Introduction

This Factsheet outlines the current progress in advancing Sustainable Public Procurement (SusPP) in Tuvalu 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.

The public sector in Tuvalu accounts for two thirds of gross domestic product (GDP). The adoption of sustainable public procurement can make a significant contribution to achieving the country’s social and environmental goals. A 2021 Amendment to the Procurement Regulations removed any ambiguity on the legality of sustainable procurement in the country. It explicitly sets out “best value for money” as the basis for contract award, a change from the previous focus on “lowest evaluated bid”. Further, it requires bids to be evaluated on the basis of bid price AND life-cycle costs, which can include operating and disposal costs. The Procurement Regulations also allow for the creation of a domestic preference through adoption of a circular by the Central Procurement Unit.

However, despite progressive procurement regulations, the level of adoption of procurement practices that contribute to social and environmental goals is unclear. The installation of solar photovoltaic cells was piloted on Government Buildings in 2015. Minimum energy efficiency standards have been adopted to regulate imports of lighting, air conditioning and refrigeration units. A draft updated Building Code has been prepared but not yet adopted and work is underway to integrate provisions to improve the climate resilience of buildings into the Code. Minimum environmental and social standards have been developed across several topics under the country’s Environmental and Social Management Plan.

Climate change poses a real threat to the country’s economy and existence. All the islands that make up the country are less than five (5) metres above sea level. The Update Nationally Determined Contribution set ambitious goals to achieve near zero in the electricity sector by 2030 and develop a net zero pathway by 2050. In the meantime, the country remains highly reliant on imports particularly food, fuel and skilled services. Programs have recently been launched to support businesses to adopt sustainable business models and promote local businesses.

>> Visual snapshot of Sustainable Procurement Maturity Level

Official Procurement Portal:

https://finance.gov.tv/central-procurement/

Key Achievements

• Procurement regulations clearly promote sustainable procurement and life-cycle costing in tender evaluations
  
• Several procurement approaches that can support sustainable procurement are allowed: framework agreements, stock management, division into lots, functional/performance criteria
  
• Market dialogue allowed for complex procurements, which can be useful when designing sustainable procurements
  
• Strong policy commitment to advancing energy efficiency and renewable energy
  
• Strong policy commitment to support local business development, especially in the food production, fisheries and eco-tourism sectors
  
• Support programs exist to promote local sustainable businesses
  

Potential pathways forward

• Support pilot sustainable procurements to showcase purchases of energy efficient equipment, local foods and fish and eco-tourism (e.g. event venues)
  
• Integrate sustainable procurement into upcoming policies and strategies
  
• Develop a sustainable procurement statement or policy
  
• Support local businesses to access government procurements
  
• Support businesses to adopt sustainable business models
  
• Build awareness and capacity of procuring entities and relevant institutions on the benefits of sustainable procurement
  
• Develop tools to enable procuring entities identify sustainable suppliers
  
• Establish a monitoring system and indicators to track sustainable procurements
  

>> Timeline of Implementation of Sustainable Procurement Activities

2013

2014

2015

2021

2022

Public Procurement Act adopted

Public Procurement Regulations allows for consideration of non-price criteria in bid evaluation

First Nationally Determined Contribution submitted to UNFCCC

Energy Efficiency Act establishes system for minimum energy performance standards and labelling

Amendment to Procurement Regulations explicitly sets out value for money as basis of award and requires consideration of life-cycle costs

National Strategy for Sustainable Development sets out country’s vision for sustainable developmen

Updated Nationally Determined Contribution sets goal for near zero emissions in electricity sector by 2030

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.

Sustainable procurement is not explicitly recognized as a policy priority in Tuvalu. However, the Government of Tuvalu has set several environmental and social policy goals that sustainable procurement can contribute towards achieving.

Climate Change

The country faces an existential threat from climate change and has set a goal in its Updated Nationally Determined Contribution to reach near zero emissions in the electricity sector by 2030 and develop a zero carbon development pathway by 2050. To reach these goals, the country plans to reduce greenhouse gas emissions (GHG) from the electricity (power) sector by 100%, increase energy efficiency in Funafuti by 30% and reduce total GHG emissions from the entire energy sector to 60% below 2010 levels by 2030.

Renewable Energy and Energy Efficiency

Government of Tuvalu set a vision in 2008 to become 100% renewable energy for all its power generation by the end of 2020. By 2022, the country had achieved approximately 20% of its 100% renewable energy target and extended the target year to 2030. The Master Plan for Renewable Electricity and Energy Efficiency, 2012-2020 recognized that Government Buildings are the top electricity consumer in the country. The Plan called for a shift to energy-efficient air conditioning, refrigeration and lighting.

