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Creating a world where
ecological sustainability
and social justice
are the normal
conditions of business
R087 – Leveraging Public Procurement to Up
Scale the Impacts of the ISEAL Alliance
June 2009
Introduction
The aim of this document is to provide background for a strategic discussion at the ISEAL
Alliance June 2009 AGM about the benefits and pathways for a collaborative engagement in
public procurement by the ISEAL Alliance.
The document provides some background on current public procurement practices, and the
challenges, risks and opportunities arising with the growing interest of public authorities in
sustainable public procurement (SPP) practices.
The paper outlines three potential degrees of engagement for collaborative work on public
procurement by the ISEAL Alliance with a view to:
> Agreeing on the degree of priority that work on public procurement represents for ISEAL
members
> Assessing the potential contributions that ISEAL members could make
> Identifying priority targets for advocacy work on public procurement
The objective will be to reach agreement on a recommendation to the ISEAL Board.
In addition to bilateral conversations with members ahead of the AGM, feedback, additions and
corrections to this document are welcome in the run-up to, as well as at, the AGM. The contact
person for this process is Elizabeth Guttenstein, elizabeth@isealalliance.org.
This document was prepared with research support and in collaboration with Anja Osterhaus,
independent consultant.
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Contents
Introduction
1
1 Public Procurement in ISEAL’s Strategic Plan
2
2 The Strategic Opportunity
3
3 Limitations & Emerging Risks
4
4 Current Approaches to Sustainable Public Procurement (SPP)
5
5 The ISEAL Alliance’s Strategy for Public Procurement
5.1 What We Want to Achieve
5.2 How We Are Going to Achieve It
8
8
9
6 Identifying Entry Points for Engagement
12
7 Annex – Background on Selected Potential Targets
7.1 The WTO Government Procurement Agreement (GPA)
7.2 United Nations Environment Programme (UNEP)
7.3 European Union
7.4 National Administrations
14
14
15
15
18
1 Public Procurement in ISEAL’s Strategic Plan
Multilateral, national and regional governmental bodies are key users and supporters of social
and environmental standards systems. ISEAL research on the “Governmental Use of Voluntary
Standards1” (2008) illustrated how governments worldwide use voluntary standards systems to
deliver on their own public policy objectives. The benefits of this relationship were recently
underscored in a communication by the European Commission, which singled out standards
systems members of the ISEAL Alliance, and stated the Commission’s intention to: “stay
engaged and further support such schemes2” confirming that “sustainable development can be
served by schemes that prioritise environmental, social or economic elements3”.
Though some governments are increasingly choosing to participate in the development of
standards systems4, or otherwise support, use and facilitate voluntary standard-setting and
certification, many governments still find this challenging. Some have underlying concerns about
the legality of using voluntary standards systems. Others find it challenging to identify which
voluntary standards systems to work with. Others still are concerned about being able to prove
1
Please refer to R079 Governmental Use of Voluntary Standards : Innovation in Sustainability Governance
2
European Commission (2009) Communication : Contributing to Sustainable Development : the Role of Fair Trade and NGO
Trade-Related Sustainability Assurance Schemes COM(2009)215 Final page 10
3
Ibid. page 7
4
See for example participation by Dutch and Swiss governmental representatives in the development of the Version 1 standard
of the Roundtable on Sustainable Biofuels
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that, by using voluntary standards systems, their intended sustainability objectives are effectively
being met.
The ISEAL Alliance Strategic Plan 2009-20135 commits ISEAL to empower stakeholders to use
credible standards systems. Multilateral and national governmental institutions are key
stakeholders targeted:
Output 3 – Stakeholders supported to use credible operating practices:
> Increased year on year uptake of credible standards systems by governmental bodies, business
and civil society
2 The Strategic Opportunity
Across OECD countries, public procurement accounts for 15-25% of GDP. A 2002 estimate by
the European Commission for total public procurement in the then 25 EU member states was of
€1500 billion, accounting for 16.3% of the Union’s GDP6. The rate of spending on public
procurement in developing countries is estimated to be substantially greater7.
Governments have used their purchasing power in the market as a tool to achieve public policy
objectives since at least the nineteenth century8. Today, most OECD countries have policies for
green or sustainable procurement9. Amongst BRIC countries, Brazil, China and India have
developed frameworks for SPP10 while in most developing countries, international and national
policy efforts currently focus on curbing corruption and ensuring transparency in public
procurement.
As well as representing a potentially significant, largely untapped, market, there are other
reasons why public procurement is strategically important for the ISEAL Alliance.
With growing recognition for the importance of sustainability, many governmental institutions,
both at national and multilateral level, have in recent years strengthened their resolve to “use
public funds to deliver real value for money11”. To this end, ambitious targets for sustainable
public procurement have been set. The UN’s Marrakech Process on Sustainable Consumption
& Production aims at achieving sustainable procurement policies in 10% of countries in all
5
Please refer to E058 ISEAL Alliance Strategic Plan 2009-2013 – Scaling Up Social and Environmental Standards Systems
6
Brack, D. (2008) Social Issues in Timber Procurement Policies (third draft) page 6
“The aggregate importance of procurement in developing country public spending is obscured because procurement
transactions frequently take place in a decentralised fashion across the entirety of government. When the value of these
transactions are combined, procurement is often one of the top three types of spending (besides salaries and debt payments), if
not the most important. Procurement is particularly prominent in developing countries with active infrastructure and social
programmes. In Uganda, for example, 70% of public spending goes through the public procurement system.” DAC Guidelines
and Reference Series - Harmonising Donor Practices for Effective Aid Delivery Volume 3:Strengthening Procurement
Capacities in Developing Countries www.oecd.org/dataoecd/12/14/34336126.pdf
7
8
Brack, D. (2008) Controlling Illegal Logging page 2
9
www.unep.fr/scp/procurement/activities.htm
10
Perera, O. et al (IISD) (2007) State of Play in Sustainable Public Procurement page 6
“The public sector needs to procure sustainably because that is the only way that we can be sure to offer real value for money
over the longer term” DEFRA (2006) Procuring the Future – Sustainable Procurement National Action Plan page 10
11
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regions of the world by 201012. The European Commission suggested a political target of 50%
green public procurement (GPP) to be reached by the now 27 EU member states by the year
2010. Front runners like the Netherlands have even committed to reach 100% sustainable
procurement by 201013. This trend is likely to continue, with emerging countries like Brazil, India,
China, and recently also developing countries, particularly in Africa slowly catching up14.
