Three European Commissioners close the day

Three European Commissioners close the day’s sessions: Commissioner for Development/Aid, Poul Nielsen;

The EU committed itself at Barcelona to an increase of ODA (overseas development aid) from the current average of 0.33% of GNP/ODA to 0.39% between now and 2006. This will translate into an extra Euro 8 billion per annum by 2006 for development aid focussing on poverty reduction and sustainable development. There are some points on which Monterrey falls short of expectations: action and initiative is needed from the EU on issues relating to global governance. The “Monterrey Consensus” limits itself to stressing the need to enhance the voice of developing countries in the ‘international financial architecture’ without going into any concrete proposals. There is a need to go beyond that and work on improving the system of global governance by making global governance structures more inclusive and coherent with each other, plus strengthening global governance in the social and environmental sector. On innovative sources of financing, the Monterrey Consensus does not go beyond a general sentence on the need to further explore this issue. The global public goods are not even mentioned.

Poul Neilsen said that they were calling the bluff on the progress of the democratisation water report – it was agreed that having organised sustainable schemes was often more political than technical. What was achieved in the Monterrey Summit did help to mobilise more official development assistance. There is a good framework and so the basis for focus on sustainable development. The Seattle summit had an overloaded agenda and so results were disappointing. Mr Nielsen emphasised the importance for links between north and south and advised that NGOs from North and South should liaise at Johannesburg. The Johannesburg Summit – in addition to any formally agreed Declarations, will have voluntary initiatives and partnerships involving countries, international organisations and stake-holders – this is terms a “type 2 outcome”.

Mr Neilsen concluded by outlining potential EU initiatives – sustainable water resource management based on strategic partnership; a similar arrangement for energy for sustainable development and a specific initiative for Africa, reflecting NEPAD (New Partnership for Africa’s Development). He stressed the need for coherent EU policies on agriculture, fishing, immigration and arms exports – all should encourage global sustainable development.

Commissioner Wallstroem too was critical of the abstract plans and unsatisfactory outcomes of past Summits. The emphasis should be on actions, not words. However, there is a continuum through the outcome of the Doha and Monterrey Summits and the ODA increase which was announced in Monterrey. This should facilitate Johannesburg, but there is a need to be more creative in seeking relevant and innovative ways to implement this. It is important to keep three pillars together, she stressed (1) the goals set for 2015 e.g. to halve the number of people who have no access to clean drinking water by 2015; (2) the emphasis on energy e.g. provide clean affordable energy to 1 billion people who do not have this by 2015 and (3) the fact that this is not only a rural issue, but one which affects cities.

In her conclusion Mrs Wallstroem emphasised the important roles to be played by the Spanish and subsequent Danish Presidencies in ensuring that the EU delivers. Her aspirations were for renewed commitment to sustainable development from all countries; a realistic but ambitious action plan and involving all stakeholders in an effective action plan. Implementation and urgency were crucial.

Commissioner Lamy opened his speech by commenting on the importance and relevance of linking sustainable development and trade. The present division of labour is neither equitable nor sustainable. He believed the strategy should be to build up a multi-lateral system that aims at global governance, bringing together North and South. The sustainable development approach is the only way which is consistent with less conflict. The sustainable development challenge is of a ‘horizontal’ nature, cutting across a number of issues. More innovative approaches are required. Internal policies in the developing world also need to be developed. The domestic governance issue is very important and there is a need to develop the system of global governance developed between the two world wars. Trade has a small but important part to contribute to sustainable development. He spoke of the WTO and the ILO relationship. The EU did not get what it wanted from the Doha Agenda – there was combined opposition from developing countries and a lack of support from the US. There is a need for coherence between Doha, Monterrey and Johannesburg – trade liberalisation will not achieve convergence between north and south unless there is financial assistance and internationally agreed social and environmental standards. The same is true for managing sustainable resources.

It is important to maximise the positive, to consider investment trade facilitation and competition. Addressing monopolies is part of the Doha Agenda. Minimum standards must be considered in the social field. ILO standards may be ‘the lowest common denominator in the planet’ but they have a means to implement them. Including the environment in the trade agenda is a ground-breaking step. Commissioner Lamy hopes that Johannesburg will incentivise negotiations in Geneva.

What can we do multi-laterally, he asked, if we are to use a ‘carrot’ rather than ‘stick’ approach. Sustainable impact assessments are used in all major trade negotiations. They are working with Government on measures that are fresh and on measures with NGOs. There is a need for interest among the trade pillars. To make a difference we all have to work together on a clear agenda. Commissioner Lamy, the last speaker of the session, described this challenge as “formidable” but was confident the EU could tackle it.