The 2016 Tuvalu Energy Efficiency Act promotes energy efficiency and legislates control of the import, use, and sale of inefficient electrical appliances. The Act determines standards for minimum energy performance and energy labelling aligned with Australian and New Zealand standards for various products, initially applying to lights, refrigeration equipment and air conditioners. A key early priority was to change the lighting system in government buildings to LED lighting.

Green & Resilient Buildings

The National Strategy for Sustainable Development 2021-2030 prioritises the construction of modernised office facilities, as well as a sustainable maintenance programme for all buildings and facilities (National Outcome 17). Water catchment systems on buildings are encouraged to improve the water storage capacity in the face of prolonged droughts.

Waste Management

Changing consumption patterns in Tuvalu have led to significantly increased use of packaged imported products that generate waste in this small island state. Responses to the growing waste dilemma are constrained by low existing waste infrastructure and limited available land space in the country. The National Strategy for Sustainable Development 2021-2030 prioritises the development and implementation of improved waste management strategies with local communities and the private sector (Strategic Action 1.5.4).

The Tuvalu Integrated Waste Policy and Action Plan emphasises that “every possible opportunity to recycle and reuse waste materials have to be taken so as to reduce costs, resource consumption and environmental impact.” Several strategic actions are identified that can be integrated into sustainable procurements including;

• promote proper waste management focusing on waste minimization through the 3R+ return approach
  

• explore measures to improve shipping services to allow back loading of recycled waste items (e.g. strap metal, cans, plastics etc) to potential markets;
  
• promote the recovery of green wastes from the waste stream through composting programmes
  
• cooperate in the handling, storage and disposal of hazardous wastes (e.g. chemicals, asbestos, healthcare wastes, used oil, e-wastes etc)
  

SMEs & Food Security

The National Strategy for Sustainable Development 2021-2030 aims to encourage private sector growth and local experts, especially reducing reliance on imported food products. (Strategic Action 1.5.4). The key sectors of focus include local fisheries, local food production and use of traditional food preservation knowledge, and eco-tourism.

Gender

The National Gender Policy identifies Women’s Economic Empowerment as a priority for sustainable development. The Department has supported activities such as the TAU-MAKETI and the Talofa Trade Fair which provides a platform for women and youths to market and trade their products.

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 is regulated by the Public Procurement Act 2013 and Public Procurement Regulations 2014, along with the Public Procurement Regulations (Amendment) 2021. A draft Public Procurement Manual was released by the Central Procurement Unit in 2016.

Non-Price Criteria

The 2014 Regulations, Section 39(f) allow procuring entities to consider non-price criteria in the evaluation of bids, including:

• the cost of operating, maintaining and repairing the goods or works;
• the cost of safe and environmentally acceptable disposal of the goods or decommissioned works at the end of their useful life.

All evaluation criteria must be quantified in monetary terms or expressed in the form of pass or fail requirements. These clauses open the door for procuring entities to include specifications related to energy efficiency, product durability and life-span, modularity and repairability and environmentally-sound disposal methods.

Value for Money and Life-Cycle Costing

The 2021 Amendment of the Procurement Regulations implemented reforms to clear the legal pathway for sustainable procurements. Section 48(8) was

amended to make clear that the basis for award is no longer “lowest evaluated bid” but rather “best value for money”. The Amendment highlights that this may not equate to the lowest bid price. Procurement entities are required to consider life-cycle costs, which may reflect “quality, maintenance and repair costs, operational costs such as power consumption and socioeconomic and environmental impacts and costs in service and at final disposal” (Section 48(6)).

Procurement Approaches

The Central Procurement Unit in Tuvalu may organise the purchase of common use items through individual contract or framework agreements, on behalf of multiple procuring entities (2014 Regulations, Section 3(b)). This approach can be useful to aggregate sufficient demand to motivate the market to respond to environmental or social criteria. Dividing procurements into lots is also allowed if that results in the best overall value for the procuring entity (Section 19(1)). This approach can be useful to create smaller contracts accessible to small and medium enterprises and diverse, local companies. Another approach that can support sustainable procurements is the use of functional descriptions (including any environmental or safety features) or performance parameters (e.g. reduction in material use, energy use or GHG emissions) as technical specifications (2014 Regulations, Section 28). This allows procuring entities to specify objectives for bidders to reach, while inviting the market to propose innovative solutions.

Needs Assessment

Article 17 of the PPR requires procuring entities to inquire whether its requirements can be met by the transfer of goods from another ministry. This environmentally-friendly approach can reduce procurement needs through improved stock management across the Government.

