June 15, 2004



Larry Berglund


Phone No.:



RTS No.:



CC File No.:



Meeting Date:

June 22, 2004


Vancouver City Council


General Manager of Corporate Services


Implementation of a Sustainable/Ethical Procurement Policy


A. THAT Council direct staff as Phase I of the development of a Sustainable and Ethical Procurement Policy, to prepare and present a draft policy to Council on the purchase of apparel and fair trade agricultural products. The policy is to be based on best practices of similar organizations and to be implemented by December, 2004. Staff will also report on resources required to implement the policy.

B. THAT Council direct staff, on a Phase II work plan to report back by December, 2004 including resource requirements for developing and implementing a comprehensive Sustainable and Ethical Procurement Policy that incorporates environmental and social objectives as well as aligns with other sustainability initiatives including the Downtown Eastside Economic Revitalization Plan, the City of Vancouver Sustainability office objectives and objectives of the Inner City Inclusive Commitment Statement for the 2010 Winter Games.

On April 8, 2004, Council resolved that The City of Vancouver will have a Sustainable and Ethical Procurement Policy in place by December, 2004. Council directed appropriate staff to report back with answers to six specific questions in relation to the resolution.


The City Manager concurs with the recommendations in this report.

The scope of a Sustainable and Ethical Procurement Policy is very large, potentially affecting all City operations and affecting every purchasing decision of all goods and services. The development of a Sustainable and Ethical Procurement Policy must be aligned with values of other initiatives such as the 2010 Olympics Sustainability Objectives, the City of Vancouver Sustainability office objectives and the Vancouver Agreement's DES revitalization program. The City will need time and resources to build internal capacity to implement and administer a sustainable procurement strategy.

At the same time, organizations have just begun to develop procurement practices that address sustainability issues so there is limited experience and knowledge to draw upon. Existing experience indicates that implementation of a Sustainable and Ethical Procurement Policy is a long term undertaking. A well developed strategy that is meaningful and effective will require that the City take an incremental approach establishing clear objectives, realistic targets and achievable time lines.

The implementation of a Sustainable and Ethical Procurement Policy over two phases starting with a focus on Ethical Procurement as defined in this report. This approach is consistent with the strategy of other municipalities that have only focused on purchasing apparel and related products that have been manufactured in a way that does not violate standards set by the International Labour Organization.

There will be a need for additional staff resources to assist with the implementation of an Ethical and Sustainable Procurement Policy. The resources will be used to develop mechanisms to monitor compliance and for working collaboratively with suppliers to ensure there is no disruption of goods and services critical to the City's operations.

One year after implementation, staff will report back to Council on the financial and service impacts of the policy on City purchases.


Council policies indirectly related to the issue of sustainable and ethical procurement include:

This Report is submitted in response to Council direction to report on questions related to implementation of a Sustainable and Ethical Procurement Policy.

On April 8, 2004, Council declared "its intention to implement a Sustainable and Ethical Procurement Policy for the City of Vancouver before the end of the 2004 calendar year", and resolved that "appropriate City staff be directed to report to Council within two months of the passage of this resolution on questions related to implementation of such a policy for City purchases of apparel, coffee and related items".


1. Introduction

This report answers the questions asked by Council. It is understood that the intention of Council is to adopt a Sustainable and Ethical Procurement Policy "that will ensure that all items, including apparel, coffee and related items, purchased by the City are manufactured or grown in accordance with established international codes of conduct regarding wages, workplace health and safety, forced labour, child labour and freedom of association, as embodied in the United Nations Declaration on Human Rights and International Labour Organization Conventions".

2. Staff Investigations and Research

As a part of the context for drafting a response to the Resolution of April 8, 2004 the following actions were taken:

On April 27, 2004, the City purchasing department convened a panel consisting of representatives from Vancouver Fire and Rescue, Vancouver Park Board, Vancouver Public Library, the Office of Sustainability, the Office of the Mayor, Purchasing, Central Stores, and Business Support Services. The purpose was to provide administration staff with increased awareness and sensitivity directly from a diverse set of stakeholders on the subject of ethical procurement and sustainability.

Presentations were made by local and national apparel suppliers, along with the Vancouver Fair Trade Coffee & Network, the BC & Yukon Building & Construction Trades Council, the BC Ethical Purchasing Group, the Social Purchasing Portal, Mountain Equipment Co-op, Vancouver City Savings Credit Union, and corporate social responsibility advisors.

Policies and practices of other local governments have been reviewed including Seattle's innovative Copernicus model for local economic, environmental, and social development and policies of Toronto, Thunder Bay and Nanaimo as specific Canadian-based references. Experiences of Canadian universities were analyzed as well.

City Staff also attended the Simon Fraser University Ethical Purchasing Conference on May 7-8, 2004 to discuss the issues related to ethical purchasing policy development and implementation.