· MEPs supported small-scale financing for the self-employed and beneficial loans for SMEs. Therre was support for 35% of the 2002 EU aid budget to go towards education and health and a call on the Council to agree to incorporate the European Development Fund (EDF) into the EU budget.

2. The European Community’s position within the ACP-EC Council of Ministers regarding the settlement of all ACP HIPC (Highly Indebted Countries) LDC special loans remaining after full application of HIPC Debt: on 25^th April MEPs voted 400 to 39 with 26 abstentions in favour of a resolution welcoming the Commission proposal for the full cancellation of the debts of the poorest developing countries for loans granted under the various Lomé Conventions. Debt servicing for the mainly African highly indebted countries accounts for 40% of their annual budgets. Debt levels increase from USD 147 billion in 1989 to USD 214 billion in 2001. Tackling the debt problem depends on the maintenance of sound economic policies – countries concerned should respect human rights, good governance and be committed to reducing poverty. Emphasis in public spending programmes should be on healthcare, combating diseases, including AIDS, and on education. The fight against fraud and corruption must continue.

Trade is an important element in any campaign to reduce poverty. MEPs have called for a revision of WTO rules in order to promote sustainable development.

This one-day Conference was held in La Maison de l’Europe at the Bibliotheque Solvay, a building of historic significance located in the park beside the towering blocks of the new European Parliament buildings.

In part the conference provided an overview of the legislative background[1], followed by a case study/debate relating to the use of chemical and non-chemical marking materials for road works (an annual market of Euro 300 million). This was intended as an insight into national purchasing policies. Only 5% of Europe’s roads are painted with the more environmentally friendly water-based markings that are now standard in other parts of the world. Despite winning ‘green product’ awards in France, market penetration is low. Speakers pointed out that under CE regulations there is a new EN46 norm about road marking performance – almost 50% of markings are below the norms. One speaker referred to CEN European standards as being a ‘voluntary tool’ for which there was no legislative test. However, another speaker took the view that mandates give political commitment, products are CE marked and by 2005-6 they should achieve a caucus of norms.

Use of solvent-based products brings additional risks. It is estimated there are currently 3,850 heavy goods vehicles carrying hazardous material – there will be 30-40% h.g.v. usage increase with enlargement of the Union. One speaker exhorted government to use its power on phasing out products. If government does not set an example, directives will not be implemented and there will be distortion of competition. Concerns were expressed that in light of the increasing use of works concessions for services contracts, the operator maintains at his own risk – there is a difference between local authority and PPP/PFI operations. In adapting to new technology the applicator would need help and assistance from companies producing product in order to learn and modify techniques. France has a law which specifies that a listed company must produce an environmental report and a social report. This will push concessionaires to look at use of best products.

UNEP, the environmental programme of the United Nations, considers that not just green issues should be considered but also health and safety. There is a need for strong discussion at national and local level. Information is important, as is life-cycle assessment.

General information: The European Single Market programme seeks to ensure that taxpayers and consumers of public services should have value for money without jeopardising the competitiveness of European suppliers. The programme includes services and utilities. According to research, public procurement liberalisation is encouraging increased competition in public procurement markets. Nonetheless, the value of EU public procurement markets is estimated as being Euro 1,000 billion or 14% of GDP, equivalent to half Germany’s GDP. Business leaders were surveyed in 1997, revealing that:

· Significant barriers limit access to public sector contracts in other member states

· Barriers are not always related to regulation but to other factors - language, need for local presence etc

Each year the European Commission publishes an Internal Market Scoreboard – around 1/3 of Single Market legislation in the areas of public procurement and transport has not been implemented in all Member States. Implementation of environmental directives related to the Internal Market is well below the European Council’s target of 98.5% set at Stockholm last year, with 7.1% of directives still not in force. Worst offenders are Germany, Belgium and Spain.

· Communicating what is and what is not legally possible under existing directives. Production of a ‘user-friendly practical handbook. Exchange of information: Green procurement is patchy in the EU. As many as 90% of public authorities in some Member States have defined a green purchasing policy; other Member States have none. In an number of Member States, advice is not available in their own language to local authorities on how to proceed and obtain appropriate environmental specifications to place in their call for tenders. DG Environment is planning an information database to inform users which eco-labels exist for the product groups, main environmental issues and potential questions to ask suppliers. This database may be posted on a web-site for reference. Feedback: Only anecdotal evidence is available in the EU about existing environmental issues and green purchasing techniques covered under present policies. There is no way of knowing if green purchasing is affecting the procurement market or the environment.

