Strengthening Sustainable Public Procurement
in Norway

The practice of procurement has an enormous impact on a country’s economic performance. As per recent estimates, it is responsible for more than 12 percent of gross domestic product (GDP) in OECD countries and 30 percent of GDP in many developing countries¹. The scale of such economic activity has severe consequences which can potentially hinder future socio-economic growth. Concerns relating to the harmful environmental and social impacts has led to adoption of sustainability in procurement process by several countries. According to UNEP, Sustainable Procurement (SP) is defined as a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organisation, but also to society and the economy, whilst minimising damage to the environment. The foundation of SP is built on the three pillars of sustainable development i.e. economy, society and environment, which also serve as the impact indicators of its success.

The last decade has seen increasing attention towards Sustainable Public Procurement (SPP) across the globe. To the extent that more than 40 countries² now have public institutions that have adopted SPP policy or policy measures. Through SPP, public and private organisations in these countries aim to leverage their procurement process to drive sustainability across the entire supply chain of a product or a service, thereby generating greater business value.

Norway has been amongst the early movers towards adoption of sustainability in its public procurement practices, with considerable success. This has been made possible through passing of several legislations and other initiatives by the government over the years. In 1990, what would eventually be a precursor to full-fledged SPP, Eco-labeling was launched in the country³ throughout the establishment of the White Swan. In 1999, the country introduced provisions for tackling environmental issues in public procurement through a system popularly known as Green Public Procurement (GPP). Later on, the year 2008 saw integration of other aspects of sustainability (viz. salaries, decent working conditions etc.) in public procurement. Since then, SPP has gradually become the mainstay of the country’s sustainable development strategy.

In 2008, annual public procurement in Norway amounted to approximately $48 billion (423 billion NOK)⁴, 12% of its entire GDP⁵, generating huge amounts of green house gases and resulting in consumption of critical natural resources. The government soon realised that mitigating these impacts requires a dedicated effort towards further strengthening the existing SPP system. One of the effective means to achieve that was through promotion of innovative and sustainable solutions available in the market. This will not only enable more responsible use of the country’s natural resources but also engender a stronger and more competitive private sector. Successful implementation of such an initiative, however, necessitated provision of training, capacity building and other support services to consumers and suppliers during the early stages in the procurement cycle.

To that end, in 2010, the government launched ‘The National Programme for Supplier Development project’ which is managed by the Confederation of Norwegian Enterprise (NHO), the Norwegian Association of Local and Regional Authorities (KS), the Agency for Public Management and eGovernment (Difi) and a consortium of 19 other agencies. The principal mandate of the programme was to promote the procurement of innovative products and services in state and municipal procurement processes. This was facilitated through implementation of several pilot projects and prototypes involving low-carbon and green public procurement.

Four years since its launch, in 2014, the programme was subjected to a formal appraisal by an independent agency. The assessment revealed that more than 40 pilot projects and prototypes had proved advantageous to both consumers and suppliers. In addition, what emerged as a primary social benefit, was the formulation of a potent mechanism of innovation which harnessed the procurement process to drive implementation of sustainable and innovative solutions across the country. ■
 

Endnotes:
1. https://wedocs.unep.org/bitstream/handle/20.500.11822/20919/GlobalReview_Sust_Procurement.pdf?sequence=1&isAllowed=y
2. https://globalecolabelling.net/assets/Documents/unep-spp-report.pdf
3. Book- Voluntary Agreements and Environmental Labelling in the Nordic Countries by Bjørn Bauer and Rikke Fischer-Bogason published in 2011
4. https://www.anskaffelser.no/sites/anskaffelser2/ files/maps_norway.pdf
5. https://countryeconomy.com/gdp/norway? year=2007

Kranav Sharma
 ksharma1@devalt.org