Introduction

This Factsheet outlines the current progress in advancing Sustainable Public Procurement (SusPP) in the Solomon Islands 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 the Solomon Islands accounts for 25.1% of GDP (in 2020). Shifting this spending to contribute to the achievement of the country’s social and environmental goals can make a significant impact. Currently, the country does not have a specific policy to promote sustainable procurement. However, the Government has set out ambitions for a more sustainable development pathway, including a target of net zero emissions by 2050.

The country’s economy depends largely on the agriculture, forestry and fisheries sectors, which together account for around 40% of GDP and provide employment for the majority of the population. (Nationally Determined Contribution, p. 5) Its largest source of GHG emissions comes from the energy sector, especially the transport sector. The Government has prioritized a shift to 100% renewable energy and improvements in energy efficiency. Electric vehicle adoption is a key priority, with ten electric buses already procured in Honiara.

While the procurement regulations promote the concept of value for money, the framework lacks clear provisions in support of a shift to sustainable procurement practices. Procuring officers are encouraged to maximize local participation in tendering and examples exist of Ministries and donor agencies that have successfully designed tenders to require the employment of women and youth in infrastructure projects. The upcoming 2023 Pacific Games offers a high-profile opportunity for the Government of Solomon Islands to pilot sustainable procurements.

>> Visual snapshot of Sustainable Procurement Maturity Level

Official Procurement Portal:

http://www.mof.gov.sb/GovernmentFinances/Procurement.aspx

Key Achievements

• High-level policy commitment to net zero, energy efficiency, renewable energy and low-carbon transport
  
• Procurement regulations encourage participation of local suppliers in government contracts
  
• Market readiness studies completed on electric vehicles and renewable energy solutions
  
• Proven experience of Government Ministries in designing tenders that promote workforce participation of women and youth
  
• Procurement of 10 electric businesses in the capital, Honiara
  

Potential pathways forward

• Carry out awareness raising and training to understand the benefits that sustainable procurement can bring to the country
  
• Reform the procurement act and regulations to explicitly encourage sustainable procurement
  
• Pilot sustainable procurement in tenders with criteria on energy efficiency, renewable energy, electric vehicles, local food or catering
  
• Strengthen procurement monitoring, including on indicators related to sustainable procurement
  

>> Timeline of Implementation of Sustainable Procurement Activities

2013

2014

2016

2017

2021

2022

Public Finance Management Act and Procurement Manual released

National Energy Policy sets target of 20% reduction in electricity consumption of Government by 2019

National Development Strategy set several environmental and social goals

Waste Management and Pollution Control Strategy 2017-2026 proposes ban on plastic bags and improved e-waste management

2nd Nationally Determined Contribution sets targets of net zero emissions by 2050 and calls for energy efficiency ratings

Procurement Regulations adopted that recognizes value for money and participation of local suppliers

Renewable Energy Roadmap developed under JICA project

National Policy Roadmap for Electric Mobility developed under UN project

Updated Procurement Manual released

PRIF study and conference on enhancing local content in procurement of infrastructure projects

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.

No specific policy or action plan exists on sustainable procurement in the Solomon Islands. However, the Government has made public commitments and set out several policy priorities that sustainable procurement can contribute to achieving.

SDGs and Climate Change

The country’s National Development Strategy (NDS) 2016-2035 with two objectives (out of five) focused on “sustained and inclusive economic growth” with “resilient and environmentally sustainable development.” To achieve these goals, the Government has set several priorities, including promotion of small and medium enterprises, energy conservation and efficiency, minimizing the negative environmental impacts of energy production, distribution and consumption, sustainable agriculture and forestry. The Government of Solomon Islands released its second Nationally Determined Contribution (NDC) in 2021, with a target of net zero emissions by 2050.

Energy efficiency

Back in 2014, the Solomon Islands National Energy Policy set a target to reduce electricity consumption in Government services by 20% in 2019, while increasing efficiency of service delivery by 2019. However it is unknown if this

target was achieved. The 2016 NDS outlines the Government’s plans to promote energy efficient technology, including by introducing product standards/labels for appliances and energy efficiency ratings. In 2016, the Consumer Protection (Approved Standards for Restricted Electrical Products) Regulations was adopted, which requires energy labelling and minimum energy efficiency standards on imported appliances (refrigerators, air conditioners, lamps). The NDC reiterates the Government’s commitment to regulate imports of electrical appliances by 2035.

