More Environmental Crimes Set to Trigger Exclusion from Public Procurement

Government Proposal HE 157/2026 vp, which implements the Environmental Crime Directive (EU) 2024/1203, focuses primarily on amendments to the Criminal Code. For procurement lawyers, however, it contains one key change: the list of mandatory exclusion grounds is growing once again, and compliance with environmental law is becoming an increasingly explicit part of a tenderer’s suitability. The development is of interest beyond Finland, since every Member State implementing the Directive now faces the same question of whether the new offences should lead to exclusion from public procurement, and other Member States are likely to follow suit.

The proposed amendment

The proposal would add four offences to section 80(2) of the Act on Public Procurement and Concession Contracts and section 84(2) of the Act on Procurement in the Water, Energy, Transport and Postal Services Sectors: aggravated waste offence, aggravated degradation of the atmosphere, aggravated offence of placing environmentally hazardous products on the market, and destruction of the environment. A final conviction for any of these offences would result in exclusion from tendering. The pace of change is notable: aggravated impairment of the environment and aggravated nature conservation offence were added to the list as recently as 18 June 2026 (HE 2/2026 vp).

The new Environmental Crime Directive is considerably more detailed than its predecessor and, for the first time, sets minimum levels for criminal penalties and for fines on legal persons. It does not, however, require exclusion from public procurement. Exclusion is instead based on Article 18(2) of the Public Procurement Directive, and under settled CJEU case law Member States may make exclusion for breaches of environmental obligations mandatory (see e.g. C‑395/18 TIM, C‑178/16 Mantovani, C‑171/15 Connexxion, C‑358/12 Libor and C‑226/04 La Cascina).

Practical implications

For tenderers, non-compliance with environmental obligations is no longer merely an environmental law risk. A conviction of a member of the company’s management or supervisory bodies may shut the company out of public procurement. As only the aggravated forms of the offences are covered, the threshold is high, but the business consequences can be significant. For contracting authorities, the change means that criminal record extracts will cover a wider range of offences to be checked.

Mandatory exclusion requires a final conviction. In environmental crime cases, pre-trial investigations and court proceedings often take years, so a ground for exclusion may arise long after the conduct in question. Moreover, the new offences apply only to conduct occurring after the amendment enters into force, so their impact on procurement will be felt only with a delay. Until a conviction becomes final, a contracting authority may arguably consider exclusion on a discretionary ground instead, provided it can demonstrate a breach of environmental obligations.

The existing time limits on exclusion will continue to apply to the new offences. A tenderer still may not be excluded on a mandatory ground once more than five years have passed since the final conviction, or on a discretionary ground once more than three years have passed since the relevant event. As before, the mandatory ground is tied to the convicted person’s position within the company and may therefore cease earlier if that person leaves the management or supervisory body. A tenderer can also still avoid exclusion by demonstrating sufficient self-cleaning measures.

If a conviction becomes final only during the contract period, procurement law does not in itself terminate a contract that has already been concluded. The contracting authority’s options will then depend on the contract terms, so it is advisable to provide in advance for a right of termination in such circumstances.

Environmental damages claims: applying the lessons of antitrust damages litigation

Environmental harm can arise in virtually every sector, from manufacturing and energy to construction, transport and waste management, and exclusion from public procurement may not be its only consequence. In competition law, infringement decisions by competition authorities laid the groundwork for a broad body of damages litigation. Environmental law offers fertile ground for a similar development: as regulation tightens, evidence gathered in pre-trial investigations and criminal proceedings may also support claims brought by injured parties.

The Geradin Partners model – which has proven successful in antitrust damages cases by combining regulatory expertise, complex economic and factual analysis, large-scale claims and third-party litigation funding – is equally well suited to environmental damages. We stand by to help companies and other parties affected by environmental harm assess the merits of their claims and explore funding options.