Circular PP Using innovation procurement and capacity building

Circular PP Using innovation procurement and capacity building to promote Circular Economy Irina Aleynikova, HSE – Saint Petersburg FORUM STRATEGOV 2018: Stakeholders of the future Saint Petersburg, 22 October 2018

Project Overview 2 About the Project • A traditional procurement model does not consider reuse or recycling of purchased goods or services. • The project promotes a circular procurement model, which takes into account the lifecycle of products throughout the supply chain. • The development of tools, exchange of best practices, training and building capacity among procurers, suppliers and policy makers for circular products stimulates the development of new business models.

Project Overview 3 Project Objectives: As a result of the project, the target groups: decision makers , policy makers and heads of departments of public authorities will be aware of the benefits of the circular economy and the necessary steps that have to be taken in order to reach the project goals. As a result of the project, public procurers and other relevant stakeholders of the procurement value chain will have the knowledge to incorporate circular economy criteria into the procurement procedures and will have an overview of circular products and solutions available on the market.

Project Overview Project Partners City of Aalborg (DK) – Lead Partner City of Malmo (SE) Aalborg University (DK) HSE – Saint-Petersburg (RU) Latvian Environmental Investment Fund (LV) Rzeszow Regional Development Agency (PL) Rijkswaterstaat – Ministry of Infrastructure and the Environment (NL) • Finnish Environment Institute (FI) • Latvian Chamber of Commerce and Industry (LV) • North. Denmark EU - Office (DK) • • 4

5 Project Overview Project Activities Building Capacity Communication Disseminate the project outcomes among public procurers and SMEs across Europe Research Pilots

Project Overview Project Activities 6 • Research: Research the state of the art in circular procurement and its improvement potentials (both in the sphere of public procurements and existing business models) • Capacity Building: Build capacity on circular procurement among public procurers, SMEs, policy and decision makers through: - Trainings and workshops for public procureres, - SME seminars (Meet the buyers concept), - Lectures for students at partner universities. • Plitos & lessons learned: 8 piloting public procurements based on implementation of circular approach in three countries (DK, SE, LV) and practical capacity building material (e. g. training, guidance, future recommendations, etc. ) • Dissemination: Disseminate the project outcomes among public procurers and SMEs across Europe

7 Project Overview Project Activities: Research the state of the art in circular procurement and its improvement potentials (both in the sphere of public procurements and existing business models) Analysis of theoretical basis Case Analysis (Best Practices) Methodology of Research Expert Interviews Recommendations: - For SMEs - For Government procurers - For Policy Makers

8 Project Overview Project Activities: Capacity Building Build capacity on circular procurement among public procurers, SMEs, policy and decision makers Best Proved Available Experience Workshops with government procurers Market Building Activities ( SMEs Seminars) Best Practices Lectures for Students (Future policymakers) - Ideas on: Subjects Criteria Understanding of CPP Recommendations: - For SMEs - For Government procurers - For Policy Makers

9 Project Overview Project Activities: Pilots 8 piloting public procurements based on implementation of circular approach in three countries (DK, SE, LV) and practical capacity building material (e. g. training, guidance, future recommendations, etc. ) Best Proved Available Experience Best Practices Subject of Procurement 8 Pilots Market analysis (Suppliers’ capabilities) Estimation criteria Analysis of theoretical basis Lessons learned Contracts Realization Recommendations: - For SMEs - For Government procurers - For Policy Makers

Project Implementation in Russia 10 Project Activities in Russia • Research: - Current state of cirlcular public procurements and possibility of implementing them in Russia, - Overview of the use of alternative business models to achieve better circularity in public procurement in Russia. • Capacity Building: - Circular Procurement Seminars for public procureres raising awareness of circular approach, - Market building activities - SME seminars for establishing the most prostective products/sevices/ industires for implementation of circular public procurements, - Circular Procurement Lectures for students at HSE – Saint Petersburg. • Dissemination: Disseminate the project outcomes among public procurers and SMEs across Europe

Current Existing Results: Circular Public Procurements in Russia 11 Policy Level & Legislation • No holistic national strategy towards sustainability neither special directives regulating green, sustainable or circular public procurement but the white paper ‘Fundamentals of the Environmental Policy of the Russian Federation for the period until 2030’ (approved in April 2012) provides advantages when procuring goods, works or services that meet the environmental-friendly requirements. • 44 -FZ: Price is still one of the mandatory requirements but among other criteria it is recommended to take into account the environmental characteristics of the object of procurement (Article 32, part 1) and life-cycle criteria (Article 32, part 3). • 223 -FZ: omits any kind of such specific requirements. • Local authorities, if interested to follow good practices, are allowed to introduce some elements of SPP policies.

