extent that the Commission based its decision on the exception for the protection of commercial interests, it was not justified in refusing to give public access to the relevant parts of the reports in their entirety.

26. The complainant did not challenge the redaction of personal data contained in the reports.

The proposal for a solution

Based on the above findings, the Ombudsman proposes that the European Commission should re-consider its decision to refuse access (to the extent that it does not concern personal data) and provide wide partial access to the reports, explaining in detail, as regards any parts that it considers deserve protection under Article 4(2), first indent, of Regulation 1049/2001, how their respective disclosure would specifically and actually undermine the commercial interests of the international organisation concerned.

The Commission is invited to inform the Ombudsman by 16 January 2023 of any action it has taken in relation to the above solution proposal.

Emily O'Reilly

European Ombudsman

Strasbourg, 04/11/2022

 

N.B. Some parts of the solution proposal are confidential and have been removed.

 

[1] Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2021.253.01.0001.01.ENG&toc=OJ%3AL%3A2021%3A253%3ATOC

[2] For more information on the different management types, visit: https://ec.europa.eu/info/funding-tenders/find-funding/funding-management-mode_en.

[3] Article 154 of Regulation 2018/1046 on the financial rules applicable to the general budget of the Union (‘Financial Regulation’): https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32018R1046.

[4] The current terms of reference are available at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019D0606(01)&from=EN.

[5] See footnote 3.

[6] Under Regulation 1049/2001 regarding public access to European Parliament, Council and Commission documents:

https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A32001R1049.

[7] In accordance with Article 4(1)(b) of Regulation 1049/2001.

[8] In accordance with Article 4(2), first indent of Regulation 1049/2001.

[9] In accordance with Article 4(2), first indent of Regulation 1049/2001.

[10] See, for example, judgment of the Court of First Instance of 13 April 2005, VKI v Commission, T-2/03, paragraph 69:

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A62003TJ0002&qid=1666343897772.

[11] See paragraph 16 above.