Transcript Procurement in Public Sector

Professional Development Seminar
AGENDA
Introduction
Mr Stephen Howson
Contract Services
Presentation One – Policies Across Government
Mr Greg Rowberry – Sustainability and Climate Change Division,
Department of the Premier and Cabinet
Mr Ian Harvey – Zero Waste SA
Presentation Two – A Government Case Study
Mr Andrew Richmond – Department for Families and Communities
Presentation Three – Supplier’s Perspective
Mr Roger Carthew – EcoIntegrity
Panel
Questions
Networking and Light Refreshments
Sustainable Procurement
– Government Policy
Greg Rowberry
Sustainability and Climate Change Division
DPC
Objective of this session
• Use examples to:
– Explore the role of procurement in
influencing business in responding to
government objectives
– Consider the implications of possible
future trends for your agency
Our Ecological Footprint
Global hectares per capita (Gha/cap)
Area of South Australia's and Australia's Ecological Footprint
9.0
8.0
The OECD's average
ecological footprint is 5.2
7.0
6.0
5.0
The w orld's average
ecological footprint is 2.2
4.0
3.0
2.0
1.0
0.0
Food
Housing
Mobility
Total Footprint, South Australia (Gha/cap)
Goods
Services
Total footprint
(Gha/cap)
Total Footprint, Australia (Gha/cap)
The Role of Business in Society
• “The fundamental purpose of business is
to provide continually improving goods and
services for increasing numbers of people
at prices that they can afford.”
• WBCSD: A Manifesto for Tomorrow's
Global Business
• “Business Cannot Succeed
in a Society that Fails”
The Role of Business in Society
• Meet customers’ needs for goods and services.
• Innovate to create products that are more efficient
and that contribute to human progress.
• Create value for shareholders
• Create jobs, pay wages and benefits.
• Fund public services and infrastructure.
• Contribute to healthy economies
– ‘The products are the purpose -
the profits are the prize.’
Sustainable Consumption?
• More isn’t always better
Sustainable Consumption?
• Less isn’t always better
Global Consumption
•
If the world is represented by 100
people, how many of them:
•
50
live on less than $2 per day
20
suffer from malnutrition
30 lack access to basic sanitation
10 have a car
40 have a mobile phone
41 People own 85% of the wealth
85
30
85
50
20
40
One World (today)
• Globalization
– World trade has risen
over 500 fold in value
in the past century
• Business power
– In Washington DC
lobbyists outnumber
legislators by
30 to 1
• Connectivity
– CNN is now available
to over 1 billion people
in 212 countries
• Integration
of cultures?
– 90% of internet
traffic is in English
Two Worlds (today)
• Inequality
– The top 10 percent
own 85% of global
household wealth, the
bottom 50% own 1%
• Population growth
– By 2050 there will be
3 billion more people
on the planet, mainly
born in developing
countries
• Poverty
– Half the world’s
population lives on
less than $2 per day
• Urbanization
– By 2050 two thirds
of the world’s people
will live in cities
Three Worlds (today)
• Scarcity of
resources
–By 2025 half
the world
will be living in
waterstressed areas
• Technology
Development
–Will it focus on
creating desires
or meeting needs?
–Of the 1223 new drugs
marketed between 1975
and 1996, only 13 were
developed to treat tropical
diseases
Three Worlds (today)
Increasing Demand
•If everyone in the world were to consume natural
resources and generate carbon dioxide at the rate that
people in industrialized economies do…
Constructing the scenarios
• Trends / pre-determined
- Globalization
- Connectivity
- Integration of cultures
- Business power
- Inequality
- Poverty
- Urbanization
- Population growth
- Scarcity of resources
-Technological development
Key drivers / uncertainties
- Consumer behaviour
- Business regulation
- Market Instruments
Will consumers be driven by…
• Concerns about the social and environmental
effects of their choices?
Will consumers be driven by…
• Materialistic desires?
The Business of Sustainable Consumption
National &
Regional
Protectionism
REGULATION
CONSUMER VALUES
Materialism
Environmental, social & economic
impact of products and services
International
Regulation &
Cooperation
Four Scenarios Snapshots
National &
Regional
Protectionism
REGULATION
CONSUMER VALUES
Materialism
Environmental, social & economic
impact of products and services
International
Regulation &
Cooperation
Bubble
• WTO and UN failure
• Intensified climate change
• Government and consumers focus on own
protection, turn away from global solutions
• Business focus on meeting demands of
middle-class consumers
Bubble life
• Growing gap between rich and poor… between
those who can insulate themselves from climate
chaos and those who can’t
Asian Economic
Area formed
WTO
fractures
UN beset by scandal
and disbanded
2050
2000
Shanghai
devastated by flood
Bangladesh
declares state of
climate emergency
China splits
into 8 states
Telescope
• International regulation secures
business transparency.
