Part II - Can We Ignore Social Sustainability in Procurement?

(Continued from Can We Ignore Social Sustainability in Procurement?.....)

Moving on, the Swiss led Marrakech Task Force, probably noticed (I guess), and corrected the above anomaly in EU approach to greening their procurement. They have constantly been talking about both environmental and social impacts of products and services during their life cycle. The UNEP’s initiative, which is based on experiences of Marrakech Task Force on SPP, on integrating environmental and social concerns in public buying, is rightly called SPP. The UNEP led initiative is relatively new and will take time to make its presence felt in this area. But again, I am still to find a convincing answer to why EU does not talk about social sustainability. One plausible answer could be that social issues are a lesser concern in EU than in emerging nations.  I agree that social and ethical issues, being less tangible, are difficult to apply in procurement process due to differing cultural and political interpretations.  Also, measuring the social impact of consumption is a difficult proposition.

But these challenges have not deterred some MNCs in integrating social concerns in their global supply chain. As early as 2003, Business Social Compliance Initiative (BSCI) came into being and created Code of Conducts for vendors, who are willing to improve working conditions of workers. Not to forget, Social Accountability International (SAI), which came into existence in 1997 and whose mission is to promote ethical working condition, labour rights, corporate social responsibility and social dialogue. Now there are many MNCs in Europe and North America, who insist on compliance of code of conducts/social standards by vendors in their supply chain. Does this mean that corporate people care more about social sustainability than their counterpart in government?  There is no yes-or-no answer to it but they have definitely brought issue of social sustainability in focus even in research universities. For example, professors at University of Tennessee, Knoxville are busy building business case around social sustainability by integrating social and ethical concerns in supply chain.

The focus currently on environmental sustainability, I believe, has more to do with its correlation with climate change. The climate change impacts are for real and something that people are experiencing themselves in their day-to-day lives. People are now demanding urgent actions. And, therefore, such demands have become a prime driver for integrating environmental sustainability in public decisions. Focusing on environmental sustainability is a part of mitigation effort to reduce climate change impacts. Given, its non-discriminatory nature, environmental degradation happening in one part of the globe would have adverse impacts on people across globe. Therefore, a developed country, though environmentally sustainable, cannot feel safe. It is equally important that other non-developed nations also take adequate measures to mitigate negative impacts of climate change. That is why one sees more conventions, workshops and conferences on environmental sustainability now! Contrary to this, to my mind, earlier many believed that social sustainability, per say, to be a local phenomenon with little or no global impact. For example - hardly anybody is likely to get affected in Europe due to simmering tension prevailing in a garment factory in Bangladesh over unsafe working condition within factory’s premises! But now, consumers would not buy this argument in today’s interconnected flat world, where supply chain extends globally. The point in case is Apple-Foxconn episode. Already having caved-in at Wall Street, Apple could not withstand pressure coming from its consumers, who no longer wanted to use products that have been produced unethically.  Apple had to agree to a probe by the independent Fair Labour Association (FLA) in response to a crescendo of criticism that its products were build on the backs of mistreated Chinese workers. I believe, such stakeholder’s pressures would help researchers build a business case around social issues and provide traction to social sustainability in sustainable procurement.

Looking forward for more discussion on social sustainability… 

Can We Ignore Social Sustainability in Procurement?

In one of the posts on this blog, Mr. Vinay Sharma, Director, African Development Bank wrote, “I also believe that while environmental sustainability has adequately been spoken about when discussing procurement, the issue of social sustainability still requires to be more comprehensively discussed.” This is indeed an experienced observation and I completely agree with him. I heard a resonance of the same idea when I was attending a workshop on Credibility Principles for Voluntary Sustainability Standards recently, organized by Iseal Alliance, an umbrella body for sustainability standards. One of the participants from Social Accountability International (SAI) raised a similar question – why stakeholders are not talking about integrating social standards in public procurement while discussing sustainable procurement? The speaker, I observed, was least prepared for this question. She, after lot of thoughts and internal processing, explained that it is probably because of difficulty in applying it in procurement process. The discussion continued but the question persisted.

The very idea of integrating environmental and social concerns in public buying is to look not just at the economic upfront cost of product and service but also look at the product and service in its entirety and ask a more wider question: does public buying provide best value for money over a product’s life cycle? When we discuss only environmental sustainability in public procurement we are obviously focusing only on two pillars of sustainable development.  A basic understanding of geometry tells us that three-legged structures are more stable than two-legged ones! In the same way, we just cannot hope for sustainable development without integrating social concerns in decision-making process. Governments around the world have a lot to do on appreciating equality and diversity; observing core labour standards; ensuring fair working conditions; increasing employment and skills; and, developing local communities. Governments, often, seem unable to ensure these in practice despite existence of laws on paper. In fact, government’s attempts to ensure social compliance through legislations, has not yielded much result on ground. The government cannot withdraw from its stated objective of working for societal growth.

But what I found baffling is that this situation is not unique to developing countries where awareness about sustainability in low and penetration of sustainable public procurement (SPP) is negligible. Even European countries, which pioneered public procurement as a tool to promote sustainable development, have all along been focusing only on environmental issues. They, somehow, dropped/missed the word ‘social’ from sustainability pyramid and have used ‘green’ interchangeably with ‘sustainable’. The European Parliament’s directive 2004/17/EC of 2004, legal framework for GPP in European Countries, has clarified how public purchasers can include environmental considerations in their procurement processes and procedures. This answers why EU talks about green procurement rather than sustainable procurement. I was looking at EU GPP criteria for products and services on their website but did not find mention of any social criteria such as rights of workers, minimum living wages, non-discrimination etc. However, I did take a note of ‘training of workers’ mentioned in case of procurement of services.  I have no clue as to why other social criteria are none of their concern! 

                                                     (TO BE CONTINUED IN NEXT POST....)