The Commission’s Green Paper (1996) “Public Procurement in the European Union: Exploring the Way Forward” considered

1. The impact and application of existing policy and its implementation in national laws.

2. Facilitating market access through information, training and electronic procurement

3. Combining procurement with SME, standardisation, TENs and other community policies

The Commission’s proposed legislative package (2000) to amend the Public Procurement Directives

Simplification is the ’buzzword’, together with ‘competitiveness’ and ‘best value’. The two objectives are to simplify and clarify what exists and to modernise procedures and make them more flexible.

By consolidating three directives into one, the number of articles is halved; new provisions are presented in a way to reflect the normal order of an award procedure; users are guided through all states of the award procedure and new thresholds will be set in euros instead of special drawing rights.

To increase flexibility new procurement arrangements are proposed for complex contracts; there is more flexibility regarding standard-form contracts and more flexibility for public sector buyers when defining contract purpose – they may specify their requirements in terms of performance and not just in standards.

In addition information technology is encouraged and as a result of market liberalisation telecommunications is excluded from the directive. Electricity and water may also be excluded once liberalisation is completed.

The European Commission’s Interpretative Communication (2001) on Green Procurement

The Communication interprets existing laws, including EC Treaty rules for the Internal Market as well as the public procurement directives. The publication of guidelines reflects the situation where an increasing number of European public authorities have set in place green purchasing programmes, although existing rules did not offer clarity on green purchasing. The Communication explains that:

1. Public purchasers can decide to buy environmentally friendly products or services when defining the subject matter of a contract. Definition is according to environmental performance and the production process used.

2. The public purchase may specify raw materials and production processes to be used in the contract. They may e.g. request that energy for public buildings is supplied from an renewable source, or that food for school canteens comes from organic suppliers.

Contracting authorities may define technical specifications relating to a product’s environmental performance in accordance with “Eco-label” criteria. The Commission also outlines the conditions under which registering an environmental management scheme may demonstrate aspects of suppliers’ and contractors’ technical capacity.

Some comments: It has been indicated that external costs can be considered when defining the subject matter of the contract but cannot be taken into account when evaluating which tender is the economically most advantageous. Clarification is sought on additional award criteria in the procurement process.

The Council of European Municipalities and Regions (CEMR) wants positive rules on environmental considerations to be included in the new directive. It believes it is not enough to rely on case law (based on old directives) or on Commission guidelines that do not have the force of law. According to the CEMR the European Parliament’s modified text on the Procurement Directive must include environmental protection requirements in accordance with Art. 6 of the Treaty .

Environmental NGOs think treatment of the environment in the proposed directive is inadequate and even a step back from existing rules. They believe that public procurement rules must include consideration of process and production methods. They also wish to see inclusion of life-cycle costing and full internalisation of environmental costs.

Next Steps: European Commission official Mrs Pamela Brumter emphasised that the Commission is committed to addressing how new legislation will be introduced in three-four years’ time. They have undertaken to collaborate with D.G. Environment to produce a practical handbook on green public procurement later this year, aimed mainly at local authorities. The handbook will contain examples of best practice in green public procurement throughout the EU as well as practical guidance on how to integrate the environment into day-to-day purchasing without infringing Internal Market rules. Mrs Brumter stated that they will create links to other web-sites to help contracting authorities to pick up the technical information.

The OECD (Organisation for Economic Co-operation and Development) Recommendation to improve the environmental performance of public procurement

On January 23^rd 2002 the OECD Council voted to encourage increased activity towards green procurement. Their Recommendation listed practical steps that governments could take to improve the environmental performance of public procurement. OECD governments need to ensure that green public procurement is consistent with their competition policies and procurement laws and their international obligations and commitments through trade agreements and multi-lateral environmental agreements.

(i) Providing appropriate policy framework to ensure that environmental criteria for products and services are included, as well as those for price and performance;

(ii) Introduce financial, budgeting and accounting measures to ensure that environmental costs of products and services are considered;

(iii) Providing information, training and technical assistance to officials concerned in all stages of the procurement process, including those who use the products and services;

(iv) Make information & tools available to aid all levels of government to aid greener public purchasing;

(v) Disseminate the information needed to help and encourage greener public purchasing decisions, as well as information on its results and benefits;

(vii) Encourage development of measuring and monitoring indicators for green procurement;

(viii) Assess and evaluate greener public purchasing policies to ensure they are economically efficient and environmentally effective.