Legal basis of Paks II public procurement infringement procedure closure

Christiana Maria Mauro made this access to documents request to Internal Market, Industry, Entrepreneurship and SMEs

Response to this request is long overdue. By law, under all circumstances, Internal Market, Industry, Entrepreneurship and SMEs should have responded by now (details). You can complain by requesting an internal review.

From: Christiana Maria Mauro

Delivered

Dear Internal Market, Industry, Entrepreneurship and SMEs,

Under the right of access to documents in the EU treaties, as developed in Regulation 1049/2001, we are requesting documents connected to the legal assessment of infringement proceeding 20154231 initiated by the Commission against Hungary.

Please provide any additional documentation related to the investigation that may be available under Regulation 1049/2001, including the legal analyses conducted by the Commission service, internal notes and documents, correspondence and reports.

On 19 November 2015 the Commission launched official infringement proceedings against Hungary due to concerns about the public procurement process for the Paks Nuclear Power Plant refurbishment and new reactor construction, which was determined to be incompatible with EU public procurement laws. On 17 November 2016 the closure of the infringement proceeding was announced. While the Russian investor in the Paks II project was "selected without calling a tender” the Hungarian Prime Minister's Office Leader János Lázár stated that the Commission “concluded that Hungary had not violated public procurement directives and had the right to conclude a contract that partly ignores the EU public procurement directives”.

In the event that any of the requested documents are denied please state the reason and the name and position of the person responsible for the denial.

Yours faithfully,

Christiana Mauro and Nuclear Transparency Watch

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Dear Ms Mauro,
Thank you for your request for access to documents.
Unfortunately you have not indicated your postal address that is required
for registering and handling your request in line with the procedural
requirements. Please send us your full postal address at your earliest
convenience. Pending your reply, we reserve the right to refuse the
registration of your request.
You may, of course, use directly the electronic form for entering your
request:
[1]http://ec.europa.eu/transparency/regdoc/...
 
Best regards,
 
 
Access to documents team
European Commission
DG for Internal Market, Industry, Entrepreneurship and SMEs
Unit A1

 
 
 
 
 

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From: Christiana Maria Mauro

Delivered

Dear Internal Market, Industry, Entrepreneurship and SMEs,

Kindly note that in response to your request of Dec. 8, 2016 I sent my postal address to DG Grow ([email address]; [email address]) on Dec. 8 and again on Dec. 16, 2016. I have not received a confirmation of receipt as yet.

Yours faithfully,

Christiana Mauro

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Dear Ms Mauro,
 
Thank you for your e-mail dated 08/12/2016 and for your reply to our
request for postal address, which we received from you only on 16/12/2016
and from a different email address.  We hereby acknowledge receipt of your
application for access to documents, which was registered on 16/12/2016
under reference number GestDem 2016/7131.
 
In accordance with Regulation (EC) No 1049/2001 regarding public access to
European Parliament, Council and Commission documents, your application
will be handled within 15 working days. The time limit will expire on
16/01/2017. In case this time limit needs to be extended, you will be
informed in due course.
 
You have lodged your application via the AsktheEU.org website. Please note
that this is a private website which has no link with any institution of
the European Union. Therefore the European Commission cannot be held
accountable for any technical issues or problems linked to the use of this
system.
 
Yours faithfully,
 
 
Access to documents team
European Commission
DG for Internal Market, Industry, Entrepreneurship and SMEs
Unit A1

 
 
 
 
 

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From: Christiana Maria Mauro

Delivered

Dear Internal Market, Industry, Entrepreneurship and SMEs,

The documents initially requested on 08.12.2016 were not released by the legal deadline. Can we expect a response shortly?

Yours faithfully,

Christiana Mauro

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Dear Ms Mauro,
 
As indicated in our acknowledgement of receipt, the first deadline for
this request is 16/01/2017.
Best regards,
 
 
Access to documents team
European Commission
DG for Internal Market, Industry, Entrepreneurship and SMEs
Unit A1

 
 
 
 

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Dear Ms Mauro,
 
We refer to your request for access to documents, registered on 16/12/2016
under the above mentioned reference number.
 