There is a growing demand for ways to identify and select environmentally and socially
preferable products. A procurement task force set-up under the auspices of the UNEP
Marrakech Process identified over 300 SPP tools in 2007, including reviews of standards and
labels15. Japan’s policy on procurement states that: “A wide variety of information about ecofriendly goods is already available, including various environmental labels and environmental
information database. Therefore, it is important to attempt to the maximum [...] impact by fully
utilizing available information from environmental labels provided by third party organizations16.
More recently, the governments of Switzerland and Germany have mandated a coalition of
partners working with the International Trade Centre’s (ITC) “Trade for Sustainable Development”
portal17 to develop an application specifically for procurement contracting authorities. The Swiss
department for Economic Cooperation (SECO) has further contracted ISEAL to propose a
framework for environmental procurement through the use of voluntary standards.
SPP catalyses further sustainable markets. Leading by example, it can influence the private
sector, e.g. by creating an incentive for companies to become certified to be able to access
procurement markets, or suppliers switching over to certified products for all their customers, for
the sake of supply chain simplicity18. Public procurement is particularly relevant for niche and
innovative products because the increased demand can help to reach economies of scale which
will ultimately help to reduce prices and make these products competitive. Finally, procurement
may also leverage consumer support for sustainability standards, by inspiring those who do not
otherwise choose sustainable products, to follow the lead of governments.
In brief, leveraging public procurement is a key pathway to scale up the impacts of the voluntary
standards systems movement. However, the potential of procurement can only truly be
leveraged if its current limitations and emerging risks are fully addressed.
3 Limitations & Emerging Risks
Despite increasing governmental interest in SPP, and the already well established use of
voluntary standards in public procurement, there are also a number of emerging risks and
limitations to current practices.
Credibility, legitimacy and accountability are hardly recognised as differentiating criteria
between standards systems when used for public procurement. Some countries, including
12
www.unep.fr/scp/marrakech/taskforces/procurement.htm
13
(2007) Dutch National Action Plan for Sustainable Public Procurement
14
Perera, O. et al (IISD) (2007) State of Play in Sustainable Public Procurement
15
Ibid. page 7
16
Japan Ministry of Environment (2008) Basic Policy on Promoting Green Purchasing page 5
17
Please refer to R091 Scaling Up Impacts of Social and Environmental Standards Systems section 5.3
18
Brack, D. (2008) Controlling Illegal Logging page 6
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France, Japan and New Zealand, currently have very loose requirements for credibility. For
example, Japan accepts any form of certificate, even company self-certification, as being
sufficient to meet their sustainable timber procurement requirements19. This means that operators
certified to ISEAL members interested in tendering for procurement contracts do not benefit from
their standards complying with ISEAL membership requirements.
With the rapidly growing landscape of standards systems and sustainability labels,
governments who have traditionally used one or more voluntary standards system find they are
increasingly challenged by stakeholders and industry groups that do not operate within those
schemes. Nowhere has this been more apparent in recent years than in the Netherlands, where
regionally this had led to legal challenges and court rulings20 or nationally, where efforts to find
ways to meet the policy-set target of 100% sustainable procurement by 201021 have been ongoing for several years, and remains as yet unresolved.
The increased engagement in public procurement by stakeholders with different interests has
also led to governments developing increasingly diverse framework criteria for defining
“sustainable” and selecting eligible suppliers for their contracts. With industry players often
disposing of greater advocacy means than civil society actors, this can result in weak criteria.
Conversely, sometimes criteria are set in such a way that they focus on issues that exclude many
credible standards systems simply because they do not explicitly adopt a certain approach (e.g.
organic farming) or because they cannot certify to a particular criterion (e.g. a living wage).
4 Current Approaches to Sustainable Public
Procurement (SPP)
There are a variety of approaches that governmental authorities use in relation to SPP. Some of
the main variables to these approaches are:
> Which governmental body is taking action, and who they have jurisdiction over. Public
procurement is addressed by multilateral institutions like the WTO and the European Union,
through national governments, down to public authorities which may include city
administrations, public hospitals and schools.
> What action is being taken, whether a policy framework is being set-up or rather tendering and
contract award requirements defined.
> Whether the action taken is binding or not. Public procurement interventions span defining
targets to be achieved (e.g. as percentage of spend compared to conventional procurement);
setting framework criteria for either impacts that should result from procurement (e.g. reduced
waste or water usage) or the products that shall be sustainably procured (e.g. timber, textiles);
to simply promoting SPP (e.g. through information campaigns, workshops, guidance
materials).
