The Malta Independent 19 May 2025, Monday
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Harvesting a rich yield from Green Public Procurement

George M Mangion Wednesday, 18 February 2015, 10:00 Last update: about 11 years ago

One may sympathise with governments that  tend to move slowly when implementing EU directives and in particular, those relating to the introduction of green public procurement. In hindsight, it was in 2011 when the PN administration, with much fanfare and aplomb, announced its intention to wholeheartedly embrace GPP.

Then, it waxed lyrical about resource scarcity and the high cost of oil, which it blamed as the cause of chronic annual deficits. The main culprit to a low competitive index was rising costs of energy and raw materials.

Since then, one hopes that a lesson has been learned to tighten on procurement and that government is motivated to find new ways of producing more or the same, with less resources. It has been stated so many times since the start of a global recession in 2007/8, that using  transparent procurement rules and maintaining sustainable supply chains are increasingly important to ensure a level playing field and guarantee transparency.

The EU is advising member states that an unbridled consumption of resources is causing environmental damage at a rate that cannot be sustained. If the world as a whole followed the EU's current pattern of consumption, global resource use could quadruple within 20 years. Should this trend continue unabated, official reports show rising environmental and health problems and this largesse could threaten economic growth due to rapidly decreasing natural resources and the cost of addressing this.

It may come as a surprise for readers to know that at an EU level, public authorities spend 16 per cent of GDP - almost €2,000 billion - on goods and services each year. Much of this is spent in sectors with high environmental impacts, such as transport, buildings and furnishings. Once faithfully followed by government, the private sector and the general public, GPP mitigates excessive consumption habits.

The Commission, in 2004,  produced a handbook on environmental public procurement, which explained how best to integrate environmental considerations into public procurement directives. According to European Union's rules, public sector procurement must follow transparent open procedures ensuring fair conditions of competition for suppliers. The opening up of public procurement within the Single  Market has increased cross-border competition and improved prices paid by public authorities.

In the current economic context, public procurement is a key element to stimulate innovation and economic development and an important instrument for the maintenance of a Single Market Act for a highly competitive social market economy.

With the context of such a noble aim, a revised EU study in 2006 revealed how only seven states were practicing GPP to a significant extent - all other 20 Member states were lagging a long way behind. Here in Malta, the application of GPP criteria was delayed within the public sector, as it was introduced on a soft landing during 2012. The list of products included cleaning products and services, transport, furniture, food and catering services, electricity, construction, mobile phones, combined heat and power, thermal insulation, wall panels, hard floor coverings, windows, glazed doors and skylights, street lighting and traffic signals, and road construction and traffic signs.

Introducing GPP measures on a voluntary basis was certainly like setting the cat among the pigeons - meaning it resulted in a haphazard approach.

For readers who may not be familiar with the concept of Green procurement, this simply means that the State, as a formidable buyer, can and must play a major role in leading by example to set transparent procurement requirements, whereby it encourages a pivotal change towards sustainable consumption and production patterns.

Thus, it was a welcome move by the Malta Intelligent Energy Management Agency ( MIEMA ) to wake up and smell the coffee - by issuing a call for tenders last year, principally to recruit an expert to support GPP strategies on a pilot scheme helping two government beneficiaries.

The lucky bidder had to devise optimal strategies and provide a scientific methodology for carrying out a comprehensive research and analysis of the modalities of procurement of goods and services. It goes without saying that the expert had to outline reference criteria for implementing Eco-innovative products, including energy related products. He/she also had to help in the selection of suppliers/contractors for such national procurement, considering that the tender is a prescriptive one asking for the expert to have other support staff. Such assistance will serve as a link to technical/scientific managers and internal staff employed by MIEMA.

This tall order includes the deliverance of scientific studies to assist beneficiaries to introduce ten environmental criteria in green public procurement. Upon reflection, this initiative by MEIMA is a drop in the ocean, knowing that it is supported by the IEEE programme, forming part of the Italia-Malta and co-financed by ERDF to the tune of 85 per cent, so one expects a higher allocation to set the wheels in motion.

It is  unfortunate that since 2011, GPP has not yet been widely implemented, even though the PN administration showed its intention to gradually introduce GPP directives. Readers may ask, ''what are the barriers to the successful introduction of the GPP?'' The official answer is a lack of policy and strategic vision, fragmentation of institutional responsibilities, poor awareness of the benefits of the GPP, and a lack of technical capacity at the level of public procurers.

In 2012, the PN administration issued an ambitious National Action Plan to rectify such deficiencies guided by the vision to promote sustainable public purchasing practices, whilst being careful not to create market distortions. The Office of the Prime Minister carries the overall responsibility for coordinating GPP rules, while as can be expected, it is the Department of Contracts that is responsible for the implementation of the pertinent procedures.

In this regard, the Statute says that as from January 2012, all calls for tenders, including Departmental tenders and those published by the Department of Contracts, had to be fully compliant with the directive. Regrettably, although this directive is now well known to all procurement sections, slow progress has been registered so far.

Typically, one may ask, ''would it have made a difference to the controversial procurement of a prototype BWSC plant burning heavy fuel oil should GPP have been in place in 2011?'' Other obvious examples come to mind, and one is curious to know how many tenders issued since 2012 were fully compliant with the GPP template.

In hindsight, one agrees that GPP had a dubious start to cover such a long and arduous journey - poorly funded by MEIMA. Cynics may ask why it is that with so many millions spent on high-heeled consultancies, more resources could not be allocated to find a speedy solution in reforming procurement methodology.

Certainly it  is with a feeling of Déjà Vu when we contemplate why green Pubic Procurement found no open arms from bureaucrats to be implemented in certain government agencies once fully monitored by the Director General for Public contracts.

In conclusion, the road to achieving full compliance to GPP procurement rules is paved with good intentions but facts show that the achievement of such a noble cause is still elusive. Malta is an exporter country without natural resources (except for manpower, sun and sea)  and consequently has to import  a larger quantity of raw materials, industrial supplies and consumer goods. Importing such a vast array of goods calls for better GPP selectivity - thus acquiring maximum value.

Green Public Procurement policy does help in strengthening SMEs' participation in public procurement and supporting achievement of other policy objectives at EU level: innovation, green growth, social inclusion. According to European Union rules, public sector procurement must follow transparent, open procedures, ensuring fair conditions of competition for suppliers.

The successful opening-up of Green public procurement rules by compliant EU countries has helped to increase cross-border competition and improved the prices paid by their public authorities at a time when economic growth is sluggish. All this is further justification to wish that in the shortest time possible, the Director of Contracts  continues  to apply GPP rules across the board - the country deserves nothing less.

 

George M.Mangion

 

[email protected]

 

The writer is a partner in PKF an audit and a business adviser 

 

 

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