Domestic Preference

The 2014 Regulations, Section 41, permit CPU to issue circulars to allow procuring entities to apply a 5-10% margin of preference to domestic bidders. Eligibility for this preference will be on the basis of local ownership; local sites or production facilities; origin of labour, raw material or components; extent of sub-contracting or association with local partners, or any other relevant factor. This means in practice that bids submitted by Tuvaluan companies would be given a financial margin of preference during bid evaluation and could be awarded a bid even if not the lowest evaluated responsive bid. The Government supports this approach as a means to encourage the development of a national manufacturing sector or civil works contracting sector. However, no circulars were found in this review and the use of domestic preferences in practice by procuring entities is unknown.

Pillar 3: Institutions & Capacity

No specific institution has been assigned responsibilities to advance sustainable procurement in Tuvalu. This section highlights the key procurement institutions and other government agencies that have related responsibilities or potential interest in participating in sustainable procurement activities.

Procurement Institutions

The Tuvalu Central Procurement Unit is responsible for developing public procurement policy, providing technical assistance in public procurement and carrying out all procurements above 15,000 AUD (“Major Procurement”). Each Ministry is responsible for designating staff as Procurement Officers responsible for all procurements not exceeding 15,000 AUD (“Minor Procurement”).

Other ministries with responsibilities relevant to sustainable procurement include:

• Climate Change Department of the Ministry of Finance
  
• Minister of Public Utilities and Infrastructure
  
• Solid Waste Agency of Tuvalu (SWAT)
  
• Development Coordination Committee
  

Civil Society

The Tuvalu Association of Non-Governmental Organizations (TANGO) is a prominent CSO network in the country committed to advancing sustainable development and inclusive governance in Tuvalu.

Capacity

The ADB has supported training of government procurement officers in past projects, including training five CPU staff to levels 2 to 4 of the Chartered Institute of Purchasing and Supply (CIPS) standard. No specific training on sustainable procurement was uncovered in this review.

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 two-stage open competitive bidding method offers an approach that can be useful for procuring entities when designing sustainable procurements. This approach is intended for complex procurements valued over $200,000 where it is not feasible for the procuring entity to fully define the technical or contractual aspects of the procurement. Procuring entities can dialogue with bidders to consider various solutions and better understand the relative merits of each option before deciding on the final technical or contractual specifications.

The Procurement Regulations 2014 also allow procuring entities to hold a pre-bid conference and/or site visit, both are normally organised only for large civil works valued above $5 million.

The Department of Trade has collaborated with the Department of Business and the Tuvalu National Private Sector Organization on a number of initiatives including market promotion activities such as the monthly TAU-MAKETI and the annual Talofa Trade Fair

Market readiness - e-mobility

The e-Motorcycle Pilot Programme by the Tuvalu Electricity Corporation (TEC) has been launched under the Tuvalu Energy Sector Development Project. The project aims to evaluate the technical and economic feasibility of deploying e-mobility at a larger scale while creating synergies with the renewable energy power plants in a harmonised energy system.

Support Programs

A three-day training and strategy workshop was held in 2022 with 30 Council and community stakeholders, mainly women, to develop a Local Economic Development (LED) strategy in the context of climate change. The proposed Strategy plans for the establishment of a Business Incubation Centre to encourage growth of local small businesses. Various small businesses ideas were explored including processing dead coconut trees for building materials. In 2023, the Pacific Community set plans to conduct a national stakeholders’ workshop on Sustainable Business Start-up and Entrepreneurship.

Business Associations

The main institutions in Tuvalu responsible for promoting local business development are the Department of Business, the Tuvalu National Private Sector Organization, and the Chamber of Commerce and 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.

Renewable energy installations

The Government recognizes the leadership role that it can play in advancing adoption of renewable energy and energy efficiency. The 1000 Solar Roof Programme was launched in 2012, with Cabinet giving approval for the use of government building rooftops to pilot the installation of photovoltaic (PV) arrays. New Zealand's Ministry of Foreign Affairs and Trade (MFAT provided US$1.3 million of financing to install rooftop solar panels on a government building and media centre on Funafuti, completed in 2015.

The Development Bank of Tuvalu started a subsidy scheme for energy-efficient appliances and housing retrofits in 2016. In November 2020, the bank was given financial assistance of US$38,600 to buffer the bank's existing energy efficiency program. The programme will now be enhanced and implemented as part of the FASNETT project.

E-mobility

Tuvalu has a pilot e-bike program with 12 e-bikes are currently being procured in the country NDC, p. 12).

Building Code

A Draft Building Code was developed under an ADB financed project and endorsed by the Minister of Public Utilities and Infrastructure and the Development Coordination Committee (the highest advisory committee to the Cabinet) in August 2019. National consultations were planned to validate the draft, however, no evidence was found during this desk review of a fully adopted Building Code. The Climate Change Resilience Act 2019 prioritizes the development of climate change friendly building and housing codes and standards.

Environmental and Social Criteria

An Environmental and Social Management Plan was developed in the context of the Tuvalu Coastal Adaptation Project funded by the Green Climate Fund. The Plan outlines criteria that could be integrated into procurement documents to ensure minimum standards on ecology, groundwater, surface water, air quality, noise and vibration, erosion, waste management and social management.

