Local government procurement set to become greener in 2017
As part of the Act on Public Procurement becoming stricter, municipalities will be subject to more demanding environmental requirements. But what will the changes mean in practice?
The new Norwegian Act on Public Procurement enters into force on 1 January 2017. Municipalities will be required to ensure that their procurement activities encourage climate-friendly solutions and reduce their impact on the environment. We have looked at what this means in practice.
“The new Public Procurement Act states that public sector contracting authorities must organise their procurement practice such that it helps reduce their impact on the environment and encourages climate-friendly solutions where relevant”, comments Marit Holter-Sørensen, from the Department of Public Procurement at the Agency for Public Management and eGovernment (Difi) and the Section Leader for the “Partners and Suppliers” Department (SPL).
Marit Holter-Sørensen explains that this change to the Act means that municipalities must look at making their procurement activities green in general, and must not simply include occasional requirements in individual procurement processes.
Understanding the sources of pollution
“Municipalities need to find out which of the goods and services that they procure have a significant impact on the environment and also to have guidelines on how the environment is taken into consideration when they procure them”, explains Marit Holter-Sørensen.
It will also be more important to set environmental requirements. The challenge is that the rules do not say anything specific about how considerations relating to the climate and environment should be taken into account when actually running procurement processes.
“Municipalities will have to rely on the judgement of their procurement professionals in relation to this”, comments Marit Holter-Sørensen.
Marit thinks that it will be appropriate to set absolute minimum requirements in relation to some goods and services, e.g. emission requirements when procuring transport services. In other instances labelling schemes will be important, or in some cases the purchaser may need to challenge the supplier market to develop new, more environmentally friendly solutions.
Marit explains that procurement activities related to buildings and construction equipment, transport, ICT and food are examples of procurement that has a significant impact on the environment. This is also the case when large volumes of any good or service are procured. Transportation is responsible for a significant and increasing proportion of Norway’s total CO2 emissions.
“There is a lot for municipalities and county authorities to get to grips with”, comments Marit Holter-Sørensen.
Talk to other municipalities
“Do you have any advice for municipalities?”
“A really good start in terms of ensuring that green procurement becomes a natural part of municipalities’ environmental work in general is for each municipality’s procurement department to develop a good collaboration with the municipality’s environmental co-ordinators”, comments Marit.
She explains that a number of municipalities and county authorities are working on this, and adds that the City of Oslo is an example of a municipality that has developed very successful green procurement activities.
The City of Oslo has calculated that 25% of emissions from the transport sector come from building sites. It has now set itself ambitious environmental targets and is challenging the market to develop environmentally friendly solutions with the aim of creating emissions-free building sites. The emissions associated with transporting materials to and from building sites, construction machinery and, last but not least, with drying and heating buildings that are being built can be reduced.
“It is really exciting”, comments Marit.
Marit is also keen to talk about Østfold County Municipality, which has invested in climate-friendly public transport, and the Municipality of Bergen, which has successfully integrated the environment into all its procurement activities.
Stricter legal requirements
Beatrice Dankertsen Hennyng, a lawyer at the Norwegian Association of Local and Regional Authorities (KS), is of the view that there are various ways for municipalities to take environmental considerations into account. She explains that one example is that municipalities can set a target in their operating plans of only building passive-house or plus-house buildings.
“Contracting authorities can, for example, set requirements that mean suppliers have to have an environmental management system or have to compete on environmental factors during the contract award phase”, she explains.
The precise point in the process at which environmental requirements are set will depend in part on the need that is to be met, what it is that will impact the environment, the competitive situation and the maturity of the market concerned.
“However, the most effective way for municipalities to achieve their environmental ambitions is probably to set environmental requirements for the good or service being procured. In other words, if a municipality only wants to build a passive-house building, it should make this a minimum requirement so that less environmentally friendly buildings will be rejected from the tender process”, she comments.
“There are lots of municipalities that are committed to the environment and that have this on their agenda”, states Beatrice Dankertsen Hennyng, and she reiterates that municipalities that fail to produce an overall strategy will breach the Act’s new provision.
Learn from each other
Marit Holter-Sørensen encourages municipalities to learn from one another.
“NOK 98 million has just been distributed via the Norwegian Environment Agency’s Climate Investment Scheme to 89 municipalities for 142 different projects. A lot of the projects relate to green procurement, both directly and indirectly. A new round of awards will be made in 2017, and the application deadline is 15 February. It may be worth applying”, she comments, adding that there is a lot of potential going forward for transport and construction equipment to become greener. The Norwegian Agency for Public Management and eGovernment (Difi) also provides guidance on how municipalities and public-sector organisations can carry out environmentally friendly procurement.
“The change to the law applies to public-sector organisations that are subject to the rules on public procurement and how this must be conducted”, concludes Marit Holter-Sørensen.