Introduction

This Factsheet outlines the current progress in advancing Sustainable Public Procurement (SusPP) in Cambodia, based on a desk review. The review applies an analytical framework of six Pillars (or "building blocks") of SusPP systems.

The Framework is designed to make clear that countries do not need to follow a linear step-by-step path to build effective GPP systems. Rather it is important to examine local contexts and prioritize the Pillars with the most potential in the country. No matter where a country starts, a balanced approach to implementation calls for progress on all Pillars to some degree.

This Factsheet is organized as follows:

• "Country Overview" section with executive summary, indicative maturity rating, key achievements, potential pathways forward and timeline of key events related to advancing sustainable public procurement.
  
• "State of Play & Forward Looking Analysis" section that summarizes the research findings from the desk review for each Pillar theme.
  
• "Key Stakeholders Driving the Agenda" explores opportunities for ADB teams to open discussions with country counterparts and add value to the work of partners.
  

The Factsheet is intended to be a living document that will be revised and improved as new information is uncovered and advances are made. It is designed to support the ADB training programs on SusPP.

The Kingdom of Cambodia spends between 20 to 40% of national Gross Domestic Product (GDP) on public spending annually. SusPP implementation has been explicitly prioritized in the Sustainable Consumption and Production Roadmap 2022-2035, as well as a draft update to the Environment and Natural Resources Code (not yet been formally adopted). An interministerial body, the National Council for Sustainable Development, leads the implementation of Sustainable Public Procurement in Cambodia. Procurement law reform is underway in 2023 that may include SusPP concepts. For now, general procurements are still based on lowest price rather than social and environmental sustainability consideraitons.

SusPP can contribute to Cambodia's vision of green growth, first set out in the 2009 National Green Growth Roadmap. Most recently, sustainable and inclusive development is defined as one of four pillars of the Rectangular Strategy Phase IV and Cambodia Vision 2050 - the basis for the National Strategic Development Plan 2019-2023.

A shift to a green economy offers many benefits for Cambodia. Its primary economic sectors of agriculture, tourism, construction, and manufacturing are heavily reliant on natural resources. The country is amongst the most vulnerable to climate change with nearly 80% of the population living in rural areas. Cambodia’s rate of urbanisation is 4.3%, the second fastest in East Asia, with air and water pollution becoming major issues partly due to weak treatment and monitoring. Urbanisation largely uncontrolled, raising costs and complexity of subsequent efforts to develop infrastructure. Meanwhile the renewable energy potential (solar, biomass and waste-to-energy) is high.

>> Snapshot of Sustainable Procurement Maturity Level

Maturity Level:

Early-Intermediate Stage

Key Links

• Official Government Procurement website
  
• E-procurement system

Key Achievements

• Comprehensive policy framework that priorities green growth, energy efficiency, circular economy, waste management and climate change (including refrigerants) as national priorities
  
• Commitment to smart city concept in Phnom Penh and seven Secondary Cities, opening door for SusPP at subnational level
• Several support programs in place to help private sector adopt greener practices and technologies
• Ecolabels, standards, building and infrastructure guides exist including nearly 1000 environmental standards, Green Building Guidelines, energy efficiency labels, eco-hotels and legal timber tracking.
  

Work underway

• None identified to date
  

Potential pathways forward

• Pilot the integration of sustainability criteria in ABD-financed procurements, guided by the Green Infrastructure Guide and other available national standards and guides
  
• Build awareness and capacity of the General Department of Public Procurement (GDPP) on SusPP concept
• Support broad awareness raising on SusPP, including a seminar or national forum and communications campaigns
• Develop a high level policy/commitment on SusPP to open the door for implementation (in the absence of legal reform)
• Support the development of implementing regulations and guidelines for the new Sustainable Procurement provision in the new 2023 Public Procurement Law
  

