How sustainable public procurement triggers sustainable growth Oshani

How sustainable public procurement triggers sustainable growth Oshani Perera September 2013

Sustainable Public Procurement Position public procurement as an incentive for sustainable industrial growth. Crowd-in domestic enterprises and domestic investors. • Design policies and strategies • Technical assistance on implementation • Accompany real time tenders

Geographical Experience

Position government’s purchasing power as an incentive for green industrial growth • Include environmental and social attributes in tenders. • Towards “functional” or “performance” specifications. • Value for money across specifications, award criteria, contract conditions. • Appreciate what suppliers can deliver and at what price. • Provide lead time.

Position government’s purchasing power as an incentive for green industrial growth Vietnam: • Establish center of expertise under the Central Procurement Platform • Tender on sustainable timber furniture with Ministry of Environment India: • Develop mock specifications with suppliers on office electronics, furniture, bricks, office electronics, indoor and outdoor lighting, textiles. • Targeted purchasing programme for green IT assembly sector Brazil: • Targeted programme to synergise local content requirements with environmental performance

Procurement is a cross cutting policy for sustainable development Use public procurement as a means to implement complimentary policies on sustainable development.

Procurement is cross cutting policy for sustainable development Abu Dhabi: Implement programme to synergize with national growth targets: • • • Renewable energy target of 7% by 2020. Increase domestic supply of food. Energy efficiency (demand to increase 11% annually). Water efficiency across domestic and industrial users. Trigger the rise of green SMEs Support the employment and up-skilling of Emirati nationals

As an incentive to increase Foreign Direct Investment + Joint Ventures SPP is a indicator of an investment-grade climate. Long term and scaled up public demand can: • crowd-in further investments on energy and water efficiency, clean technologies, recycling, bio-based products, green building materials. • Build supplier linkages to create green domestic supply chains • Diversify domestic industrial capacities.

Use Procurement to increase Foreign Direct Investment and Joint Ventures South Africa, Province of the Western Cape: • Establish renewable energy technology producing industrial parks • Attractive feed in tariffs by Provincial Government Mauritius: Redesign investment incentives and business linkages policies to promote domestic production in food, furniture, building design, energy and water efficient technologies.

Crowd in domestic enterprises • Set asides or reserved areas for domestic enterprises + SMEs. • Offsets agreements: procuring governments receive additional benefits from foreign suppliers beyond the procured asset. Can include up-skilling and R&D spillover. • Minority supplier programmes to do business with disable persons, women-owned businesses, rural enterprises.

Crowd in domestic enterprises Abu Dhabi: • Western Region Development Council, Abu Dhabi: Set asides for programme for local SMEs • Khalifa Fund programme for disabled entrepreneurs Ghana: SME set asides for paper, school books and printing.

Procurement of sustainable infrastructure Policy instruments to mandate that sustainable architectural and engineering features in pre-concession-feasibility studies and Request for Proposals. Defining and quantifying environmental and social risks in project finance models Government-backed guarantees/incentives to increase the netpresent-value (NPV) of green infrastructure. Critical to increase private capital participation in this asset class.

Procurement of sustainable infrastructure India: Ministry of Finance Infrastructure development Finance Corporation Are environmental and social safeguards bringing value for money in the procurement of infrastructure? Demonstrate the losses to investors and the public purse due to the lack of safeguard implementation

Creating employment and skills building Procurement as an incentive for • Employment • building competencies • technology transfer

Creating employment and skills building South Africa: Programme to link into green procurement with Black Economic Empowerment (BEE). Sectors: bus bodies pylons, canned fruits/vegetables; textiles; pharmaceuticals. India: State governments to set asides for SMEs.

3 GF Partnership for Procurement and Green Growth Chair: Danish Ministry for the Environment State Government of Sao Paulo, Brazil Confederation of Indian Industry International Road Federation The Electronic Product Environment Assessment Tool, EPEAT Philips Global Energy Basel Abu Dhabi Sustainability Group* Infrastructure Development Finance Cooperation Thomson Reuters, Commodities and Energy Danfoss Office Depot CH 2 MHill National Institute for Ecology, Mexico Laurence Berkley National Laboratories , USA

About IISD • Non profit Think-Tank, 50 specialists. • Advisory and implementation services to Governments, International Organizations and Companies. • Themes: water, energy + climate change, procurement, finance, subsidies, investment, industrial development, commodities. • Offices in Canada, USA, Switzerland, China. • MOU supported in 45 countries. • Supported by Norad, DANIDA, SECO, SDC, CIDA, SIDA, UNEP, Aus. AID, NZAid, OECD, AFD, GIZ, IDRC • Third in the Financial Times/Foreign Policy ranking of influential think tanks.

Thank you Oshani Perera operera@iisd. org http: //www. iisd. org/markets/procurement/ http: //www. iisd. org/pgg/