• Investors base their decisions on
long-term value creation.
• Consumers demand that businesses
be more accountable and provide
information on social and environmental
impacts.
Telescope life
• Economic growth aligned to
global priorities for social and
environmental well being.
• But those whose concerns
do not fit this framework are
marginalized.
SRI overtake non-SRI
funds by value in US
2030 Global Agreement on
economic cooperation and
transparency
2050
2000
Peace in the middle east: Istanbul
peace accord signed, Israel's wall
comes down
GDP replaces by gross
national welfare as
international headline
indicator
Overview
Consumer
expectations of
business
Middle class
minority
Providing
comfort and
security
A new generation
of conscientious
consumers
Expanding
Opportunity
Bubble
Moon
Loop
Telescope
Doing
no harm
New mass
consumers
in developing
countries
Innovation to
solve global
problems
Future
generations
Which
consumers are
driving business
strategy?
What does all this have to do with me?
• How can procurement policy influence
business decisions to get the outcomes
that we/government want?
Green Office Procurement
 2005 HR Sustainable Cities Inquiry
 Report on Green Office Procurement
 71 Australian Government agencies
 95% of AG contracts (including Defence)
Findings
“Performance….in meeting the
government’s expectations on office
building energy efficiencies are
commendable, but performance in motor
vehicle emissions, reducing recycling,
office wastes and conserving water has
been pretty variable and, in most cases,
pretty poor”
Australian Government Commitment
To lead by:
 Buying goods and services that seek to
minimise possible environmental impact
 Working with industry to encourage
continuous reduction in …. environmental
impact of goods/services
Assessing the environmental impact of
goods and services against informed and
internationally recognised standards
16 Recommendations
1. Internal policies
2. Whole of lifecycle
3. EMS
4. Targets
5. Benchmarking and group purchasing
6. E-waste & energy star ratings
7. Fleet energy performance
8. Greenhouse gas emissions
16 Recommendations (cont.)
9. Water conservation
10. WLA for buildings & offices
11. Waste reduction – actions + contracts
12. Energy reporting
13. Energy management
14. Energy ratings for tenancies
15. Join Greenhouse Challenge+ Program
16. Best practice guidance
Procurement & Waste:
The Life Cycle of Materials
Zero Waste SA
State Government Waste
Targets
South Australia’s Strategic Plan:
reduce waste to landfill By 25% by 2014
South Australia’s Waste Strategy:
30% increase in recovery of
commercial & industrial materials by
2010
South Australia Strategic Plan Objective 3: Attaining Sustainability –
Targets
www.saplan.org.au/plan_targets_obj3.php
South Australia’s Waste Strategy
www.zerowaste.sa.gov.au/waste_strategy.php
What is Zero Waste?
Waste Management Hierarchy
Image area
Most Preferable
REDUCE: producing/purchasing less
materials which will become waste
Avoid
Reduce
Reuse
Recycle
Recover
Treatment
Disposal
Least Preferable
AVOID: not producing/purchasing
materials which will become waste
REUSE: using materials more than
once before recycling or disposing of
them
RECYCLE: remanufacturing used
materials into new
products/resources
RECOVER: capturing otherwise
wasted resources (eg. recovering &
using heat from electricity
generation processes
TREATMENT: treat materials to
minimise harmful effects on land,
water or air
DISPOSAL: release
materials/pollutants to land, water
or air
Less Stuff = Less Energy (C02)
AVOID
USE LESS
USE LESS
USE LESS
DISPOSE
USE LESS
USELESS
Waste = Materials + Energy (C02)
The story of a can!
The secret life of products
Climate Change & waste
 Evidence is now irrefutable
 Witnessing daily events of increased intensity and
magnitude
 Australia is not immune
 Waste reduction and recycling have an exceptionally
important role to play!