Renewables

The Solomon Islands has the potential to increase electricity access and use through renewable energy resources and technologies to 100% by 2050 (NDC 2021). By 2021, the renewable energy generation in the country was 23 megawatts (MW) from 14 Solar Hybrid Systems, three grid connected Solar Systems and one Hydro-Diesel Power Station. In 2022, a Renewable Energy Roadmap was launched with the plan to reach 100% renewable energy by 2030. The Roadmap envisions the creation of an independent energy regulatory body, amendments to the Electricity Act and development of a new electricity sectoral Bill/Act to transform the sector in the long term.

Sustainable Transport

The National Policy Roadmap for Electric Mobility was launched in September 2022, which included a Feasibility Study and Market Readiness Assessment. More than 50% of the country’s GHG emissions comes from the energy sector, with the transport sector contributing a huge portion.

The Roadmap aims to guide the deployment and scale-up of electric vehicles for the country. It proposes a coordinated approach to improving affordability of electric vehicles, creating charging infrastructure, building skills and capacity and minimizing any environmental externalities. Under the Roadmap, an EV awareness program for Government agencies is planned as well as subsidies, GSP and custom duty reductions/exemptions until 2035.

The Roadmap authorizes government agencies to aggregate EV demands (from Govt. departments, fleet operators, corporate, others) and do bulk procurement of EVs at price discounts. It clearly outlines the multiple benefits of EV adoption in the country. Importantly it offers a detailed analysis of the Total Cost of Ownership (TCO) of EV purchases to demonstrate the overall cost savings over the vehicle lifespan.

Waste Management

Waste management and recycling facilities on Solomon Islands are limited, and existing legislation not enforced and outdated. The Government main policy on waste is the Waste Management and Pollution Control Strategy 2017 - 2026. The Strategy includes a plan to introduce a legislative ban on the use of all plastic bags by 2020 with bio-degradable bags as a replacement. It also plans for the formulation of national guidelines on the disposal and management of E-wastes, including waste from solar lighting and other sources.

At the city level, the Honiara City Council Solid Waste Management (SWM) Plan 2019-2027 has been adopted, with plans for further development under ADB grant financing. Further, the upcoming 2023 Pacific Games to be held from 19 November to 2 December 2023 will feature a waste segregation program. The event offers an opportunity to pilot sustainable procurement.

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.

Public procurement in Solomon Islands is regulated by the Public Financial Management (Procurement) Regulations 2021 and the Solomon Islands Government (SIG) Procurement Manual 2022. These complement Chapter 7 “Supply Chain Management” of the Financial Instructions of 2010 and the Public Finance Management Act (PFMA) 2013 (Part 9 - Procurement and Use of Public Resources). An online copy of the 2013 Procurement and Contract Administration Manual was found, however not of the updated 2022 Procurement Manual.

Value for Money

The concept of value for money is listed as the first procurement principle in the 2021 Procurement Regulations (Article 10), defined as “good quality at the lowest price”. Other principles include “efficient, effective and ethical use of resources” meaning that procurement should be conducted so as “to eliminate waste and make only proper use of Government resources.”

The Regulations clarify that “value for money” allows procurement officers to acquire goods at a price that is not the lowest attainable price, if satisfied that it is the most appropriate choice considering other factors that contribute to using public funds in the most efficient and effective manner. (Article 12(3)(a)).

Framework Agreements

A common procurement approach for sustainable procurements is to aggregate demand across procuring entities to motivate suppliers to offer solutions that meet sustainability criteria. The 2021 Procurement Regulations allow for the organization of “period contracts” (similar to framework agreements) for regularly required items such as office suppliers, IT equipment, food and catering, printing and equipment maintenance services (Articles 76-81).

Equal Opportunity

The 2021 Procurement Regulations cite “equity” as a core principle, calling for procurements to be conducted in a way that “supports equality of opportunity in general”, in particular “advances community equality by providing economic opportunity to all citizens of Solomon Islands, including women, youth and the people with disabilities” (Article 10(f)). Procuring officers are required to assess the capacity of the local market and maximize local participation in tendering (Article 14(2)(c)).

