Governments and corporate social responsibility
Sustainable public procurement on the rise
Many governments are introducing laws and policies to stimulate responsible business practices, says Emmanuel Julien, Deputy-Director of the ILO's Enterprises Department. The annual Inter-agency Roundtable on Corporate Social Responsibility (CSR) focuses on how governments are promoting responsible business conduct through sustainable public procurement (SPP).
Meanwhile, many governments are introducing laws and policies to stimulate responsible business practices. The ILO is hosting the annual Inter-agency Roundtable on Corporate Social Responsibility (CSR), which focuses this year on how governments are promoting responsible business conduct through sustainable public procurement (SPP).
Public procurement represents 13 per cent of GDP in OECD countries and comprises 15-25 per cent in non-OECD States. This means that governments are major buyers and can significantly impact market demand for responsible and sustainable business practices.
The concept of linking public procurement to other government policy objectives is not new, but concerns about protectionism and lack of transparency had impeded the use and development of SPP. Trade-related objections to SPP have largely been overcome and debates focus no longer on whether to use SPPs but rather on how to put them in practice.
SPP traditionally concentrated on environmental impacts, as SPP was often linked to national environmental policies stemming from the Earth Summit agenda and Kyoto protocol commitments. More recently, countries such as the Netherlands have started to incorporate social considerations into their SPP practices.
The main ILO instruments that provide guidance on social policy and responsible labour practices to companies are the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration) and the ILO Declaration of Fundamental Principles and Rights at Work. They also provide guidance to governments on what social criteria to include in sustainable public procurement.
The challenge now is how to incorporate social criteria effectively in procurement processes , which a growing number of governments at various levels are launching while guarding against adverse impacts.
For example, the Chilean SPP programme ChileCompra sets a target of 15 per cent for procurement orders to meet sustainability criteria. The regulatory framework provides ample room for the implementation of sustainable procurement practices and innovation. Programmes include eco label integration, supplier accreditation, training and capacity building, and information sharing. The government has not only met its target but also reduced procurement costs in the process.
At the municipal level, the City of Malmö in Sweden has put in place a verification scheme for social provisions in public procurement which starts with risk analysis to identify product categories that are more likely to infringe on worker’s rights. It then establishes binding codes of conduct for those product categories. Tools for verification with specific companies include questionnaires, evaluation of providers’ self-assessments by public entities, audits and supplier inspections often made by public inspectors.
Representatives of governments, UN agencies, the European Union, as well as non-governmental organizations attending the CSR Roundtable on 19 November, will look at current trends in SPP and good practices at various level of government, including within the UN system itself.
The leeway for governments to provide additional stimulus to encourage responsible business conduct is relatively wide. In using this considerable leverage, governments need to find their own formula, build on good practices and lessons learned, and internally encourage innovation and change. In this endeavour, there is room to ‘think outside the box’ and ground-breaking pioneer practices.
On the other hand, governments need to be mindful of impacts. Does SPP really help to raise awareness of business responsibility to respect workers’ rights? How can SPP practices avoid disadvantaging small and medium-sized enterprises (SMEs)? In this regard, the social partners have a critical role to play in developing SPP policies and practices.