Used strategically, public procurement can contribute to the 2030 Agenda for Sustainable Development by supporting a more resource-efficient economy, stimulating innovation, supporting small and medium-sized enterprises (SMEs) and promoting social values. In recent years, citizens’ expectations have risen, with calls for greater accountability in government purchasing decisions, increasing the need to consider broader outcomes and multi-dimensional risks, including in global supply chains. As large buyers, governments have the power to set standards that can shift markets towards more responsible business conduct (RBC) and levelling the playing field for suppliers who strive to implement RBC standards.
Among 27 countries surveyed (26 OECD countries and 1 partner, Brazil), all use enhanced public procurement frameworks to promote at least one of the RBC objectives covered, whether by regulation or strategy, but only a few address all of them. All countries have a framework to support environmental objectives in public procurement, 70% have a framework for human rights, 41% have a framework for gender considerations and 48% for minority issues (Figure 8.3). For example, Chile introduced a programme to promote the participation of companies led by women in the public procurement market, and in Iceland and Switzerland suppliers must have equal pay between men and women to participate in tenders. In Canada, the Policy on Ethical Procurement of Apparel requires suppliers of apparel to the government to certify that they and their first-tier subcontractors comply with local laws and international standards on labour and human rights.
RBC frameworks do not systematically apply to the full supply chain. Only 40% of countries apply integrity considerations to the entire supply chain, 10% do so for objectives related to taking on the long-term unemployed, and 8% for gender considerations (Figure 8.4). Sweden’s legislation on labour law requirements is currently integrating objectives related to human rights and labour rights along the full supply chain, and modern slavery acts in Australia and the United Kindgom address modern slavery and human trafficking in the supply chains of public sector suppliers.
When it comes to sanctions, 15 out of 25 OECD countries (60%) foresee actions against suppliers infringing RBC standards in their supply chains, while 10 countries (40%) require a change in suppliers in the event of violations (see Online Table G.34). Canada has certification frameworks in place to identify breaches of human and labour rights in supply chains. Maintaining this certification is an obligation of the main contractor. In New Zealand, the regulatory framework does not mandate sanctions, but procuring entities have the discretion to apply appropriate sanctions.
Countries are inconsistent in how they monitor and follow up RBC objectives. Only environmental considerations are monitored routinely, with 88% of countries monitoring them at least partly. In contrast, considerations on the inclusion of minorities are only monitored by 32% of countries (see Online Figure G.35).
