PROCUREMENT AND SOCIAL RESPONSIBILITY

Procurement And Social Responsibility

Procurement And Social Responsibility

Introduction

Public procurement (the purchase by public bodies of goods and services from others) has proven to be a dedicated follower of political fashion. Historically, we see consistent attempts to link public procurement with the government policy of the day, in areas as diverse as national industrial policy, reducing unemployment, improving employment conditions, support for small businesses, local development, employment of disabled workers, and equal pay for men and women, to mention only a few. With the increasing popularity of "corporate social responsibility," it is hardly surprising, then, that CSR has become linked to the use of public procurement. The definition of CSR is contested and so, for the moment, Moon's definition will suffice: "In essence CSR refers to business responsiveness to social agendas in its behaviour and to the performance of these responsibilities."1 This chapter considers the "new" use of public procurement in the pursuit of CSR in general, but considers in particular the relationship between CSR, public procurement, and the law. (Roger 2002)

Today's business environment is demanding that organizations understand and meet certain social responsibility measures as a condition of contract award. Reputational risk can no longer be controlled through first tier contracting alone. This paper identifies the challenges in dealing with Corporate Social Responsibility, and provides approaches and strategies which allow for the synchronization of various social issues. (Thomas 2007)

Social Responsibility

The authors define Social Responsibility as the duty to make decisions and take action to support the welfare and interest of society in the areas of:

Core Labour Standards

Safety

Environment

Diversity

Community involvement.

No matter what type of industry we are in, whether public or private, we have many diverse interests attempting to influence the priorities in their favour. In most organizations, the issues of social responsibility are not combined - we typically forego one aspect for another. Associated costs of socially responsible practices are difficult to quantify. How do we effectively measure our impact on the environment, let alone society? We face risks associated with the loss of customers - not only at a micro level, but at a macro level through our brand or organizational reputations. In many cases, we do not see it coming, and if we react without completing any due diligence, we may cause even more damage. (Anders 2001)

Environmental Goals

Findings indicate that the pre-awarded environmental assessments need to include procurement activities. This ensures that the environmental management plan will include measurements of environmental impact. Ratification of the Kyoto agreement by countries will support standards, however not all countries have ratified this treaty.

Diversity Goals

From a procurement perspective private and public interest differ. Private organizations are interested in diversifying primarily to support increasing market share.

Government agencies utilize diversity to support economic objectives of the specific entity.

Procurement researchers are now looking at the impact of strategic sourcing: are we compromising innovation and nimbleness that a competitive market with many sources delivers for the sake of reducing costs and supply base numbers?

Community Involvement

In private organizations companies typically support projects close to their stakeholders interest ...