A typology of these approaches and other variables are represented in Table 1:
19
Brack, D. (2008) Social Issues in Timber Procurement Policies (third draft) page 25
20
Please refer to E048 Governmental Use of Voluntary Standards Case Study 3 : Groningen Province (the Netherlands) and
Fairtrade (FLO) Standards
21
(2007) Dutch National Action Plan for Sustainable Public Procurement page 2
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Table 1 – A Typology of Governmental Uses of Voluntary Standards in Procurement
Binding
Targets for
Sustainable Public
Procurement (SPP)
Uptake
Measures by
Government
Aimed at
Governmental
Bodies
Multilateral Institutions
EU – binding green procurement
targets under consideration22
National Institutions
Contracting Authorities
Netherlands – 100% SPP by 2010
n/a
Various countries - Fairtrade
Towns24 commitment to source
certain percentage of FT products
(varies)
NonBinding
UN Marrakech Process – 10%
countries have SPP by 2010
UK – measuring progress in
achieving sustainability23
Binding
WTO – Agreement on
Government Procurement
UK – Procuring the Future sets
sustainability criteria and priority
products
NonBinding
EU – green procurement criteria
for 20 product groups by 201025
Japan – timber procurement
Germany – Towns commit to only
procure products that are free
from forced child-labour26
Tender & award
criteria
Binding
EU – binding green requirements
under consideration27
Denmark – timber procurement
“legal” & “sustainable”
Groningen (NL) – hot beverages
tendering28
Generic Promotion
NonBinding
OECD – undertakes surveys
between members, new research,
shares good practice29
UK – sustainable consumption
strategy funding certified and
healthy school lunches30
Various countries - Fairtrade
Towns31
Criteria for SPP
n/a
22
European Commission (2008) Communication on Public Procurement for a Better Environment COM(2008)400/2
23
www.defra.gov.uk/sustainable/government/progress/policy-monitoring/consumption-production.htm
24
www.fairtrade.org.uk/get_involved/campaigns/fairtrade_towns/default.aspx
25
http://ec.europa.eu/environment/gpp/consultation_en.htm
26
www.earthlink.de
27
European Commission (2008) Communication on Public Procurement for a Better Environment COM(2008)400/2
28
Please refer to E048 Governmental Use of Voluntary Standards Case Study 3 : Groningen Province (the Netherlands) and Fairtrade (FLO) Standards
29
Ref OECD website
30
Please refer to R170 Proceedings – Private Standards and Public Policies: Making the Fit
31
www.fairtrade.org.uk/get_involved/campaigns/fairtrade_towns/default.aspx
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Multilateral Institutions
Targets for
Sustainable
Procurement (SP)
Uptake
Binding
NonBinding
Measures by
Government
Aimed at
Business
n/a
EU – Retail Forum measures
progress in sustainable
procurement33
Binding
Criteria for SP
NonBinding
Tender & award
criteria
Binding
Generic Promotion
NonBinding
National Institutions
US – 23 States have binding
Renewables Portfolio Standards,
obliging energy retailers to
introduce renewable energy into
their portfolio32
n/a
n/a
n/a
Belgian social label, awarded to
companies that respect ILO core
labour standards36
n/a
EU Sustainable Development
Strategy promotes voluntary
schemes37
n/a
US – 4 States have non-binding
Renewables Portfolio Standards34
n/a
EU Parliament - CSR resolution
which commends coordination
through ISEAL35
Contracting Authorities
n/a
Belgian Fair Trade Week38
32
www.eere.energy.gov/de/renewables_portfolio_standards.html
33
http://ec.europa.eu/environment/industry/retail/index_en.htm See section 1.6.4 for more information
34
www.eere.energy.gov/de/renewables_portfolio_standards.html
35
European Parliament (2007) Resolution of 13 March 2007 on Corporate Social Responsibility: a New Partnership (2006/2133(INI))
36
www.social-label.be
37
n/a
n/a
Germany - Fair coffee
partnerships of towns
(Städtekaffee)39
Renewed EU Sustainable Development Strategy (Council Resolution 10117/06), p.13: Member States should support information campaigns with retailers and other organisations to promote
sustainable products inter alia products that stem from organic farming and fair trade as well as environmentally sound products.
38
E046 Governmental Use of Voluntary Standards Case Study 1: Belgium’s Fair Trade Centre and the Fair Trade Movement
39
www.service-eine-welt.de/finanzierungsratgeber/foerderbeispiele-neuwied.html
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5 The ISEAL Alliance’s Strategy for Public
Procurement
5.1 What We Want to Achieve
While the growing interest by public authorities in sustainable public purchasing clearly
represents an enormous opportunity for the ISEAL Alliance, under current circumstances this
trend can convert into challenges and even risks for ISEAL and its members, as illustrated in
chapter 3.
Scaling up the impacts of voluntary standards systems through leveraging public procurement
critically depends on achieving the following three targets:
1. Building awareness and alignment on the importance of credibility as a differentiator
between standards systems
It is proposed that this can be achieved by building on the recognition and use of ISEAL
Credibility Tools by governmental bodies. Strengthened advocacy to key policy makers,
based on a shared position paper will be the primary means to achieve this. Strengthened
communications outreach aimed at mobilising potential champions and multipliers for the
advocacy effort will also be critical to underscore the “ask” for credibility.
2. Supporting and enabling procurement policy makers and procuring authorities to
confidently and effectively define criteria that will strengthen the access to products
and services certified to credible voluntary standards systems
Objective criteria pertaining to the dimensions of credibility enshrined in the ISEAL Credibility
Tools (such as accountability, transparency, participation and verification) can be identified.