>> Timeline of Implementation of Sustainable Procurement Activities

2009

2012

2013

2015

2018

2019

2020

2021

2022

2023

Rectangular Strategy Phase IV prioritizes sustainable & inclusive development

Draft Environment & Natural Resources Code proposes legal instrument on SusPP

Sustainable Consumption & Production Roadmap priorities SusPP

National Strategic Plan on Green Growth 2013-2030

7 Secondary Cities set Sustainable City Strategic Plans

1st and 2nd Nationally Determined Contributions submitted

National Green Growth Roadmap sets vision for "low carbon Green Growth"

Virtual Workshop on SusPP organized by GIZ

Circular Economy Strategy & Action Plan

Commits to climate neutrality by 2050

National Strategic Development Plan 2019-2023

Green Infrastructure Guide released

Phnom Penh sets Sustainable City Strategic Plan

New Law on Procurements consolidates patchwork of regulations

New Law on Public Procurement adopted

National Cooling Action Plan endorses energy efficienct appliances & low GWP refrigerants

Industrial Development Policy 2015-2025 prioritizes environmental protection & safety

Pillar 1: Government Vision & Awareness of SusPP

Governments that establish a clear policy vision on SusPP can accelerate the shift from procurement as an administrative to strategic function, making clear how SusPP can deliver on important national social and environmental goals.

Progress to date:

Green public procurement is recognized in Cambodia's Sustainable Consumption and Production Roadmap 2022-2035 as a key strategy to promote "Sustainable Investment" - one of the Roadmap's five key pillars. The Roadmap calls for the “set up of a sustainable (green) procurement standard, under the National Council for Sustainable Development and Ministry of Economy and Finance” and “design of environmental criteria and performance requirements for priority products and services. In addition, a new Environment and Natural Resources Code has been drafted (but not yet adopted) with a detailed section on “Sustainable Public Procurement.”

SusPP aligns with the country's vision for "Sustainable and Inclusive Development" - one of four Pillars of Cambodia's national development, outlined in the Rectangular Strategy Phase IV under the National Strategic Development Plan 2019-2023.

SusPP implementation can contribute to the achievement of several national goals in Cambodia. The country has a long-established vision for "Low-carbon Green Growth", first articulated in 2009 within its National Green Growth Roadmap. The importance of environmental protection and safety for investments projects in the Industrial Development Policy 2015-2025.

This green growth vision has been further elaborated over the years through a robust set of national policies and plans including:

• National Waste Management Strategy and Action Plan (2018-2030)
  
• updated Nationally Determined Contribution (2020)
  
• Municipal Solid Waste Management Policy (2020-2030)
  
• National Energy Efficiency Policy (2021-2030) (draft)
  
• Circular Economy Strategy and Action Plan 2021-2025
  
• National Cooling Action Plan 2023

SusPP can also contribute to development priorities set at the city level in Cambodia. Many Cambodian cities have committed to leapfrog to a more sustainable pathway for urban and infrastructure development. Phnom Penh created a Sustainable City Strategic Plan in 2019, an effort that was repeated by seven secondary cities (Siem Reap, Battambang, Kampong Cham, Suong, Bavet, Kep, Sijanoukville) in 2020. These plans set out a vision of “sustainable urban infrastructure for sewerage and drainage systems, solid waste management, water supply, transport, communications, and energy supply—including through resilient grey-green and decentralised models.” Phnom Penh, Battambang, and Siem Reap have been selected to participate in the ASEAN Smart Cities Program, reinforcing their commitment and support available to shift to a greener urban development model.

Pillar 2: Legal & Regulatory Framework

Procurement law reform can be key to clear obstacles to implementation by establishing "value for money", not "lowest price", as a core procurement objective, and authorizing procurement approaches suited to SusPP.

Progress to date:

Cambodia’s law on public procurement (PPL) was enacted in 2012, considered to be a major milestone in modernising the procurement system. Its achievement was in consolidating the previous patchwork of sub-decrees and other regulations into one central legal instrument. The 2012 PPL does not contain specific provisions related to social or environmental criteria. For ADB-financed projects, Article 3 of the PPL allows procurements financed by development partners to be organized under terms outlined in the financing agreement - opening the door for SusPP.

