Introduction

This Factsheet outlines the current progress in advancing Sustainable Public Procurement (SusPP) in Myanmar 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 to promote knowledge sharing and support training activities at ADB. It will be revised and improved as new information is uncovered and advances are made. If you have new information, please contact ychu@adb.org.

Government expenditure in 2023 by the Government of the Republic of the Union of Myanmar is estimated at 13 billion €, 18% of Gross Domestic Product (GDP). As such public procurement offers a powerful opportunity for the Government to leverage its spending power to achieve its national economic, environmental and social goals. Procurement reform has been underway in Myanmar for several years, mainly focused on improving transparency to tackle corruption. A draft Procurement Law to create a unified, modern procurement system was developed and submitted for Parliamentary approval in 2020, however has not yet been formally adopted.

Since economic liberalization in 2011, Myanmar’s economy grew rapidly but at the cost of higher environmental degradation. Prior to the installation of the military-led government in 2021, the Government of Myanmar was making significant policy progress in putting in a comprehensive framework to tackle issues of climate change and deforestation, and promote green public procurement, responsible business practices, sustainable transport and green growth with support from international donors. However, progress has been stalled since 2021.

>> Visual snapshot of Sustainable Procurement Maturity Level

Maturity Level:

Early Stage

Official Procurement Portal:

https://www.mopf.gov.mm/my/page/ministry/ministry-tender

Key Achievements

• Policy commitment to sustainable development especially in the energy, water, waste and transport sectors
  
• National policy on energy efficiency sets out a program to improve energy efficiency in public buildings
  
• Procurement Directive allows consideration of non-price criteria related to “compliance with important standards” and allows application of donor procurement rules in procurements funded by grants or loans
  
• Procurement practice in place preferences the purchase of non-ozone depleting substances in air conditioning and refrigeration units
  
• Several donor supported projects to advance responsible and sustainable businesses through networks, capacity building and knowledge exchange
  
• National building codes sets minimum architectural design requirements for energy efficiency and green building criteria
  

Ongoing Activities

• EU-financed projects to enhance responsible business practices in the garment, textile and footwear industry
  

Potential Pathways Forward

• Pilot sustainable procurements in ADB financed projects
  
• Revisit and advance adoption of an updated unified Procurement Law
  
• Revisit and advance draft policies to promote a Green Economy Strategy Framework and other sectoral policies on transport, forestry, agriculture, and integrate SusPP into such policies
  

>> Timeline of Implementation of Sustainable Procurement Activities

2016

2015

2017

2021

2011

2018

1st instruction on public procurement issued by President Thein Sein

National Energy Efficiency policy sets out program to improve energy efficiency in public building's

National Building Code sets out minimum energy efficiency and green building criteria

Directive to guide public procurement issued

Sustainable Development Plan priorities job creation, private sector development and environmental protection

National Waste Management Strategy and Master Plan aims to establish a resource circular society

Analysis study completed to assess status of SusPP and environmental labels in Myanmar

Pillar 1: Government Vision & Awareness of SusPP

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

The Government of the Republic of the Union of Myanmar has made significant progress in putting in place a robust policy framework to support sustainable development, green growth and green and sustainable public procurement. However, many proposed policies were in draft form at the time of the installation of the military-run government and their application and approval status remain unknown or pending. This section outlines the policy framework in support of green and sustainable public procurement that was put in place up to 2021.

The country’s overarching development vision is outlined in the Myanmar Sustainable Development Plan (MSDP) 2018- 2030 developed by the Ministry of Planning, Finance and Industry (MOPFI). Complementary policies include a Green Economy Strategic Framework developed in 2016 with support from the World Wildlife Fund (WWF) and a Climate Change Strategy and Action Plan 2017-2030.

The Sustainable Development Plan (SDP) sets five main goals including Goal 3: Job Creation and Private Sector-Led Growth and Goal 5: Natural Resources and the Environment for Posterity of the Nation. The SDP prioritizes the development of a standardized, transparent and competitive procurement system, sustainable production and consumption and green and low-carbon

industry resilient to climate change and disasters. Linkages between these goals and the role of sustainable public procurement in achieving them are not specifically recognized. Promotion of energy efficiency and conservation in public sector use and low-carbon, energy efficiency, urban infrastructure are stated as priority actions. Improved water efficiency, waste management and sustainable public transport are also highlighted for action in the SDP.

Other relevant policies include:

• Energy: A National Energy Efficiency and Conservation Policy, Strategy and Roadmap set a goal to reduce national electricity demand by 12% by 2020 compared to 2012 (pp. 104-108). It was developed with ADB financing in 2015. It sets out a program to improve energy efficiency in public buildings through energy audits, adoption of standard procurement guidelines for equipment ((lighting, ACs, Fans, Computers, Printers, Copiers etc), awareness raising, guidelines and training for public sector employees. The Policy proposes a range of energy efficiency standards, financial incentives and awareness raising programs.
  
