Belén Aliciardi, Coordinator of the Master's Program in Environmental Law and Management Policy at the Universidad Austral and consultant for the Inter-American Development Bank (IDB), was interviewed by Télam ahead of the upcoming presentation of the updated Sustainable Public Procurement Manual, and highlighted that in many aspects of the matter Argentina is "a pioneer in Latin America" in terms of its legislation, but warned that state training is insufficient if it is not complemented by similar awareness among companies and society in general.
Incorporating sustainability criteria into national, provincial, and municipal public procurement requires not only training for officials in charge of these operations but primarily for suppliers, since if they do not update themselves, "they will not only be unable to sell in the local market" but also "to the European Union," due to the requirements imposed by their countries for the import of goods and services.
The warning was issued by Belén Aliciardi, who cautioned that unless due attention is paid to the situation, the condition of sustainability in foreign trade "will end up becoming a non-tariff barrier."
What measures are being taken regarding CPS?
We are updating the Public Procurement Manual and will present it at the end of June, both the general module and the supplementary one—which I am in charge of—that focuses on CPS (Consumer and Service Procurement). It was originally developed in 2017, and since then, with the pandemic intervening, there are several areas for improvement. Since then, Argentina has produced 11 recommendation sheets with sustainability criteria for goods and services.
A validation meeting will be held with representatives from various jurisdictions, including the Anti-Corruption Office, SIGEN (General Audit Office of the Nation), and the Ministry of the Environment. Chambers of commerce will also be invited, as they are two sides of the same coin, since the State purchases goods sold by suppliers. NGOs and the general public will also be invited to contribute their input and validate the content.
How important is the adoption of sustainability criteria in public procurement?
In a federal country like ours, public procurement is carried out through the national, provincial, and municipal levels. We speak of sustainable procurement when, in evaluating bids, we don't just consider price, but also incorporate environmental and social factors into the analysis. This means, for example, whether the supplier has measured its carbon footprint or greenhouse gas (GHG) emissions to comply with the country's commitments, or whether the supplier has a system for reducing water consumption, known as its "water footprint," another natural resource we must protect.
Incorporating social criteria means considering whether suppliers have a gender perspective, whether they include women, people with disabilities, or older adults in their production processes, or whether they prioritize local labor to support regional economies. That's what sustainable public procurement is all about.
Public procurement represents 16,3% of GDP. This is a significant percentage that the government can leverage to achieve a "two-for-one" strategy, fulfilling its objective of purchasing goods and services for public works projects while also achieving other national public policy goals. In fact, Argentina has embraced and is fulfilling the commitments of the UN's 2030 Agenda, which established the 17 Sustainable Development Goals (SDGs) in 2015. As a country, we have until 2030 to achieve them. Within Goal 12, "Responsible Consumption and Production," is target 12.7, "Promote sustainable public procurement practices in accordance with national policies and priorities."
If I speak of "two sides of the same coin," what role do state suppliers play?
The European Union is beginning to require its suppliers to report their carbon and water footprints. Fifty percent of purchases in EU countries are subject to environmental and social criteria. While the government is consuming responsibly, suppliers must also sell responsibly.
We need to prepare and expand our network of suppliers in Argentina. Otherwise, they won't be able to sell in the local market, nor in the European Union. This will ultimately become a non-tariff barrier at a time when we desperately need foreign currency. International organizations like the IDB, CAF, Fonplata, and the World Bank apply their own regulations, which include environmental and social criteria.
That's why it's important to have a single message for suppliers: that when they carry out projects with national funds, they should do so using sustainable criteria, but also when we carry out projects that have international financing.
And in this regard, what is the situation of the suppliers?
We conducted a survey based on MAPS (Methodology for Evaluating Public Procurement Systems) and found that over 50% of public officials are trained in public procurement systems, but unfortunately, this is not the case for suppliers. Many are not upgrading due to a lack of training. It would be beneficial, for example, to partner with UAPE (Argentine Union of State Suppliers) to conduct joint training programs. We need trained national, provincial, and municipal public buyers, as well as trained suppliers in each jurisdiction.
"Sustainable purchasing is urgent and important," Aliciardi emphasized.
