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Five outsourcing trends to watch | CNET News.com

Five outsourcing trends to watch | CNET News.com

Experts are tracking consolidation, globalization, and emergence of small-scale services, virtual worlds and even “green sourcing.”
By Natasha Lomas
Special to CNET News.com
Published: July 6, 2007, 6:22 AM PDT

Five outsourcing trends to watch

Which way is the wind blowing in the outsourcing market? What’s looming on the horizon in the next five years?

Silicon.com has identified five areas to watch.

Consolidation

Globalization

Person-to-person offshoring

Green sourcing
Rising energy prices have put ecology issues firmly on CIOs’ radar. But could pressure to demonstrate green credentials influence businesses’ outsourcing decisions as well?

Silicon.com’s CIO Jury–a pool of chief information officers and other corporate IT professionals who are polled on various technology issues–recently revealed that environmental factors play a key role in the selection of technology suppliers and partners.

Virtual worlds

How will procurement have changed by 2082?

Supply Management.com - for purchasing and supply management professionals
Peers into the future

How will procurement have changed by 2082? Rebecca Ellinor asks six experts

It’s impossible to predict what the world will be like 75 years from now. Will we all be holidaying on Mars or replaced by machines?

We spoke to futurologists and academics who analyse and observe trends to see what they predicted for the future and what it might hold for the purchasing profession. Here’s what they said.

DR HELEN WALKER
Deputy director of the Centre for Research in Strategic Purchasing and Supply (CRiSPS), University of Bath School of Management

“Purchasing and supply will still have a key role - as long as the world goes round, companies, consumers and governments will need to buy supplies. There will be a strong shift towards outputs rather than process, in other words: “Have we performed well through purchasing and supply?” rather than: “What is the best way to go about purchasing and supply?”.

“There will be some changes in how we view ‘value’, and sustainable procurement and ethical supply will be increasingly crucial.

“Countries such as China and India will be integrated into global supply chains. At the same time, there will be a return to sourcing locally to minimise pollution and support local communities.

“E-technology will have advanced to the point where there are fewer purchasers with a more strategic focus and broader capabilities.”

Scottish Parliament to help SMEs win work - Responsible Purchasing Strategy

Scottish Parliament to help SMEs win work  -  Responsible Purchasing Strategy

By Antony Barton
Guidelines published this week aim to make it easier for small businesses to bid for Scottish Parliament contracts.
In the draft Responsible Purchasing Strategy, which is open to a month-long public consultation, the parliament says it will address remaining barriers to SME participation, maximise sub-contracting opportunities for SMEs and measure, monitor and report on progress.

Among other measures, it will establish a public sector focus group to identify opportunities for collaboration, and review information available to SMEs and procurement processes to ensure they are not over-complicated.

A spokesman for the Federation of Small Businesses in Scotland said he was happy to see a strong emphasis on transparency and fairness and supported the focus on all aspects of professional development.

SMEs and local suppliers are one of the four areas covered by the strategy. The others are: professionalism; environmental impact; and ethical and social issues.

Anyone can submit feedback on the draft document, which is available to download from the link below.

Kick starting green procurement

Kick starting green procurement
Web Posted - Mon Jul 02 2007
By Janelle Husbands

HAVING articulated the policy, it has been recommended that Government now set the trend in procuring things green. The recommendation came from Sydney Symmonds of Global Development Services as he spoke on the topic Kick Starting Green Procurement at a recently held seminar hosted by the Ministry of Energy and the Environment. His comments came as he revealed findings of a recently conducted survey, where several businesses were asked whether they would participated in a Eco-labelling programme or procure green goods, even though it would not increase their bottom line.

What was fascinating is that some 52 per cent of the businesses surveyed said yes they would. So we have a platform on which we can talk about Green procurement and the transforming of Barbados from its current procurement method, and current consumption method into a whole green method.

The concept of greening was well articulated by the Prime Minister in his budgetary statement but I believe that to make this into practice is going to consider considerable effort and change in the consumption patterns he said.