Similarly, objective criteria for environmental, social and economic outcomes can be drawn
from the draft ISEAL Impacts Code. Whilst governments today often define criteria for
“sustainability” outcomes, they do not as yet include ones for credibility. Both sustainability
and credibility criteria need to be developed into a framework to be promoted for uptake both
in policy frameworks for SPP, as well as in the form of objective criteria for tenders.
Coordination and partnership opportunities for this are likely to develop with a number of
initiatives currently underway aimed at developing similar frameworks as mentioned in
chapter 240.
3. Influencing policy developments to enshrine the use of credible voluntary standards
systems in legislation
As indicated in the first two targets, achieving a scalable impact on SPP will require
identifying policy processes to influence, opportunities and means to engage in these
processes, as well as champions and multiplier partners: “Dedicated legal- or policy-backing
is critical to give sustainable public procurement efforts the legitimacy needed to break
through and become embedded into the traditional thinking and financing that is
commonplace in public sector procurement41“. Some of these are explored in this paper, for
discussion and agreement at the June 2009 AGM.
40
Please refer to R091 Scaling Up Impacts of Social and Environmental Standards Systems section 5.3
41
Perera, O. et al (IISD) (2007) State of Play in Sustainable Public Procurement page 10
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5.2 How We Are Going to Achieve It
The typology presented in Table 1 can help us to unpick which might be useful entry points for
the ISEAL Alliance in wishing to leverage public procurement for scaling up the governmental use
of voluntary standards. The patterns are not entirely surprising. The higher the level of
government (multi-lateral > national > local contracting authority) the closer the relationship to
policy-making. The lower the level of government (local contracting authority < national < multilateral) the closer the relationship to actual tender requirements. It is also important to remember
that whilst relatively few governmental authorities are involved in setting the policy framework for
SPP, most public authorities use public procurement in their own operations: from the WTO
secretariat down to the town halls and hospitals of each city.
Based on this analysis, three scenarios for engagement by the ISEAL Alliance in public
procurement can be envisaged. The first two scenarios focus respectively on shaping the policy
frameworks at i) multilateral level (e.g. EU and UN, ...) and ii) at the national level. The third
scenario focuses on the integration of sustainability criteria in public tenders.
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Table 2 – Engagement Strategies
Level of collaboration
(Low)
Shaping Multilateral Policy
Objective
Ensure national policy and regulatory
documents for public procurement are
based on an ISEAL defined framework
which includes:
Include in efforts to shape guidance for
tenders and/or specific tender policy
processes which are based on an ISEAL
defined framework which includes:
> Use of international voluntary standards
> Use of international voluntary standards
> Selection criteria based on ISEAL
> Selection criteria based on ISEAL
> Use of international voluntary standards
> Selection criteria based on ISEAL
Who in
ISEAL
Alliance
42
credibility tools
credibility tools
One or more multilateral institutions (e.g.
EU, UNEP, ...)
One or more key countries (e.g.
Netherlands, Switzerland, US, Brazil, ...)
i) Multipliers who propose tendering
frameworks (e.g. ICLEI42, EU)
(see chapter 7)
(see chapter 7)
ii) Actual administrations before tendering
> International advocacy groups (e.g.
> ISEAL members’ national members /
> EFTA Public Affairs project (Fair Trade)
IISD, IIED, ICTSD, Oxfam, WWF,
Potential
Allies
(High)
Influencing Tendering Requirements
Ensure multilateral guidance and
regulatory documents for public
procurement are based on an ISEAL
defined framework which includes:
credibility tools
Policy Target
(Intermediate)
Shaping National Policy
ICLEI, ECCJ43 ...)
> Members of Parliament (for the EU)
initiatives
> National advocacy groups (e.g. Oxfam,
> National advocacy groups (e.g. Oxfam,
WWF, Members of ECCJ...)
WWF, members of ECCJ…)
> EU Retail Forum (see chapter 7)
> ICLEI Regional Offices
> ISEAL Secretariat
> ISEAL members
> ISEAL members
> ISEAL Secretariat
> ISEAL members (national members /
initiatives where available)
ICLEI - is an association of over 1000 local governments from 67 countries who are committed to sustainable development. www.iclei.org
43
European Coalition for Corporate Justice - www.corporatejustice.org, advocating for the systematic integration of sustainability criteria in public tenders at EU and, through their members, at
national level.
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Level of collaboration
(Low)
Shaping Multilateral Policy
(Intermediate)
Shaping National Policy
(High)
Influencing Tendering Requirements
> ISEAL member stakeholders
> ISEAL Secretariat (framework only)
> Joint position paper
> Collaborative advocacy (e.g. organising
a procurement conference at the EU)
> Coordinated communications
> Joint position paper adapted and
> Joint report on including credible
voluntary standards in procurement
translated for different countries
> Development of training44 and toolkits
members (e.g. organising a
procurement conference, or series of
regional workshops)
How
tenders and contract awards
> Collaborative advocacy by affected
for procurement authorities
> Coordinated outreach to potential
> Coordinated landscape monitoring and
pooling of good practice (and up
multipliers
> Coordinated communications
coming threats) intelligence
> Development of case studies of national
best practice examples
> Coordinated communications
This could be done, for example, as part of the “Forum for dialogue and learning between governments and multi-stakeholder standards systems”. This is referred to indirectly in the Strategic Plan
2009-2013 Output 3 (page 10) when we speak of “ISEAL is committed to lead efforts to bring together governments and voluntary standards systems. With governmental partners, ISEAL will pursue
the creation of a permanent dialogue between public bodies and voluntary standards systems, to learn from each other and share best practice”.
