Labour Clauses (Public Contracts) Convention, 1949 (No. 94) - Bosnia and Herzegovina (Ratification: 2010)

Direct Request (CEACR) - adopted 2017, published 107th ILC session (2018)

Article 1 of the Convention. Scope of application. The Committee notes the Government’s detailed report indicating that the Law on Public Procurement governs the system of public procurement in Bosnia and Herzegovina, establishing the public procurement procedures and defining the rights and obligations of participants in the process. The Government adds that monitoring the implementation of the Law is the responsibility of the authorities at the state level: the Public Procurement Agency of Bosnia and Herzegovina and the Office for the Procurement Review Body of Bosnia and Herzegovina. The Committee notes the indication of the Republika Srpska that the competent authorities did not determine the extent or manner of application of the Convention to contracts awarded by authorities other than central authorities (Article 1(2) of the Convention). The Republika Srpska questions the applicability of the Convention to public contracts to which it, or one of its agents, is a contracting party, indicating that it is an authority that is not the central authority. Moreover, the Republika Srpska indicates that the competent authority has not made any determination regarding exemptions to the application of the Convention within the meaning of Article 1(4) and (5). In its 2008 General Survey concerning the Labour Clauses (Public Contracts) Convention, 1949 (No. 94) and Recommendation (No. 84), paragraphs 70 and 72, the Committee noted that the central authority could be either the federal authority, a central authority or a constituent unit and the scope of application of the legislation on labour clauses in public contracts may extend to contracts concluded by authorities other than those of the central government. The Committee therefore requests the Government to provide information on the measures taken or envisaged to ensure application of the Convention in all entities of the country and to indicate the nature of any exemptions determined in accordance with Article 1(4) and (5).

Article 2. Inclusion of labour clauses in public contracts. The Committee notes that for public contracts, section 45(1), item (c), of the Law on Public Procurement of Bosnia and Herzegovina provides that the contracting authority – the public authority or a company in which the public authority has a majority ownership – will reject the tender if the candidate/tenderer fails to fulfil its obligations related to the payment of pension, disability and health insurance for its workers. The Government indicates that, in the Republika Srpska and in the Federation of Bosnia and Herzegovina, the rights and obligations of employers are governed by general legislation applicable to all workers, including those employed under public contracts. In its 2008 General Survey on labour clauses in public contracts, paragraphs 18 and 40, the Committee recalled that the rationale for the adoption of minimum labour standards in public procurement was that public authorities should seek to ensure the observance of socially acceptable standards in work performed for the public account and that the insertion of fair labour clauses in public contracts could play a useful role in attaining and maintaining a high standard of social protection at the national level. The Committee indicated that the essential purpose of the Convention is to ensure that the workers employed by a contractor and paid indirectly out of public funds enjoy wages and labour conditions which are at least as satisfactory as those normally established for the type of work concerned, whether these are established by collective agreement or otherwise, in the locality where the work is carried out. The Convention requires that this be done through the insertion of appropriate labour clauses in public contracts. Moreover, as the Committee noted in paragraph 45 of the 2008 General Survey, the general applicability of labour legislation to all workers is insufficient to meet the requirement specified in Article 2 of the Convention. The Committee therefore requests the Government to provide information on the specific measures taken or envisaged to ensure the effective implementation of the Convention. The Committee recalls that the Government can avail itself of ILO technical assistance in this regard.

Articles 4 and 5. Notice and sanctions. The Committee requests the Government to provide information on the manner in which it is ensured that the laws, regulations or other instruments giving effect to the Convention are brought to the notice of all persons concerned. The Committee also requests the Government to indicate the measures taken to ensure that notices informing workers of their conditions of work are posted in conspicuous places in the establishment or workplace concerned, and invites the Government to provide information on the measures taken or envisaged to ensure effective enforcement.

Application of the Convention in practice. The Committee requests the Government to give a general appreciation of the manner in which the Convention is applied in all entities of the country including, for instance, extracts from official reports and information on any practical difficulties in the application of the Convention.

Direct Request (CEACR) - adopted 2012, published 102nd ILC session (2013)

Articles 1 and 2 of the Convention. Insertion of labour clauses in public contracts. The Committee notes the Government’s indication that it encountered difficulties in preparing the first report on the application of the Convention, in particular as regards the identification of appropriate national legislation and the competent authorities through which this international instrument is to be implemented. It also notes the Government’s request for technical assistance from the Office in terms of explanations and best practices for an adequate implementation of the Convention. The Committee recalls that when submitting the first report following the entry into force of a ratified Convention, a government is expected to collect and communicate to the ILO full particulars on each of the provisions of the Convention and on each of the questions contained in the report form to enable the Committee to assess the extent to which the provisions of the Convention are given effect both in law and in practice. The Committee therefore looks forward to the results of the technical assistance that the Office is expected to provide.

Nonetheless, the Committee considers it useful to draw the Government’s attention to the core requirements of the Convention which may be summarized as follows: (i) the insertion in all public contracts falling within the scope of Article 1 of the Convention of labour clauses – drafted after consultation with employers’ and workers’ organizations – ensuring to the workers concerned wages and other working conditions not less favourable than those established for work of the same character in the same area by collective agreement, arbitration award or national laws or regulations; (ii) the notification of the terms of the clauses, by advertising specifications or otherwise; (iii) the posting of notices in conspicuous places at the workplaces with a view to informing the workers of their conditions of work; and (iv) the effective enforcement through a system of inspection and adequate sanctions, including the withholding of contracts and the withholding of payments for failure to observe and apply the provisions of labour clauses.

In this connection, the Committee wishes to refer to its General Survey of 2008 concerning labour clauses in public contracts (paragraphs 2 and 40), in which it indicated that the idea behind the adoption of minimum labour standards in the field of public procurement is that public authorities should concern themselves with the working conditions under which the operations in question are carried out. The concern stems from the fact that government contracts are usually awarded to the lowest bidder and that contractors may be tempted, in view of the competition involved, to economize on labour costs. The Committee also indicated that the insertion of appropriate labour clauses has the effect of setting as minimum conditions for the contract, standards that are already established within the locality, and that labour costs are thus removed from competition between bidders.

The Committee notes that the Public Procurement Act (Official Gazette of BiH No. 49/04 of 2 November 2004) and Implementing Regulations (Official Gazette of BiH No. 03/05 of 24 January 2005), which largely follow relevant EU Directives, seek to promote efficiency, transparency and fair competition in public procurement operations. The Committee stresses that under this Convention, the Government is also under the obligation to ensure that workers employed by a contractor and paid indirectly out of public funds enjoy wages and conditions of labour which are at least as satisfactory as the wages and conditions of labour normally established for the type of work concerned, which implies that local standards higher than those of general application should be applied, where they exist. The Committee accordingly requests the Government to submit a detailed report on the state of law and practice in the different entities of the country and to transmit copies of any relevant bidding documents, which may have been adopted in accordance with existing public procurement legislation.

Finally, the Committee attaches herewith a copy of a Practical Guide on Convention No. 94 which was prepared by the Office in September 2008 based on the conclusions of the aforementioned General Survey in order to help member States better understand the requirements of the Convention, and in so doing, promote its implementation.