SOCIO-ENVIRONMENTAL PRINCIPLES IN PUBLIC BIDS: BEYOND COMPANIES’ SELECTION CRITERIA

Awarding additional points to bidding companies for the social-environmental contents of their proposals is not the only option to reinforce the sustainability of public investment

Author: Luis Sánchez Torrente

The inclusion of social and environmental principles in public procurement and purchases processes is a well consolidated trend in several Spanish-speaking countries, as well as in other regions of the world, although still with different levels of development and scope. More and more often, companies bidding for public investment projects or supply contracts have to face new responsibilities and requirements, placing the private sector as a privileged partner in the responsible implementation of public policies or investment projects.

Over the past years, one of the most clearly consolidated modalities of these requirements is the introduction of social and environmental principles in the selection criteria of bidding companies. In doing so, it is now increasingly common to receive additional punctuation in a competitive process thanks to the inclusion of additional environmental certifications, for having a certain percentage of disabled people in the staff or for prioritizing the use of products and raw materials from the contracting country.

However, possibilities to provide a public investment project or a supply construct with higher rates of socio-environmental responsibilities are not limited to the own competitive process, since there is a wide variety of elements in the procurement process that can contribute to this end. A study recently published by the AECID[1] and available online, analyzes a wide sample of public procurement documentation in seven countries of Latin America with particular attention to social and environmental principles introduced into public infrastructure projects. The study not only provides a global vision of the usual practices in sustainable management in the region, but also brings a wide menu of regulatory possibilities that can be used as a source of mutual learning in the progress towards more responsible and sustainable purchase systems.

There is a wide variety of elements in the procurement process that can contribute to provide a public investment project with higher rates of socio-environmental responsibilities.

That being said, what other regulatory formulations and in which aspects and phases of the procurement process can we introduce social and environmental aspects? Among the more than 600 clauses identified in the study, the introduction of direct liabilities and prohibitions for the contractor in the technical specifications of the project, is undoubtedly the most common way to introduce this kind of elements. The range of possibilities of this kind of clauses is almost unlimited, although the most common aspects refer to the work safety of the staff, special requirements in forestry and waste management, limits of emissions and noise, actions to protect archaeological remains, obligation to realize public consultations, etc. A particularly relevant modality of these principles is the requirement of including within the human team of the project the collaboration of specialists in social and environmental issues, and profiles such as sociologists, archaeologists, specialists in work safety, biologists, environmentalists, etc. In any case, these are obligations and prohibitions already detailed in the technical specifications which, once the project is awarded, become part of the contractual company’s legal obligations.

We also often find principles that explicitly refer to articles or country legal provisions directly applying to the contracted companies, independently from their nationality. This kind of clauses, even if they are simple referrals to legal obligations, suppose an important reinforcement of social and environmental responsibility, since they come to clarify parts of the country´s legal system not always known and respected by the bidding companies. Referrals to general environmental protection laws are the most usual, although we can also find mentions to legislations related to consultation with indigenous people, labour protection, social welfare, expropriation norms, and access for disabled people, etc.

Another way of introducing this kind of principles is by using project design guidelines that, without being specific enforceable obligations, may contribute to its sustainability by putting limits to certain interventions and prioritizing  quality alternatives. Thus, we can find guidelines such as the prioritization of elements that are less aggressive with the landscape, the elimination of architectonic barriers for disabled people, efficient energy options, use of sustainable materials, etc.

Sometimes, and depending on the investment’s scale, the introduction of socio-environmental principles is insufficient to guarantee the sustainable management of the project, in which case the preparation of an integrated socio-environmental plan may turn out to be more effective. These are extensive separate documents that usually collect all the obligations of the awarded company with respect to the social impact of the project, the environmental management, the labour guarantees for the workers, the anticorruption norms or the protection of archaeological remains. Regarding the preparation of this kind of programs, it is common to find documents extensively elaborated and standardized according to the type of project, although in some cases the contractor itself is in charge of developing the document under general guidelines collected in the technical specifications. In any case, it is an increasingly extended practice that will probably tend to become a default requirement in public infrastructure projects.

Finally, the enforcement of sanctions and the requirement of additional guarantees are other examples of regulatory formulations also presents in procurement documents, although with less frequency. Regarding the former category, we can find penalties or even the suspension of the contract in case of environmental negligence or for serious violations of labour rights and working conditions, whereas for the latter we often see the requirement of additional insurances for environmental risks and/or damages to third parties, or the extension of responsibilities of subcontracting companies

In sum, we see that the consolidation of sustainable practices in the field of public procurement is being performed not only through incentives or rewards schemes for companies bidding in a competitive process, but there is also a wide menu of regulatory options for the achievement of this end. In this sense, having an available menu of clauses and specific examples implemented by several administrations in different countries, as compiled in the recent study by the AECID, is undoubtedly a strong tool for the mutual learning and the identification of opportunities.

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[1] Spanish Agency for International Development Cooperation