• Transport: A National Transport Master Plan and National Implementation Plan on Environmental Improvement in the Transport Sector were under development but their current status is unknown. Cities, like Yangon, were actively studying options for sustainable transport development in close collaboration with interested civil society organizations.
  
• Waste: The National Waste Management Strategy and Master Plan (2018-2030) was developed in 2020. It set goals to improve the management of hazardous wastes, promote the 3Rs of reduce, reuse and recycle, and establish a resource circular society.
  
• Forestry: Myanmar suffers from high rates of deforestation. The national Forestry Master Plan sets a goal of 30% reforested land area by 2030, including by promoting solar energy, biogas, and mini-hydropower systems for rural electrification to reduce reliance on wood for burning.

Myanmar has participated in regional multi-country projects to support Green and Sustainable Public Procurement since 2014 with support from the European Union, GIZ and UNEP. Under this work, an analysis study of the status of GPP and environmental labels in Myanmar was completed in 2021. The study found that the country benefits from a strong policy framework in support of sustainable development and climate action. However, a lack of awareness, financial incentives and environmental standards exist to support SusPP practices. It is unclear if the Government of Myanmar continues to participate in these regional projects.

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.

The first regulatory framework on public procurement was put in place by President Thein Sein in 2011 (Governance of Public Procurement p. 14). Two instructions were issued calling for a change from closed to open tenders and decentralization of procurement implementation to individual line ministries. These instructions were followed over the years by various directives with additional instructions for procurement in construction and public-private partnerships (PPP).

Currently, the governing framework for procurement in Myanmar’s states and regions is Presidential Directive 1/2017, Tender Procedure for the Procurement of Civil Works, Goods, Services, Rental and Sale of Public Properties for the Government Departments and Organizations.

The Directive requires an open tender procedure for procurements valued at Ks. 10 million or more [Article 10(a)]. The basis for award is the lowest price bid that complies with the technical standards, implying that non-price criteria can be considered. [Article 25]. The Directive specifies a rating point system that requires 50-70 points to be allocated to offered price, with the remaining 30-50 points to be assigned to factors such as experience and capacity of the tender bidder, methodology, compliance with important standards and employees. The Directive does not

specifically encourage consideration of environmental and social criteria, however, such criteria could arguably be considered as “important standards”. Further legal reform is recommended however to reduce the uncertainty of applying sustainability criteria in public procurements in Myanmar.

The Directive allows for the application of procurement rules and regulations of international or partner organizations, such as the ADB, for procurements funded by loans or grants. This opens an opportunity for sustainable procurement to be piloted in ADB-financed projects.

A Guideline for Execution of Works by Contractors, which was developed by the Ministry of Construction in 2016, complements the 2017 Directive. A Construction Management Guideline for Road and Bridge was developed under the project for “Capacity Development of Road and Bridge Technology in the Republic of the Union of Myanmar (2019-2019) supported by the Japan International Cooperation Agency (JICA). The Guideline outlines the need for an Environmental Impact Assessment and Environmental Management Plan for major public road and bridge works. The Guideline calls attention to the need to properly dispose of used water when sourcing aggregates [Article 7.6.3], and assigns responsibilities to ensure proper environmental management.

The Ministry of Transport and Communications has been leading e-Government projects for the Republic of the Union of Myanmar. Draft Guidelines for Procurement in e-Government were released in 2019 to guide procurements in e-Government projects. The draft Guidelines are the first national document to mention “value for money” as one of several bid evaluation methods (Draft E-Government Procurement Guidelines p. 23). It provides guiding questions for procurers to assess “value for money”

including whether the tender advances Government priorities, considers non-cost factors that benefit the Government and reflects the real cost of the goods and services. Another possible bid evaluation method mentioned is the “Swiss Challenge” where potential bidders may identify a project and submit a proposal directly to the government. The Guidelines call on procurers to consider the “social and environmental impact” (Draft E-Government Procurement Guidelines p. 24).

A draft Public Procurement and Asset Disposal Bill was drafted and submitted to the Union Parliament in late 2020 but never formally adopted.

Pillar 3: Institutions & Capacity

The Ministry of Natural Resources and Environment (MNRE) is the representative agency for Myanmar in international donor projects to advance Green and Sustainable Public Procurement. However, the lead agency responsible for public budgets and financial management is the Ministry of Planning, Finance & Industry (MOPFI). Engagement of both ministries will be important to ensure a whole of government approach to SusPP implementation that mainstreams SusPP practices across government agencies, states and regions.

