DUG30023

GREEN TECHNOLOGY COMPLIANCES

DISCUSSION
QUESTION 2
(GREEN PROCUREMENT)

PREPARED BY :
1. MUHAMAD AMAR FARHAN BIN AZIZUL
RAHIM (06DPR20F2028)
2. SYAHDINA BINTI OTHMAN (06DPR20F2049)
3. NURUL ADILA BINTI SHAMRAN
(06DPR20F2009)
4. FATIN AMANI BINTI SAHARUDIN
(06DPR20F2034)
5. SELVI A/P RAGURAMAN (06DPR20F2055)

PREPARED FOR :
PUAN ZAIMILATUN LAILA

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1.0 INTRODUCTION
Green procurement is defined as the acquisition of goods, works, services
or consultancies whose results have the least possible harmful effects on
the environment, human health and safety when compared to other
competing and similar acquisitions, or those that make a positive impact
on the environment. Various multilateral financing organizations,
international organizations and countries have joined the global effort to
promote green procurement. This strategic focus, via procurement, seeks
to increase efficiency with the smallest possible environmental footprint,
while producing energy and even financial savings. Contrary to common
belief, green procurement does not necessarily mean higher costs, but
rather a change in perspective, in which a green investment may be more
efficient in the medium- term, creating win-win situations for countries.
The application of green procurement does not require a total overhaul of
the project’s procurement; it is a gradual process that may include certain
elements, even though they may not have been initially considered
during the programming, identification and preparation process of the
operation. The IDB has trained professionals available to help project
teams include these elements right from the design phase of the operation
and to strengthen the dialogue with borrowing countries. This document
is aligned with the IDB’s procurement processes and policies.

2.0 POLICY GREEN PROCUREMENT

The Government recognizes the importance of GGP and early steps have
been taken to implement it. Among the Government's commitments are
as follows:

i. The Eleventh Malaysia Plan (RMK-11) is moving towards green

growth to enhance sustainability and resilience under the strategic thrust
fourth, where the government targets at least 20% of turnover
green by 2020 towards creating a green market and approach
sustainable consumption and production. Consumption and Production
Plan
Sustainable (SCP Blueprint) will be launched and emphasis on
GGP as one of the pathways to support and guide in
implement activities for green growth in the 11MP.

ii. Medium -term goals for the National Green Technology Policy (NGTP)
stated that green technology is a top choice in Procurement.

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iii. The Construction Industry Transformation Program is one of the core
initiatives
to public projects to spearhead sustainable practices that improve
standards for construction, with a focus on public projects for
improve the specification of procurement, distribution and access to
resources.

iv. The Renewable Energy Policy and Action Plan outlines

strategically by using government procurement power to stimulate
Renewable Energy and the growth of industries that require
implementation
construction or modification of tenders by the government to provide
Renewable Energy technology priorities.

v. The New Economic Model proposes a government procurement policy

for encourage product technology innovation in making Malaysia one
‘Testing platforms’ for prioritizing new products and services
energy efficient equipment and sustainable manufacturing practices.

vi. The 2010 Budget Speech emphasized the priority of friendly products
and services
nature and products that comply with green technology and procurement
standards
government.

vii. Star Rating Index (SSR Index) - Beginning 2015, the GGP initiative
has be part of the evaluation criteria under the SSR Index for agencies
Public Sector by the Administrative Modernization and Management
Planning Unit Malaysia (MAMPU).

viii. Enforcement of GGP through Treasury Circular 1PP/PK1/

Paragraph 6 (ix) as in Appendix 1. The Ministry of Finance (MOF) has
issued a letter of instruction dated 6 April 2016 for the implementation of
GGP at 12 Ministries and agencies under it for 2016. While
implementation GGP has been extended to all Ministries and Government
Agencies Federation in 2017 by letter dated 6 January 2017.

3.0 PRINCIPLES GREEN PROCUREMENT

GGP was introduced to enhance existing procurement policies. GGP can
works to achieve long -term savings and reduce load to the public budget,
promote green growth and increase competitiveness local industry.

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Likewise, there should be no conflict arising between existing
procurement rules with the implementation of GGP. Government
Procurement Policy existing as follows:

• Stimulate the growth of local industry through the use of materials

and local resources to the maximum.
• Encourage and support the development of Bumiputera entrepreneurs in
line
with the national aspiration to create a Trading Society and
Bumiputera Industry.
• Enhancing the capacity of local institutions and industries through
relocation
technology and expertise.
• Stimulate and promote local industry -oriented services
such as transportation (freight) and insurance.
• Accelerate economic growth in which Government revenue is used
as an instrument to achieve socioeconomic and development goals.

Existing procurement principles are also important for implementing

GGP more effectively.

