Socially & Environmentally Responsible Procurement

What Is the Issue:

Except for important but limited prohibitions on child labor and the manufacture and sale of landmines, the United Nations system does not have a common set of social and environmental requirements that its suppliers must abide by in order to do business with the UN.

What Human Rights and Environmental Principles Promoted by the UN Are at Stake:

Global Compact

UNEP Sustainable Procurement Principles

Strengthening the Implementation of Corporate Social Responsibility in Global Supply Chains, World Bank, Recommendations for International Organizations

Other human rights and environmental treaties and conventions such as the UDHR, ICCPR, ICESR, CRC, CEDAW, the Rio Declaration, major ILO conventions and other key UN human rights and environmental documents.

What Needs to Be Done:

The Inter Agency Procurement Services Office (IAPSO) as well as individual agencies should:

• review their current contractor/supplier minimum standards with the aim of incorporating new, improved requirements as mentioned above, including environmental, labor and other standards representing current best practices, that all suppliers and/or contractors must abide by in order to secure UN contracts, and;
• establish and maintain reasonable auditing practices to ensure that its contractors and/or suppliers actually follow these codes of conduct.
  

Who Can Do It:

UN Secretary-General Kofi Annan
UN USG For Management Catherine Bertini
UN ASG Office of Central Support Services Andrew Toh
Individual agency/organization heads

With offices and activities around the world, the United Nations system regularly enters into supply contracts with a broad array of contractors and suppliers.

According to the UN IAPSO (Inter Agency Procurement Services Office), whose motto is Buying for a Better World, "the United Nations, including its many affiliated agencies, represents a vast global market for suppliers of virtually all types of goods and services and, during 2000, the procurement of goods and professional services, under grants from all sources of funding, was over US$ 3 billion. Procurement by the UN system in 2000 was 59% from developed countries, and 37% from developing countries."

As such, the United Nations had the potential to positively impact the countries it does business in by insuring that all of these contractors and suppliers abide by certain basic principles, including those highlighted in the United Nations' Global Compact. These generally include labor, environmental and human rights standards.

UNEP has defined socially and environmentally responsible procurement as the process in which organisations buy supplies or services by taking into account:

• the best value for money considerations such as, price, quality, availability, functionality, etc.
  
• environmental aspects ("green procurement": the effects on the environment that the product and/or service has over its whole lifecycle, from the cradle to the crave)
  
• the entire Life Cycle of products
  
• social aspects: effects on issues such as poverty eradication, international equity in the distribution of resources, labour conditions, human rights
  

The reputation and legitimacy of the United Nations will be negatively affected if it is associated with contractors and suppliers that violate those principles. As highlighted below, there is a broad range of activities that could constitute a violation.

In the past fifteen years, the private sector has experienced several landmark scandals involving, for instance, the use of child labor in the manufacturing of sports goods in Asia and the use of security companies that violate the human rights of local populations in oil-producing countries such as Nigeria.

Companies have seen their brand tainted and their share price dramatically affected by such scandals. Some of them have reacted over time by improving their supply chain practices. These companies now often have published codes of conduct for their suppliers and contractors and they regularly audit them to certify that their goods are, for example, child labor free.

The United Nations system has established general supplier terms and conditions for the supply of goods requiring that neither its suppliers nor their affiliates be engaged in the use of child labor or the manufacturing of landmines. Any breach of these provisions can lead to the termination of a supply contract.

Other types of supply chain problems, however, from environmental degradation to labor issues as described in the above-chart, do not appear to be included by IAPSO in its minium requirements. Some UN member organs such as UNHCR and WFP have added environmental standards to their bidding requirements but they represent a minority within the UN system.

UNHCR's environmentally friendlier policy is to strive to purchase products and services that have a less negative impact on the environment. Environmental considerations form part of the evaluation and selection criteria, which could cover, depending on the types of goods and services to be purchased, their manufacture, transport, packaging, use and disposal.

IAPSO does encourage UN contractors and suppliers to adhere to the principles of the Global Compact but unfortunately does not make their adoption mandatory. Finally and importantly. there are no mentions of audit measures to ensure that current standards are being followed by suppliers/contractors.

UN Observer.org recommendations:

The Inter Agency Procurement Services Office (IAPSO) and individual agencies should:

• review their current contractor/supplier minimum standards with the aim of incorporating new, improved requirements, including environmental, labor and other standards representing current best practices, that all suppliers and/or contractors must abide by in order to secure UN contracts, and;

• establish and maintain reasonable auditing practices to ensure that its contractors and/or suppliers actually follow these adopted codes of conduct.