Green Public Procurement and India

By

Shantanu RoyGreen Purchasing Network Indiaan initiative of Environmental Management Centre LLPshantanu.roy@emcentre.com

Conference: Strategies to Promote sustainable Consumption

23rd and 24th April 2012, New Delhi

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Do we start or Restart?

Public Procurement – Indian Legislative Framework

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• PP is Well regulated– Indian Contracts Act, 1872– Sale of Goods Act, 1930 – General Financial Rules, 1963 – Delegation of Financial Power Rules, 1978– Directorate General of Supplies &

Disposals (DGS&D) Manual on Procurement

– Central Vigilance Commission (CVC) Guidelines

• Responsibilities are assigned• Financial powers defined• Bulk procurements done through

specialized agencies like Directorate General of Supplies & Disposal (DGS&D)

• Decentralized Approaches– Each purchasing organization has

developed documented policy guidelines regarding purchase

– The State governments/GOI Public Sector Units (“CPSU”) have their own general financial rules based on the broad principlesoutlined in the GFRs

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Public Procurement: Selection and award criteria• Adequate information and

announcement made available;

• Non-discriminatory practices to provide equality of opportunity, transparency in bidding, as well as in the evaluation process;

• Accountability; and

• Non-restrictive bidding conditions to unlock the particular market

• Generally governed by the applicable financial rules

• The lowest evaluated tender is the primary award criterion

• National defence and security considerations are overriding factors

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Barriers to GPP

• No regulatory push to promote Green Purchasing

• E&S disjoint from GP– Procurement staff not fully aware of environmental issues and

environmental staff not fully integrated into the purchasing process

• Procurement process often complex, involving different geographic regions and business units, each with own special characteristics

• Difficult to evaluate what is “greener” than something else

• Procurement department “cost first” mindset

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Green Public Procurement: Key Challenges

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A quick case on GPP in Japan

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Green Purchasing Initiatives in Japan

• Green Purchasing Law– ‘Law Concerning the Promotion of Eco-Friendly Goods and Services by the State

and Other Entities’ enacted in 2000 and enforced since 2001

• All state ministries & agencies must draw up annual green procurement policy, implement plan and report results

– All state institutions obliged to purchase designated procurement items

• All central government ministries, 47 prefecture governments, 12 designated cities and 68% of local governments and cities undertook green purchasing

• Collectively 95% of purchased products in designated categories were green. GPNI @ EMC LLP 7

Green Purchasing Initiatives in Japan

• Eco Mark Programme– ISO Type I environmental label– Established by Japan Environment Association (JEA) and

widely used since 1989– Currently over 4,400 certified products in 48 categories– Criteria corresponds to those of Green Purchasing Law in many product

categories. Thus, they’re often used as guides for GPP

• Green Purchasing Network (GPN)– Founded in 1996 by governments, businesses and associations– Currently has 2,920 members (2,381 companies, 268 governments, 300 NGOs)– Established 15 purchasing guidelines, green products database (13,000 products

registered), green hotels & inns database, award system, training/seminars, etc.

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So where do we (Re)start?Green Public Procurement

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• Define the key tenets of GPP in Indian context (Principles)

• Promulgate GPP Policies

• Develop guidelines

• Use of supporting tools

• …

GPP Principles: the US-EPA guiding principles on EPP

• Guiding Principle 1: Environment + Price + Performance = Environmentally preferable purchasing (EPP)

• Environmental consideration should become part of normal purchasing practice, consistent with such traditional factors as product safety, price, performance, and availability.

• Guiding Principle 2: Pollution prevention• A key reason for EPP is to protect the environment by reducing waste and pollution at

the source with the resulting benefit of reduced overall cost to the government and the public. Thus, consideration of environmental preferability should begin early in the acquisition process and be rooted in the ethic of pollution prevention.

• Guiding Principle 3: Life-cycle perspective and multiple attributes (e.g. increased energy efficiency, reduced toxicity)

• Agencies are required to consider the life-cycle perspective and the multiple environmental attributes in applying the principle.

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GPP Principles: the US-EPA guiding principles on EPP

• Guiding Principle 4: Comparison of environmental impacts• In comparing environmental impacts, agencies should consider the reversibility and

geographic scale of the environmental impacts, the degree of difference among competing products and services, and the overriding importance of protecting human health.

• Guiding Principle 5: Environmental performance information• To determine if a product or service is environmentally sound, agencies must have

comprehensive, accurate, and meaningful information about the environmental performance of products and services. Agencies are encouraged to seek, and product and service providers are encourage to provide, life-cycle-based information about the environmental performance of products and services.

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Status Assessment: the Zeroeth Step!