The procurement system in Myanmar is decentralized with individual line ministries responsible for their own planning, practice, monitoring and oversight. According to the 2017 Directive, each procuring entity must form a cross-organization Tender Committee and subcommittees to manage tenders valued at Ks. 10 million or more.

Other key public bodies involved in procurement governance are:

• Public Procurement Rules and Regulations Supervision Committee (PRRSC) established in 2015 to develop a unified procurement legislative framework. The Committee was chaired by the Deputy Minister of Planning, Finance & Industry (MOPFI) with other members consisting of Director Generals from different departments across three ministries.
  

• Project Appraisal and Progress Reporting Department (PAPRD) within MOPFI is responsible for appraising, monitoring and evaluating projects valued at MMK 5 billion and above.
  
• Central Equipment Statistics and Inspection Department (CESID) within MOPFI is responsible for policy-making, tracking and end-of-life auctioning of state-owned vehicles, machinery and office equipment.
  

Advancement of SusPP requires involvement from agencies across government. In identifying entry points for SusPP implementation, other agencies to consult include (2021 Analysis Study pp. 62-63):

• Environmental Conservation Department within the Ministry of Natural Resources and Environmental Conservation (MONREC) is responsible for supporting sustainable development projects involving inter-ministerial coordination (including climate change).
  
• Development Assistance Coordination Unit (DACU) is responsible for ensuring that development assistance to Myanmar is efficient, effective, well-coordinated, and nationally owned. DACU currently has the State counsellor as its chair together with the Minister of Planning, Finance and Industry (MOPFI) and the Minister of Investment and Foreign Economic Relations (MOIFER) as vice-chairs.
  
• Ministry of Commerce (MOC) is responsible for producing/maintaining a sufficient supply of essential and important goods for domestic consumption and manufacturing industries and ensuring stability of prices
  
• Myanmar Investment Commission (MIC) is a government-appointed body which is responsible for verifying and approving investment proposals. Its mandate include emphasizing social impacts and safeguarding environmental conservation, creating job opportunities and enhancing technology transfer, abiding by existing labor law and supporting corporate social responsibility in investments.
  

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.

Government support programs

The Government of Myanmar has created committees to promote development of small and medium enterprises (SME) under the 2015 SME Development Law. Green financing for SMEs is made available through the Central Bank of Myanmar, the Small and Medium Industrial Development Bank, Myanmar Insurance, and various international organizations.

Business associations

A Myanmar Sustainable Business Network, supported by UNDP, acts as a multi stakeholder platform for businesses and professionals committed to building a more sustainable economy in Myanmar through responsible business practices. The Myanmar Centre for Responsible Business (MCRB), created in 2013 as a joint initiative of the Institute for Human Rights and Business and the Danish Institute for Human Rights.

Business networks and associations such as the ASEAN CSR Network, Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), the American Chamber of Commerce and EuroCham collaboration to organize regular events and make resources on responsible business conduct available to the public. These associations often work in collaboration with international organizations. The UMFCCI has expressed interest to support initiatives on

green and sustainable public procurement from a private sector perspective. It notes that by virtue of its membership, the UMFCCI is well placed to disseminate policies in the private sector as well as providing guidance, workshops, and training to the businesses. A Myanmar chapter of the UN Global Compact was established in 2012 with 82 participants as of 2023.

Other support programs

The EU-funded SWITCH-Asia has supported projects since 2010 to improve energy efficiency, environmental management, resources efficiency in the textile industry and logistics sector. This includes projects to set up an environmental declaration scheme for construction and building materials (THA BAR WA Project), catalyze sustainable water and energy management in food and beverage industries (SMART MYANMAR I), support SMEs on environmental responsibility in the garment and agri-food sector (SMART MYANMAR II) and advance sustainable freight transport and logistics solutions in the Mekong Region. A website “Smart Myanmar” is supported by the European Union to build capacities for responsible business practices and advance women’s rights in the textile, clothing and footwear industries.

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.

The 2021 Analysis Study on GPP found that the MOPFI will give priority to buying green products if there is no price difference with other options. For example, government procurers are encouraged to purchase air conditioning and refrigeration equipment that uses R410A gas rather than R-22, an ozone-depleting substance. However, no policy is in place to guide or mainstream this practice.

The National Standards and Quality Department, Department of Research and Innovation (DRI) is Myanmar’s Standards Body, created under the Law on standardization in 2014. No environmental label or certification has been created in Myanmar. However, a few international ecolabels are recognized in the country such as TCO Certified, Programme for the Endorsement of Forest Certification (PEFC) and EarthMark.

