The Local Government Act 1988 does not debar a Local Authority from excluding Veolia from public contracts on grounds of grave misconduct

A letter to local authorities by Angus Geddes (Derail Veolia international campaign), with Richard Jones (Swansea Dump Veolia Campaign) and Daniel Machover (Lawyers for Palestinian Human Rights)

The 1988 Act prohibits a Council from taking certain non-commercial considerations into account in making contract awards. The extract from the Local Govt Act 1988 in the box below defines these non-commercial matters: they are not in conflict with EU legislation or the right to exclude Veolia on the grounds put forward.

The 1988 Act does not hinder an authority from excluding an economic operator on grounds, for example, of non-compliance with Equality Laws, or for that matter, if they had a criminal record, neither of which are commercial considerations.

We are asking the Council to specifically take into account that Veolia’s activities clearly constitute misconduct sufficiently grave to warrant the exclusion of its subsidiaries from public contracts. Indeed, it is difficult to imagine what ‘misconduct’ could be more ‘grave’ than the aiding, abetting, facilitation or exacerbation of war crimes and human rights violations. Such breaches of International Law clearly do not come under any of the exclusions in section 17(5) of the 1988 Act.

It is the precise nature of the company's activities that should be taken into account, namely that it is involved in the construction of the light railway between West Jerusalem and Pisgat Zeev and has a contract for its operation; the operation of bus routes linking other illegal settlements; and the operation of the Tovlan waste disposal scheme, all of which serve illegal settlements. We are not concerned here with 'the country or territory of origin of supplies to, or the location in any country or territory of the business activities or interests of contractors' such as Veolia by reference to Israel or the West Bank per se. Indeed, if Veolia were providing a bus service solely within Israel proper or waste disposal services in the West Bank to Palestinian communities alone, then there would be no complaint. It is therefore not the country or territory in question that gives rise to the problem, but the nature of the economic activity inside the West Bank. It is the fact that the company acts in wilful defiance of international law that constitutes the alleged 'grave misconduct', making the 1988 Act wholly irrelevant in this context.

In order to emphasise the current and ongoing concern regarding these matters, we would draw your attention to the decision of the UN Human Rights Council adopted on 14th April 2010. Para 5g expresses its grave concern at " The Israeli decision to establish and operate a tramway between West Jerusalem and the Israeli settlement of Pisgat Zeev, which is in clear violation of international law and relevant United Nations resolutions;"

Full resolution may be found at
http://unispal.un.org/UNISPAL.NSF/0/37BF1829818D0B788525770D00536076

(5) The following matters are non-commercial matters as regards the public supply or works contracts of a public authority, any proposed or any subsisting such contract, as the case may be, that is to say—

(a) the terms and conditions of employment by contractors of their workers or the composition of, the arrangements for the promotion, transfer or training of or the other opportunities afforded to, their workforces;

(b) whether the terms on which contractors contract with their sub-contractors constitute, in the case of contracts with individuals, contracts for the provision by them as self-employed persons of their services only;

(d) the conduct of contractors or workers in industrial disputes between them or any involvement of the business activities of contractors in industrial disputes between other persons;

(e) the country or territory of origin of supplies to, or the location in any country or territory of the business activities or interests of, contractors;

(f) any political, industrial or sectarian affiliations or interests of contractors or their directors, partners or employees;

(g) financial support or lack of financial support by contractors for any institution to or from which the authority gives or withholds support;

(h) use or non-use by contractors of technical or professional services provided by the authority under the [1984 c. 55.] Building Act 1984 or the [1959 c. 24.] Building (Scotland) Act 1959.