Public procurement refers to the process by which public authorities, such as government departments or local authorities, purchase work, goods or services from businesses. The scope of goods and services bought by public authorities ranges widely, from large-scale infrastructure and urban development projects, to the acquisition of complex items such as weapon systems, to commissioning of essential public services in the health and social care sector, and to buying common goods such as stationery, furniture, and foodstuffs.
In Organisation for Economic Co-operation and Development (OECD) states, public procurement contracts account for 12% of GDP on average and is a substantial component of the overall economy. Public procurement can be the single most important source of revenue in some sectors, including health and research-related industries, construction and transportation. Public procurement, therefore, has the potential to influence global supply chains in a positive or negative way. Accordingly, in recent years, public procurement has increasingly been recognized as a means for states to fulfill their human rights obligations and to realize sustainable development. These requirements entail that public procurement process must ensure that suppliers help prevent human rights abuses from occurring within value chains and businesses contracted by government departments or public authorities, and, in particular, those which carry out service delivery to the general public comply with human rights standards.
Through protecting human rights in the public procurement processes, states:
- Fulfill their international and domestic legal obligations to protect human rights;
- Enhance risk management in various aspects. The primary risk that public buyers must address is that public procurement can be linked to serious harm to individuals; However, there are other risks that public buyers and suppliers must consider, including legal risks, financial risks and reputational risks;
- Lead by example and implement requirements that suppliers respect human rights. This will encourage the corporate sector towards the same aim;
- Create a level playing field for suppliers that strive to respect human rights.
In practice, addressing the risk of human rights abuses occurring through public procurement means including human rights protections within provisions and clauses of tender-related documentation and resulting contracts. These requirements, in essence, should require the supplier to implement human rights due diligence. Human rights due diligence compels a business to identify, prevent, mitigate and account for human rights impacts that it may cause or contribute to through its own activities, or which may be directly linked to its operations, products or services via business relationships. By requiring suppliers to comply with Human rights due diligence, states guarantee human rights protection throughout public procurement process.
Human rights risks which can be prevented in public procurement processes include, but are not limited to, modern slavery and human trafficking, child labour, Discrimination and unequal treatment, freedom of association, excessive working hours, and unsafe working conditions. For example, investigations by the NGO Danwatch in 2015 showed that the Chinese manufacturers of servers for brands such as HP, Dell, and Lenovo, relied on the forced labour of students. The students were required by their schools to work up to 12 hours a day on production lines without pay on so-called ‘traineeships’ in order to graduate and receive their diplomas – in unrelated disciplines, such as nursery school teaching and accounting. The Danwatch report highlighted that the servers produced with students’ forced labour were purchased by higher education institutions in Europe.
In addition to preventing human rights abuses, public procurements can also promote the rights of vulnerable and at-risks groups by favouring them, or businesses which support them, in public procurement exercises. These groups include Persons with disabilities, women and children, economically disadvantaged minorities, migrant workers, etc.
The UN Guiding Principles (UNGPs) on Business and Human Rights afford special attention to the state’s role when it acts as a commercial actor. Guiding Principle 6 provides that “States should promote respect for human rights by business enterprises with which they conduct commercial transactions.”
Commentary to Guiding Principle 6 specifies:
“States conduct a variety of commercial transactions with business enterprises, not least through their procurement activities. This provides States – individually and collectively – with unique opportunities to promote awareness of and respect for human rights by those enterprises, including through the terms of contracts, with due regard to States’ relevant obligations under national and international law.”
The 2030 Agenda for Sustainable Development highlights in Target 12.7 that to ensure sustainable consumption and production patterns that states should “Promote public procurement practices that are sustainable, in accordance with national policies and priorities”. This provides an opportunity for states not only to procure from suppliers which deliver the cheapest product quickest but also to prioritize procurement from suppliers which respect the three dimensions of sustainable public procurement; economic, social and environmental.
Advancements in the area of public procurement and human rights includes the EU Directive 2014/24/EU of 2014 which includes measures to allow procurers to use public procurement to further common societal goals and new routes to remedy for victims. In this regard, the EU Commission has recently developed a publication on making socially responsible public procurement work. The publication details 71 good practice cases from 10 different sectors, such as construction, healthcare, ICT, etc.