• Public Accountability - The procurement matters entrusted shall

implemented responsibly in accordance with policies and regulations
designated.
• Managed Transparently - All procurement policies, regulations and
processes
implemented should be clear, known and understood generally as well as
in accordance with the policy
and established rules.
• Best Benefit Value - Procurement management should provide
the best return for every dollar spent.
• Open Competition - The procurement process should provide open
opportunities
to all parties eligible to compete.
• Fair and Equitable - A procurement is invited, processed and
considered fairly and equitably based on its policies and regulations
set.

4.0 SELECTION OF PRODUCTS AND SERVICES

Selection of products and services in the implementation of GGP in the
public sector is based on the following criteria:

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a) Budget considerations: Frequently used products and services in the
public sector and the amount spent is significant.

b) Availability of Standards (Standards): Product criteria or standards

and the service is available under the MyHIJAU Mark recognition where
it can be used in the procurement process. In addition, this will make it
easier government procurement officials recognize environmentally
friendly products and services which has been recognized and listed in
the MyHIJAU directory.

c) Environmental Impact: Green products or services can reduce

negative impacts on the environment such as the reduction of carbon
emissions dioxide, efficient use of water and energy resources or
reduction content of contaminants and harmful substances.

d) Readiness of local suppliers: Implementation of GGP for group

categories related products or services can help local manufacturers
especially Small and Medium Enterprises (SMEs) that can afford it
compete in local and international markets.

Based on the above criteria, products and services have been

identified and selected in the implementation of GGP in the public sector
as below:
1) Information and communication technology (ICT) equipment
2) Cat
3) Fiber cement
4) Interior lighting
5) Paper
6) Textiles
7) Wood -based furniture
8) Versatile printer
9) Air conditioning
10) Product packaging

4.1 MyHijau Program

The MyHIJAU program was introduced on October 23, 2013 after getting
approval of the Green Technology and Climate Change Council (MTHPI)
Meeting is an integrated program based on the concept of development
sustainable development under the Ministry of Environment and Water
(KASA) with Malaysian Green Technology and Climate Change Center
(MGTC) as the implementing agency.

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The program aims to coordinate all product development initiatives and
green services in Malaysia, raising awareness and knowledge
society about the importance of environmental conservation, creating a
line guidelines and procedures as well as developing party capabilities
and skills industry and consumers.
The focus of this program is guided by sustainable production
production) especially in encouraging manufacturers, producers and
suppliers locally produce green products and services; as well as
sustainable use (sustainable consumption) which is a focus on consumers
and buyers with promote the green market as well as encourage the use of
products and green service.

4.2 Recognition of MyHIJAU Mark

Currently, there are various types of "green" or "eco" signs and symbols
for products or green services that cause confusion among consumers and
buyers. MyHIJAU Mark's recognition is given through a logo make it
easier for consumers and buyers to recognize green products and services
valid and listed in the MyHIJAU Directory by MGTC. MyHIJAU Mark
recognizes products, equipment as well as providers services that meet
the standards or standards of nature around local or international. It is
expected to give confidence in consumers and increase purchases
green products in promoting sustainable practices.

All products under the MyHIJAU Mark recognition have been divided
into four categories according to compliance with standards or
environmental standards such as below:

Category One:
Green or environmental labeling schemes that comply with ISO standards
14024 (Eco Label Type First).
Examples: SIRIM Eco Label (Malaysia), German Blue Angel, Thai
Green Label, Environmental Choice Australia and Korean Eco Label.

Category Two:
Green or environmental labeling schemes that comply with ISO standards
14025 (Eco Label Type Three)
Example: SIRIM (Malaysia) Product Carbon Footprint Label, Thai
Carbon Footprint Reduction Labels, Korean Carbon Footprint Labels and
Taiwanese Products Carbon Footprint Reduction Label.

Category Three:

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Green or environmental labeling schemes that have been recognized as
Other Types My Love Voluntary Sustainability Scheme; VSS 16
GOVERNMENT GREEN PROCUREMENT GUIDELINES (GGP) 3.0
Example: Minimum Energy Performance (ST) Standard, Water Efficient
Product Labeling Scheme (SPAN), Forest Stewardship Council (FSC)
and Program for Forest Certification Endorsement (PEFC)

Category Four:
Performance Standard Compliance with environmental criteria
Example: MS 2413: 2011 (P) Electric Motorcycle Specifications Part 3
(Test Achievements)

All green services recognized under the MyHIJAU Mark have complied
qualifications as below:

⚫ Have Company or Organizational Policies and Standard Procedures

Relevant Standard Operating Procedure (SOP) environmental services
provided as well
⚫ Has an expert force related to the environment and obtained
certification which is recognized by the MGTC.