A 2016 Procurement Manual for Public-Private Partnerships (PPP) clarified that the principles of value for money and optimal life-cycle costs are applicable to both general public procurements and PPPs. However, the emphasis is different between the two. While general procurements place greater emphasis on detailed design specifications and lowest costs, PPPs are developed on the basis of output requirements that require risk management and life-cycle considerations.

The draft Environment and Natural Resources Code proposes a target to "develop a legal instrument on sustainable procurement by 2025." The text, while not formally adopted, indicates potential priorities for procurement law reform in the country by calling for a legal instrument that:

• Encourages resource efficiency;
• Designates categories and priority rankings of products and services, including but not limited to environmentally sound technology and green finance;
• Defines minimum environmental criteria and performance requirements, including but not limited to resource efficiency, reduction, reuse, recycling of waste, integrated waste management, and cleaner production, for each category of products and services based on the environmental impact of such products and services;
• Defines reporting requirements for categories of products, services, and magnitude of procurement;
• Provides guidance for selecting appropriate suppliers;
• Provides guidance for decision-making based on environmental considerations, including but not limited to weighing environmental criteria against other purchasing criteria including but not limited to economic considerations price, performance and quality;
• Lists sanctions for breaches of environmental performance requirements of products and services; and
• Defines measures for ministries or institutions responsible for procurement to encourage and assist stakeholders in undertaking sustainable procurement practices.

The Code proposes setting mandatory requirements for all ministries and institutions to comply with minimum energy specifications and enforcement of International Electrotechnical Commisson (IEC) standards.

A new PPL was adopted in May 2023 but available in Khmer language only. Article 54 introduces the concept of Sustainable Procurement (Transparency International).

Pillar 3: Institutions & Capacity

Progress to date:

The Ministry of Economy and Finance (MoEF) is the competent institution responsible for public procurement policy. The General Department of Public Procurement (GDPP) within the MoEF oversees all procurement activities in the Kingdom of Cambodia. Each Procuring Entity is responsible for appointing a Head and Procurement Unit (PU) to undertake all procurement activities. Procurement Committees within each Entity review plans, assess and award contracts and address complaints. To date, none of these procurement entities have been assigned specific responsibilities related to SusPP.

The SusPP agenda in Cambodia is led by the National Council for Sustainable Development (NCSD). Established in 2015, the NCSD acts as an inter-ministerial platform under the direction of the Minister for Environment and chaired by the Prime Minister. Its membership consists of 34 members from line ministries and 25 governors of the provincial capitals' governing bodies.

The Department of Green Economy (DGE) is the main agency responsible for promoting sustainable consumption and production (SCP), including green label certification and green public procurement. Within the DGE, an Office of Green Labels and Green Certification and Office of Green Environmental Standard Consumption have been created.

A Technical Working Group on Sustainable Consumption and Production was created under the SCP Roadmap under the NCSD. Their mandate is to:

• Prepare an annual action plan to implement the project on green public procurement (GPP) and environmental labels
  
• Study and evaluate priority areas for implementation on SCP which focus on GPP mechanisms and Eco-labels
  
• Consult and provide policy advice related to regulations and legal standards on GPP and Eco-labels
  
• Coordinate and cooperate with relevant sectors to strengthen the successful implementation of GPP projects and Ecolabels
  

The three main line ministries in charge of GPP implementation are the Ministry of Environment - NCSD, Ministry of Industry, Science, Technology & Innovation (MISTI)- Institute of Standards of Cambodia) and Ministry of Economy and Finance (MEF).

Another relevant agency is the Council for the Development of Cambodia (CDC), the highest decision-making level of the government for private and public sector investment. It has the authority to grant incentives to qualified investment projects including profit tax exemptions or special depreciation - that can be potentially applied to environmentally-friendly projects.

Training opportunities are emerging but appear limited. Training has been provided on draft guidelines and certifications of green buildings. The National Strategic Development Plan 2019-2023 reported that 265 people had been trained on green certification from 2017-2018.

