By Jeroen Kwakkenbos
Public Procurement can be a major driver of sustainable development and should therefore be on the G20s agenda. Public procurement accounts for at least 15 percent of global GDP. It is the largest share of government spending besides wages. Moreover, as illustrated by eurodad research, it is a section of the economy which is directly under public control, and can be directed towards achieving development goals such as food security and domestic resource mobilisation. Thus, if wisely used, it is a major policy tool for driving sustainable development, in both developed and developing countries.
Sustainable Public Procurement (SPP) is often defined as a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money in terms of generating benefits not only to the organisation, but also to society and the economy, whilst minimising damage to the environment. SPP takes developmental, social and environmental criteria into account and makes public procurement contribute to reaching the Internationally Agreed Development Goals.
SPP can be critical in developing capacities and long term sustainability of small holder farmers and empower the most marginalised communities by giving them preference in terms of contract tenders. SPP can also create incentives for private sector actors engaged in large scale public infrastructure projects to engage in pro-poor and environmentally friendly practices.
The relevance of SPP has already been identified by the World Summit on Sustainable Development in Johannesburg in 2002. The Johannesburg Plan of Implementation contains an SPP chapter. However implementation since then has been limited. Several UN Member States conducted smaller, more fragmented reforms but scope, depth and speed of reforms leave much room for improvement. The European Union is considering adopting some SPP approaches to modernise its own procurement policy, but has a narrow focus on the environmental dimension.[i] This is why it is critical that G20 countries agree to implement SPP.
G20 summit can give a new impetus to Sustainable Public Procurement. In this regard we recommend that the G20 commit to:
- A deepened and strengthened agreement on sustainable public procurement.
- The commitment to reform procurement practices of bilateral aid agencies, development banks and international organizations. This implies full untying of aid grants and development loans, using and strengthening country procurement systems of partner countries or giving preference to local and regional procurement; and taking developmental, social and environmental considerations into account.
- Public procurement reform programs should enable developing countries to maximise the development effectiveness of public procurement. Governments should refrain from imposing inadequate liberalisation objectives which have proven to be disastrous.
[i] European Commission (2011): green paper on the modernisation of EU public procurement policy. Towards a more efficient European Procurement Market.