EU Procurement Draft Faces Criticism Over Human Rights Gaps
A Swedish watchdog warns that the European Union's new public procurement framework may fail to adequately protect workers and communities in global supply chains, despite efforts to prioritize quality over price.
The European Commission’s proposal to unify existing procurement directives into a single regulation has drawn sharp criticism from human rights advocates. Swedwatch, a Swedish watchdog organization, issued a warning on Wednesday that the draft legislation does not go far enough in embedding mandatory human rights and environmental due diligence. According to the organization, while the new rules aim to simplify procedures and shift focus away from the lowest price, they still allow unscrupulous companies to win contracts by underbidding on cost, potentially at the expense of labor standards in global supply chains.
The proposed Public Procurement Act introduces several measures intended to improve transparency and quality. Bids would now require quality to account for at least 30 percent of the evaluation score, rising to 50 percent for labor-intensive contracts. Additionally, the regulation mandates the publication of contract data from initial notices through to final payment milestones. However, Swedwatch argues that these steps are insufficient without explicit requirements for human rights due diligence as a preferred award criterion or a condition for contract performance.
Watchdog Highlights Supply Chain Risks
Mathieu Vervynckt, head of the supply chains unit at Swedwatch, stated that without firm due diligence requirements, suppliers that cut corners on human rights may still secure public contracts. He warned that this could result in workers producing goods for the public sector continuing to face severe violations. The organization noted that the current proposal stops short of recommending human rights due diligence as a standard, failing to introduce mandatory social obligations that would require public entities to comply with the Corporate Sustainability Due Diligence Directive.
Evidence from Textile Industry Study
To substantiate their concerns, Swedwatch referenced a 2025 report linking public funds to exploitative labor practices in Pakistan’s textile industry. The study, which interviewed 89 factory workers across nine facilities in Faisalabad and Karachi, found that many workers manufacturing textiles for European healthcare systems earned below the legal minimum wage. These workers often lacked formal contracts, social security, and sick leave, while facing significant occupational health and safety risks. Sofia Käll, the lead researcher, described the situation as a system where European taxpayer money effectively supports exploitation.
Despite these findings, the report also highlighted positive examples from Swedish regions that voluntarily implemented sustainability-driven procurement practices. These regions reported notable success in integrating human rights and environmental frameworks without undermining competitiveness or limiting opportunities for small and medium-sized enterprises. Käll argued that stronger requirements would prevent companies competing primarily on low prices from gaining an unfair advantage, while providing a competitive edge to EU firms adjusting to emerging sustainability rules.
Competitiveness and Market Integrity
Swedwatch contended that the assumption that stronger human rights requirements would harm Europe’s competitiveness is unfounded. According to the organization, such measures would level the playing field by ensuring that social criteria carry real weight in the bidding process. The watchdog criticized the proposed 'comply or explain' approach, arguing it allows for insufficient accountability. Instead, they urged the inclusion of mandatory social obligations to promote fair working conditions and accountability throughout the entire supply chain, ensuring that public procurement serves as a force for good rather than a subsidy for abuse.
As the European Commission moves forward with the legislative process, the debate over the final wording of the regulation remains intense. The outcome will determine whether public spending in the EU can effectively drive improved labor standards globally. Stakeholders are now watching closely to see if the final text will incorporate the stronger safeguards advocated by civil society groups, balancing the need for procedural efficiency with the imperative to protect human rights and ensure fair market competition.