He said this will call for the emergence of a new lifestyle and encouraging the consumer to change his or her buying habits, which he noted, could be assisted by the retailers. Symmonds suggested that procurement is done on three levels, the public sector level, the private sector and the personal level of consumption.

If we are to transform Barbados over the next three to five years it is our recommendation that Government should set the trend in procuring things green. He noted that this could range from changing to Eco-friendly paint to the type of office furniture bought.

He noted that already countries have established their own Eco-marks such as the Nordic Swan and the Euro flower. Across the world there are many labels and many countries that have in fact, put Eco-labels on several products. Across the spectrum, more countries are moving to produce green items and to label them. So it is a question of education, knowledge and informing people.

If we are to kick start, we are going to have the Chamber off Commerce, the Small Business Association, the Manufacturers Association, the Barbados Hotel and Tourism Association, all of these have to incorporate into their policy and influence their members to move in the green direction.

He said that while the responses from the business community have been favourable, there was a lack of knowledge in some areas.

To this end, Symmonds suggested that longer-term incentives will be needed along with ongoing workshops and seminars to urge business owners to move away from traditional suppliers towards a gradual increase of green products in their inventory.

Ethical Sourcing Forum Europe, Paris, 18th & 19th October

Ethical Sourcing Forum Europe, Paris, 18th & 19th October

Mark your calendar.
This years Ethical Sourcing Forum Europe will be held at the Sofitel Hotel in Paris on 18th & 19th October.

No problem can withstand the assault of sustained thinking, a quote by the Parisian social reformer Voltaire is at the heart of the event. As well as appreciating “Paris in the Fall,” we plan a sustained attack.

The Forum will be opened by Kerstin Born, executive director of CSR Europe. The Ethical Sourcing Forum is a multi-stakeholder, accelerated learning and benchmarking platform, addressing the latest social and environmental challenges facing global supply chain professionals.

Confirmed speakers include The Walt Disney Company, GTZ, Microsoft, Maplecroft, Johnson & Johnson, International Labour Organization ILO, The Diamond Trading Company , LOreal, Marks & Spencer and Boots.

Topics include CSR and its future, compliance culture, business and academic partnerships, employee engagement, the challenges of communication, transparency, capacity building, collaboration and REACH.

As well as hearing about the latest developments, delegates can get involved. Collaborative communication is encouraged with sessions dedicated to speed networking, interactive business training and much more.

Early bird discounts saving €400 are available to those booking before 9th July online at www.intertek.com/esf/europe/register1

For the latest information on topics and speakers http://www.intertek.com/esf/events/europe/

Brown urged to reform ethical trade profile

Supply Management.com - for purchasing and supply management professionals
Brown urged to reform ethical trade profile
By Paul Snell
Gordon Brown is being called on to improve the public sector’s record on ethical sourcing.
Charity Oxfam has produced a “manifesto” for Brown, who takes over as prime minister today, for him to carry out during his first 100 days in office. The proposals include starting a Treasury review of public procurement guidelines to “create a more enabling environment for ethical trading and fair trade”.

The manifesto also urges Brown to declare the UK’s intent not to impose higher export tariffs on goods from countries in Africa, the Caribbean and the Pacific. The EU has already made a tentative offer to scrap tariffs and quotas on a number of goods, such as fruit and cereals, from these countries (News, 26 April).

The Ethical Trading Initiative (ETI), an alliance of companies that includes Boots, Marks & Spencer and The Body Shop, supports the manifesto.

Dan Rees, ETI director, said: “The private sector is used to the government preaching to them about sustainability. It’s now time for the government to catch up with the private sector in ethical sourcing. Until the public sector starts practising what it preaches any progress we make will continue to be limited.”

