Corporate responsibility in the procurement process and framework agreements

Framework agreements are an efficient way of implementing government decisions with regard to procurements, because the volume of central procurements is significant – in 2016 the state procured products and services through framework agreements worth over 770 million euros.

Thanks to this large volume, Hansel is able to influence the generation of new services and the development of more environmentally aware products. Hansel can have an impact on what is available on the market by incorporating CSR aspects in framework agreements and setting criteria related, for example, to the environment.

Tendering processes organised by Hansel are carried out openly and fairly, in line with procurement legislation. All suppliers of goods and services who fulfil the minimum requirements set in the call for tenders are allowed to take part in the tendering processes organised by Hansel, in line with the open procedure.

Corporate responsibility aspects are taken into account in all stages of tendering process:

  1. Needs assessment
  2. The tenderer’s eligibility
  3. Technical specifications: product or service features
  4. Comparison criteria: items for which a score is given
  5. Contractual terms and conditions and supervision of compliance

Accounting for CSR in framework agreements

Hansel offers its customers services and framework agreements which are easy to use and in which corporate responsibility aspects have been taken into account as widely as possible. Contract solutions are made in accordance with government guidelines and policies. The decision-in-principle to promote sustainable environmental and energy solutions in public procurement determines, for example, the emission levels of vehicles in government use, and the principles of energy procurement.

Hansel requires that the suppliers have paid their taxes and social security contributions, and comply with statutory demands related to the environment, health and safety, working conditions and terms of employment.

Environmental aspects already taken into account for years

For assistance with environmental aspects, Hansel has drawn on other criteria, such as Motiva’s eco-friendliness and the European Commission’s Green Public Procurement criteria.

Environmental factors are highlighted in, for example, the framework agreements regarding computers and office furniture. Computers are required to fulfil the requirements of the Energy Star. At least 70% of the timber for office furniture comes from sustainably managed forests. It is an objective of framework agreements to account for the recycling of discontinued products or packaging materials whenever possible.

Framework agreements allow Hansel’s customers to acquire low-emission vehicles with carbon dioxide emissions below 100 g/km. All-electric vehicles and plug-in hybrids are also available, with extremely low consumption and carbon dioxide emissions. The selection of car included in the contract is updated automatically.

Financial aspects emphasised in labour-intensive sectors

Hansel takes financial responsibility aspects into account comprehensively in its framework agreements. In this regard, suppliers taking part in the tendering process are required to have fulfilled their social obligations properly: Financial aspects are important especially in labour-intensive sectors, which include the hospitality industry, the transport industry, and the cleaning and security services industries.

In procurement that falls within the scope of the Act on the Contractor’s Obligations, it is required that selected contract suppliers provide reports on their tax payments and the collective labour agreements under which they work, as well as provision of occupational health care, proof of registration in the trade register, prepayment register, VAT register and employer register at regular intervals.

Supervision of contract suppliers’ financial and legal status is performed by external organisations. Hansel is immediately informed if a supplier’s financial position weakens or its legal structure changes.

Social aspects included in contract terms

The basic principles of public procurement are applied to the inclusion of social responsibility aspects. All criteria must be fair and non-discriminatory, mindful of the principle of proportionality and openly communicated. In practice, social elements may be incorporated in the terms and conditions of the contract – e.g., by requiring that the supplier commit to the key labour and human right conventions of the International Labour Organization (ILO).

Hansel has conducted a risk analysis on the social responsibility of its framework agreements. The analysis showed that the highest social risk lies in the framework agreements made with specific international goods suppliers and Finnish service providers. With regard to the international suppliers of goods, the high risk was linked to labour-intensive production practices, a large number of subcontractors and long supply chains.

Social risks tend to grow when goods are manufactured in countries where little attention is paid to workers’ rights, and when raw materials are mostly sourced from outside Europe. With regard to Finnish service providers, the risk factors were related to labour-intensive services, a large number of subcontractors and low-income sectors. Hansel has around ten framework agreements whose placement in the matrix indicated high or very high social risk.