The Government is consulting on its procurement rules, which affect the $41 billion it spends each year buying goods and services from third party suppliers. Procurement contracts are a powerful tool to leverage action on climate change.
Please take the time to submit on the proposed changes.
Consultation closes at 5pm on Tuesday 5 March 2019.
Why submit on government procurement rules?
Each year the Government spends $41 billion dollars buying goods and services from third party suppliers. In 2018 Cabinet agreed that government contracts could be more explicitly leveraged to support the Government’s economic strategy and broader outcomes, and that the Government Rules of Sourcing should be updated to enable this. Procurement contracts are a powerful tool to leverage action on climate change. One of the four broader outcomes agreed upon by cabinet is to: -
“Support the transition to a zero net emissions economy and assist the Government meet its goal of significant reduction in waste by 2020.”
See more on the broader outcomes here. With these broader outcomes in mind, The Ministry of Business Innovation and Employment (MBIE) is currently consulting on the proposed Government Procurement Rules 4thEdition. The Government is specifically focussing on fleet vehicles and stationary heat for government agencies.
However they are missing a big opportunity with health sector procurement. The health sector contributes 3-8% of total national greenhouse gas emissions. Procured goods and services make up as much as 58% of these greenhouse gas emissions (Carbon Footprint update for NHS in England 2015). This figure is likely to be similar in New Zealand. Pharmac is currently responsible for procuring the two largest categories in terms of greenhouse gas emissions - pharmaceuticals and medical devices. There is no requirement for Pharmac to ask suppliers about whether they are measuring and reducing their carbon footprint.
How to submit and some suggested submission points
Click here to complete feedback online.
You do not have to answer every question so you can skip to the key questions relating procurement and climate change. Please feel free to answer other questions as you see fit. It would be useful to indicate that you are a health sector worker where appropriate. Some suggested responses are included below: -
Rule 16: Broader Outcomes
The Government’s use of its procurement power to leverage broader social and environmental outcomes is to be commended. The initial requirement for these broader outcomes to be included in designated contracts shoulder be applied more broadly to all government procurement contracts. Specifically rule 20 supporting a transition to a low emissions economy. At a minimum suppliers of goods and services should be asked the following questions as part of procurement tenders: -
- What environmental accreditation/certification do you currently hold?
- Does your organisation annually measure its carbon footprint?
- Is this footprint being independently verified or audited?
- Have you set a target for reducing your organisations carbon footprint?
- What progress have you made towards this target to date?
These generic questions are applicable to the majority of procurement contracts not just those designated (fleet vehicles and stationary heat). It should be a mandatory requirement that all government procurement of goods and services requires the suppliers to answer what steps they are taking to transition to a “net zero emissions economy”. It should also be a requirement that answers to these questions are awarded points when scoring tender applications to supply goods and services.
Rule 20: Supporting the Transition to a low emissions economy and designing waste out of the system
The Government’s use of its procurement power to support the transition to a low emissions economy is to be commended. The initial requirement for this broader outcome to be assessed as mandatory only by specific agencies for designated contracts should be applied more broadly to all government procurement contracts as per previous comments for Rule 16. Specifically, as a significant contributor to national greenhouse gas emissions, the health sector has a number of areas that could be the focus of Rule 20 and should be included in the designated contracts. It is widely acknowledged that climate change is the most serious threat to global population health in the 21stcentury. It is crucial that the health sector takes a leading role in reducing its contribution to climate change.
- Pharmac should be required to assess the climate change impact of pharmaceuticals and medical devices as part of its procurement activity. The Minister of Health’s letter of expectation for 2018/2019 clearly requires Pharmac to address climate and health.The health sector is responsible for 3-8% of national greenhouse gas emissions. The majority (58%) of these health sector emissions are from procured goods and services (NHS England 2015). The two biggest categories of health sector procurement are pharmaceuticals and medical devices, which come under Pharmac’s control. Pharmac, as a government agency, should be required to include a climate change impact assessment as part of its factors for consideration (FFCs) decision-making framework for pharmaceuticals and medical devices.
- There is strong evidence that hospitals built and accredited using an environmental certification (LEED, NZGBC) have lower greenhouse gas emissions as well as improved patient and staff health and wellbeing. Therefore all government construction contracts for new hospital builds should require environmental certification as mandatory.
- After procurement, stationary heat for hospitals and other health care facilities, is the largest source of health sector greenhouse gas emissions. All new stationary heat for government healthcare facilities should be low or zero greenhouse gas emissions.
- All new hospital fleet vehicle purchases should be Low Emission Vehicles (LEV), either plug in hybrid electric vehicles (PHEV) or electric vehicles (EV).
NZ Health partnerships as a procurement agent for the health sector should be required to address the climate change impact of its service providers when contracts are up for renewal or new contracts being tendered for.Of particular importance: -
a. Banking contracts should assess the banker on their policies on divestment from fossil fuels and on direct funding of the fossil fuel industry. The current contract is with Westpac a bank that directly funds expansion in the fossil fuel industry. New Zealand banks TSB and Kiwibank currently do not support expansion of the fossil fuel industry. A contract for banking services with a New Zealand bank would also support broader outcome one – Increasing access to government procurement contracts for New Zealand Businesses.
b. Food services through the choice of food they supply (meat based versus plant based) can contribute to climate change mitigation and health. The transport of food over long distances (Compass contract with Southern DHB is an example of this) can also contribute to climate change. Procurement contracts for food should include a climate change impact assessment.