Pillar 4: Market Practices

Market dialogue throughout the procurement process helps procuring entities to choose realistic sustainability criteria and ensure suppliers succeed in delivering on sustainability commitments over the contract duration.

Progress to date:

Cambodia has begun an economic shift from low to high productivity sectors, moving out of agriculture into textiles, followed by electronics and machinery manufacturing.

Recent policy and legislative reforms are expected to accelerate green practices in the private sector. The SCP Roadmap includes an action to establish Extended Producer Responsibility (EPR) schemes by 2022, to be led by the Ministry of Environment (MoE). Under an EPR scheme, producers are given a significant responsibility – financial and/or physical – for the treatment or disposal of postconsumer products. This responsibility provides an incentive to reduce waste at the source and promote product design for the environment. The SCP Roadmap also proposes the development of standards for environmentally sustainable packaging, reduction of solid waste, and less wasteful plastic production.

The new Law on Investment and Law on SEZ encourages and favors companies that take a long-term view of social responsibility, focusing on three main areas: (1) environment, (2) staff well-being, and (3) social inclusion. This will further encourage municipal authorities and relevant institutions to promote green infrastructure investment for urban development. Cambodia’s Sub-Decree No. 18 adopted in February 2021 introduced preferential tax treatment for imported electric vehicles (compared to combustion-engine

vehicles). The SCP Roadmap identifies the need to further encourage the use of low-emissions vehicles, including electric motorbikes and cars, through other fiscal and regulatory incentives, and the phase out of old vehicles.

Four industrial sectors with good potential for greening in Cambodia were identified in 2018 as: food processing, construction, manufacturing of non-metallic mineral products and garments manufacturing.

Several international development projects are underway to support Cambodian businesses to adopt green practices and technologies, including:

• The ‘Switch Garment’ project (2020-2024) aimed at supporting sustainable garment industries in Cambodia led by the Global Green Growth Institute (GGGI).
  
• The Cambodia Sustainable Landscape and Ecotourism Project (2019-2025) aimed at promoting ecotourism opportunities and non-timber forest product value chains in the Cardamom Mountains and Tonle Sap landscape, implemented by the MoE and Ministry of Rural Development with World Bank support.
  
• The ‘Building an Enabling Environment for Sustainable Development’ project aimed at producing and promoting viable plastic alternatives to combat plastic pollution, supported by the Embassy of Sweden and UNDP.
  
• The “Low-carbon development for productivity and climate change mitigation through the Transfer of Environmentally Sound Technology (TEST) methodology” project aimed at promoting more resource efficient and cleaner production practices in industry, implemented by the Ministry of Industry, Science, Technology and Innovation with support from the United Nations Industrial Development Organization (UNIDO) and funding from the Global Environment Facility.
  
• The ‘Green Invest Asia’ project that aims to support companies’ readiness to secure finance for the sustainable production of cashews, charcoal (made from coconut waste and recycled wood) and teak, supported by USAID.
  
• Sustainable infrastructure development in the logistics, water and waste management spaces by Infrastructure Asia, a Singaporean government office set up by the Monetary Authority of Singapore and Enterprise Singapore.
  

Pillar 5: Procurement Operations

Various tools and procurement approaches can be employed to help procurers more easily identify environmentally friendly goods and services and attract a competitive market response.

Progress to date:

The draft Environment and Natural Resources Code outlines a proposed mechanism for the design of green tenders that depends on the development of environmental standards and ecolabels. The NCSD Is currently designing an eco-labelling program in Cambodia, in collaboration with relevant line ministries and with support from GIZ.

The Ministry of Industry, Science, Technology and Innovation's National Standards Council coordinates technical committees that develop and approve certified international standards for national application. Nearly 1000 certificate national standards exist aiming to set a minimum benchmark of quality, safety, effectiveness, eco-friendliness and ethics management. These standards cover areas such as construction practices and materials, chemical and chemical products, electricity and electronics, rubber products, motor vehicles, cosmetics and digital systems.

Other sector-specific ecolabelling initiatives include:

• An energy efficiency label for electrical appliances and equipment, including testing and certification procedures by the Ministry of Mines and Energy (MME).
  