Your application is currently being handled. However, we will not be in a
position to complete the handling of your application within the time
limit of 15 working days, which expires today (16/01/2017).
 
Therefore, we have to extend the time limit with 15 working days in
accordance with Article 7(3) of Regulation (EC) No 1049/2001 regarding
public access to documents. The new time limit expires on 06/02/2017.
 
We apologise for this delay and for any inconvenience this may cause.
However, please note that the reply is ready for signature by the
hierarchy and will be sent as soon as possible in the next days.
 
 
Yours faithfully,
 
Access to documents team
European Commission
DG for Internal Market, Industry, Entrepreneurship and SMEs
Unit A1
_____________________________________________
From: GROW ACCES DOCUMENTS
Sent: Monday, December 19, 2016 5:20 PM
To: 'Christiana Maria Mauro'
Cc: GROW ACCES DOCUMENTS
Subject: Acknowledgement of receipt - Legal basis of Paks II public
procurement infringement procedure closure - MAURO - GESTDEM 2016/7131
 
 
Dear Ms Mauro,
 
Thank you for your e-mail dated 08/12/2016 and for your reply to our
request for postal address, which we received from you only on 16/12/2016
and from a different email address.  We hereby acknowledge receipt of your
application for access to documents, which was registered on 16/12/2016
under reference number GestDem 2016/7131.
 
In accordance with Regulation (EC) No 1049/2001 regarding public access to
European Parliament, Council and Commission documents, your application
will be handled within 15 working days. The time limit will expire on
16/01/2017. In case this time limit needs to be extended, you will be
informed in due course.
 
You have lodged your application via the AsktheEU.org website. Please note
that this is a private website which has no link with any institution of
the European Union. Therefore the European Commission cannot be held
accountable for any technical issues or problems linked to the use of this
system.
 
Yours faithfully,
 
 
Access to documents team
European Commission
DG for Internal Market, Industry, Entrepreneurship and SMEs
Unit A1

 
 
 
 
 

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This message has been hidden. postal address visible Please contact us if you have any questions. If you are the requester, then you may sign in to view the message.

From: Andreas Pavlou


Attachment Access to documents request MAURO GESTDEM 2016 7131 Redacted.pdf
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From: Christiana Maria Mauro

Delivered

Lowri Evans
European Commission
DG for Internal Market, Industry, Entrepreneurship and SMEs
B-1049 Brussels, Belgium

Dear Ms. Evans,

Following our request for access to documents of 8 December 2016, we are submitting a confirmatory application in accordance with Article 7(2)[1] and 7(4)[2] of Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents. We ask that you reconsider the position taken as regards the request for the legal basis of the conclusion of infringement procedure NIF 2015/4231, to which access has been refused.

Since the infringement proceedings were concluded on 17 November, 2016, neither Hungary nor the European Commission has provided evidence that the absence of an international public procurement tender was justified and proportionate. The first ground of appeal is an overriding public interest in favour of disclosure of the reasoning supporting the conclusion of the infringement procedure; it encompasses the principle of transparency, the ability to participate in a decision-making process, and institutional accountability.

The second, and more important, ground of appeal is a pressing public interest in disclosure linked to the fact that the choice of Rosatom as supplier (and the VVER as a reactor design) was justified by the need to address post-Fukushima safety standards. An overriding interest in public disclosure exists when requested documents concern emissions likely to affect the environment.

Overriding public interests

I. The principle of transparency

In support of the denial of access it was argued that disclosure of the conclusions of the case would undermine the climate of mutual trust required to resolve disputes between the Commission and Hungary should the case be reopened.

The Commission cannot avail itself of the exception to transparency that is based on the protection of investigations. At the time the request for information was filed, the Commission had already concluded the investigation and the conclusions of the Commission are a matter of public record. The abstract possibility that it may open the investigation in the future is not sufficient to justify a refusal to grant access. The European Court of Justice has recognized that the mere fact that a document concerns an interest protected by an exception is not, in itself, sufficient to justify the application of that exception. It must, in principle, justify how disclosure of the requested document could specifically and effectively undermine the interest protected by the exception the institution is relying on. In addition, “the risk of protected interests being undermined must be reasonably foreseeable and not purely hypothetical”.[1]
Moreover, Hungary's obligation to comply with EU public procurement law is not, and cannot be, contingent on political negotiation.