44
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The premise of this paper is that there is a need for collaborative and coordinated engagement
between ISEAL Alliance members and the ISEAL Secretariat if we wish to meaningfully leverage
the potential of public procurement to scale up the impacts of the voluntary standards movement.
Collaboration is needed to reach agreement on a common position which underscores the
benefits of using voluntary standards systems to implement SPP, and promotes the recognition
and use of credibility as a differentiator between standards systems.
Collaboration is also needed to monitor and identify opportunities for influencing public
procurement frameworks, as well as collecting and sharing in examples of good practice (and
evidence of bad practice). Whilst as individual organisations we may have limited geographical
scopes, as a network we can cover not only a larger geography, but also experiences and
intelligence from a variety of procurement sectors (e.g. energy, food, construction timber ...).
Finally, coordination is needed to ensure that we can mobilise sufficient resources (e.g. people to
speak at events or meetings with officials, communications materials ...) to engage in
opportunities as these arise. This paper assumes that work on public procurement may be only
one small activity for the majority of ISEAL members and hence that most members will have
limited staff resources available for this, underscoring the benefits of coordination and
collaboration.
A Brief Glossary
ISEAL Members – Unless otherwise stated, standards systems members of the ISEAL Alliance
ISEAL Alliance – Unless otherwise stated, ISEAL Alliance refers to the ISEAL Secretariat and its
members
ISEAL Secretariat / ISEAL – Unless otherwise stated, ‘ISEAL’ is used as an abbreviation for the ISEAL
Secretariat
Standards Systems - This term captures all component functions involved in the application of a
specific standard, ranging from its definition and implementation, through capacity building to
certification and accreditation.
6 Identifying Entry Points for Engagement
Different degrees of collaboration underpin the three scenarios presented in the previous section,
with the first scenario requiring the lowest level of commitment from ISEAL members (and
respectively higher commitment from the ISEAL Secretariat). The third scenario, being the most
diffuse, demanding a higher level of commitment over time and in the effort needed to mobilise
the ISEAL Alliance’s partners and networks.
If we consider the relative size and spread of the ISEAL Alliance resources, as well as our
respective strengths in influencing policy makers and business, we can start to identify which
could be useful entry points for a collaborative push on public procurement:
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12 of 20
Strongest
Average
WTO / EU / UN
ISEAL Secretariat
ISEAL members
European Union
ISEAL Secretariat
Fair Trade Advocacy
Office
IFOAM EU office
Rainforest Alliance /
MSC
National
ISEAL members
(FSC, MSC, CRS,
RA, Utz ...)
National initiatives
(FLO, FSC, ...)
Supporters (e.g.
Oxfam, WWF)
ISEAL Secretariat
Sub-National
Certified businesses
(who would apply for
tenders)
Supporters (e.g.
Oxfam)
ISEAL members (Utz,
RA, …)
National initiatives
(FLO, ...)
Weak
ISEAL Secretariat
This table is most likely incomplete. Whilst there has been a steady growth in the information
shared between members and the ISEAL Secretariat on their activities on public procurement,
the practice is still relatively new. In particular, interventions at the “national” and “sub-national”
levels may be diverse and simply less visible to ISEAL.
Nonetheless, this analysis suggests that the ISEAL Secretariat has relative strengths at the multilateral level, having relatively established working relations with the WTO Secretariat and a
number of EU Commission departments and, to a lesser extent, members of the EU Parliament.
As regards the OECD and UN, ISEAL has the foundations for a working relationship, though not
yet established with those engaged in SPP policy making.
ISEAL members are of course quite a diverse group, and this paper only provides a general
overview. In general, therefore, ISEAL members seem to have strong presences in particular
countries, notably those where they are based or –for those who have national
members/initiatives, where these are based. Some ISEAL members are also active in multilateral
fora. At EU level some have dedicated advocacy resources (FLO, WFTO, IFOAM, RA and MSC).
Others engage also with UN departments and the OECD, though whether this is also on SPP is
unclear.
Finally, many ISEAL members also enjoy large networks of stakeholders and constituents who
often act in support of their standards systems. These can be operators certified to their
standards or even supportive advocacy and pressure groups (e.g. local action groups).
This analysis suggests that focussing on multilateral and key national targets is likely to offer the
best outreach potential for the ISEAL Alliance. In the light of the analysis in chapter 4, this also
implies that the priority focus would have to be on influencing policy-making rather than shaping
individual tenders.
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7 Annex – Background on Selected Potential
Targets
The following sections look into some of the potential key targets at international and national
level that could be prioritised in advocacy work on procurement.
7.1 The WTO Government Procurement Agreement (GPA)
Trade rules defined at the WTO represent the highest level policy framework for public
procurement. Government procurement measures are subject to the WTO Government
Procurement Agreement (GPA). Unlike most WTO agreements, this is a plurilateral rather than
multilateral agreement. By December 2008, forty-one countries were signatories to the GPA45.
In 2006, working in collaboration with the Centre for International Environmental Law (CIEL),
ISEAL mandated a legal opinion regarding the ability of governments to reference existing
voluntary international standards in relation to government procurement. The legal opinion
concluded that: “Technical specifications laying down the processes and methods for the
production of products, including social and environmental processes and methods, fall within the
scope of the GPA. These should be based on international standards, where appropriate,
including international social and environmental standards.46”
As there has never been a WTO dispute involving the GPA and the use by governments of
voluntary standards in their procurement rules, it is not possible to say for certain how any
potential conflict would be resolved. However, and because of this, ISEAL has no reason to
pursue engaging the WTO on clarifying or strengthening the link between voluntary standards
systems and the GPA. The legal opinion undertaken by ISEAL and CIEL provides sufficient basis
for the ISEAL Alliance to advocate that governments can use voluntary international standards in
their procurement policies.
