CBA in SRPP

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see also: Buying Social

A BETTER FUTURE FOR THE SOCIAL ECONOMY (BFSE)

REPORT ON MEETING OF STEERING COMMITTEE OF HIGH LEVEL GROUP ON CORPORATE SOCIAL RESPONSIBILITY

BORCHETTE CENTRE, BRUSSELS, MON 7 JUNE 2010

Background

This open committee meeting was convened by Sue Bird (Employment DG) to review the progress made by her contactors, Adelphi Consult of Berlin.

Participants: The only active member states were the Netherlands and Germany. Els de Leeuw from Flanders was on the attendance list but didn’t show up. The 20 or so other participants included CSR Europe, Amnesty, Greater London Council, the coffee producers, the security industry, and DGs ENTR, REGIO & TRADE. The Business Europe representative distinguished herself by her ignorance of how business actually works!

The 5 activities

The contract has five strands, three of which are less interesting to BFSE:

1. A compendium of CSR practices in Member States – this is a description, not recommendations for good practice

2. Reporting – a good practice guide from two points of view: the reader and the company.

5. Support to the High Level Group.

The two strands of interest to BFSE are:

3. Study on supply chain management. They have chosen five issues – child labour, freedom of association, standards of living, unfair pricing and biodiversity – and three sectors – cotton, sugar and electronics (coltan)

This strand primarily concerns developing countries but where relevant will also include employment practices within the EU, including the employment of disabled people and social firms.

4. Cost benefit analysis of socially responsible public purchasing (CBA in SRPP).

This stand directly concerns BFSE. The consultants, led by Mikael Henzler, have:

  • defined SRPP criteria including support for inclusion and the social economy;
  • established that social policy criteria can be used in public procurement, where the “most economically advantageous offer” procedure is used, rather than simply the cheapest one. This reiterates the conclusions of the EQUAL Antwerp procurement seminar in April 2008. However going further, they say that social criteria can be used not only in award criteria (Beentjes case) but in selection criteria too (Nord de Calais case);
  • examined 49 models and are focusing on ten of them. These include:
    • checklist, comparative cost, portfolio analysis, gap analysis, scoring out of 100…
    • cost benefit analysis (CBA) – costs and benefits are monetised (expressed in euros)
    • cost effectiveness analysis (CEA) – costs and benefits are expressed in some physically countable way such as people employed or hours of training
    • cost utility analysis (CUA) – costs and benefits are measured against an arbitrary scale. (This is used in areas like health where putting a price on life is contentious.)

(See slides 33-63 of the presentation for more detail)

The output will be a very useful tool – a spreadsheet application that public authorities can use to incorporate social responsibility in their purchasing. However it takes as its starting point the MEAT (most economically attractive tender) procedure. It does not go back to the first step of an SROI analysis – the stakeholder analysis. So it does not ask the crucial first questions: who benefits and who pays? It will therefore not address whether the benefits are for the purchasing authority or society at large – or for an authority at a different level. Sue Bird understands the issue but said this was outside the scope of this study.

Action

Products will be drafted in November for a final steering committee meeting on 3 Dec 2010.

BFSE members are encouraged to ask for the questionnaire from:

Toby Johnson