• A Green Building Guidelines and Certification system by the NCSD with support from the Korean Institute of Civil Engineering and Building Technology (KICT), under the support of the Mekong-Republic of Korea (ROK) Cooperation Fund.
  
• A third-party verification of green buildings called Cambodia Energy & Environmental Leadership (CAMEEL) managed by the Cambodia Green Building Council.
  
• Clean Green Cambodia, an ecolabel certification scheme for hotels, restaurants, shops, and activity organizers (eco-tours, workshops, etc.) operating under the Green Influence Programme by the Soulcial Trust since 2017.
  
• A timber tracking system to verify sustainable origins known as the ‘Forest Law Enforcement, Governance and Trade’ (FLEGT) Programme by the Forestry Administration (FA) under an EU and United Nations Food and Agriculture Organization (FAO)-supported project.
  

A 2019 Green Infrastructure Guide was developed by the Ministry of Public Works and Transport with ADB support. It provides locally-feasible options to green urban and transport infrastructure projects.

Pillar 6: Monitoring & Impact Measurement

Monitoring systems are essential to gather the information needed to keep SusPP implementation on course and communicate on the benefits achieved for the country.

Progress to date:

No information was found on monitoring of SusPP at the national level in Cambodia.

A 2021 presentation by a NCSD official reported that annual action plans are prepared to implement the project on green public procurement and environmental labels, coordinated by GIZ. The SCP Roadmap proposed monitoring of broader SCP activities through NCSD-led annual meetings of its Technical Working Group for SCP and an annual public-private forum on SCP to share knowledge amongst stakeholders on SCP action in Cambodia.

Projects Supported by ADB

Current ADB operations in Cambodia are implemented under the country partnership strategy (CPS) 2019–2023. One of four strategic pillars of the CPS is to "foster green, sustainable and inclusive development." (ADB 2019).

Under the CPS, ADB will continue to support the government to update procedures and build capacity on procurement aligned with value for money. ADB plans to finance projects and programs to promote sustainable and green urban infrastructure, livable cities and energy efficiency.

Other Initiatives supported by National/International Agencies

• GIZ (2020-present) provides technical training courses for government officers to understand the concept of SusPP, preparing an institutional set-up for SusPP, and fostering knowledge sharing between countries.
  
• The EU-Switch Asia (2010-2023) program has been active in Cambodia with initiatives to support green business and SMEs in the freight and transport sector, solar solutions, plastic bag reduction, garment and food sectors. Cambodia is also a participating country of the Global Green Growth Institute and Partnership for Action on the Green Economy (2022).

Several bilateral partners are advancing green initiatives in Cambodia.

• The Japan Ministry of Environment (2017-2023) coordinates a "Joint Crediting Mechanism (JCM) Model Project that has supported the installation of solar panels in schools, improvements in the water supply and sanitation and greenhouse gas reductions.
• The Republic of Korea has provided support to the development of a Green Building Guidelines and Certification system by the NCSD.
• USAID (2019-2022) supports a Sustainable Finance Initiative and Green Invest Asia program.
• The Agence Francaise de Developpement supports an initiative to improve the environmental performance of the airport sector and create a local production label for honey and other agricultural products.
  

Resources

GIZ, 2021. National Green Public Procurement and Environmental Labels in Cambodia, Lao PDR, Myanmar, Vietnam, and Bhutan.

Green Growth Institute, 2018. The Economic, Social and Environmental Impacts of Greening the Industrial Sector in Cambodia.

Kingdom of Cambodia, 2016. Public-Private Partnerships (PPP) Procurement Manual - Revised First Draft.

Presentation on "Green Public Procurement And Action Plan" by Dr. Keo Vanthoueun, October 2021.

Switch Asia, 2022. Policy Brief - Cambodia's Roadmap for Sustainable Consumption and Production (SCP).

Transparency International. Legal Analysis Report - The Draft Law on Public Procurement (Version 2022) and Related Regulations.

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