Faced with the twin challenges of accelerating climate change and the economic and social fallout from a global pandemic, not to mention persistent, widespread problems such as inequality, hunger and air pollution, all countries have a tool at their disposal that they are not using nearly strategically enough.
Each year, governments around the world spend around $13 trillion on goods, services, works and utilities to meet the needs of their populations and economies. This public procurement spend represents one-sixth of total global GDP.
Developed and developing economies spend about the same amount but in lower-income countries procurement accounts for a much bigger proportion of the national budget and arguably has more potential to make a difference – if the right system is in place.
The concept of sustainable procurement has been around since the 1990s but has been gaining traction ever since, as public awareness of environmental problems in particular has risen.
Historically, the focus of sustainable procurement has been on mitigating harm, rather than on doing good. Sustainable procurement encourages consideration of social and environmental impacts alongside a focus on price and quality. However, in practice these additional goals are secondary to the original considerations, and are also defined too narrowly.
In a new Chatham House paper, I argue governments must urgently adopt a new definition of sustainable procurement which is much more ambitious, holistic, and proactively addresses considerations such justice, human rights, diversity, health, and wellbeing.
By building these goals into public procurement policy, and enshrining this in legislation, governments could harness the vast potential of public spending to drive positive change.
We are in a moment of crisis as a species. Climate breakdown and biodiversity loss, entrenched and pernicious inequality within and between societies, and COVID-19 are creating unparalleled demand for action and public expenditure.
As governments respond, they must take long-term sustainability and the ‘ripple-effect’ of their actions into account, and not squander this opportunity to lay the foundations for a fairer, more resilient future for all.
Governments need to adopt public procurement strategies that explicitly promote equity within and between generations, states and species. For too long the exploitation of cheap labour and resources in certain geographies has been treated as a way to ‘advance’ and ‘develop’ other economies.
Similarly, exploitation of natural resources has been justified on the grounds of economic progress, but without sufficient consideration of the long-term effects on nature, animals and ultimately all of us.
It is no longer possible to look at things in silos. As John Donne wrote nearly 400 years ago, ‘no man is an island’ – and in this vein, few of our actions as individuals or nations are isolated or without implications for others.
The business-as-usual approach to procurement, which seeks to limit the negative impacts of government spending, is not good enough anymore. We have to recognize our interconnectedness and adopt an approach that benefits people and planet.
This is not just wishful thinking. There are examples, profiled in our paper, of countries using public procurement in exactly this strategic way. For example, in the first decade of this century, Brazil’s government used public procurement as a key plank in its strategy to eliminate hunger.
Through its Food Acquisition Programme, the government bought food from small family farms to distribute to families living in hunger. The programme was successful in both improving nutrition and food security and reducing poverty, and its legacy lives on, with 30 percent of government budget for school meals spent sourcing directly from local smallholder families.
In more recent examples, both Ecuador and Papua New Guinea have published national procurement strategies designed to address social and environmental issues faced by their countries and use the power of public procurement for good.
The policies include insisting on certain environmental standards and giving preference to smaller and local suppliers, women-owned businesses and peasant farmers.
One-third of Papua New Guinea land is currently under foreign control through logging concessions and business leases. The national procurement strategy seeks to promote more national ownership and keep more value in the country by supporting local processing, banning the export of round logs and increasing export taxes on raw commodities. To some extent, Papua New Guinea’s strategy mimics measures taken by Britain and the US in their periods of economic consolidation.
Meanwhile, under Ecuador’s National Plan for Good Living, which explicitly pursues the wellbeing of citizens as a goal on the grounds that ‘no one can live well if others live badly’, public procurement contributes to economic localisation, rural development and food sovereignty.
These countries show how public procurement can be used deliberately and strategically to address national development priorities. For all governments, it is time to realise the absolute necessity of better public procurement for building more resilient, sustainable and just societies.