4.3 MyHIJAU Directory

The MyHIJAU directory is a complete reference for products and

providers services that have been certified and recognized by MyHIJAU
Mark, categorized with detailed information along with descriptions. This
directory will be a reference source for government green procurement
and all companies in make a green purchase decision. The green directory
website is browsable at www.myhijau.my or upload the mobile
application (MyHIJAU) for obtain information on registered green
products and services.

5.0 METHOD OF GGP IMPLEMENTATION

In general, the implementation of GGP is similar to the procurement

method existing supplies or services starting from the planning process,
advertising, provision of specifications, provision of quotation or tender
documents, evaluation, awarding of service providers or contractors,
management contracting, performance monitoring and reporting.
Therefore, the Ministry or Agency The government should refer to the
current procurement procedures and procedures in force to execute a
procurement including GGP.

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The most important component in the implementation of GGP is planning
green procurement at an early stage, preparation of specifications based
on green criteria and evaluation by giving weights to the green element.
Based on this component, the supplier has information that the Ministry
or Agency The government wants green supplies or services and so on
offer supplies or services that meet green specifications.
Ministries or Government Agencies will benefit from acquiring
supplies or services required based on need and on time
the same has minimal impact on the environment.

The GGP implementation process is divided into six (6) stages as follows:

Level 1 Level 2 Provision of Level 3

Procurement Planning Specifications Evaluation & Awards

Level 6 Level 5 Level 4

Monitoring, Reporting Agreement or Appointment of Service
& Evaluation Contract Supplier or Contractor
Management

6.0 IMPORTANCE GREEN PROCUREMENT

i. Improved Employee Health and Safety

Green procurement also serves your employees health, safety and overall
well being. For example, buying certified eco-friendly cleaners to use in
your workplace avoids the caustic and often toxic chemicals used in
many conventional store-bought products.

The food items you provide in the break room vending machine can also
be included in your GPP. Buying locally-made, organic and sustainable
food options are usually healthier and can make your employees feel
better and be more productive.

ii. Economic savings and smart investment

When considering the life-cycle costs of works and goods, public

spending efficiency is promoted and is possible to achieve savings in the
medium and long-term. This also increases the demand of sustainable
solutions and market competitivity, as well as the development of market

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capabilities for innovation and manufacturing that considers the entire
life-cycle of goods.

In addition, by reducing the environmental footprint, society makes an

indirect investment to prevent social and economic damages incurred by
climate impacts while avoiding negative externalities. Even if the savings
are not reflected in the short term, a green purchase can still be a smart
investment if it has a smaller negative environmental impact and allows
maximizing value for money.

iii. Reputation

Citizens are increasingly more aware of the adverse effects that

consumption and production patterns have on the environment and expect
the authorities to take action in guiding them to adopt more sustainable
consumption habits. Becoming a leader in this sector generates empathy
and support from society.

On the other hand, if the media, citizen groups and NGOs (non-
governmental organizations) detect practices with negative environmental
impacts, this could significantly affect the organization’s reputation.

iv. Fulfilling national and international policies and commitments

Green procurement is a mechanism to demonstrate an alignment with the

national policies on environmental sustainability and to increase
compliance with international targets/ goals and commitments, such as
the Nationally Determined Contributions 9 (NDC), under the United
Nations Framework Convention on Climate Change (UNFCCC).

The role of public procurement is so important in relation to climate

change that three of the largest city networks (ICLEI, C40 and the Global
Covenant of Mayors for Climate and Energy) stated at the end of 2017 10
their intent to support public sustainable procurement as part of their
strategy to speed up the implementation of the Paris Agreement.

v. Innovation incentives in the National industry

Green procurement can be an indication for suppliers and contractors or
the general industry of a country to begin incorporating environmental
practices into their production, distribution, marketing and final disposal
processes, as long as this does not restrict competition. It is an incentive
for the industry to adopt the best possible standards.

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7.0 CONCLUSION
With the increasing problems of environment, the effectiveness of the
green procurement is crucially needed. GP is able to play roles in the
mitigation on the environmental adverse impact from construction
activities which leads to sustainability throughout construction supply
chain. Throughout its life cycle, building gives significant contribution to
global GHG emissions, pollution and waste management issues. Today
more than ever, buildings have tremendous impact on the environment
both during construction and operation and it has raised the growing
concerns regarding construction industry locally and globally. This study
provides insights regarding the level of readiness on GP in the Malaysia’s
construction industry, and reveals the challenges on the GP’s adoption in
construction and the required key drivers for implementing GGP. Ideally,
GP should be looked as a whole system and the rating tool provided
points for procuring energy efficient products as well as optimizing
performance and building sustainability. It is hoped that this study would
be a starting point to continue the agenda on establishing green
procurement for Malaysian construction industry and producing further
strategic implementation plans.

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