Current Existing Results: Circular Public Procurements in Russia 12 Main Public Bodies • The main public bodies in charge of building Circular Economy are the Government of the Russian Federation, the Ministry of Nature and Ecology and the Ministry of Economic Development. • The main public bodies responsible for public procurement policy are the Ministry of Economic Development, the Government of the Russian Federation, the Ministry of Finance, the Federal Treasury. At the local level it is the regional and the municipal authorities. • Since there is currently no national strategy in CPP in Russia, there are no specific bodies responsible for implementing measures for circulation procurement.

Current Existing Results: Circular Public Procurements in Russia 13 Implementation on Local Political Level Moscow City Government Decree No. 3326 PP "About environmental requirements for the quality and technical characteristics of products purchased under the state order of the city of Moscow and directions for improving environmental certification and audit systems”, 2010 • • The document contains environmental criteria for a number of groups of goods and services purchased by Moscow institutions. Most often environmental requirements in Moscow are applied when purchasing catering services and food. From the list of environmental requirements stipulated by Moscow Government Decree the purchasing organizations apply a much smaller set of requirements and do so less frequently (requirements mostly applied when purchasing computers and office equipment). The text of the Decree in comparison with environmental requirements and criteria adopted in the European countries is substantially narrower. Individual customers, especially those working in industries with a risk for the environment (petroleum companies such as Gazprom, LUKOIL, ROSATOM etc. ) have also increased environmental criteria for suppliers.

Current Existing Results: Circular Public Procurements in Russia 14 Implementation on Local Political Level Requirements used: • No toxic substances • No GMOs • Indication of the minimum permissible proportion of surfactants • Gentle cooking methods • Reusable packaging • Packaging from recycled materials • Replaceable parts: cartridges, mechanics, etc. • The estimated cost of the life cycle is also applied as a criterion. • The require a warranty period is very common. Not the purchase of a product but rather its function: the practice of purchasing transport services, cleaning services, copy machines' maintenance are very common. As for Reuse and recycle criteria: they are practically never applied. It should be note, that according to the law, the procurement entities are required to purchase only the new products.

Current Existing Results: Circular Public Procurements in Russia 15 Capacity Building Potential Russia's potential is high. Currently there is: • an adjusted system of regulatory and legal regulation of procurement activities • a unified public procurement portal (zakupki. gov. ru) where you can place requirements, instructions, criteria • competent national specialists in this field • different industrial and entrepreneurial associations • SME support infrastructure where it is possible share experience, conduct training etc. According to a recent study [Shadrina, Belokrylova, 2016] approximately 50% of the buyers are aware about SPP/CPP, 50% is not aware, but 25% said they are ready to learn, only 25% said that they don’t have any need for this approach. The main problem is that the European countries are involved in international networks to promote the SPP, while Russia has stayed on the sidelines. EU purposefully carries out norm-setting in this area, which all countries are obligated to follow in one way or another. Russia does not have such rigid commitments on sustainable development.

Current Existing Results: Circular Public Procurements in Russia 16 Key Notes • There is need for a clear signal from the government that CPP and SPP are important. • There is a need to include the concept of sustainable public procurement into the Federal contract system of Russia. • Russia's potential for sustainable procurement is high. • Sector public institutes (subject to 223 -FZ), are much more flexible in potential possibilities to use the principles of sustainable procurements. • Local authorities are allowed to introduce some elements of SPP policies • CPP development should go in parallel with the evolution of the innovative production, the use of recycling and reuse technologies.

Contact Information Irina Aleynikova Vice Director Centre for Applied Research and Development HSE – Saint – Petersburg 190121, St. Petersburg, St. Soyuza Pechatnikov, 16, office 401 Mob. : +79217653993 E-mail: ialeinikova@hse. ru card. spb. hse. ru www. circularpp. eu