Hilandar is burning, and we are talking about the circular economy. Citizens are sick, the economy is on its knees, and we are talking about green public procurement, some uninformed reader would say. However, this is not the case. Corona created a tsunami in international economic relations, cut supply chains all over the world, closed plants everywhere, even in Serbia, which is why many governments looked into their ranks and wondered how they use resources.
The circular economy, which is increasingly talked about in Serbia, could be a channel for faster recovery of the Serbian economy after the pandemic, because it is based on the use of internal reserves and domestic resources – waste, recycling and energy, which would create space for opening a large number of jobs we need now. Green public procurement is a tool for applying the concept of circular economy, because it encourages the production and consumption of products that contain recycled materials produced according to standards that protect the environment and human health.
Dusan Vasiljevic, a consultant with many years of experience in environmental policies, reminds “Nova ekonomija” that there were long supply chains until the corona, which were interrupted the moment everything stopped in China.
“Production in China is cheaper, one squinted to see if it was according to environmental and social standards. We have now realized that this supply chain is not sustainable. The idea is for local economies to be self-sufficient, and it is certain that a part of the industry will try to provide resources that are close,” says Vasiljevic, emphasizing that one should not expect that the “return” of technology and production from China will be massive.
On the other hand, Serbia, which is a small economy and a small market, has room to establish an efficient economy based on existing resources with low production costs, taking into account health and the environment. The benefits are multiple: less pollution, savings, encouraging innovation and technology, and the benefits are also political, because the government would show concern for the environment and the well-being of citizens. The space for savings and promotion of green procurement is quite large. The share of public procurement in the gross domestic product of Serbia in 2017, according to the Annual Report of the Public Procurement Administration, was 7.68%, while in 2018 there was a slight increase (7.98%).
“The environmental protection system is half established. We have an idea, but it has not been realized because there is no systematic approach to economic development. “Now we have one priority, tomorrow another, and state subsidies are a way to provide security to investors and the economy,” Vasiljevic underlined. The situation is similar with the framework for the circular economy and green public procurement. We are at the beginning of the beginning. “We only have elements of the system, points that are not sufficiently connected,” Vasiljevic estimates.
Importantly, the economy should be actively involved, but not because it has to, but because it has an interest. A way must be found for the economy to earn from recycling, the use of renewable sources, that is, to reuse waste from primary production. The state’s task is to provide that framework and incentives, he added.
A few days ago, the Ministry of Finance published an analysis of public financial management for last year, where it boasted that in November 2019, at the proposal of the Public Procurement Administration, the RS Government adopted the Public Procurement Development Program for the period 2019-2023 that recognizes green procurement. It is stated that the guidelines for the improvement of green public procurement have been developed and published on the website of the Public Procurement Administration. However, what they do not say is that these guidelines were published in 2015, which means that in five years, not much progress has been made in this area.
What is certainly commendable is that the circular economy and green public procurement are increasingly being talked about in professional circles and in the general public. The state has formed a working group for the circular economy, several analyzes have been done on the circular economy, in which leading domestic and international institutions have been involved in these areas.
Among the latest is the Ex ante analysis of effects for the circular economy published in early 2020, the development of which was supported by both the EU and GIZ. Dusan Vasiljevic, as a co-author of this analysis, says for “Nova ekonomija” that the law on public procurement recognizes the possibility of conducting green procurement.
This means that there is no obligation to conduct green public procurement, which means that there are no systematic records of realized procurement, which there is no doubt, especially in the non-governmental sector, this consultant will explicitly say. This is also the reason why it is necessary to develop criteria and rules that will oblige customers to order goods and services according to these criteria, and at the same time this will encourage an industry that can meet that demand.
The Ex ante analysis, without gloves, openly says that so far there have been no more concrete plans to develop a national action plan for green public procurement. It also says that there are promises from the Public Procurement Administration that from July 2020, when the launch of the new public procurement portal was announced, it will be possible to monitor which public procurements are green.
Although the procedure of open public procurements has increased, those who announce procurements are not stimulated to announce green procurements, because it is important for them to pass as cheaply as possible. The public sector as a large customer could play a leading role in promoting green procurement, it was assessed in the analysis of the Alternative for Safer Chemicals AlHem. By promoting and using green public procurement, public institutions can provide real incentives for the industrial sector, for the development of green technologies and products. In addition to direct measures that implement the goals of environmental protection policy, the state could thus indirectly, through this procedure, contribute to the realization of those goals, estimates the non-governmental organization AlHem, whose goal is to promote sustainable development. In its analysis of green public procurement in Serbia from May 2019, this organization pointed out that the weak point is the highest management of procuring entities that does not have a sufficient level of awareness regarding green procurement.
According to Vasiljevic, the Proposal of the Action Plan for Public Procurement recommends that the one who announces the procurement should have at least one green procurement per year. That is an acceptable intermediate step in the introduction of the system, but the state must move away from the recommendation, experts believe. This means that we need a whole framework in which everything is defined, from what are the criteria for green procurement, for which product groups, to what are the goals of such procurement, who conducts training for green procurement, who supervises, etc. And of course, how to stimulate the economy to participate in it and find its interest. Instead of direct payments, Vasiljevic advocates fiscal incentives as the healthiest way, because practice has shown that subsidies do not give good results.
Serbia would not have to invent hot water and go far to see the advantages and risks of green procurement. Croatia, and especially Slovenia, prospered in the region.
In January 2018, a new Regulation on Green Public Procurement entered into force in Slovenia, which expanded the number of categories of products and services for which green public procurement is mandatory to 20 products. Defined goals are established for each product or service. For example, at least 15% of food should be of organic origin, 50% of office and toilet paper should come from sustainably managed forests, and at least 50% of electricity should come from renewable sources or high-efficiency cogeneration plants, etc. How far they have gone is evidenced by a small detail that AlHem points out, and that is that for each of the 20 green public procurement cases, specific guidelines and proposals of specific criteria are available. Also, a list of contact persons (with telephone numbers and e-mail addresses) is provided for additional information – for each individual subject of public procurement, Nova Ekonomija writes.
