Global value chains are under heavy strain right now. The current crisis is not only a health crisis, but also an economic one. Economic activities, including the production of goods, have been slowed down or came to a complete halt in the wake of the COVID-19 pandemic. This has brought new attention to the fact where the goods for our daily consumption actually come from.
The sustainability potential of public procurement
The conditions, socially and environmental, under which those goods are being produced deserves more attention. One way to improve these conditions is to make sure that they are accounted for when buying products. Public authorities have the legal option to procure more sustainable goods and services. This can create a shift in demand through public procurement spending, which amounts to 16 per cent of the EU Member States’ GDP.
Reform proposals from SMART
The EU research project Sustainable Market Actors for Responsible Trade (SMART) recently published reform proposals for the way forward of reaching sustainability through public procurement in the EU, as part of a broad set of reform proposals aimed to ensure the contribution of market actors to sustainability. A wide range of public procurement experts from different disciplines came together in a workshop at the University of Oslo, organised by the lead-authors of the proposal Marta Andhov and Roberto Caranta to present solutions for the current deficit in implementation in sustainable public procurement. This was necessary before the crisis to support the shift to more sustainable consumption and production. It is even more important now, to put the spotlight on the leverage of public procurement and how it can be used to making post-crisis economic recovery socially and economically sustainable.
Concrete proposals to make procurement sustainable
The three main elements of the proposal are:
(1) professionalisation of contracting officials,
(2) making the mapping and monitoring of supply chain risks mandatory, and
(3) creating a legislative environment that is more ‘friendly’ for sustainable public procurement.
The proposal aims to both foster reforms at the EU level by addressing the European Commission and to initiate implementation within the member states. Revaluating public procurement and providing contract authorities with the means to make more strategic procurement decisions, can contribute to an increasing consideration of social and environmental aspects in public procurement.
Sustainable procurement can contribute to making the economy more sustainable – now and after the current coronavirus crisis. Reforms over the last few years have improved the flexibility of how public authorities in the EU can procure and made it possible to consider the sustainability performance of products, works and services bought by the public sector. Sustainable public procurement is, however, still not standard.
Reforming public procurement matters for everybody
Enabling public authorities to successfully integrate environmental and social aspects into their calls for tenders is often considered to be an additional effort. The current situation makes clear that those aspects might be more important to the core of global value chains as often assumed. Incentivising businesses to take responsibility along their value chains is necessary in normal times and more so now. Workers in Bangladesh or China face not only the risk of infection, heightened by missing sanitary facilities in many factories, but also job-loss through dwindling orders in the economic downturn. Maintaining responsible business conduct through sustainable public and private procurement is called for now. Working conditions have to be adjusted to the pandemic in production countries as well as they do in Europe. In the long run, improvements of working conditions, compliance with labour laws and environmental standards, are an important part of creating a sustainable economy.
Disruption and an opportunity for change
The current crisis is a disruption of business as usual and an opportunity for change. The SMART report Sustainability through public procurement: the way forward offers a range of reform proposals for how to make this change happen. Europe will need an economic boost after this crisis and it must be a boost that supports the transition to sustainability, rather than one that fuels business as usual, and sustainable public procurement decisions can contribute to more sustainable global value Chains.
Andhov, Marta; Caranta, Roberto; Stoffel, Tim; Grandia, Jolien; Janssen, Willem A.; Vornicu,Roxana; Czarnezki, Jason J.; Gromnica, Adam; Tallbo, Kristin; Martin-Ortega, Olga; Melon,Lela; Edman, Åsa; Göthberg, Pauline; Nohrstedt, Peter; Wiesbrock, Anja (2020) Sustainability through public procurement: the way forward – Reform Proposals, SMART Project Report, ISBN 978-82-691886-0-8.