Social Aspects in Sustainable Public Procurement. Christopher McCrudden University of Oxford University of Michigan

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1 Social Aspects in Sustainable Public Procurement Christopher McCrudden University of Oxford University of Michigan

2 Origins 19 th Century United States and 10 hour day Great Britain and fair wages France and employment conditions Disabled workers Tackling unemployment ILO Conventions Anti-discrimination and status equality

3 Some current examples Enforcing anti-discrimination laws (Canada, United States, United Kingdom, German states) Set-asides for minority businesses (United States, Malaysia, South Africa, Canada) Employment conditions where services privatized (United Kingdom, German states) Human rights conditions abroad (United States) Posted-workers employment conditions (Germany) Unemployment (Northern Ireland, France, Netherlands)

4 Diversity of technical approaches to linkages Qualification criteria Contractual conditions Award stage Price preference Offer-back Public bodies involved Which contracts? Sub-contracts Institutional mechanisms Enforcement

5 Accounting for developments Considerable variation between countries. Why? Extent of procurement differs Ethical justifications differ Regulatory competition (central vs local; executive vs legislature) Effectiveness assessments vary Absence of sustained empirical assessments and monitoring

6 Globalization meets social linkage Different types of globalization Social globalization encourages linkages directly, e.g. ILO Economic globalization sometimes encourages globalization indirectly, e.g. contracting out But relationship between linkage and procurement reforms beginning in the 1960s is main focus, EC, WTO, NAFTA, bilateral procurement treaties: issue is restrictions, rather than encoragement

7 Functions of procurement reforms at regional and international levels Transparency Integrity Competitive supply Effectiveness Value for money Fair-dealing Responsiveness Informed-decision decision-making Consistency Accountability

8 Tensions between procurement reform and social linkages Possible extra costs? Possible unfairness to particular stakeholders? Greater bureaucratization of procurement process? In practice, easier for larger companies to comply? Why use procurement, rather than other policy instruments?

9 Tensions between procurement reforms and social procurement Partial coverage, only relating to those companies in government procurement market? Encourages political corruption, through increasing discretion? Lack of transparency, especially the larger the number of social criteria involved? Floodgates argument? No stopping point? Protectionist in effect, if not in intention? Evasion of democratic and constitutional controls? Why should public sector contracting differ from private sector contracting?

10 National adaptation and co- evolution? Considerable variation in responses: Some countries abandon social linkages, even if temporarily (e.g. United Kingdom) Some countries opt out of international agreements in order to preserve social linkages (e.g. Malaysia) Some countries adapt their social linkages somewhat, whilst retaining them (e.g. German states) Some countries negotiate country-specific exceptions (e.g. Canada) Some countries have yet to decide what to do (South Africa?)

11 European Community adaptation Crucial role played by the European Court of Justice in set of crucial cases: Beentjes, Nord-Pas Pas-de-Calais, Concordia Bus Communication by the European Commission Package of legislative reform measures, heavily negotiated on the social issues by Council, Commission, Parliament

12 Adaptation at the WTO? Massachusetts case relating to Burma/Myanmar - unresolved Singapore issue in Doha Round: Transparency in public procurement, and problems in Cancun - unresolved Will the issue be tackled in dispute settlement or in negotiations, or elsewhere?

13 Other regional/international developments Free Trade Agreement of the Americas, Procurement chapter Bilateral trade agreements involving procurement, e.g. South Africa/US/EFTA negotiations

14 Some questions How similar are the issues that arise in social and environmental linkages? What role do social issues have in sustainable procurement? Are social issues necessarily in conflict with procurement reform? How far do social linkages result in a North-South split? Is it possible to increase the range of social linkages, AND reduce corruption? To the extent that social linkages are included in procurement, can this be done without detriment to the social issues?