The National Building Code was adopted in 2016. Part 2 on Architecture and Urban Design sets out a section with minimum design requirements to promote energy efficiency and green buildings criteria [Section 2.12]. The requirements are directed toward the design of building envelopes with adequate thermal resistance and low air

leakage, and toward the design and selection of mechanical, water heating, water resources development and groundwater extraction plans, electrical and illumination systems that promote effective use of depletable water and energy resources.

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.

No monitoring system or e-procurement system currently exists in Myanmar. The Central Statistical Organization occasionally provides information on public procurement to donors and multinational agencies. However, these are not made publicly available (GPP Analysis Study p. 56).

Projects Supported by ADB

ADB has temporarily put on hold sovereign project disbursements and new contracts in Myanmar effective 1 February 2021. ADB remains deeply concerned about recent developments in Myanmar and will continue to consult with shareholders and stakeholders on any operations in the country.

From 2012 to January 2021, ADB provided development assistance to the country mainly to sustain economic growth and help create an enabling business environment, with a focus on improvements in agriculture, human capital development, rural development, energy, and transport. ADB also provided support to mitigate the health, social, and economic impacts of the coronavirus disease (COVID-19) pandemic.

Other Initiatives supported by National/International Agencies

The Global Green Growth Initiative’s (GGGI) objective in Myanmar is to strengthen the government’s institutional framework for NDC implementation by assessing green growth potential and priorities, and developing necessary tools and capacity. GGGI supports development of innovative Green Cities policies, investments and technologies for the

promotion of socially inclusive, liveable cities. This program aims to stimulate the creation of green jobs, will improve access to sanitation, waste management and green mobility, to identify opportunities for promotion of circular economy value chains, renewable energy and resource efficiency technologies, and increase policy maker adoption of low-carbon urban development pathways for Myanmar’s secondary cities.

The project “Improvement of Industrial Energy Efficiency” (Global Environment Facility (GEF) project #5321) is being carried out by the Government of Myanmar in partnership with UNIDO. The Government of Myanmar and the industrial private sector in Myanmar are providing USD13.8m towards the project which is also being supported by a grant from the GEF Trust Fund (the total project cost is USD16.5m). The objective is to promote sustained GHGs reduction in the Myanmar Industry by improving policy and regulatory framework, institutional capacity building for industry energy efficiency; implementation of energy management system based on ISO 50001; and optimization of energy system in industry.

The Multi-Stakeholder Alliance for Decent Employment in the Myanmar apparel industry (MADE in Myanmar) project (Dec 2022 - Dec 2026) continues the SMART Factories Programme, an initiative running for several years to monitor and improve social and environmental performance within the supply chains of participating retailers. MADE is implemented together by partners sequa gGmbH and EuroCham Myanmar, and will be further supported by a broad coalition of local stakeholders and affiliates.

References

ADB Member Fact Sheet, 2023. Myanmar.

ADB, The Government of the Republic of the Union of Myanmar - Ministry of Industry (2015). National Energy Efficiency and Conservation: Policy, Strategy and Roadmap for Myanmar.

APRSCP and SWITCH-Asia RPAC (2021). Scoping Study on SCP in ASEAN: Inputs to the Development of the ASEAN SCP Framework.

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH (2021). Analysis Study: National Green Public Procurement and Environmental Labels in Cambodia, Lao PDR, Myanmar, Vietnam, and Bhutan.

The Government of the Republic of the Union of Myanmar (2016). Myanmar National Building Code 2016.

The Government of the Republic of the Union of Myanmar (2017). Directive No. 1/2017 Tender procedures to be followed by government departments and organizations in construction, purchase, procurement of services, lease and sale.

The Government of the Republic of the Union of Myanmar (2018). National Waste Management Strategy and Master Plan 2018-2030.

The Government of the Republic of the Union of Myanmar, Ministry of Construction, Japan International Cooperation Agency (2019). Construction Management Guideline for Road & Bridge, 1st Edition.

The Government of the Republic of the Union of Myanmar, Ministry of Transport and Communications (2019). Draft Guidelines for Procurement in e-Government.

The Government of the Republic of the Union of Myanmar (2021). Nationally Determined Contributions.

The Government of the Republic of the Union of Myanmar, Ministry of Planning and Finance (2018). Myanmar Sustainable Development Plan (MSDP) 2018- 2030.

OECD (2020). OECD Investment Policy Reviews: Myanmar 2020 4. Promoting and enabling responsible business conduct.

J. Owen, N. Myaing, N. Yan Oo (2020). The Governance of Public Procurement in Myanmar’s States and Regions, The Asia Foundation.

The World Bank. Global Public Procurement Database “Myanmar country profile for 2021”.

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