Procurement can be used as a mechanism to further the economic, social and environmental development of recipient countries and/or regions. As such, sustainable procurement should incorporate a number of safeguards and checks in the procurement process to positively assist in the following areas:
- Human rights
- Labour rights
- Environmental impacts
- Local entrepreneurship
- Empowerment women
- Poverty eradication
Human rights are increasingly being seen as a business issue. They are inextricably linked to corporate risk and reputation management. By continuously expanding supplier sourcing strategies, as well as by increasing sourcing from developing countries procurement officers are increasingly exposed to companies operating in countries with repressive governments, ethnic conflict, and weak rule of law or poor labour standards. The procurement function must include processes that are designed to identify companies that flaunt their responsibility to uphold universal human rights towards their employees and toward the communities in which they
With globalization and increasingly extending global supply chains, procurement officers have the unique opportunity as well as responsibility to ensure that the procurement function serves to protect workers‘ rights. Companies operating in global markets are increasingly expected to assume some level of responsibility for labour practices along their supply chains. This responsibility can and should also form an integral component of the procurement function, by ensuring that contracted companies operate within the universally accepted International Labour Organization‘s (ILO) core conventions on labour standards. Procurement officers should be
aware of a potential supplier‘s performance in the following areas:
- Freedom of association and the right to collective bargaining
- Child labour
- Bonded or forced labour
- Achieving decent working conditions
Adverse environmental impacts
Procurement can play an integral role in promoting sustainable production and consumption patterns. It is widely recognised that industrial development will only be truly sustainable if it is built on firm ecological foundations. The growing attention to issues of sustainable production and consumption is a natural outcome of decades of work on cleaner production and ecoefficient industrial systems. It represents the final step in a progressive widening of the horizons of pollution prevention; a widening which has gone from a focus on production processes (cleaner production), to products, (eco-design), then to product-systems (incorporating transport
logistics, end-of-life collection and component reuse or materials recycling) and to ecoinnovation (new products and product-systems and enterprises designed for win-win solutions for business and the environment). Procurement is in the unique position to help influence industry by encouraging it to develop and adopt policies and practices that:
- Support a precautionary approach to environmental challenges
- Are cleaner and safer
- Make efficient use of resources
- Ensure adequate management of chemicals
- Incorporate environmental costs
- Reduce pollution and risks for humans and the environment.
Supporting local entrepreneurship
Strategic procurement can provide a framework to ensure that local content becomes an integral component of the procurement policies and practices. In this manner the procurement function can be adapted and utilized to achieve good practice in the goals of an organization in terms of:
- Gender and the empowerment of women
- Poverty eradication
Gender and the empowerment of women
The Millennium Development Goals (MDGs) addressing this issue set a target for ―the elimination of gender disparity in primary and secondary education preferably by 2005, and to all levels of education no later than 2015‖. The procurement function can assist this issue by adopting practices that promote the contracting of minority businesses, particularly those owned by women. A straight forward and simple approach is to use an evaluation preference that favours minority business by a certain percentage (similar to the World Bank‘s Domestic Preference policy).
The MDG calling for the eradication of extreme poverty and hunger set two targets that require the world to:
1. ―Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day‖.
2. ―Halve, between 1990 and 2015, the proportion of people who suffer from hunger‖.
International aid agency procurement has a role to play in the eradication of poverty, by providing capital investment through local and regional sourcing strategies in the respective economies. By ensuring that supplier sourcing takes place in the countries and regions where the outcome of the procurement function is to occur, procurement is able to influence:
- Job creation opportunities
- Increases in income
- Capacity in spend categories
- Advances in economic opportunity within communities
- Contribution toward economic development
The procurement function plays an important role in achieving and ensuring good governance. It is an integral component of a government‘s capacity to provide the required goods and services. A well-functioning procurement system ensures; better value for money, increased efficiency and effectiveness of delivery, reduces the potential for corruption, positive impact on a country‘s
investment climate, non-discriminatory practices, transparency and accountability. Good governance encompasses a functioning regulatory system, as well as institutional set-up, well designed processes and proven capacity. Strategic approaches to procurement, as well as the knowledge transfer of good procurement practice and capacity building within procurement functions toward National government procurement entities assist in the development of good governance practices.