Vancouver City Council: Implementation of a Sustainable/Ethical Procurement Policy

CITY OF VANCOUVER

ADMINISTRATIVE REPORT

Date:

June 15, 2004

Author:

Larry Berglund
Phone No.: 604-873-7254

RTS No.:

RTS04225

CC File No.:

3501

Meeting Date:

June 22, 2004
TO: Vancouver City Council
FROM: General Manager of Corporate Services
SUBJECT: Implementation of a Sustainable/Ethical Procurement Policy

RECOMMENDATION

A. THAT Council direct staff as Phase I of the development of a Sustainable and Ethical Procurement Policy, to prepare and present a draft policy to Council on the purchase of apparel and fair trade agricultural products. The policy is to be based on best practices of similar organizations and to be implemented by December, 2004. Staff will also report on resources required to implement the policy.

B. THAT Council direct staff, on a Phase II work plan to report back by December, 2004 including resource requirements for developing and implementing a comprehensive Sustainable and Ethical Procurement Policy that incorporates environmental and social objectives as well as aligns with other sustainability initiatives including the Downtown Eastside Economic Revitalization Plan, the City of Vancouver Sustainability office objectives and objectives of the Inner City Inclusive Commitment Statement for the 2010 Winter Games.

On April 8, 2004, Council resolved that The City of Vancouver will have a Sustainable and Ethical Procurement Policy in place by December, 2004. Council directed appropriate staff to report back with answers to six specific questions in relation to the resolution.

CITY MANAGER’S COMMENTS

The City Manager concurs with the recommendations in this report.

The scope of a Sustainable and Ethical Procurement Policy is very large, potentially affecting all City operations and affecting every purchasing decision of all goods and services. The development of a Sustainable and Ethical Procurement Policy must be aligned with values of other initiatives such as the 2010 Olympics Sustainability Objectives, the City of Vancouver Sustainability office objectives and the Vancouver Agreement’s DES revitalization program. The City will need time and resources to build internal capacity to implement and administer a sustainable procurement strategy.

At the same time, organizations have just begun to develop procurement practices that address sustainability issues so there is limited experience and knowledge to draw upon. Existing experience indicates that implementation of a Sustainable and Ethical Procurement Policy is a long term undertaking. A well developed strategy that is meaningful and effective will require that the City take an incremental approach establishing clear objectives, realistic targets and achievable time lines.

The implementation of a Sustainable and Ethical Procurement Policy over two phases starting with a focus on Ethical Procurement as defined in this report. This approach is consistent with the strategy of other municipalities that have only focused on purchasing apparel and related products that have been manufactured in a way that does not violate standards set by the International Labour Organization.

There will be a need for additional staff resources to assist with the implementation of an Ethical and Sustainable Procurement Policy. The resources will be used to develop mechanisms to monitor compliance and for working collaboratively with suppliers to ensure there is no disruption of goods and services critical to the City’s operations.

One year after implementation, staff will report back to Council on the financial and service impacts of the policy on City purchases.

COUNCIL POLICY

Council policies indirectly related to the issue of sustainable and ethical procurement include:

    · Corporate Climate Change Action PlanThat staff report back on opportunities to establish an Energy Efficient Purchasing Policy by September 2004, and in the interim purchase Energy Star rated equipment and appliances where applicable;

    · Contracts Goods and Services Policy - Environmentally Sound Purchasing

    In order to contribute to waste reduction and to increase the development and awareness of environmentally sound purchasing of goods and services, contracts and tender specifications should be reviewed to ensure that wherever possible and economical, specifications provide for expanded use of durable products, reusable products, and products that contain the maximum level of post-consumer waste and/or recyclable content or that minimize environmental impacts.

This Report is submitted in response to Council direction to report on questions related to implementation of a Sustainable and Ethical Procurement Policy.

On April 8, 2004, Council declared “its intention to implement a Sustainable and Ethical Procurement Policy for the City of Vancouver before the end of the 2004 calendar year”, and resolved that “appropriate City staff be directed to report to Council within two months of the passage of this resolution on questions related to implementation of such a policy for City purchases of apparel, coffee and related items”.

DISCUSSION

1. Introduction

This report answers the questions asked by Council. It is understood that the intention of Council is to adopt a Sustainable and Ethical Procurement Policy “that will ensure that all items, including apparel, coffee and related items, purchased by the City are manufactured or grown in accordance with established international codes of conduct regarding wages, workplace health and safety, forced labour, child labour and freedom of association, as embodied in the United Nations Declaration on Human Rights and International Labour Organization Conventions”.