Pillar 3: Institutions & Capacity

No specific institution in the Solomon Islands has been assigned responsibility for sustainable public procurement. This section presents the institutional framework for procurement in general and identifies procurement institutions that may be consulted in discussions to advance sustainable procurement.

Tiered Procurement Responsibilities

Procurement responsibilities in Solomon Island are allocated based on the value of the contract. Each Ministry manages their own procurements up to a value of $500,000, with tenders valued between $100,000 to $500,000 requiring the review of a Ministerial Tender Board (Articles 28-35). Procurements valued at $500,000 or more are to be organized by the Central Tender Board consisting of the high-level officials from the Ministries responsible for finance, development planning and aid coordination, infrastructure development, the Accountant General and Attorney General (Articles 18-27).

Central Procurement Unit

The 2021 Regulations created a central unit called the Treasury Procurement Unit (TPU). The TPU acts as the government’s central procurement unit responsible for developing procurement policy and regulatory framework, ensuring compliance of procurement documents, managing procurement data

and providing training of procurement officers (Article 38). The TPU can organize procurements for items of common use within Government, an approach that can be used to procure sustainable goods and services at scale (e.g. recycled paper).

Other Institutions relevant to sustainable procurement

Other Government Institutions that may have responsibilities and interest in sustainable procurement include:

• Ministry for Environment, Climate Change, Disaster Management, and Meteorology: The division of the executive branch responsible for the implementation of environmental-related policies, including the National Waste Management and Pollution Control Strategy 2017-2026.
  
• Ministry of Mines, Energy, and Rural Electrification The division of the executive branch responsible for the implementation of related policies, including the Solomon Islands National Energy Policy 2014
  

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.

Market dialogue

The 2021 Procurement Regulations allow procuring officers to conduct a pre-tender conference (Article 60). This approach can be useful in sustainable procurements, to dialogue with potential suppliers to identify realistic sustainability criteria that can attract a competitive market response. Procuring entities can hold the conference to clarify the details of goods and services and inform the preparation of tender documents.

Market readiness

Market readiness studies have been completed to assess the feasibility of introducing low carbon transport and electric vehicles, as well as renewable energy solutions in Solomon Islands. These studies can offer a useful starting point to understand the sustainability criteria that can be introduced in procurements for these sectors.

Renewable energy training programs

In September 2022, The Global Green Growth Institute (GGGI) in partnership with the Department of Energy under the Ministry of Mines, Energy and Rural Electrification (MMERE) conducted the “Capacity Building to Strengthen Sustainable Implementation of Renewable Energy Technologies for Rural

Energy Access” training programme. Under this program, approximately 750 people in the Solomon Island received training on renewable energy technologies, including maintenance of solar and hydro systems. Participants

were drawn from diverse groups, including 40% women and 20 % from vulnerable groups.

Support for domestic suppliers

The Pacific Region Infrastructure Facility (PRIF) hosted a weeklong conference in October 2022, co-hosted by the Solomon Islands Chamber of Commerce and Industry (SICCI), to discuss the opportunities for improving Pacific-based participation in infrastructure development in the post COVID-19 economic recovery. The conference was linked to a 2022 PRIF study (with ADB Financing) on “Enhancing Procurement Practice and Local Content in Pacific Infrastructure.”

The PRIF study found that a significant amount of local capacity exists in Solomon Islands to deliver low-value contracts, particularly related to road infrastructure. Local contractors are currently delivering miscellaneous works valued at approximately $15 million per annum. The World Bank has undertaken research to identify actual local capacities in the Solomon Islands related to infrastructure projects, offered training to interested domestic suppliers in bid preparation, and then reshaped contract packages to match the identified capacities (PRIF 2022 at p. 18). In the Solomon Islands, 90% of World Bank financed works contracts were “locally won”, representing 40% of the financial value of total works contracts.

The awarding of contracts to local suppliers is not without controversy. The PRIF study noted that it could not be verified whether the contracts were being satisfactorily performed. In addition, the awarding of contracts to “unproven” local contractors was identified as an issue that was making entities with proven competencies less interested in bidding due to perceived lack of transparency in procurement. Meanwhile, the November 2021 rioting in Honiara was alleged to have stemmed partly from the discontent of local businesses regarding their inequitable access to infrastructure project funding compared with foreign providers.