Procurement & Waste
• procurement is first point of ‘materials
metabolism’ - what goes in, must come
out
• fate of material at the end of its life cycle
is determined at the beginning of its life –
the design stage
• procurement specifications can send
market signals to encourage processes
and designs that are efficient, enables
disassembly and reuse/recycling, and
which eliminates or reduces use of
hazardous substances
Case Study: Procurement & E-Waste
E-Waste (electrical and electronic
waste) high on list of priority waste
streams in every OECD jurisdiction,
including South Australia, due to:
• volume of material generated
• toxicity of many of the components
including lead, mercury and
cadmium
Case Study: Procurement & E-Waste
Volume of Material Generated
In 2007, it is estimated that:
2.2 million new PCs will be sold in Australia
1.6 million computers will be sent to landfill
1.8 million computers will be stored...
...in addition to the 5.3 million computers
already in storage
Environment Australia – Computer Waste Model
www.environment.gov.au/settlements/publications/waste/electricals/comp
uter-report/pubs/appendixb.pdf
Toxicity of components
• Lead – CRT screen (1.8 – 3.6kgs);
solder
• Barium – CRT screen
• Hexavalent Chromium
• Beryllium
• Mercury
E-Waste is HAZARDOUS waste
• Cadmium
• Brominated fire retardants
E-Waste: Toxic Trash
Exporting Harm
Guiyu, China, December 2001 – Basel Action Network
www.ban.org
E-Waste: Toxic Trash
Exporting Harm
Guiyu, China, December 2001 – Basel Action Network
www.ban.org
Procurement is also about resources & ghg
• Manufacturing one average computer uses:
– 240 kg of fossil fuels,
– 22 kg of chemicals;
– 1,500 kg of water
– a total of 1.8 tonnes of materials.
• Environmental impacts increasing:
– materials and energy intense production process
– greater adoption of PCs worldwide
– rapid rate at which they are discarded for newer machines.
• Leading to: growing amounts of e-waste and
increasingly serious contributions to resource
depletion, environmental pollution and climate
change.
Waste, Procurement & Greenhouse:
Shifting Perception
…seeing waste as
materials…
…seeing
materials as
‘energy carriers’
Image from:
www.worth1000.com
Procurement is power!
• procurement also relevant to purchasing
waste/recycling services
• need to develop specifications for
managing of end-of-life material
• consolidated approach by State
government to determine preferred
service provider(s).
Where to from here?
• This is worth doing, there are clear benefits, it can be done,
it is not difficult, it will not cost more in the medium term
and will show real dividends in the long term.
• Those in charge of our big public sector organisations must
see their spending power as a tool to deliver a more
sustainable future and to be prepared to use it, only then
can government truly claim that is achieving real value for
the public purse.
• UK Sustainable Procurement Task Force
Beyond Recycling
AVOID
Recycling is only
the halfway
point of the
journey towards
being a zero
waste society…
Recycling?
We Are
Here!
DISPOSE
Zero Waste is Global
Australian Green Procurement
www.greenprocurement.org.au
Designed for procurement officers and
professionals involved in green procurement
Good Environmental Choice Australia
http://www.aela.org.au/
 Certified Products Register
 Green Procurement Database
 Standards Register
 The Eco Label
The State of Green Procurement in
Australia (2004)
 Market mechanisms
 Local, State, C’wth Government analysis
 International arrangements
 Business, NGO and Industry actions
 Trends, conclusions & recommendations
South Australia
 State Procurement Board Policy
 Environmental Impact Policy
 EI policy yet to extend to services
 GOGO: Objective 6
 Energy Efficiency Action Plan
 Initiatives
SGP Conclusion - Shift
From:
“.. to reduce the impact on the
environment of our operations”
To:
“.. creating a balance between the
consumption of resources of our
organisation and the ability of the
regenerative capacity of the environment to
sustain this consumption”
SGP Recommendations
 The Manufacturer
- measure and report (ISO14020)
 The Transaction
- articulate expectations
 The Consumer
- track material flows
- corporate change & build capacity
 The End of Life System
- market mechanisms
- manufacture -> RFT->end of life
Toyota
Statefleet – Mixed Messages?
Greenhouse Projections
Projections of SA greenhouse gas emissions
South Australia's projected emissions (Base Case)
Estimated Base-Case
Projection including achievement of SASP Targets
Scenario to meet 2050 targets
Baseline (1990)
70
Future Estimates
60
40
Kyoto Target
108% of 1990 levels
35 MT
30
1990 Baseline 32.4MT
20
10
year
50
20
48
20
46
20
44
20
42
20
40
20
38
20
36
20
34
20
32
20
30
20
28
20
26
20
24
20
22
20
20
20
18
20
16
20
14
20
12
20
10
20
08
20
06
20
04
20
90
0
19
MT CO2eq
50
G8 Climate Change Roundtable
Thank you
[email protected]