- Sustainable Public Procurement
Everything we buy to the public sector leaves a footprint. Sustainable procurement is about reducing the negative impact on environment and people from the goods, services and works that the public sector purchases. The largest footprint is often found outside the country where the goods are used. Raw material extraction, refinement and production are often very important from a products life cycle perspective.
How can we do to reduce our footprints? As usual, the devil is in the details. What at first glance seemed simple often turns out to be both complex and difficult to handle. Sustainable procurement is no exception!
To be successful in sustainable procurement a strong expressed political will is necessary as well as an organization with sufficient resources and access to expertise over time. To use relevant, ambitious and balanced environmental and social requirements is of course an important prerequisite for sustainable procurement. But it is by no means enough in order to ensure that the end result, i.e. the supplied goods and services, will be sustainable. Problems promptly arise since the demand for social responsibility in the supply chain and environmental performance is both comprehensive and global.
How do we know if the tenderers have the capacity and capability in order to meet these requirements during the contract period? In public procurements, it is common to simply trust that the suppliers or service provider takes these issues seriously and has both the resources and expertise to ensure sustainability in the supply chain for the upcoming contract period. The answer is not to add more or sharper requirements in the tender document. The time span during the procurement process is often too short for checking if the tenderers have both capacity and organization in place to handle sustainability issues. Therefore follow-up during the contract period is the recommendation for a truly sustainable procurement.
At SKL Kommentus, SKI, central purchasing body for Swedish local authorities we do not like to leave important issues to chance. We use requirements in the qualification phase regarding procedures and processes in framework agreement where we believe that social responsibility in the supply chain is of great importance in order to reduce risk. The tenderers must be able to demonstrate how to take care of these issues not only within the organization but also in the supply chain.
For some industries it may seem unrealistic as supply chains can be both long, complex and impenetrable. For procurements in wholesale sectors, these questions comes to a head when the supplier often has a large number of sub-suppliers. These in turn can be intermediaries that convey products from manufacturers or just part of a longer tiers of intermediaries. These intermediaries are often reluctant to give details of where and how the products are manufactured. Such data are often considered to be trade secrets. How should the contracting authorities do to break through this myriad of suppliers to ensure that the requirements stipulated in the contract actually are followed?
SKI has a Code of Conduct which expresses requirements on social responsibility of our suppliers, i.e. supply chains. The requirements of the Code of Conduct can be found in our framework agreement/contract clauses. These requirements apply during the period of the framework agreement or subsequent contracts and are linked to penalties if the supplier is in breach of them.
In order for these requirements to be effective there must be some kind of actual follow-up during the period of the framework agreement. SKI do this partly through document review and in office audits of the suppliers and partly through so-called spot audits where we check manufacturing sites. To gain access to the documentation and in order to visit the facilities we and our auditors work under a confidentiality agreement, to protect suppliers / subcontractors from sensitive information leaking out. If deficiencies are found, we demand that they will be corrected promptly. Our primary purpose is to correct deficiencies and bring about improved conditions, which ultimately benefits all involved parties.
Why is follow-up on sustainability requirements so important? Besides the obvious and important view to ensure that tax-payers money are not contributing to crimes against humanity, poor working conditions and environmental degradation, it is about being fair and to uphold the principle that economic operators should be treated equally. If we think this is important our actions must include follow ups. How else can we distinguish between those who act professionally, invest resources and have control over their business from those who “tick yes the box” without knowing a bit about the state of their supply chains?
If we want to ensure that the companies we buy from are serious in their work on environmental and social sustainability, a great responsibility falls on us to make fair assessments. If we do not, the companies that are investing a lot of resources and money in their sustainability efforts end up with higher costs and competitive disadvantages. The obvious risk is that these companies will cut back on their sustainability work. The contracting authorities’ ambition to purchase sustainably will then result in the opposite.
SKI’s mission is to support local authorities by setting relevant sustainability requirements and to monitor them in the framework agreements that we procure on their behalf. Users of SKI’s framework agreements should feel confident that sustainability are well cared for.
We also offer municipalities the opportunity to participate in our system for follow up on social criteria where we coordinate follow up actions on contracts that they purchased themselves.
Follow up on sustainability criteria is for SKI a natural and very important part of a sustainable procurement process.
by Peter Nohrstedt, Sustainability manager at SKL Kommentus