Policy Review

Mapping of current policies and strategies

that has relevance to the

promotion of Sustainable

Products

Gap analysis

- with an eye to create a conducive GPP policy framework - identifying options for improving policies

Mainstreaming GPP in national policy and strategy frameworks

Identification of specific policy

items that facilitate the

promotion of GPP

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How much ‘Green’ is ‘Green’?

• Products and services– That are environmentally friendly and socially non-

discriminating

• Environmentally friendly relative to those available– Have lesser / reduced impact on human health and

environment than other product that perform similar function

• conservation of energy and water• minimized generation of waste and releases of

pollutants or emissions• be recyclable or themselves be made from recycled

materials; and • use energy from renewable sources

• Behind every product there’s a ‘past’ and a ‘future’– The life cycle

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Mapping of current Policies and strategies that has relevance to the promotion of GPP

• Leveraging on the Existing Procurement Policies for Promoting GPP

– Encouraging khadi products– Specialized system of reservations for handloom

sectors – Products from Small Scale Industries are preferred

in some notified items– Protection is provided to the domestic industry in

recognition of high costs, like input costs, interest rates, etc.

• Many of the International Conventions / Agreements Ratified by India have the tenets of GP

– UNFCCC– Kyoto Protocol, Basel Convention, CITES, Montreal protocol, MARPOL, ILO

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Mapping of Driving forces in augmenting the agenda of GPP

• Pollution Prevention / Cleaner Production Focus

– Policy framework has been developed to complement the legislative provisions

– National Conservation strategy and Policy Statement on Environment

– The Government has initiated efforts in identifying Green Product Manufacturers

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Mapping of Driving forces in augmenting the agenda of GPP

• National Action Plan on Climate Change (NAPCC) has been notified

– Stress on demand-side management in the use of energy and natural resources in consumption sectors (Energy Efficiency)

– Emission reduction in the production sectors contingent on transfer of new technology and finance (Cleaner Technology)

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Mapping of Driving forces in augmenting the agenda of GPP

• Energy Conservation – Energy performance standards

and labelling for equipment and appliances already is in place

– Through the notification of standards of energy efficiency empowering Bureau of Energy Efficiency (BEE)

– BEE is empowered to prohibit manufacture or sale or purchase or import of specified equipment or appliance unless such equipment or appliance conforms to energy consumption standards

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GPP supporting Tools

• Synergy between GPP and Ecomark has to be established– Interanationally, it has been observed that GPP and eco-labeling work

hand-in-hand and complement each other in filling the information gap

• Adoption of Ecomark criteria in the tendering language and technical specifications for facilitating public procurement

– Direct identification of ecomarked products as green products

• GPP and eco-labeling programmes often look at each other in deciding future product categories to work with

• GPP may significantly increase consumer awareness of eco-labeling programme

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• Reviving the Ecomark

GPP supporting Tools

• Proposed Restructuring under a Two-Tiered Structure– Disengaging the Ecomark from Extensive Quality-Specific Criteria

– The First Tier – Five Core Criteria

– The Second Tier – Product-Specific Criteria

• Giving a carbon orientation to the Ecomark

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*A Carbon-Oriented Ecomark Scheme for India; March 2010 by GPNI – under a study funded by Japan Fund for Global Environment

Compliance, Exclusions/Preferences, Leaness & Competitiveness, Continual Improvement, Responsible Disclosure

• Reviving the Ecomark with Carbon Orientation*

GPP supporting Tools• Engaging with the Supply Chain

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Internal preparedness of Purchasing organisation

Leadership building

Procurement staff capacity building

Communication of Requirements to Suppliers

Preparedness level of suppliers

Regulatory compliance status

Technology levels assessment

Use of Environmental Management System

Local or international produce?

Availability of technological interventions

Knowledge Transfer to Suppliers

Technical assistance regarding ways to improve environmental performance

Supplier training

Special attention to targeted suppliers

GPP supporting Tools

Government

CII, ASSOCHAM,

FICCI

Sector-specific associations

Research institutions

Academia

Non-governmental environmental organizations

Consumer organizations

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Cementing engagement across various stakeholders

• Evolving usable GPP criteria

• Understand market readiness to deliver Green Products

• Ensuring availability of Green Products

• Impactful dissemination of green purchasing information

Conclusions

• Public Procurement Governance exists with high level of implementation & transparency

• Leveraging existing allied programs and planned initiatives of the GoI to promote GPP could be the best step to ensure success.

• A National GPP Policies & Principles should guide the procurement agencies.

• Ecomark needs to be revived to promote GPP

• Engaging with Stake holders key to GPP success

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Thank you for your attention!!!

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Green Purchasing Network India (GPNI)c/o Environmental Management Centre

C-29, Royal Industries Estate, Naigaon X Road, Wadala,

Mumbai 400031, India

Tel/Fax: 91 22 24147481/24108255

Email: info@gpnindia.org / shantanu.roy@emcentre.com

Website: http://www.gpnindia.org/