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 2022 PRIF Conference featured experiences from government agencies in the Solomon Islands in designing tenders with social criteria. One example was Solomon Water, a state-owned enterprise that includes requirements for 20% of the local workforce to be female and equal pay for equal work in its Construction Environment and Social Management Plan obligations. These obligations are used in their Urban Water Supply and Sanitation Sector Project, and developed under the broader Waka Mere Program aimed at promoting workplace gender equality.

Another example are specifications set by the Ministry of Foreign Affairs and External Trade (MFAT) for the construction of a multipurpose hall in Solomon Islands (PRIF 2022, p. 23) . The successful contractor was required to engage a minimum of 12 youth from local technical colleges on the project with at least 25% girls and women. All youth were recruited through local training providers and received employment contracts for a minimum of 12 months. The MFAT also imposed other requirements on rates of pay, employee benefits, work hours, health and safety training, skills transfer and employment contracts. Bidders were required to submit methodologies that included their approach to the inclusion of youth training and employment within the contractor’s build team.

The Government of Solomon Islands has leased ten e-buses for its capital - Honiara, with a projection to increase the EV over the next five years. The project is supported by the Global Environmental Facility (GEF) under the UNEP eMobility Program. This pilot is intended to offer a preliminary assessment of the EV potential in the country.

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 specific monitoring requirements or system to track sustainable procurements have been put in place in the Solomon Islands.

The 2021 Procurement Regulations (Article 26) requires the Central Tender Board to submit an annual report to the Minister about the performance of Government procurement. However, no specific indicators are set.

Projects Supported by ADB

Other Initiatives supported by National/International Agencies

ADB, 2022, $3-million. Honiara Sustainable Solid Waste Management Project responds to the Government pof Solomon Island’s request for assistance for solid waste management, made for the first time.

ADB, 2021, $6 million. Transport Sector Project Development Facility will improve the startup efficiency for priority transport projects in roads, maritime and aviation sectors for funding by assisting the government transport agencies to prepare feasibility studies, detailed designs, and supporting initial procurement and safeguards activities.

ADB, 2019. $6.79-million grant for the Solar Power Development Project supports the implementation of grid-connected solar to supply clean electricity and reduce reliance on expensive diesel imports

ADB, 2022, Pacific Private Sector Development Initiative

Climate Technology Centre & Network (2021-2022, 169,810). The Feasibility Study for Low Carbon Transport in Solomon Islands project consisted of two key deliverables: a market analysis to recommend policy and implementation roadmap on low carbon transport through electric vehicle and feasibility study on selected interventions and capacity building on low carbon transport.

IFC, Solomon Islands Chamber of Commerce and Industry, Solomon Airlines (2017-2019). The Waka Mere: Advancing Workplace Gender Equality project focused on advancing workplace gender equality. In partnership with 15 large local companies, several interventions were implemented throughout the 2-year period.

References

ADB, 2023. Asian Development Bank and Solomon Islands: Fact Sheet.

Government of Solomon Islands, 2016. Consumer Protection (Approved Standards for Restricted Electrical Products) Regulations.

Government of Solomon Islands, 2016. National Development Strategy 2016-2035.

Government of Solomon Islands, 2017. National Waste Management and Pollution Control Strategy 2017-2026.

Government of Solomon Islands, 2018. HCC's Solid Waste Management Plan (2018-2027).

Pacific Region Infrastructure Facility, 2022. Enhancing Procurement Practice and Local Content in Pacific Infrastructure.

Japan International Cooperation Agency (JICA), 2021. The Project for Formulating Renewable Energy Road Map in Solomon Islands Final Report.

SPREP 2019. Solomon Islands State of the Environment Report.

UN Climate Technology Centre & Network (CTCN), 2021. Feasibility Study for Low Carbon Transport in Solomon Islands, Technical Assistance Response Plan - Terms of Reference.

UN Climate Technology Centre & Network (CTCN), 2022. National Electric Mobility Policy and Market Readiness Framework for the Solomon Islands.

World Bank, Global Public Procurement Database. Solomon Islands: Country Profile for 2021.

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