2. Staff Investigations and Research

As a part of the context for drafting a response to the Resolution of April 8, 2004 the following actions were taken:

On April 27, 2004, the City purchasing department convened a panel consisting of representatives from Vancouver Fire and Rescue, Vancouver Park Board, Vancouver Public Library, the Office of Sustainability, the Office of the Mayor, Purchasing, Central Stores, and Business Support Services. The purpose was to provide administration staff with increased awareness and sensitivity directly from a diverse set of stakeholders on the subject of ethical procurement and sustainability.

Presentations were made by local and national apparel suppliers, along with the Vancouver Fair Trade Coffee & Network, the BC & Yukon Building & Construction Trades Council, the BC Ethical Purchasing Group, the Social Purchasing Portal, Mountain Equipment Co-op, Vancouver City Savings Credit Union, and corporate social responsibility advisors.

Policies and practices of other local governments have been reviewed including Seattle’s innovative Copernicus model for local economic, environmental, and social development and policies of Toronto, Thunder Bay and Nanaimo as specific Canadian-based references. Experiences of Canadian universities were analyzed as well.

City Staff also attended the Simon Fraser University Ethical Purchasing Conference on May 7-8, 2004 to discuss the issues related to ethical purchasing policy development and implementation.

Discussions were held with other City departments regarding complimentary initiatives that related to ethical and sustainable purchasing to identify common interests, potential alliances and operational synergies.

3. Definitions

There is no single definition of Ethical Procurement. Ethical Procurement has been defined by the Ethical Trading Action Group as practices that “promote humane labour practices based on accepted international labour standards.” Usage varies, but ethical purchasing policies consistently include “no sweat”, often extend to “fair trade” and sometimes include sustainable practices.

The Canadian Labour Congress has described “no sweat” as follows: “Retailers and manufacturers are increasingly outsourcing the manufacture of their apparel products, searching the globe for the lowest waged production facilities and the most lax enforcement of labour regulations; and this race to the bottom is negatively affecting the jobs and bargaining power of Canadian organized garment workers and encouraging the spread of sweatshop practices in Canada; and employers purchase a significant amount of apparel products, including staff uniforms, and could therefore help eliminate sweatshop abuses by requiring that those products are made under humane working conditions, preferably in union shops.”

Fair Trade principles address the purchase of agricultural products, primarily coffee, tea, cocoa and sugar grown in Latin America, Africa and Asia. Transfair Canada states that “Canadian importers and distributors must follow certain criteria: pay a set minimum price that covers the costs of production, advance payments or extend credit to producers to help avoid debt while financing next year’s production, agree to longer term trading relationships that provide producers with added security to plan for the future and promote sustainable production practices.” Sustainable practices would include “shade grown” coffee plants grown with organic farming methods.

Sustainable Procurement has been defined by the United Nations Environment Programme (UNEP) as “the process in which organizations 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 cradle to the grave); 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.”

Environmental/Green Procurement means goods and services purchased must be evaluated by environmental criteria that address recycled content, efficient use of resources, use of renewable rather than non-renewable resources, energy efficiency and waste and emissions in their manufacture. Food products purchased must be healthy - without biological or chemical contaminants, environmentally beneficial or benign in their production, and compliant with animal welfare standards.

Social and local procurement considerations state that ethical, fair trade and environmental principles apply most directly at home - within and around the City of Vancouver. Effective procurement can stimulate economic development in City communities such as the Downtown Eastside by integrating supply chain economics with corporate social responsibility to achieve community benefits.

Answers to Council Questions

The April 8 Council Resolution asked staff to report back with answers to six specific questions:

    i) “What is the extent, purpose and value of city procurement of items that may be affected by this policy?”Annual apparel purchases are about $1.4 million - 48% by Vancouver Police Department, 39% by Fire and Rescue, and 9% by Engineering Services.

