(An abridged version of this blog was published in Business Standards, Mumbai, India on 30.06.2019 under the title "Five ways to implement sustainable procurement.")
In March 2018, the Government of India notified a Task Force (TF) on Sustainable Public Procurement (SPP) with the aim to transform its procurement policies in the light of climate change and SDGs. A year on, SPP stakeholders are eagerly waiting for a public announcement of some sort.
A similar SPP journey, via task force route, was started by the UK in 2005. In 2006, its task force report - “Procuring the Future” – paved the way for the country’s SPP implementation, aiming for the UK to emerge as an SPP leader in EU by 2010. Today, the UK is one of the leading countries in this field not only in Europe but also in the world. In 2002, Japan took the route of legislation and enacted a law on the Promotion of Procurement of Eco-friendly Goods and Services by public agencies. Since 2006, the Republic of Korea has a dedicated SPP policy, with clear targets for SPP in its Third Action Plan for the Promotion of Purchase of Green Products (2016-20). Similarly, Brazil too has its SPP policy embedded in its Action Plan for Sustainable Consumption and Production: Guidelines for its Implementation (2016-20). Closer home, China, Malaysia, Thailand, Indonesia, Sri Lanka, etc. all have policies and action plans for implementing SPP.
The key learning here is that having a policy is only the beginning; the ultimate push for transforming these policies into actual practices will come from a national action plan with a clear mandate, dedicated resources, delegated roles and responsibility, clear-cut set timelines and monitoring mechanisms. United Nations Environment Programme Guidelines on SPP Implementation published in 2012 also advocates the critical role of action plan in SPP implementation.
India took its first serious step in this direction in 2017 via the executive route and came up with new General Financial Rules (GFR) 2017 and Manual for Procurement of Goods 2017. While these directives facilitate the procurement of sustainable products by public authorities, there is no significant progress. Therefore, setting up a task force to develop a National Action Plan (NAP) on SPP Implementation shows government’s commitment to the issue and is in consonance with international experiences in SPP implementation.
The Task Force has created a positive buzz in the region with countries keenly observing what shape India’s NAP will take. Considering India’s stake in the region, this plan has the potential to transform business rules and usher in a new era of regional collaboration to meet SDGs. Regional countries already having an SPP policy stand to gain via sustainable supply chain linkages with a regional power; those yet to formulate a policy, can take guidance regarding best practices.
International experiences on action plan show that countries have taken different routes to ensure implementation. However, what is common is that all action plans reflect the prevailing ground realities of the respective countries. India’s NAP must also address her context-specific needs and provide clear direction on the following five elements for successful SPP implementation.
Definition of Sustainable: Understanding relevant impacts of a product on the environment, society and human health besides economic impact, and taking responsibility for these impacts is fundamental to begin SPP journey. How does one say that a product is sustainable? Individual responses would vary depending on their interpretation of balancing organizational and national priorities with larger objectives of climate change and sustainable development. The NAP must come out clear on these priorities so that sustainability conveys the same meaning to all stakeholders involved in the procurement process.
SPP Policy Framework: A clear and concise SPP policy framework legitimizes procurement of sustainable goods by public procurers without fear of retribution in the future by oversight bodies. The NAP should further clearly specify national and international obligations that apply to public bodies in the context of public procurement and internalize them in SPP policy.
List of Prioritised Products: In order to maximize outcome, it is important to prioritize product categories based on national context, spend analysis, risks mitigation opportunities, market readiness, degree of market influence, etc. Having prioritized them, the NAP should specify product criteria for sending unambiguous signal to the market and channelizing investment in design, development, and manufacturing of those products. Such a top-down approach will further ensure that resources are aligned to those initiatives which are most likely to generate maximum sustainability outcome.
Institutional Governance Mechanism: Creation of a separate institute/cell, provided with adequate teeth and resources - both financial & human - and mandate to assign, govern and review, would go a long way in fast-tracking implementation of SPP. This Cell would drive SPP implementation, coordinate various activities with ministries for identification, development, and review of product(s) criteria, and design and impart appropriate training modules for different stakeholders. It would further take upon itself to adopt an appropriate communication strategy for disseminating guidance on SPP to market and other stakeholders to support effective implementation of SPP policy.
Training & Capacity Building: Most of the procurers do not know how to apply existing policy into actual practices. Identifying training needs of different stakeholders, designing appropriate training modules and delivering them in a time-bound manner are prerequisites for launching SPP. Without this, any attempt to move forward on SPP would at best give tardy progress on the ground. Designating training institutes, possibly as a joint operation with the proposed Cell, as centers of excellence on SPP would pay good dividends in the long run.
Finally, one must remember that the plan would need revision and updating as India gains experiences on SPP implementation. NAP, thus, must provide for feedback from stakeholders to flow in on a regular basis so that the latest developments/ solutions may be incorporated. This would ensure that NAP remains relevant in emerging scenarios and continues to spearhead India’s SPP movement.
