Public sector ‘20 years behind’ on ethical procurement

Concerns that public sector supply chains are vulnerable to unethical trade as governments get to grips with key changes to  procurement practices.  

Researchers in the UK have warned that the public sector’s ethical procurement practices are “significantly less advanced” than in the private sector, raising questions about the integrity of public sector supply chains.

While the ethical sector supply chains in the private sector have come into focus in recent years, the public sector has traditionally lagged behind, according to co-author of the report, Dr Kanchana Ruwanpura from the University of Edinburgh.

“There are more initiatives pushing ethical procurement in the private sector and our research found that public procurement is around 20 years behind in terms of standards. This is one of our main take-home messages,” Dr Ruwanpura told Government News.

There are key challenges for public sector procurement given the relatively little attention it receives, and the fact that many of the materials used in public services have a low profile for consumer groups, she argues.

This is exacerbated by the fact the private sector produces goods that are often consumer-facing, meaning there is a more direct relationship to the public, resulting in increased expectations of accountability.

“This consequently limits reputational risk for state departments and first-tier suppliers if labour issues are encountered in their supply chains,” she says.

New laws 

Until recently, in the UK and EU state purchasers were discouraged from specifying social criteria in contract tenders, according to Dr Ruwanpura.

But she points out the situation is also changing in Australia with the introduction of the Modern Slavery Act, which requires purchases, including governments, with consolidated revenue of $100 million to report annually on risks of modern slavery in supply chains.

The enacting of the Act last December means there is “fresh attention” on Australia’s supply chains – both public and private, she says.

The research findings, while UK-based, have international implications, Dr Ruwanpura says.

“Although this paper focuses on the UK public sector, it still carries the same implications for the Australian public sector, as the constraints that frame the sector are applicable all over the world.”

Shake-up of procurement contracts

Government procurement contracts should crackdown more on non-compliance with ethical codes of conduct and ensure that they align with the objectives of the Modern Slavery Act, Dr Ruwanpura argues.

“Public servants can also include stricter conditions in procurement contracts so that they reflect supplier codes of conduct, and legislation including the Modern Slavery Act,” she argues.

Government should also ensure that they have clear supplier codes of conduct that include ethical conditions.

“As a base level, these should reflect the Ethical Trading Initiative’s Code, which includes points on freedom of association, safe and hygienic working conditions, child labour,” she says.

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