    The City purchases about $3.7 million in food each year. The principal corporate buyers of food are Parks and Recreation, which sells food products through park concessions and golf courses, and the Community Services Group, which provides meals at Carnegie and Evelyn Saller Centres and at Gathering Place.

    A comprehensive sustainable and ethical procurement policy could potentially apply to all City purchases, of all commodities, across all City Boards and Departments, amounting to between $150 million to $200 million each year.

    ii) “What information does the City have now on the place and conditions of manufacture of these items?”

    Current information is very limited. A few direct suppliers of apparel and apparel-related products (Claymore Clothes (1982) Ltd., Logotex Mfg. Ltd. and Tristart Cap & Garment Ltd.) have voluntarily provided information. The information provided by the suppliers gave no indication of any problems related to ethical purchasing. This information has not been verified because the City does not currently have a mechanism to do the verification.

    The number of companies that report voluntarily is growing. The feasibility of obtaining third-party verification of these reports has yet to be determined. Mountain Equipment Co-op uses inspectors to review the manufacturing processes of suppliers, but such a commitment from the City would be extraordinary and likely not practical given the relatively small scale and scope of City procurement.

    iii) “What would be the procedures under which a Sustainable and Ethical Procurement Policy for the City of Vancouver could be implemented?”

    A policy addressing “no sweat” and “fair trade” can build upon the work of other organizations and adopt generally accepted standards. Existing policies of other organizations, such as the Maquila Solidarity Network’s “Model No Sweat Municipal Purchasing Policy” or Mountain Equipment Co-op’s “Sourcing Policy” can be customized and adapted to meet specific City of Vancouver requirements.

    Initial implementation steps include requiring suppliers to sign off on the policy to create awareness and secure consent, obtaining disclosure of subcontractors and manufacturing locations and resolving related issues, establishing principles for monitoring and verification, defining reporting requirements, establishing complaint and investigation processes, and defining corrective action plans.

    A policy cannot reasonably extend to every product and every supplier in every area of the City simultaneously. Effort must be initially concentrated on those procurement areas where worthwhile results may be achieved directly and immediately. These areas are to ensure that apparel purchased by the City is manufactured in conditions compliant with International Labour Organization conventions1, and that coffee and other food purchased by the City is produced under Fair Trade conditions.

    Legal review and participation is an essential element in procurement policy formulation.

    A broad policy that additionally encompasses environmental and green procurement and social and local procurement would require a more sophisticated development process, featuring extensive consultation and participation among both internal and external City stakeholders.

    iv) “What mechanisms, if any, are in place now to ensure that suppliers to the City of Vancouver are in compliance with International Labour Organization standards?”

    The City purchasing department primarily focuses attention on direct suppliers, ensuring that where required they have a local business licence and have WCB clearance. No mechanisms are in place to ensure suppliers and any foreign or domestic subcontractors or distributors in the supply chain are in compliance with international labour standards.

    v) “What other relevant factors or costs might be involved in the implementation of such a policy?”

    A measured and cautious approach and carefully phased implementation will be necessary to address the sheer scale and distributed nature of City procurement activities adequately, and ensure that the critical supplier relationships essential for effective service delivery are not disrupted.

    Also time must be given and assistance provided to help suppliers develop policy and reporting capabilities. City suppliers generally express willingness to comply with an ethical procurement policy, but request a notification period to give time to prepare. Suppliers caution that a too-sudden policy introduction could leave the City without sources of fully-compliant products. An additional supplier concern is the cost of compliance, particularly if certification must be purchased from third-party compliance auditors.

    Cost may be incurred by the City as assistance may be required from auditing agencies, if feasible, to ensure that products supplied from third world countries meet international standards.

    Leading organizations such as Mountain Equipment Co-op have begun to address the full range of ethical practices of their suppliers. The scope of this industry scrutiny is evolving, but so far is applied to few suppliers, and across a narrow range of products. However, a City effort could potentially gain considerable leverage by coordinating policy implementation phases with the steadily developing efforts of other organizations.