The lack of long-term analysis in most Latin American countries is one of the main obstacles to the development of Sustainable Public Procurement (SPP) systems, although in this context Argentina is a "pioneer" in the region, having specific legislation that, with modifications, has been in force since 2012.
This was pointed out to Télam by Belén Aliciardi, head of CPS at the National Procurement Office of the Chief of Staff, who also warned about the shortcoming of not yet having a statistical system that allows the establishment of management and impact indicators.
Given the financial and fiscal urgencies, what decision should the State make between acquiring a more expensive sustainable good or service and a similar one that is not sustainable?
Sometimes the urgent leaves us no time for the important, but sustainable purchasing is both urgent and important. In Argentina, we tend to analyze prices in the short term with our budgets, rather than in the medium and long term. A medium- and long-term analysis would reveal that we would actually be saving money.
To implement effective policy, we need indicators, and that's Latin America's biggest shortcoming. We lack both management and impact indicators. Do we know how much we save in natural resources by buying from this supplier instead of that one? In any case, I want to highlight an initiative: in 2020, the SIGEN (General Audit Office of the Nation), together with the Internal Audit Office of the Ministry of the Environment, designed a Monitoring and Sustainability Index (ISOSOS), and one of its key areas is sustainable procurement practices. Based on this, they assign a red, yellow, or green rating to each government agency and make recommendations for improving the implementation of sustainable procurement.
This year, Decree 31/2023 was issued, which establishes sustainable procurement as a strategic priority. Within this framework, the Ministry of Environment issued a resolution setting short- and long-term indicators, with the National Procurement Office (ONC) contributing to its development. Among the key points is the training of public employees and suppliers.
Furthermore, the national procurement system offers numerous tools to save money on CPS (Consumer Protection Schemes). For example, framework agreements, where the National Procurement Office (ONC) purchases goods for the entire public administration, allow for the acquisition of more sustainable and even cheaper goods than non-sustainable ones due to bulk purchasing. The same occurs with consolidated purchasing, where several ministries join forces to buy something, resulting in cost reductions. The Argentine Network of Municipalities Against Climate Change (RAMCC) uses this methodology to purchase more sustainable goods at lower prices. Many provinces have already developed framework agreements and consolidated purchasing systems within their jurisdictions and have incorporated environmental and social criteria into their legislation.
Where does Argentina stand in relation to other countries?
Argentina was a pioneer in this area with the enactment in 2012 of the National Administration Procurement Regime (Decree 893), which included a chapter on sustainable public procurement. Unfortunately, Decree 1030 of 2016 amended and eliminated that chapter, although some related articles remained.
Mercosur has regulations requiring member countries to work on sustainable procurement. Brazil has a strong policy in this area, especially regarding SMEs, and its suppliers are required to comply with these standards.
In general, Latin America has been focusing more on social than environmental criteria, the opposite of the European Union. The OAS has a working group on sustainable procurement within the framework of the Inter-American Network on Government Procurement (RICG). I personally worked with various leaders in sustainable public procurement throughout Latin America, and in December 2021, the model directive on sustainable public procurement for the region was published, incorporating both successes and failures. Any country that lacks regulations on this matter can adapt it and incorporate it into its domestic legislation.
Is there no assessment, even an approximate one, of the savings that would result from the generalization of CPS?
There are no studies at the national level. When discussing sustainable procurement, the principle of justified need is considered: is what the administration is buying truly necessary, or are there other options available?
For example, several municipalities joined together in the RAMCC (Metropolitan Association of Road Construction) to purchase road machinery that they use very infrequently. They assess planned obsolescence, price, and remaining useful life. I think it's an excellent initiative to avoid unnecessary purchases. It's important that our budgets begin to clearly label sustainable purchases so we know how much we invest in them and how to align government policies accordingly.
Awarding a contract to a supplier that lacks policies for the inclusion of people with disabilities or for the promotion of women is awarding a contract to someone who is not aligned with national policy. We must be consistent in the messages we convey, especially when we have to execute this expenditure, which must be efficient, effective, and sustainable.
The national government and the provinces have an Annual Procurement Plan (PAC), in which each ministry must report its planned purchases for the following year. Currently, the PAC does not include sustainability criteria, so we are working to incorporate environmental and social criteria.
