Military-logistic service provision by Dutch private sector to Dutch Ministry of Defence EU-proof

Militair in uniform en met geweer bij herdenking op de Dam in Amsterdam

As Europe is being confronted with military tensions in the east, shifting global structures of power and pressured alliances, the challenges for the Dutch armed forces are increasingly complex. Although military cooperation within the EU is expanding, national security has remained the sole responsibility of each individual member state. For certain EU member states, NATO commitments still intervene and interact with EU military cooperation. It is beyond any doubt that military cooperation within the EU and within NATO are crucial for the national security of the EU member states and thus of the Netherlands as well. The intergovernmental commitments within these alliances are, however, not by themselves sufficient. 

In absence of a supranational EU military defence, it remains necessary for the member states to ensure military-logistic capabilities. To do this, the Ministry of Defence considers setting up the ‘Ecosystem Logistics’ in cooperation with the Dutch private sector. Researchers at Utrecht University concluded that, taking into account the conditions that they discuss in their report, such an Ecosystem can be considered EU-proof. 

Adaptive Armed Forces requires Ecosystem Logistics

To effectively protect its own and allied territory, the Dutch Armed Forces need sufficient (domestic) military capabilities, including military-logistic capabilities. A major part of this will, however, only be used during military security crises. Because of structural shortage of military personnel, the Dutch Ministry of Defence requires its Armed Forces to be ‘adaptive’ (in English this is also known by the broader concept of ‘Total Force’). This means that the Ministry of Defence seeks extensive cooperation with the private sector, including the exchange of personnel.

Ecosystem Logistics will ensure military-logistic capabilities by engaging in structural cooperation with private businesses in the logistics sector. There are strict security conditions for participation, as the participants and their personnel need to be military deployable. The latter requires for personnel to have the Dutch nationality.

Systemic method in studying the applicable legal frameworks 

Utrecht University researchers prof. dr. Elisabetta Manunza LLM, Nathan Meershoek LLM and prof. dr. Linda Senden LLM carried out contract-research for the Ministry of Defence to investigate the legal conformity of the Ecosystem Logistics with the EU internal market regulation, in particular EU public procurement- and competition law. To answer this legal question, the researchers applied a systemic research method aimed at evaluating the different legal systems within the overall system of the EU-Treaties and the NATO-Treaty. The military commitments and responsibilities these treaties create for their member states were at the center of this analysis. To correctly analyze the overall system, the researchers, first, considered the origins and developments of the treaties in historical perspective from WWII onwards in relation to the function of military cooperation and the internal market therein. 

Military security and the EU’s internal market

EU internal market law requires EU member states to act in accordance with the principle of non-discrimination when awarding public contracts (for logistics service provision for instance) to private companies. According to EU public procurement legislation private companies should be selected through open and transparent public procurement procedures. The current Covid-19 crisis, however, showed that it becomes complex to effectively contract businesses which are not located within a state’s own jurisdiction in times of crisis. Regarding the Ecosystem, non-discrimination would become even more complex, as its participants also need to be military deployable. This could for instance be necessary for transporting military troops to crisis territory. This military employability requires that (at least a part) of the personnel of the participating businesses have the Dutch nationality and participate in military exercises.

The researchers conclude that EU internal market law, on which the public procurement rules are based, insufficiently ensures the military security interests of the Dutch Armed Forces in the case of the Ecosystem; this is the reason why derogation from these rules is justified. The national security of EU member states such as the Netherlands, including the commitments of military cooperation within the EU and within NATO, require direct control over military-logistic capabilities. In times of crisis, this can only be effectively guaranteed when the capabilities are located within one’s own territory. 

Legal obligations arising from national law?

After the interim conclusion that the selection of participants can be exempted from EU internal market law, the researchers conclude further that legal principles of Dutch civil law (which apply to public contracts in the Netherlands)-, among which the principle of equality and the principles of reasonableness and fairness have to be applied to the selection of the private companies participating in the Ecosystem. These principles provide affected parties with the possibility  of judicial review by Dutch courts of the limits of the discretionary powers of the Ministry of Defence when setting up the Ecosystem. There are also some obligations arising from competition law.

Crisis-resistance of EU-law falls short

In a more general sense, the researchers underline in the report that the different crises which the EU faced in the last two decades – in the area of financial markets, migration, rule of law and the Covid-19 pandemic – show that the legal structures of the EU are generally ill-equipped for crisis management. Rather than utilize existing structures effectively, the common reaction to the crisis is to adopt emergency measures. Recently, the EU-response to the Covid-19 crisis has revealed how fluid internal market rules can become in times of crisis.

The researchers emphasize the need for developing a more preventive oriented policy approach to tackle effectively a potential European (military) security crisis. For an effective European military response to such a crisis, it is crucial to determine more clearly the division of competences and tasks between the EU and the member states in the area where military security and the internal market intertwine.

By determining the national discretion within EU-law, in light of shifting global structures of power, the report also aims at providing a theoretical basis for further (academic) discussion and policymaking on matters of military cooperation in Europe and the limits on military-industrial integration in the EU.

The report (translation from Dutch) ‘The Ecosystem for the military-logistic capabilities of the adaptive Armed Forces: An analysis in light of the NATO-Treaty, the EU-Treaties and national law on public procurement and competition’  can be found below.

UU report on logistics ecosystem (pdf)