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Almost two years ago, we reported here on a ruling by the Hamburg Regional Court (LG Hamburg, Beschluss v. 9.12.2013, Az. 415 HK O 175/13) that prohibited a wood-processing company by way of a temporary injunction,
“in business dealings for the purposes of competition in the context of public tenders, to submit tenders which contain the declaration that wood products certified according to FSC and/or PEFC or equivalent or which individually fulfill the criteria of the FSC and/or PEFC applicable in the respective country of origin would be used for the execution of orders if corresponding certifications are not actually available.”
The background to the dispute was that the claimant and the defendant had both applied for a contract in the context of a public tender for the installation of new wooden windows as part of the conversion of a barracks.
Wood from sustainable forestry must be used in tenders for the procurement of wood products
Based on the joint decree of the Federal Ministry of Economics and Technology (BMWi), the Federal Ministry of Food, Agriculture and Consumer Protection (BMELV), the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) and the Federal Ministry of Transport, Building and Urban Development (BMVBS) on the procurement of wood products, participating bidders in tenders issued by the federal administration and some federal states for the procurement of wood products from sustainably managed forests must be able to provide evidence that they use appropriately certified wood.
For the declaration to be made that PEFC™ and/or FSC®-certified timber products are to be used, the respective bidder must itself be certified accordingly. A non-certified bidder may purchase and install certified goods, but may not, for example, make a PEFC™ and/or FSC® statement about the material used in its advertising, in its declarations and confirmations or in its delivery or invoice documents.
Non-certified bidder was awarded the contract
Although the applicant met the requirements for certification, it was rejected. In contrast, the contract was awarded to the respondent, a company that could not provide the required certifications itself. In the course of the procedure, it even turned out that the wooden windows to be installed did not even come from a certified company, but only the wood used in them.
The Hamburg Regional Court initially followed the arguments compiled in cooperation with the management consultancy “It’s Business Time” in the application and ordered the company that had been awarded the contract to refrain from making inaccurate statements about its certification status in future.
After conducting appeal proceedings, the Hamburg Regional Court revoked the injunction
Following an objection by the defendant, the Hamburg Regional Court revoked the interim injunction after a turbulent hearing. However, it did so without taking a comprehensive look at the requirements for a proper procurement procedure, instead citing alleged procedural problems.
The applicant therefore appealed to the Hanseatic Higher Regional Court, not least due to the fact that the decisive questions that had prompted it to take legal action had not been answered. Namely, in particular, which characteristics bidders in an award procedure in which certified wood is to be used must provide themselves and when they can rely on third-party certifications in this respect and, last but not least, how the competent authorities must assess compliance with these requirements.
Appeal leads to an important advisory decision by the Higher Regional Court of Hamburg
Although the appeal of the applicant represented by us did not lead to the desired success, it did lead to a reference order with important information on the requirements for the proper award of public contracts using certified products (OLG Hamburg, Beschluss v. 23.7.2015, Az. 3 U 141/14, available here as PDF).
Bidders must always be PEFC™ and/or FSC® certified themselves
In its decision, the Senate states, among other things, that the applicant had submitted significant points of view with the decrees of the federal authorities and the FSC guidelines, which indicate that the general understanding in public tenders is that the participant in the tender is self-certified.
The Hamburg authority’s tendering procedure was flawed
However, this understanding was – in the specific case – decisively called into doubt because the defendant had adopted the statement of the policy officer in the procurement law department of the responsible legal department at the oral hearing, according to which it was decisive for the responsible authority that a timber company – whether certified or not – purchased a certified product. The decisive factor for them (the Hamburg authority) was therefore that the product itself was verified and not the company as such. Due to this understanding of the authority, however, the defendant’s offer was not suitable to cause deception there, because the tender conditions were meant exactly as the wording specified by the authority.
However, the defendant did not act anti-competitively
In other words, the participating bidder is not acting in an anti-competitive manner if it complies with the requirements of the authorities, even if these do not meet the legislative requirements of the decree of the federal authority and the guidelines of the certification organizations and the award procedure is thus carried out in violation of administrative law.
Despite remaining legal doubts about the statements contained in the decision of the Hanseatic Higher Regional Court – for example, the Senate did not take into account that only the wood used and not the windows installed came from an actually certified company and that the award procedure was probably also unlawful in this respect – the applicant has withdrawn the appeal against the civil judgment of the Hamburg Regional Court and will now examine administrative steps against the parties involved.
(Disclosure: Our law firm comprehensively advised and represented the applicant).
Investments in the ecological and social timber industry continue to pay off
Lawyer Arno Lampmann:
“Even if the civil proceedings could not ultimately be brought to a victorious conclusion as hoped, the decision of the Higher Regional Court of Hamburg shows that the demands of many people for environmental protection and socially fair procurement of goods are also being recognized by the public administration and – even if not always correctly – implemented. It is also pleasing that the competent courts are taking the relevant processes seriously. Finally, the decision is an important signal to entrepreneurs who spare neither expense nor effort to meet the high demands of environmental protection and sustainability and have themselves properly certified that these not inconsiderable investments are actually rewarded.”
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