    In addition to a phased approach, a second essential implementation requirement is pro-activity - working incrementally with a deficient supplier to encourage and reward improved practices. This approach can prevent disruption of the supplier relationships essential for City service delivery, and is ultimately more effective in achieving policy goals. Otherwise, if the City takes its business elsewhere, supplier practices will probably remain unchanged.

    An illustration of the difficulty in applying a broader scope policy is purchase of jackets. Jackets must be manufactured under conditions compliant with International Labour Organization conventions. Embroidered crests must be similarly ILO compliant. But additionally, the jackets include components such as zippers, manufactured by another supplier. Fabric involves yet another supplier. Each individual supplier must be identified and evaluated not only on an ethical “no sweat” basis.

    An ethical procurement policy could potentially have financial consequences. Cost of purchases may increase, and so may the time required to obtain those purchases. Additional administrative staff resources may be required, and it may be necessary to purchase third-party verification of vendor reports.

    vi) “How are other municipalities/cities, such as Nanaimo and Toronto, and universities, such as Simon Fraser University, implementing a similar policy?”

    Ethical procurement policies of Toronto, Thunder Bay and Nanaimo focus exclusively on banning the purchase of sweatshop-manufactured apparel. Policies are generally applied by requiring vendors to certify, when tendering, that apparel products are not produced under sweatshop conditions. The policies do not contain enforcement mechanisms beyond the legal principles that underlie any contract. Similarly, the policies do not provide for audit, verification or inspection of vendor certification. The policies were recently introduced, mostly in the past year, and infractions have yet to be encountered. Presumably any future complaints will be reviewed with the vendors by the municipality, with further escalation to legal avenues if required.

Nanaimo City Council passed a policy in 2003 which states that the City will “place a

    term in its tenders, specifically for apparel for City employees. This term will advise suppliers that the City of Nanaimo does not wish to encourage the purchase of products manufactured in factories where children are used as slave labour or other exploitive circumstances that impede child development. This term holds the supplier to the commitment by asking the supplier to confirm in writing, compliance of this term in the bid response.”In 2002, Toronto City Council approved “a purchasing policy that will require the City to buy its uniforms and other apparel items from “no sweat manufacturers” that respect the rights of their workers regarding working conditions and pay”. The Toronto policy similarly depends on pledges signed by vendors.

    Also in 2002, Thunder Bay Council passed a resolution requiring a “condition of contract” with respect to No Sweat Procurement. This condition of contract would advise suppliers that the City of Thunder Bay does not wish to encourage the purchase of products manufactured in factories where children are used as slave labour or other exploitive circumstances which impedes child development. The recommended condition of contract holds the supplier to this commitment by asking them to confirm in writing, compliance of this directive in their bid response. The City of Thunder Bay requires bidders for the supply of linens, textiles, uniforms, shoes or any product where possible exploitation of children in sweat shops exist to sign the “condition of contract” as part of their bid.

    As of May 2004, ten universities across Canada have adopted ethical procurement policies. The majority of policies apply to retail book store operations only. Simon Fraser University has appointed an Ethical Purchasing Policy Task Force to work towards adopting a “No Sweat” and Fair Trade purchasing policy for products bought and sold at the university.

    The University of Toronto became one of the first Canadian universities to develop a code of conduct for trademark licensees to ensure that manufacturers and suppliers of trademarked merchandise for resale through retail operations meet minimum employment standards regarding wages and benefits, working hours and overtime compensation. The code also has specific prohibitions on child labour, forced labour and harassment and requires licensees and their contractors to recognize and respect the right of employees to freedom of association and collective bargaining. The University of Toronto’s code, and the parallel efforts of McMaster University took more than three years to develop. The University adopted an approach that engages with current suppliers and uses the code for future contracts, once current contracts expire. Compliance and disclosure requirements have been implemented throughout the acquisition process. The university places an emphasis on working with non-compliant suppliers to address concerns and issues.

    The City can, as a first phase, adopt the same approach as other organizations to focus first on an Ethical Procurement policy. This policy requiring vendors to certify that apparel is “no sweat” can readily be extended to certification that agricultural products are “fair trade”, and enforced in the same manner.

