On 17 February 2016, the UK Government issued a Procurement Policy Note (PPN) entitled “Ensuring compliance with wider international obligations when letting public contracts”. It states, referring to public bodies, that “boycotts in public procurement are inappropriate, outside where formal legal sanctions, embargoes and restrictions have been put in place by the UK Government”.
In October 2015, LPHR expressed substantial concerns about a Conservative party press release that stated an intention for the UK Government to introduce this guidance. Since then, LPHR has also responded to the Department for Communities and Local Government’s (DCLG) consultation, which seeks to implement similar restrictions for local authority pension funds.
LPHR is reviewing the PPN in detail and will be considering, in particular, the veracity of the Government’s interpretation of the Public Contract Regulations 2015, the EU procurement directives and the WTO Government Procurement Agreement (WTO GPA).
At this stage, LPHR wishes to make three initial points about fundamental omissions in the PPN and the consequences that flow from them for local authorities.
The PPN fails to adequately define ‘boycott, divestment and sanctions’
As with the Conservative party press release on this issue in October and the DCLG consultation, the PPN fails to properly distinguish between local government boycott and divestment initiatives with Israel proper, and those that specifically relate to illegal Israeli settlements in the occupied Palestinian territory (OPT). LPHR does not take a position in relation to the movement to boycott, divest from, and sanction Israel, but it does take a considered policy position that the UK Government and local authorities should withhold incoming and outgoing trade with illegal Israeli settlements as a matter of compliance with their fundamental legal obligations. LPHR’s policy position aligns with the UK Government’s clear, and long-standing, policy to recognise the illegality of Israeli settlements in the OPT.
The need to distinguish between boycott and divestment initiatives relating to Israel proper and those relating to illegal Israeli settlements in the OPT is fundamental and calls into question the integrity of the Government’s analysis in the PPN. The PPN and its accompanying press release suggests that boycott and divestment initiatives against Israeli companies are not in compliance with the WTO GPA on the grounds of discrimination on the basis of nationality. However, LPHR’s above policy position intentionally does not involve, or encourage, discrimination on the grounds of nationality, but rather, where necessary, on the grounds of compliance with fundamental international humanitarian and human rights law obligations in respect of carrying on activities in illegal Israeli settlements, as detailed further below.
The PPN fails to refer to, or potentially enable local authorities to comply with, the UN Guiding Principles on Business and Human Rights, and broader international humanitarian and human rights law obligations
It is regrettable that, despite the fact that the PPN claims to set out “contracting authorities’ international obligations when letting public contracts”, it fails to make make any reference to the United Nations Guiding Principles on Business and Human Rights (UN Guiding Principles), which the UK Government has declared a policy commitment to in its 2013 UK National Action Plan, or to broader international humanitarian law and human rights law considerations which are particularly relevant to Israel’s occupation of the OPT.
In brief, the UN Guiding Principles recognise and reaffirm states’ existing duty to respect, protect and fulfil human rights, and confirms that states, businesses and civil society have a key role to play in enhancing standards of business respect for human rights. In particular, the second of the UN Guiding Principles provides that: “States should set out clearly the expectation that all business enterprises domiciled in their territory and/or jurisdiction respect human rights throughout their operations.”
Various sources of international law, outlined in detail in our response to the DCLG consultation, make clear that local authorities are organs of the state and are therefore required to comply with the UN Guiding Principles. As referenced in our consultation response, the UN Human Rights Council Advisory Committee has stated in particular: “Local authorities are obliged to comply, within their local competencies, with their duties stemming from the international human rights obligations of the State. Local authorities are actually those who are to translate national human rights strategies and policies into practical applications.”
LPHR believes that the PPN statement that “public procurement should never be used as a tool to boycott tenders from suppliers based in other countries”, subject to a narrow range of exceptions where formal legal sanctions, embargoes and restrictions have been put in place by the government, would be a major and unacceptable curtailment on local authorities’ ability to act in full accord with the UN Guiding Principles and the UK National Action Plan.
In relation to the PPN’s lack of reference to relevant international humanitarian and human rights law obligations, LPHR has set out, in detail, the legal consequences that flow from the illegality of the settlements in its recent response to the DCLG consultation and in its blog responding to the Conservative party press release last October. In particular, the impact of illegal settlements and related infrastructure on obstructing the fundamental Palestinian right to self-determination engages legal obligations on all states, including local authorities as an organ of the state, to take appropriate measures not to recognise the situation as lawful, or to aid or assist its maintenance. The PPN’s omission of reflection on this crucial legal and human rights issue in the context of relevant boycott and divestment initiatives is striking, especially as Israel is the only country expressly referenced in the short press release accompanying the PPN.
The PPN fails to enable local authorities to act in accordance with UK Government policy on the illegality of Israeli settlements in the occupied Palestinian territory
The Foreign and Commonwealth Office (FCO) has existing published guidance (FCO Guidance) which does not encourage, or support, UK business to operate within illegal settlements. The Overseas Business Risk advice for Israel states: “The UK has a clear position on Israeli settlements: the West Bank, including East Jerusalem, Gaza and the Golan Heights are territories which have been occupied by Israeli since 1967. Settlements are illegal under international law, constitute an obstacle to peace and threaten to make a two-state solution to the Israeli-Palestinian conflict impossible.’ Set against this clear legal context, the FCO guidance states: ‘There are therefore clear risks related to economic and financial activities in the settlements, and we do not encourage or offer support to such activity.”
By allowing boycott and divestment initiatives only where “formal legal sanctions, embargoes and restrictions” have been put in place by the Government, the PPN prevents local authorities from complying with the UK Government’s considered foreign policy positions, such as the FCO Guidance. Whilst the FCO Guidance expresses a substantial position, it is neither a legal sanction, embargo or restriction and so, under the PPN, would not provide sufficient justification for boycotting or divesting from companies that operate in illegal Israeli settlements.
In summary, LPHR’s initial assessment of the PPN suggests that the Government’s consideration of boycott and divestment initiatives appears to be inappropriately limited, in particular as the PPN fails to properly acknowledge the international humanitarian and human rights law implications of the guidance for local authorities, and by preventing local authorities from taking steps to support expressions of the UK’s overarching business and human rights policy and foreign policy.
LPHR will continue to review the PPN, and any related developments, and will release further statements as necessary.
In the meantime, and as LPHR has urged previously, it is essential that the UK Government clarifies the apparent disjunction of the PPN with its coherent existing policy and guidance in relation to illegal settlements and the UN Guiding Principles. If the PPN is found to be incompatible with the Government’s current policy and guidance and broader international law obligations, it is imperative, from a rule of law and human rights perspective, that the PPN is revised accordingly.
Tareq Shrourou; Claire Jeffery