In a field where the lowest price often is regarded as the best offer, new regulations which open up for considering the quality of the product, and the best value for money, also open up for taking other considerations than price. The Fairtrade-label is used by many in an effort to ensure just working conditions for workers in developing countries, but even that label may be problematic.
How to handle social and ethical clauses was one of the topics of the Procurement Beyond Price Conference held at the University of Copenhagen in May. Even with the relatively new EU Procurement Directives making it easier to promote sustainable choices and demands in procurement, challenges remain.
Steen Treumer from Copenhagen University has done research on the implementation of Fair Trade in Danish municipalities. He presented a case from the Danish municipality Aarhus, which in 2010 became a Fair Trade City. The project led to a complaint from a citizen who claimed that the municipality had not acted in accordance with the law since the requirements concerning fair trade fell outside the scope of legal activities. The administrative court concluded that the fair trade activities were illegal.
This sparked a debate about local self-government in Denmark. The Ministry for economic affairs and the interior made a statement saying that the fair trade activity was legal, but the municipality did not apply for status as a Fair Trade City again. A difficult trade-off between higher product prices and welfare services for the citizen may have been one of the reasons, Treumer speculated.
Treumer argues that the largest obstacle to ensuring social and ethical demands in the procurement process is legal uncertainty.
-Central authorities are uncertain about the task and make demands. They also fear legal challenges. There is a lack of will or resources for paying the increased price that follow with more ethical products. But procurement authorities have a range of tools. They can for example demand labels as stipulated in the EU Procurement Directive Article 43. They can also take the more unpaved road and weight labels in the award criteria, Treumer says.
Treumer’s best advice for public officials who do want to make social and ethical demands, is to look for relevant guidance.
Abby Semple, a procurement practitioner and consultant as well as the author of the book A Practical Guide to Public Procurement, is also of the opinion that the main obstacle to promoting social and ethical clauses in procurement is not only about the law.
-The real challenge is capacity and the priorities of the purchasing authorities, Semple says.
Nevertheless, she sees great potential in the procurement system.
-Where the largest potential lies depends on what you are buying and which country you are in. Corruption might be a bigger problem in some countries than others, and there the biggest potential will be to handle corruption. What constitutes good, legal ethical and social requirements must be decided by a case-by-case basis, Semple says.
-I would recommend a proportionality approach, rather than one size fits all. If you try to make standards for socially responsible procurement for all of Europe, you risk lengthy procurement documents. The tenders will not take the requirements seriously, because they only tick off a lot of boxes on issues which might not even be relevant for the product bought, Semple says.
Buying legal services within England does not raise the same issues as for example buying clothes which originate in a developing country. Therefore, Semple would like to see a system where there is a duty to consider social and ethical issues, and when appropriate, include ethical and social clauses in the procurement documents rather than one that seeks to encompass everything.
The Procurement Beyond Price Conference was held at the University of Copenhagen in May.
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