It was also argued that the withheld documents are covered, inter alia, by the exception relating to the protection of the purpose of investigations, as the case is part of an ongoing investigation into whether the Paks project stands to benefit from illegal state subsidies.

The Commission is also required to publish the decisions which it takes pursuant to Article 7 of Regulation No 1/2003, stating the names of the parties and the content of the decision. The overriding public interest requires, at the very least, the publication of a non-confidential version of the legal basis of its conclusions. That being the case, the requirement to interpret in a restrictive way the grounds for refusal of access imposes a precise obligation on the Commission to consider whether the partial disclosure of an administrative file is feasible. As regards the rationale for your conclusions, it must be observed that the reasoning offered in your letter is quite incompatible with the requirement that the public should have the widest possible access to the documents held by the institutions of the European Union.

The principles of transparency and democracy require that citizens have the right to be informed of the extent to which national law is compatible with EU law and to participate in the decision-making process. It is also of fundamental importance to the citizens of the Union that EU public procurement law is correctly implemented by the Member States, and information relating to the conformity with that law constitutes an overriding public interest of pressing concern in this case.

In a letter explaining the closure of the infringement procedure the Commission concluded that “[…] following a final definition of the needs and taking into consideration the lessons learnt from the Fukushima accident and the continuous improvement of nuclear safety, only the Russian technology could technically fulfil the final Hungarian requirements.”[2] Yet the Hungarian government has neither offered a justification for technological exclusivity nor evidence that the lessons learnt from the Fukushima accident were considered.

The Hungarian environmental NGO Energiaklub asked the Ministry of the Economy about the technical parameters that justify the technological exclusivity of the VVERs and in what way these parameters could be attributed to the lessons learnt from Fukushima, and requested any documentation of the decision-making process that led to the awarding of the contract without an open tender. Notably, the Hungarian Ministry refused to disclose this information in a letter on 2 February, 2017, and also failed to offer a legal basis for its refusal in violation of Hungary’s own freedom of information laws. It has also also passed laws that prevent scrutiny of the specifics of the Paks II contract for at least thirty years.[3]

While government officials stated between September 2010 and November 2013 that a tender announcement was impending,[4] in January, 2014 the agreement with Russia was signed with neither an open public tender nor an official explanation.

The argument for the ‘technical exclusively’ exemption, which allows a contract to be granted directly to a company when it is the only company that can implement the project, was the argument used by Hungary after its previous rationale was rejected by the Commission. The minutes of a Hungarian parliamentary committee meeting establish that the real incentive for directly awarding the construction contract to Rosatom without a transparent procedure was Russian financing, rather than technical exclusivity.[5]

The public must be in a position to ascertain the actions taken by the Commission in the field of competition in order to ensure that it is possible to identify in a sufficiently precise manner conduct for which economic operators are liable to be penalized and that the Commission’s decision-making practice is understood. The functioning of the internal market affects all EU citizens as economic operators and as consumers. The Commission can, in particular, ensure that there is a sufficient understanding of the reasons that led to its conclusions in the infringement case against Hungary by publishing a non-confidential version of the decision.

There is an overriding public interest in the public being able to ascertain certain essential elements of Commission actions.

II. Public safety

A number of environmental NGOs have expressed concerns about the compatibility of VVER with EU safety regulations, the failure of Hungary to explore safer supply options[6], and the changes made last year to Hungary's energy laws which undermine the independent position of the Hungarian Atomic Energy Agency. This agency is responsible for setting the license conditions for the construction of nuclear power stations and radioactive waste management facilities.[7]

Greenpeace has also argued that the VVER rector design fails to meet EU nuclear safety requirements, and that given the array of problems and accidents that have occurred “it does not seem plausible that a Member State claiming to be facing security of supply issue would decide to rely solely on the construction of two VVER reactors without exploring whether other safer and more cost-effective supply options are available”.[8] And both the Austrian government and German and Austrian energy companies are strongly opposed to the Paks project for safety reasons.