Nevertheless, since recent research has again shown that legal uncertainty is still one of the main
limitations for green public procurement47, the ISEAL Alliance should maximise the outreach of
the legal opinion, both in terms of making it more visible (e.g. through mailings, presentations at
conferences) and more accessible (i.e. easier to understand and translate into practice). ISEAL
should also not delay developing a framework for procurement, which underscores the benefits of
using international standards systems that meet objective criteria for credibility and alignment to
“In December, Chinese Taipei joined forty other WTO members as signatory to the WTO Government Procurement
Agreement. Current members are: Canada; the European Communities, including its 27 Member States; Hong Kong, China;
Iceland; Israel; Japan; Korea; Liechtenstein; the Kingdom of the Netherlands with respect to Aruba; Norway; Singapore;
Switzerland; and the United States. Other WTO Members that are in the process of negotiating their accession to the
Agreement on Government Procurement are Albania, China, Georgia, Jordan, the Kyrgyz Republic, Moldova, Oman and
Panama. A further six WTO Members, namely Armenia, Croatia, the Former Yugoslav Republic of Macedonia, Mongolia, Saudi
Arabia and the Ukraine, have provisions regarding accession to the Agreement in their respective Protocols of Accession to the
WTO.” Policy Watch Vol 4 Issue 4
45
46
R052 ISEAL-CIEL Legal Opinion on GPA
47
McKinsey (2008) Potenziale der öffentlichen Beschaffung für ökologische Industriepolitik und Klimaschutz
www.bmu.de/files/na/application/pdf/mckinseystudie.pdf
The ISEAL Alliance is a not-for-profit company, limited by guarantee. Registered in England and Wales, company number 4625800
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international trade law requirements, such as those defined in ISEAL Credibility Tools, including
the Code of Good Practice in Setting Social and Environmental Standards.
7.2 United Nations Environment Programme (UNEP)
UNEP and the United Nations Department for Economic and Social Affairs (UN-DESA) are the
leading agencies of the Marrakech Process, a global multi-stakeholder process to promote
Sustainable Consumption and Production which aims at developing a 10 years Global
Framework of Programmes on SCP (10YFP). The 10YFP will be negotiated at the 19th session
of the UN Commission on Sustainable Development in 2011.
Seven Task Forces have been set-up under the Marrakech Process, one of which focuses
specifically on SPP. Led by the Swiss government, this Task Force has developed a general SPP
approach which includes a definition of SPP, the development of key principles, a status
assessment as well as the development of country implementation plans, tools and trainings.
This framework will be tested in 14 countries in all regions in order to give input into the 10YFP.48
Given that it is a UN-led process, it has the potential to become a reference on sustainable
procurement, particularly for developing countries. So far, however, (voluntary) standards are
only addressed as potential barriers to trade in the draft 10YFP. ISEAL should monitor the
process, and engage with the lead UNEP unit, the Sustainable Consumption & Production
Branch, to glean greater understanding of their aspirations and drivers behind this process.
7.3 European Union
The Communication adopted by the European Commission in July 2008 on Sustainable
Consumption & Production and Sustainable Industrial Policy Action Plan (SCP)49, aims at
integrating and strengthening the potential of different policy instruments, such as the Ecolabel,
the Energy label, Green Public Procurement and others to deliver sustainability outcomes. While
proposing some areas for new or revised legislation, the SCP also initiated some new policy
processes, such as the establishment of a Retail Forum. It is worth noting that, despite the title,
the SCP clearly focuses on the environmental dimension of sustainability. The most relevant
processes for public procurement are addressed in some detail below.
7.3.1 Communication on Public Procurement for a Better Environment50
As the title suggests, this Communication focuses specifically on the environmental dimensions
of SPP, or green public procurement (GPP). The main objectives of the Communication are to set
common GPP criteria for a range of products, and to develop legal and operational guidance for
their use across the EU.
Criteria for ten product groups have already been developed, including construction (covering raw
materials, such as wood, heating and cooling equipment), food and catering services, energy
48
www.isealalliance.org/document/docWindow.cfm?fuseaction=document.viewDocument&documentid=747&documentFormatId=
1498
49
European Commission (2008) Communication on Sustainable Consumption & Production and Sustainable Industrial Policy
Action Plan COM(2008) 397Final
50
European Commission (2008) Communication on Public Procurement for a Better Environment COM(2008)400/2
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(including electricity, heating and cooling coming from renewable energy sources), clothing,
uniforms and other textiles, copying and graphic paper, furniture and cleaning products and
services. Criteria for other ten product groups are currently being drafted. They are divided into
“core” and “comprehensive” criteria. Core criteria are designed to be used by any European
contracting authority. They address the most significant environmental impacts, and are designed
to be used with minimum additional verification effort or cost increases. Comprehensive criteria
are intended for use by authorities who wish to purchase the best environmental products
available on the market, and may require additional administrative effort or imply a slight cost
increase as compared to the purchase of other products fulfilling the same function51.