Relevant legalisation has been introduced in some EU member states, such as Poland’s Public Procurement Law which allows procurers to take of social and environmental protections, to implement this directive. Other legislative measures include those undertaken in the UK; the Public Services (Social Value) Act 2012 (England & Wales) and the Procurement Reform (Scotland) Act 2014 allow for economic, social, and environmental improvements through public procurement. In Denmark, the Procurement Act, Act No. 1564 of 15 December 2015, which entered into force on 1 January 2016, paved the way for the state and municipalities to be able to integrate social and environmental considerations into their procurement exercises.
Constitutional protection for human rights within public procurement can be found in South Africa where the Constitution allows organs of the State to implement a preferential procurement policy in the allocation of contracts for the protection and advancement of persons that were previously disadvantaged by unfair discrimination. Section 217(3) provides for legislation that will prescribe a framework within which the policy must be implemented. As a result, the Preferential Procurement Policy Framework Act (PPPFA) and the regulations published under it (PPPFA Regulations) establish requirements regarding black economic empowerment (BEE) and local production and content.
Other measures include those introduced by Norway which developed a Socially Responsible Public Procurement (SRPP) Guide, with the aim to help public organisations integrate and mainstream SRPP criteria in the procurement process. Norway further developed a Supplier self-assessment questionnaire goal of to ensure that the supplier’s socially responsible supply chain management system meets the requirements of the social contract performance clauses.
In 2017 the new Pubilc Procurement Law in Spain was passed. This law established a wider range of possibilities in including human rights concerns in public procurement and includes more social aspects compared to its predecessor, but it does not allow for complete exclusion of businesses responsible for human rights abuses from public procurement procedures. Following on from this, Novact, Servei Civil Internacional de Catalunya and Nexes jointly with Tornos Abogados, developed a Guide on Pubilc Procurement Responsible with Human Rights.
Sustainable public procurement has become an important issue in Japan. The Japanese government has committed to contributing to the Sustainable Development Goals (SDGs) that includes “Promoting public procurement practice that are sustainable” in the SDG target 12.7. The Tokyo Organizing Committee for Olympic and Paralympic Games (TOCOG) has announced its respect for the UNGPs and developed a sustainable sourcing code for goods and services to be procured for the 2020 games based on the UNGPs. The TOCOG has established a Grievance Mechanism, which will receive reports of non-compliance with the sourcing code and respond with a view to resolving reported cases promptly in a fair and transparent manner. The CSO Network Japan decided to conduct a baseline study of major municipal governments to see how sustainable public procurement is being implemented in each municipality, with a summary of the results available here.
The French public procurement code (Ordinance 2018-1074) entered into force on April 1, 2019; it integrates public procurement and concession contract rules into a single code. The new code is an opportunity for all stakeholders in public procurement processes (mainly, granting authorities, contracting entities and economic operators) to have a better understanding of the rules that apply to them.
Part of the difficulty in ensuring that human rights are integrated into public procurement processes can be the lack of sufficient knowledge and specific skills around human rights on the side of public procurement officers. The International Learning Lab on Public Procurement and Human Rights has been attempting to address this through sharing the good practice and the development of tools and guidance to increase the capacity of local and national procurement agencies to integrate human rights into their purchasing practices. National Human Rights Institutions (NHRIs) in some jurisdictions, such as Northern Ireland, have also developed material and guidance on the topic. The Danish Institute for Human Rights has published a toolkit on public procurement and human rights.
The transformative potential of public procurement as a driver of sustainable development and sustainable production and consumption is recognised in SDG 12. Target 12.7 calls on all states to “ romote public procurement practices that are sustainable, in accordance with national policies and priorities
romote public procurement practices that are sustainable, in accordance with national policies and priorities”.
Public procurement impacts on many aspects of human rights and SDGs. For example, procurement exercises that place a focus on procuring from suppliers which have effective measures in place to eliminate forced labour and human trafficking can not only contribute to the achievement of target 12.7, but also support the achievement of targets 8.7 and 16.3 to end child labour, forced labour, modern slavery and human trafficking, among many others.
The official methodology for gathering data to measure progress towards Target 12.7 contains important human rights references: the social dimension of SPP is tied to human rights and human rights standards; it contains an indicative list of international treaties and other instruments that are of relevance to SPP (including the ILO’s 8 fundamental Conventions, other key ILO standards, the 9 core UN human rights treaties and other key UN human rights instruments such as the UN Guiding Principles on Business and Human Rights); and human rights principles and fundamental rights such as equality and non-discrimination are woven into the calculation methodology.