    Such a policy would be “sustainable” as well as “ethical” in the sense that fair trade practices are not just fair to growers but also environmentally-friendly, and sweatshops may abuse not just their workers but the environment as well.

CONCLUSION

Council has resolved that the City will have a Sustainable and Ethical Procurement Policy in place by the end of 2004. It is evident that the policy must address the basic principles of ethical purchasing, by ensuring that apparel is not purchased from sweatshops and that coffee and other agricultural products are acquired from fair trade suppliers.

It is suggested that Council direct staff to prepare and present a draft policy for Council review to address the purchase of apparel and fair trade agricultural products in a manner similar to that of other local governments. Staff can report back at the same time on resources required to implement the recommended policy. After the policy has been in effect for one year, staff will be in a better position to assess the financial and service impact the policy has had on City purchases and report back to Council.

Council can direct staff, as a subsequent phase to prepare a procurement policy that includes not only sweatshops and fair trade, but goes much further to integrate a comprehensive range of environmental and broad social objectives. Such a policy is a considerably more complex undertaking, and will require a coordinated effort with other ongoing City initiatives and organizations.

The City will also need time and resources to build the internal capacity necessary to develop, implement and optimize a comprehensive sustainable and ethical policy. Efforts must be cautious and aim at making steady incremental change in supply chain relationships over time.

Key stakeholders must be engaged in policy development and implementation and suppliers must become partners in solutions. A stakeholder approach to policy development will ensure that the complementary and competing interests of key groups will be considered and that an approach to implementation can be agreed upon that will ultimately be both administratively practical and meaningful.

A Sustainable and Ethical Procurement Policy will be complimentary to other City initiatives such as the Sustainability strategic action plan, green building policy and Corporate Climate Change Action Plan. Therefore, the development and implementation of a comprehensive procurement policy will depend in part on coordination with the work being done on these other initiatives.

Buying from social enterprises simple, effective and positive

Buying from social enterprises simple, effective and positive

 
Shelagh Hayes
Special to the Sun
What if I told you there was a way for the city of Vancouver to address its pressing social issues without raising taxes? And what if I added that it would have a nominal effect on the city budget?It’s quite simple.The city purchases just about everything imaginable, from paper clips and dish towels to trucks and catering. Most of the companies producing these products operate with a traditional, profit-oriented model. While there is nothing wrong with making money, there are several businesses in Vancouver that offer goods and services at market rates and at the same time produce a host of positive social impacts. By buying more products from these socially motivated suppliers, the city could achieve a higher overall value without increasing costs.

For example, the Potluck Cafe on East Hastings has a regular, competitively priced restaurant and catering business. At the same time, it also trains and employs at-risk, hard-to-employ residents of the Downtown Eastside. On top of that, the cafe provides 3,000 free meals and 600 subsidized meals a month to low-income members of the community. Potluck invests 100 percent of the proceeds earned through its catering business into its employment and meal service programs.

Now, compare the overall value of awarding a major city catering contract to the Potluck Cafe versus a regular caterer. The owners and employees of any business would benefit from a sizable contract with a stable client. If the city awarded its contract to the regular caterer, the economic benefits would end there. By directing that purchase to a business like Potluck, the city could put money into an economic development and social program without increasing its budget.

This practice is called social procurement, and it’s catching on in other parts of the world. The United States has a federal program that allows businesses from disadvantaged communities to submit a higher bid on a contract and receive preference over traditional competitors. Britain has several national procurement strategies to aggressively target social enterprise.

Ottawa has shown no such leadership in social purchasing. It is up to the municipalities, arguably the most innovative and resourceful governments in this country, to take action to generate societal benefits through purchasing. Municipal governments are also closer to the community and can offer smaller contracts suitable for social enterprise.

Vancouver is regarded as a leader in responsible procurement because of its commitment to purchasing products that are environmentally sound, fairly traded and ethically produced. Yet it lacks a policy that rewards suppliers that generate positive societal impacts.

Social enterprises like the Potluck Cafe have mandates that are driven by a social or environmental purpose rather than a profit-making goal. Other local examples are Starworks Packaging and Assembly, Landscaping with Heart, and the Cleaning Solution, all of which employ workers with mental or developmental disabilities.