After the Commission unexpectedly exonerated Hungary for awarding the Paks II contract without an open tender, it argued that "Hungary has sufficiently justified the use of the so-called technical exclusivity exemption".[9] Media reports, however, subsequently demonstrated that the technical and safety requirements of the project could have been met by companies other than Russia's Rosatom.[10]

The choice of Rosatom as supplier (and the VVER as a reactor design) was allegedly justified with the need of addressing post-Fukushima safety standards (i.e. to prevent emissions in the environment). The fact that the information requested relates to potential radioactive emissions into the environment must particularly be taken into account when applying exceptions. When requested documents concern factors such as emissions and measures (including administrative measures) likely to affect the environment, there is an overriding interest in disclosure.[11]The European courts have established that an overriding interest in disclosure of documents related to such emissions must be presumed to exist.

As we explained, the requested documents pertain to a closed investigation in which the Commission concluded that there was no violation of EU public procurement rules, therefore the “investigation exception” cannot be invoked since: a) the Commission is no longer investigating, b) according to the Commission itself, there has been no infringement of EU law, and c) the Commission has treated the State aid investigation and the public procurement case as separate.[12]

The Aarhus Regulation modifies the exceptions laid down in Regulation No 1049/2001 with respect to information relating to emissions into the environment, stipulating that “with the exception of [ongoing] investigations, in particular those concerning possible infringements of Community law, an overriding public interest in disclosure shall be deemed to exist where the information requested relates to emissions into the environment. As regards the other exceptions set out in Article 4 of Regulation (EC) No 1049/2001,the grounds for refusal shall be interpreted in a restrictive way, taking into account the public interest served by disclosure and whether the information requested relates to emissions into the environment.”

The request for disclosure of the Commission's justification for concluding that the Hungarian position, according to which the Russian VVER reactor is “the only technology choice that meets all the technical requirements” involves a tender for a massive atomic project, purportedly the most significant Central European project over the next three decades. The closing of the case means that the EU has removed obstacles to the project, authorizing a deliberate and transparent violation of EU law; thus construction may begin as early as 2017-2018.[13]

The European Commission has come under intense scrutiny since media reports have questioned the environmental safety implications of Rosatom reactors, focused attention on a possible conflict of interest involving Commission officials, and offered evidence that contradicts the justification for the ‘technical exclusivity’ exemption from internal Commission memos and excluded bidder companies. In light of the arguments presented above, the urgency of the matter and the high public interest in the Commission's rationale for closing the infringement proceedings against Hungary, we respectfully request a response to this application within the shortest time possible based on the specific circumstances of this case.

Yours Sincerely,

Christiana Maria Mauro and Nuclear Transparency Watch

[1]Case T‑167/10 Evropaïki Dynamiki v Commission, § 64
[2]http://g8fip1kplyr33r3krz5b97d1.wpengine...
[3] http://budapesttimes.hu/2015/03/06/paks-...
[4]http://nol.hu/gazdasag/20140208-maghasad...
[5]"Why in 2014? [...] a very important element of the Paks II project was Russian financing. The availability of this Russian funding involved highly favourable financing conditions, and as a result the price of electricity can be reduced as well. It would have been a mistake not to take advantage of such an offer" - Attila Aszódi, commissioner responsible for Paks II, Minutes of the Meeting of the Hungarian Sustainable Development Parliamentary Committee FFB-12/2015. sz. ülés, 13 May, 2015, p. 44, www.parlament.hu/documents/static/biz40/...
[6]www.pakskontroll.hu/hu/11-alapvetes
[7]Letter to IAEA Deputy Director General and Head of Department of Nuclear Safety and Security, 10 January, 2017, www.energiaklub.hu/files/news/20170110_L...
[8]www.greenpeace.org/eu-unit/Global/eu-unit/image/2016/2016094%20Letter%20to%20EC%20on%20Paks%20II%20public%20procurement%20infringements.pdf
[9]European Commission spokeswoman Lucia Caudet, http://www.world-nuclear-news.org/NN-Hun...
[10]www.politico.eu/article/hungary-nuclear-approval-expected-thanks-to-uk-and-france-precedent; www.politico.eu/article/questions-grow-o...
[11]Art. 2 (1), Directive 2003/4/EC of the European Parliament and of the Council of 28 January 2003 on public access to environmental information and repealing Council Directive 90/313/EEC
[12] See http://europa.eu/rapid/press-release_IP-...
[13]Világgazdaság, pp.1&3; www.fidesz.hu/hirek/2016-11-17/2017-2018...

