ESA takes further steps against Norway over the granting of exclusive rights for waste management

The EFTA Surveillance Authority (ESA) has today sent a supplementary letter of formal notice to Norway for failing to comply with EEA rules on public procurement when municipalities enter into agreements for the management of waste. 

ESA in September 2022 sent a reasoned opinion to Norway after having received a complaint concerning the award of exclusive rights by municipalities to publicly owned companies in the waste-management sector. ESA concluded that a contract between 12 Norwegian municipalities and the inter-municipal waste management company Midtre Namdal Avfallsselskap IKS (MNA) were not in line with EEA public procurement rules. 

ESA remains concerned about the practice of municipalities relying on the existence of “exclusive rights” to award contracts for waste management services without competition. Consequently, ESA has decided to send a supplementary letter of formal notice. The letter deals with specific arrangements entered into between Sunnfjord Miljøverk IKS (SUM) and its owner municipalities in Vestland county, as well as the general practice of municipalities awarding contracts for certain waste management services in reliance on the existence of exclusive rights. In ESA’s view, these contracts should be awarded following a competitive tendering process. 

While there are exemptions from the requirement for competition when awarding contracts within the public sector, ESA considers that the conditions for these exemptions have not been met. The development and innovation of sustainable waste-management solutions have to be pursued within the legal framework of the EEA Agreement.

ESA therefore finds that Norway has failed to comply with EEA public procurement rules. Fair competition is essential to a well-functioning public procurement market. Since the arrangements constitute public contracts and the relevant exemptions do not apply, they should have been put out to public tender. 

Following the issuance of today’s letter of formal notice, Norway now has two months to express its views before ESA decides whether to take the case further.

Read the supplementary letter of formal notice here.

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