Social enterprises face barriers to securing contracts, as they are often small and lack the capacity to bid on a large city contract, and Vancouver does not incorporate social impact criteria into its bid evaluation process.

My research on social procurement in other jurisdictions points to solutions. Contracts can be broken down into smaller, more accessible components; social enterprises can team up with conventional enterprises in a bid; explicit points can be awarded to bidders for social benefits; targeted training can enable social enterprise managers to traverse the contracting minefield, and social enterprises can propose to the local government areas of work that they believe they could fill.

Vancouver needs to step up to the plate and preserve its reputation as a leader in responsible procurement. It has the opportunity to be the first municipality in Canada to encourage its suppliers to generate societal benefits.

Once businesses begin to realize that the city will reward them for socially conscious actions, maybe they will start to incorporate a social hiring policy or community benefit plan into their operations. In the end, won’t we all benefit?

Shelagh Hayes is a graduate of the master’s degree program in public policy at Simon Fraser University.

© The Vancouver Sun 2007

Scoop: Sustainability to guide govt spending Dalziel says

Scoop: Sustainability to guide govt spending Dalziel says
Sustainability to guide govt spending Dalziel says
Thursday, 14 June 2007, 3:39 pm
Press Release: New Zealand Government
14 June 2007

Sustainability to guide govt spending Dalziel says

Commerce minister Lianne Dalziel has welcomed the establishment of a New Zealand branch of an international organisation for procurement professionals.

The Chartered Institute of Purchasing and Supply (CIPS), which held its inaugural New Zealand conference in Auckland today, aims to promote best practice and quality standards as well as raising awareness of the effective contribution the management of supply markets makes to corporate, national and international prosperity.

“Linking New Zealand practitioners into a global community of over 42,000 members in 120 countries has got to be good for the profession,” Lianne Dalziel told the conference.

“The Labour-led government is looking to the procurement professional community as a whole to help achieve our sustainable development goals.

“We’re integrating sustainability into a single government procurement policy and implementing a national framework for sustainable procurement by setting standards and developing sustainability performance indicators, targets and reporting mechanisms, and developing a carbon costing methodology for procurement decisions.

“In some areas, government is the single biggest customer in the domestic market,” Lianne Dalziel said.

“We’re looking at different ways New Zealand companies can benefit from the opportunities offered by government procurement.

“Procurement decisions should be based on best value for the taxpayer’s dollar over whole-of-life and this won’t always mean the lowest price is the determining factor.

“New Zealand companies sometimes feel they are overlooked because they represent local innovation rather than a well known international brand.

“One option for ensuring New Zealand companies get full and fair consideration is to require departments to give reasons for rejecting a local tender, signed off at senior management level,” Lianne Dalziel said.

“We need to consider the additional benefits that arise when home-grown innovation can foot it on home ground as a step up to the world stage.”

Think through green initiatives, execs told : Industry News : News : BCS

Think through green initiatives, execs told : Industry News : News : BCS
Think through green initiatives, execs told

15/06/2007

Business executives are being urged to pay close attention to environmentally aware initiatives and play a leading role in the development of energy-saving practices.

Speakers at the recent Kyocera Green Card conference, Victoria Barber of energy firm Centrica recommended that business leaders to commit to energy saving and sustainable procurement in an attempt to achieve positive environmental benefits among their organisations, reports IT Week.

To this end a number of ways in which IT can be used to help meet these goals were outlined, with businesses able to reduce paper consumption and travel, both of which can have definite environmental benefits in the long-term.

In doing this, Nick Harwood of Sustainable Energy Developments advised chiefs to carefully access the long-term benefits before committing to new, green processes. Stuart Williams of environmental charity Forum for the Future echoed these views.

‘IT represents a quick win as it has sizable environmental impacts, but there is a clear cost case for buying kit that uses less energy over its lifetime,’ he said.

The government recently launched a green IT taskforce designed to reduce CO2 emissions in the IT industry.