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 system or indicators have been specified to track sustainable procurements in Tuvalu.

Procurement Monitoring

Section 7.3(i) of the 2014 Regulations requires the CPU to “present an annual report to the Finance Minister regarding the overall functioning of the public procurement system.” Article 14 requires each ministry to prepare The ADB supported the CPU in the development of annual reports starting from 2014 to 2018, all publicly available on the official procurement website of the Government of Tuvalu. No reports are available after 2018. The reports outline a list of successful/unsuccessful bidders for public contracts and their beneficial owners, an amount of each awarded contract, contract type, types of goods/services provided.

E-Procurement

The ADB provided access for the CPU to advertise tenders and accept bids on the e-procurement portal managed by a UK company, In-Tend, from 2016-2017. However, no current e-procurement system was found in this review.

Projects Supported by ADB

ADB Tuvalu: Improved Fiscal and Infrastructure Management Program, 4 million USD, 2019-2021. The project focused on two reform areas: (i) improved policies and processes for public financial management, and (ii) an improved institutional and legal framework for national infrastructure management.

ADB Supporting Reforms to Strengthen Fiscal Resilience and Improve Public Service Delivery, 700,000 USD, 2017-2021. The objective of the technical assistance (TA) was to support Tuvalu in improving public financial management practices and public service delivery to build fiscal resilience and address identified weaknesses in public financial management. Specifically, the TA intended to strengthen procurement compliance, public enterprise performance and management, and resilience through an updated building code.

Two large renewable energy projects, funded by the World Bank and the Asian Development Bank (ADB), will see the installation of an additional 2MW of solar PV, 2MWh of battery storage, and a small, 200kW wind turbine on Funafuti.

Other Initiatives supported by National/International Agencies

The UNDP Vaka Pasifika project, funded by the European Union, aims to ensure public finance contributes to enhanced service delivery and enable the achievement of Sustainable Development Goals in Pacific Island countries including Tuvalu.

The World Bank approved a US$7 million grant from the International Development Association (IDA), which was supported by a US$2.1 million grant from Energy Sector Management Assistance Program (ESMAP) Small Islands Development States (SIDS) DOCK Support Program, to implement solar PVs, wind power infrastructure, battery storage, and grid communication systems in Tuvalu. Construction completion was planned for September 2022.

The Facilitation of the Achievement of Sustainable National Energy Targets of Tuvalu (FASNETT), funded by the Global Environment Facility (GEF), seeks to facilitate the development and use of feasible renewable energy resources and the application of energy efficiency technologies for achieving Tuvalu's 100% renewable energy targets. The project was approved for implementation in 2017 but has a revised completion date of the end of 2022.

EU-funded Pacific Waste Management Programme (PacWastePlus), implemented by the Secretariat of the Pacific Regional Environment Programme (SPREP), to further strengthen the country’s waste management. This project especially focuses on e-waste streams as a national waste priority, and provides technical assistance in Tuvalu’s transition towards a circular economy.

References

ADB Member Fact Sheet, 2020. Tuvalu.

ADB, Tuvalu: Strengthened Fiscal Sustainability Program: Completion Report, March 2017.

International Monetary Fund, 2021. Tuvalu: Staff Concluding Statement of the 2021 Article IV Mission.

Government of Tuvalu, 2016. Presentation on “Procurement”, Ministry of Finance and Economic Development.

Government of Tuvalu 2012. Master Plan for Renewable Electricity and Energy Efficiency, 2012-2020.

Government of Tuvalu 2013. Public Procurement Act 2013.

Government of Tuvalu 2014. Public Procurement Regulations 2014.

Government of Tuvalu 2014. National Gender Policy.

Government of Tuvalu 2016. Energy Efficiency Act.

Government of Tuvalu 2016. Draft Public Procurement Manual.

Government of Tuvalu 2017. Integrated Waste Policy and Action Plan 2017-2026.

Government of Tuvalu 2019. Climate Change Resilience Act 2019.

Government of Tuvalu, 2019. The 2nd Annual Review of the Implementation Status of Tuvalu’s Integrated Waste Policy and Action Plan 2017-2026.

Government of Tuvalu 2020. Infrastructure Strategy and Investment Plan 2020-2025.

Government of Tuvalu, 2020. National Strategy for Sustainable Development 2021-2030.

Government of Tuvalu, 2021. Public Procurement Regulations (Amendment) 2021.

Government of Tuvalu, 2022. Updated National Determined Contribution (NDC).

Kalavi L., 2022. Trade Linkages with Public and Private Sector Organizations Report.

World Bank, Global Public Procurement Database “Tuvalu country profile for 2021”.

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