A full history of my request and all correspondence is available on the Internet at this address: https://www.asktheeu.org/en/request/lega...

Yours faithfully,

Christiana Maria Mauro

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Internal Market, Industry, Entrepreneurship and SMEs

Dear Madam,

Thank you for your email dated 22/02/2017, by which you request, pursuant to Regulation No 1049/2001 regarding public access to European Parliament, Council and Commission documents, a review of the position taken by DG GROW in reply to your initial application GESTDEM 2016/7131.

We hereby acknowledge receipt of your confirmatory application for access to documents which was registered on 27/02/2017 (Ares(2017)1033251).

Your application will be handled within 15 working days (20/03/2017). In case this time limit needs to be extended, you will be informed in due course.

Please be informed that the answer to your confirmatory application is a formal Commission decision that will be notified to you by express delivery.

We kindly offer you the possibility to provide us a contact phone number (by email to [email address]), so that the external delivery service can contact you in case of absence.

Please note that the Commission will not use your phone number for any other purpose than for informing the delivery service, and that it will delete it immediately thereafter.

Yours faithfully,

Carlos Remis
SG.B.4
Transparence
Berl. 05/315

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This message has been hidden. [This is a holding reply but contains postal address] I refer to your email of 22 February 2017, registered on 27 February 2017, by which you submit a confirmatory application in accordance with Article 7(2) of Regulation (EC) No 1049/2001 regarding public access to European Parliament, Council and Commission documents' (‘Regulation 1049/2001’). Your confirmatory application is currently being handled. Unfortunately, we have not yet been able to gather all the elements we need to carry out a full analysis of your request in order to take a final decision and, therefore, we are not in a position to reply to your confirmatory request within the prescribed time limit expiring on 20 March 2017. Consequently, we have to extend this period by another 15 working days in accordance with Article 8(2) of Regulation 1049/2001. The new deadline expires on 10 April 2017. Please contact us if you have any questions. If you are the requester, then you may sign in to view the message.

This message has been hidden. [This is a holding reply but contains postal address] I refer to your letter of 22 February 2017, registered on 27 February 2017, by which you submit a confirmatory application in accordance with Article 7(2) of Regulation (EC) No 1049/2001 regarding public access to European Parliament, Council and Commission documents1 (‘Regulation 1049/2001’). I also refer to our holding reply dated 17 March 2017, by which the time limit for replying to your confirmatory application was extended by 15 working days, pursuant to Article 8(2) of Regulation 1049/2001. This extended time limit expires on 10 April 2017. Unfortunately, we are not able to provide you the reply to your application in the above mentioned time limit. The draft decision is now subject to the further internal consultations between the relevant Commission departments. When its final version is agreed and approved, it will be sent to your address. We expect that we will be able to send you our reply within coming weeks. I regret this additional delay and sincerely apologise for any inconvenience it may cause. Please contact us if you have any questions. If you are the requester, then you may sign in to view the message.

From: Christiana Maria Mauro

Delivered

Dear DG Growth,

After failure to meet several deadline extensions we were last informed on April 7, 2017 that we will receive a response to our confirmatory application within weeks. There has been no communication since that time.

The disclosure of the requested documents is of urgent public concern yet over six months have passed since our initial request. When may we expect a response?

Kind regards,

Christiana Maria Mauro and Nuclear Transparency Watch

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Internal Market, Industry, Entrepreneurship and SMEs

Dear Ms Mauro,

Thank you for your email.

Please note that your confirmatory application has required detailed consultations with the relevant Member State and amongst several Commission departments. We expect that these consultations would be finalised and the respective confirmatory decision formally adopted in September 2017.

I can assure you that we are doing our utmost to provide you with the final reply as soon as possible. We regret this additional delay and sincerely apologise for any inconvenience it may cause.

Yours faithfully,

Carlos Remis
SG.B.4
Transparence
Berl. 05/315

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