By: Laura Treviño Lozano and Martina Trusgnach

On 1st December 2021, our Lead Researchers Professor Olga Martin-Ortega  and Associate Professor Marta Andhov contributed with their interventions to the public hearing of the European Parliament’s Committee on Internal Market and Consumer Protection in association with the Committee on Environment, Public Health and Food Safety titled  ‘Sustainable public procurement: using the full potential of public buying to achieve goals of the European Green Deal’ 

The European framework on sustainable public procurement has still a long way to go to be fit for purpose and to secure purchases that are economic, environmental, and socially sound.

While most experts agreed that the current framework is not yet fit for purpose, four core points stood out, which, if addressed, can make EU procurement work for sustainability.

First, associate professor Marta Andhov underlined it is necessary to revisit the fundamentals. How we understand the internal market in 2021-2022 must truly encapsulate the ‘social market economy’ introduced with Lisbon Treaty and it needs to be translated to legal terms. While  ‘social market economy has become a widespread term it is not yet reflected in legislation, which makes arguing for sustainability as the core objective of public procurement problematic due to the existing tension with the traditionally understood procurement objective of open competition.

We must interpret the internal market as a sustainable internal market. The continuous perception of sustainability as an “add on” to public procurement gives it a secondary value in comparison with traditionally recognised and interpreted principles of non-discrimination and equal treatment. This leads to procurement authorities risk aversion, as highlighted by Mark Hidson, Deputy Regional Director, Global Director Sustainable Procurement, ICLEI – Local Governments for Sustainability. Currently, the procures worry to face legal action for potentially infringing the rules of the internal market in favour of sustainability. In the words of Morten Qvist Fog, Head of Public Procurement and State Aid Law, Confederation of Danish Industry, representing Business Europe, a clearer mandate is therefore needed for procurement officials. Clarifying the relationship between sustainability and the internal market, as well as highlighting the importance of environmental and human rights protection through procurement would thus allow the more straightforward practice.

Second, the current interpretation of the link to the subject matter is seen as limiting sustainable public procurement in practice as well as creating a sustainable internal market in general. Marta Andhov stressed that the concept of life-cycle costing could replace it, as it provides enough security to equal treatment, non-discrimination and open competition in the internal market. This was already recommended last year in the Proposal for SPP Reform edited by the SAPIENS Network Coordinator Roberto Caranta and Marta Andhov titled Sustainability Through Public Procurement: The Way Forward-Reform proposals to which Olga Martin-Ortega also contributed. The importance of life-cycle costing lies in the fact that it can ensure that environmental impacts are minimised not only at the production stages but also in the use and after use of goods. A clear definition of life cycle cost can enable its inclusion in planning tenders and budget of procurement. As Olga Martin-Ortega pointed out, however, it is crucial to develop life-cycle costing methodologies which also evaluate the social impact of procurement decisions, rather than being limited to impacts on the environment.

Third, recognising the importance of sustainable public procurement is necessary, but not sufficient to ensure its adoption. Currently, most procurement provisions related to sustainability, such as lifecycle costing, bidder exclusions and requiring ecolabels, fair trade or environmental management systems, remain voluntary measures. With their implementation relying on the public buyers’ discretion, they have not been as widely adopted as it was hoped for. To overcome the risk of neglect in favour of other more regulated procurement objectives, sustainable public procurement needs to become the default approach. To achieve such an aim, experts recommended developing sectoral regulation, where minimum green and social criteria are set as mandatory for all public buyers. As it has been stressed a gradual, targeted approach that includes collaboration with relevant markets to assess their maturity is crucial.

As Harri Kalimo, Professor at the Institute for European Studies, Vrije Universiteit Brussels, suggested public buyers should be also required to justify when not including sustainability in their procurement exercises. Likewise, Stéphane Arditi, Director of Policy Integration and Circular Economy at the European Environmental Bureau stressed it should be ensured that sustainability is endorsed as a ‘default choice’ rather than the exception. He also stressed the need to take a sectoral approach to obligations and argued that these should be extended to public services managed and delivered by private actors, such as schools and hospitals, to ensure fair competition between the public and private sector offering the same services.

Fourth, the EU should return to a definition of sustainable public procurement which includes both the environmental and human rights dimensions, in accordance with national, regional and international developments. This was argued by Olga Martin-Ortega and endorsed by other speakers. In fact, when compared to environmental issues, the social aspect of sustainability has so far been neglected or pursued in a less ambitious manner at the EU level. For example, despite its emphasis on both people and the planet and the idea of ‘no person left behind’, the European Green Deal does not detail how social considerations are going to be dealt with. As pointed out by Olga Martin-Ortega this reinforces the idea that green procurement is more important than socially responsible procurement. However, the experts argued that we cannot disassociate the impact of our economic activity on the environment from the human rights of those who produce the goods, provide the services and participate in the works that are procured by public authorities – both at the national level and in global supply chains. Awarding contracts to bidders who take advantage of exploitative conditions in supply chains is, according to Olga Martin-Ortega, anticompetitive. Instead, requiring decent wages and adequate working conditions is essential to ensure a transition to climate-neutral procurement and to align procurement activities to the recently presented Social Economy Action Plan.

In summary, the current EU framework on sustainable public procurement is not yet fit for purpose. Among the issues highlighted by experts are lack of clarity on the relationship between sustainability and core EU objectives and principles, absence of sectoral legislation, and limited focus on the social aspect of sustainability. By addressing these issues the European Union could not only ensure that its progress is in line with recent developments at the national, regional and international level but also lead by example.