The criteria refer to the European Ecolabel and other national Ecolabels where these exist. Some
ISEAL members’ standards are referenced as well, namely FSC (copying and graphic paper,
construction, furniture), IFOAM and MSC for Food and Catering Services52.The European
Commission intends for the member states to endorse the criteria developed. Formal
endorsement by Member States would imply that the common GPP criteria would be included in
the national action plans and guidance on GPP. The Commission proposes that by 2010 fifty
percent of all tendering procedures should be green, where "green" means compliant with
common “core” GPP criteria developed through this process. To monitor progress, the
Commission is currently developing a method for calculating exact levels of GPP. This will focus
on compliance with common "core" GPP criteria and will be based on an analysis of a
representative sample of tendering procedures. The European Commission is also identifying
indicators to assess the “environmental and financial [impact] gains delivered by GPP”. The
method will be implemented in the best performing Member States from the outset, and repeated
in all member states in 2010.
While the European Commission Directorate General for Environment (DG Env) clearly plays a
leading role in developing the product criteria, engagement with the Commission is unlikely to be
sufficient if we want to influence this process. Key targets to consider addressing include the
member states that are most active in the process (to be identified), as well as the nongovernmental organisation ICLEI.
ICLEI, Local Governments for Sustainability, is an international association of local governments
as well as national and regional local government organizations that have made a commitment to
sustainable development53. ICLEI has a long-standing engagement in public procurement, with
programmes on sustainble procurement implemented for over a decade in Europe, Latin America
& the Caribbean and Oceania. DG Env and ICLEI worked together in the development of the
criteria for the first ten product groups for GPP.
Engagement in this process should start immediately and is likely to be most intense until the end
of this year, given that the criteria are currently being developed and/or endorsed. Discussions
are still open as to whether this process might become formalised and developed into binding EU
legislation. Should this occur, the potential impacts of GPP criteria would be most significant, as it
will shape GPP practices across the EU and will certainly constitute a reference for many other
countries.
51
http://ec.europa.eu/environment/gpp/toolkit_en.htm
52
For sustainable aquaculture the EC background report on Food and Catering Services refers to ten different schemes,
including IFOAM, MSC, but also EurepGAP, Debio, KRAV and Mileukeur, among others
http://ec.europa.eu/environment/gpp/pdf/toolkit/food_GPP_background_report.pdf
53
www.iclei.org
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7.3.2 Revised Ecolabel Regulation
In the Spring, the EU adopted revisions to the Ecolabel Regulation. The Ecolabel currently
applies to 26 product groups. The revised regulation plans to extend its scope to a further 40 to
50 product groups by 2015, including potentially fish and aquaculture, processed food and drink.
The criteria themselves are not determined by the regulation, but by subsequent individual
decisions for each product group.
It is expected that the process of setting criteria under the Ecolabel will inform the analytical work
carried out in other policy areas for the setting of minimum requirements and benchmarks of
environmental performance, and vice-versa. For example, following a request from the European
Parliament, the Commission will now have to assess whether the Ecolabel for food and drink
should be awarded exclusively to organic products54. Alternatively, it could include references to
further voluntary standards systems55 or even be dropped. A strategic assessment of the pros
and cons of an extension of the Ecolabel into processed food and drink, fish and aquaculture and
its relationship with ISEAL member standards systems is critical.
The Ecolabelling unit in DG Environment is leading in the definition of the product groups and
how the Ecolabel would apply to those products.
7.3.3 Retail Forum
According to the European Commission, “retailers are in a strong position to influence more
sustainable consumption through their own operations, supply chains, and consumer
behaviour“56. Therefore, a Retail Forum was identified in the SCP Action Plan as a strategic
means to influence sustainable consumption and supply chains. The objective is that individual
large retailers commit to a series of ambitious and concrete actions towards sustainable
purchasing practices, with clear objectives, timelines, deliverables, and monitoring indicators.
To this end, DG Env commissioned research from BIO Intelligence Service57, published in
February 2009, which gathered information on the status quo and identified a methodology to
measure progress. It references a number of ISEAL member standards systems, such as FSC,
MSC, RA and “a Fair Trade label” (not FLO specifically), but it does not refer to ISEAL credibility
tools as a distinctive criterion.
At the same time,, in February 2009, major stakeholders in the European food and drink value
chains set-up the “European Food SCP Roundtable”58. Supported by UNEP and the European
Environment Agency, the roundtable’s intention is to: “...facilitate agreement on uniform and
scientifically reliable environmental assessment methodologies for food products.”
The SCP Plan has thus started to put pressure on private actors to foster sustainable
procurement practices. Retailers and food processors will need to respond and implement the
ambitious Commission plans. This constitutes a potential for further uptake of voluntary standards
systems, and, even more importantly from a policy-perspective, retailers and processors can be
key multipliers and allies in promoting ISEAL credibility tools in procurement policies.
See, for example, IFOAM EU Group Press Release of 3 March 2009 Ecolabeling for food products – added value for
European consumers? www.ifoam-eu.org
54
55
Personal communication DG MARE
56
ibid
57
http://ec.europa.eu/environment/eussd/pdf/report_green_retail.pdf
58
Joint Press Release of 26 February 2009 Key Food Chain Partners to Launch Sustainability Roundtable
www.ciaa.eu/documents/press_releases/PR_EFSCPRT_final_260209.pdf
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7.4 National Administrations
The review of potential national targets is far from being complete. Particularly the omission of
European national governments is notable, given that important processes are happening in this
region, for example Switzerland (new procurement legislation draft expected in summer 2009),
the Netherlands (ongoing discussions on criteria for 100% sustainable procurement by 2010) and
Germany, which the ISEAL Alliance will undoubtedly more strongly positioned to address once
the lowest level of engagement (as proposed above) is agreed upon.
The choice to limit this paper to the national processes identified is based on the impossibility to
cover all within this background document, and an interest in exploring the geographical spread
and interest of the ISEAL members.
6.4.1
United States
Environmentally Preferable Purchasing (EPP) is a federal-wide programme of the U.S.