Discussions were held with other City departments regarding complimentary initiatives that related to ethical and sustainable purchasing to identify common interests, potential alliances and operational synergies.

3. Definitions

There is no single definition of Ethical Procurement. Ethical Procurement has been defined by the Ethical Trading Action Group as practices that "promote humane labour practices based on accepted international labour standards." Usage varies, but ethical purchasing policies consistently include "no sweat", often extend to "fair trade" and sometimes include sustainable practices.

The Canadian Labour Congress has described "no sweat" as follows: "Retailers and manufacturers are increasingly outsourcing the manufacture of their apparel products, searching the globe for the lowest waged production facilities and the most lax enforcement of labour regulations; and this race to the bottom is negatively affecting the jobs and bargaining power of Canadian organized garment workers and encouraging the spread of sweatshop practices in Canada; and employers purchase a significant amount of apparel products, including staff uniforms, and could therefore help eliminate sweatshop abuses by requiring that those products are made under humane working conditions, preferably in union shops."

Fair Trade principles address the purchase of agricultural products, primarily coffee, tea, cocoa and sugar grown in Latin America, Africa and Asia. Transfair Canada states that "Canadian importers and distributors must follow certain criteria: pay a set minimum price that covers the costs of production, advance payments or extend credit to producers to help avoid debt while financing next year's production, agree to longer term trading relationships that provide producers with added security to plan for the future and promote sustainable production practices." Sustainable practices would include "shade grown" coffee plants grown with organic farming methods.

Sustainable Procurement has been defined by the United Nations Environment Programme (UNEP) as "the process in which organizations buy supplies or services by taking into account: the best value for money considerations such as, price, quality, availability, functionality, etc.; environmental aspects ("green procurement": the effects on the environment that the product and/or service has over its whole lifecycle, from cradle to the grave); the entire Life Cycle of products; social aspects: effects on issues such as poverty eradication, international equity in the distribution of resources, labour conditions, human rights."

Environmental/Green Procurement means goods and services purchased must be evaluated by environmental criteria that address recycled content, efficient use of resources, use of renewable rather than non-renewable resources, energy efficiency and waste and emissions in their manufacture. Food products purchased must be healthy - without biological or chemical contaminants, environmentally beneficial or benign in their production, and compliant with animal welfare standards.

Social and local procurement considerations state that ethical, fair trade and environmental principles apply most directly at home - within and around the City of Vancouver. Effective procurement can stimulate economic development in City communities such as the Downtown Eastside by integrating supply chain economics with corporate social responsibility to achieve community benefits.

Answers to Council Questions

The April 8 Council Resolution asked staff to report back with answers to six specific questions:

Nanaimo City Council passed a policy in 2003 which states that the City will "place a


Council has resolved that the City will have a Sustainable and Ethical Procurement Policy in place by the end of 2004. It is evident that the policy must address the basic principles of ethical purchasing, by ensuring that apparel is not purchased from sweatshops and that coffee and other agricultural products are acquired from fair trade suppliers.

It is suggested that Council direct staff to prepare and present a draft policy for Council review to address the purchase of apparel and fair trade agricultural products in a manner similar to that of other local governments. Staff can report back at the same time on resources required to implement the recommended policy. After the policy has been in effect for one year, staff will be in a better position to assess the financial and service impact the policy has had on City purchases and report back to Council.

Council can direct staff, as a subsequent phase to prepare a procurement policy that includes not only sweatshops and fair trade, but goes much further to integrate a comprehensive range of environmental and broad social objectives. Such a policy is a considerably more complex undertaking, and will require a coordinated effort with other ongoing City initiatives and organizations.

The City will also need time and resources to build the internal capacity necessary to develop, implement and optimize a comprehensive sustainable and ethical policy. Efforts must be cautious and aim at making steady incremental change in supply chain relationships over time.

Key stakeholders must be engaged in policy development and implementation and suppliers must become partners in solutions. A stakeholder approach to policy development will ensure that the complementary and competing interests of key groups will be considered and that an approach to implementation can be agreed upon that will ultimately be both administratively practical and meaningful.

A Sustainable and Ethical Procurement Policy will be complimentary to other City initiatives such as the Sustainability strategic action plan, green building policy and Corporate Climate Change Action Plan. Therefore, the development and implementation of a comprehensive procurement policy will depend in part on coordination with the work being done on these other initiatives.


1 The International Labour Organisation (ILO) is a UN Agency promoting social justice and human and labour rights, has established conventions that discourage forced labour, child labour, harassment and abuse, discrimination - particularly against women, excessive hours of work, restrictions on free association and collective bargaining, inadequate wages and compensation, unhealthy and unsafe workplaces, and unfair employment relationships.