Environment Protection Agency (EPA) that encourages and assists executive agencies in the
purchasing of environmentally-preferable products and services. Established through Presidential
Executive Order (EO13101) in 1998, it requires the EPA to develop guidance to “address
environmentally-preferable purchasing”. Together with section 23 of the Federal Acquisition
Regulation (FAR 207), it requires executive agencies to identify and purchase environmentallypreferable products and services. The EPP programme serves as a clearinghouse for information
and practice, both for executive federal government agencies, as well as state, local governments
as well as the private sector59.
Sustainability claims towards consumers are regulated by the “Guides for the Use of
Environmental Marketing Claims,” commonly known as the Green Guides. The Green Guides
outline general principles that apply to all environmental marketing claims and then provide
guidance on specific green claims, such as biodegradable, compostable, recyclable, recycled
content, and ozone safe. Over the past eighteen months the Federal Trade Commission (FTC)
has been consulting on the regulatory review of the Guides and conducted three public meetings,
addressing “Carbon Offsets and Renewable Energy Certificates”, “Packaging” and “Green
Building and Textiles”60. Legal proposals are expected in 2009.
Another sustainable purchasing programme is the Renewables Portfolio Standard (RPS)61. The
RPS obligates electricity retailers to include in their resource portfolio a certain amount of
electricity from renewable energy resources. RPS policies are implemented at the state level, and
vary considerably in their requirements with respect to which requirements they set, and what
targets are set for each requirement, amongst others.
With the recent change in Administration, the U.S. will undoubtedly step up its efforts, particularly
in combating climate change. Apart from the ongoing processes mentioned above, new
opportunities and challenges will arise which should be monitored by the ISEAL Alliance in order
to identify strategic entry points.
59
www.epa.gov/oppt/epp/pubs/about/about.htm
60
www.ftc.gov/opa/reporter/greengds.shtm
61
www.eere.energy.gov/de/renewables_portfolio_standards.html
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7.4.1 Brazil
International environmental obligations and domestic resource issues have been the two primary
drivers of sustainable procurement in Brazil. For example, as a response to eliminating the illegal
mining of wood from the Amazon, the government implemented a certification system to track
and regulate mining. In order to market the system, the government made it mandatory to buy
only certified wood in government procurement schemes. Several cities have or are in the
process of adopting legislation to regulate the illegal timber trade and also adopt procurement
practices for buying timber from legally- and well-managed forests (FSC-certified). Public
procurement in Brazil is estimated at about 10% of GDP62.
There have also been significant developments at the city and state levels. In August 2008, for
example, the states of Minas Gerais and of São Paulo created state programmes for sustainable
public purchasing and contracting. São Paulo represents about 43% of Brazil’s GDP, and its
public procurement amounts to approximately US$1 billion a year. Minas Gerais contributes
approximately 9% of Brazil’s GDP63. Both states worked with ICLEI64 to develop their SPP
policies. These policies include both green purchasing guidelines and specific purchasing criteria.
In São Paulo, the State Secretariat of Public Management is responsible for emitting the legal
directives, norms and procedures to ensure that these criteria are adopted in public contracts.
The Environment Secretariat is in charge of the technical studies for characterizing goods and
services and determining which can be awarded the state’s “socio-environmental seal” indicating
that they meet the criteria.
7.4.2 China
China does not have legislation specifically for SPP. However, its 9th Law of Public Purchasing
stipulates that public procurement should promote, inter alia, social development and the
protection of the environment65. Article 9 of the procurement law states that “Environmental
friendly products should be preferred to purchase during governmental procurement process to
promote environmental protection and economic sustainable development66”.
To enable its enforcement, the State Environment Protection Agency (SEPA) and the Ministry of
Finance published at the end of 2006 ““Implementation Guidance on Government Procurement
on Environmental Labelling Products”. Applicable across the whole country since 2008, the
Guidance requires that priority should be given to purchasing products that carry an
environmental label67. To facilitate this, the government has defined environmental criteria listings
for 14 product groups, including office equipment, furniture, building materials and interiordecorating materials68.
62
www.temasactuales.com/temasblog/environmental-protection/green-purchasing-environmental-protection/minas-sao-pauloadopt-a-green-purchasing-program/
63
www.temasactuales.com/temasblog/environmental-protection/green-purchasing-environmental-protection/minas-sao-pauloadopt-a-green-purchasing-program/
64
ICLEI - is an association of over 1000 local governments from 67 countries who are committed to sustainable development.
www.iclei.org
65
www.igpn.org/guideline/guideline_in_china.html
66
www.grip.no/Hamar2006/presentations/P1%20-%20Zhang%20Xiaodan.pdf
67
www.grip.no/Hamar2006/presentations/P1%20-%20Zhang%20Xiaodan.pdf
68
The full list is available at www.sepa.gov.cn
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The Chinese government has also developed an environmental label, which covers 56 product
categories and is used as reference for green procurement. Through its “Project of Constructing
an Environmentally-Friendly Society”, it has established a series of policy documents to promote
green purchasing, as well as a series of green purchasing networks at the provincial and district
levels, aimed at building the capacity of finance and environment protection local
administrations69.
Given the strategic geopolitical importance of China, the sheer size of its market, as well as the
stated interest of the government to step up its efforts to promote the implementation of these
practices by further developing and extending the criteria for environmental labelling and SPP;
procurement may offer one pathway to identify engagement opportunities for the ISEAL Alliance
in China.
69
Perera, O. et al (IISD) (2007) State of Play in Sustainable Public Procurement pages 63-64
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