Introduction

This Factsheet outlines the current progress in advancing Sustainable Public Procurement (SusPP) in Vanuatu 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 Government of Vanuatu has recognized public procurement as a key tool to achieve its goals to promote energy efficiency. It is recognized that Government agencies have a leadership role to play in promoting the adoption of new green technologies. The Government has committed to creating developing green public procurement criteria for energy efficient appliances as well as complementary fiscal and policy reforms. The 2021 Procurement Regulations set out a clear legal basis for sustainable procurement by setting value for money as the key evaluation criteria. The Regulation allows procuring entities to consider non-price criteria, specifically environmental sustainability, domestic preferences, and whole-of life costs.

Vanuatu is a carbon negative country with its large forest area removing more than 10 times the GHG emissions generated by human activity in the country. Despite this, climate change action is a priority for the Government of Vanuatu. The National Parliament unanimously declared a climate emergency in 2022. As a small-island developing state, Vanuatu is amongst the countries facing the highest climate risk and has experienced damage due to increasingly intense cyclones. Its Nationally Determined Contribution sets out the country’s commitment to rapidly phasing out fossil fuels, deeply decarbonising and transitioning completely to a circular economy.

>> Visual snapshot of Sustainable Procurement Maturity Level

Maturity Level:

Very Early Stage

Official Procurement Portal:

https://ctb.gov.vu/en/

Key Achievements

• Public procurement recognized as a policy tool to achieve the country’s energy efficiency goals
  
• Procurement framework based on value for money and allows for non-price criteria including environmental sustainability, domestic preference and life-cycle costing
  
• Commitment to conduct energy audits in 5% of Government buildings by 2025
  
• Minimum energy performance standards in place for air conditioners, refrigerators and lighting, with plan to expand to 27 other categories
  
• Target set to achieve 10% of electric vehicles in the government fleet by 2030
  
• Ban on the use of single use plastic bags, polystyrene takeaway boxes and plastic straws
  

Ongoing Work

• Development of vehicle emission and fuel standards
  
• Development of a Green Building guideline for government, institutional and commercial buildings
  
• Plans to phase out of incandescent and compact fluorescent lightbulbs (CFL)
  

Potential pathways forward

• Build awareness of government ministries of the benefits of sustainable procurement as a policy tool to achieve social and environmental goals
  
• Support pilot sustainable procurements for energy efficient appliances and green buildings
  
• Support design of environmental criteria for energy efficient appliances and green buildings
  

>> Timeline of Implementation of Sustainable Procurement Activities

2016

2021

2022

National Sustainable Development Plan prioritizes equitable, sustainable growth

National Energy Road Map elevates energy efficiency as a national priority

Minimum energy performance standards set for electrical appliances, equipment and lighting products

Public procurement regulation sets value for money as evaluation criteria and promotes non-price criteria

Greenpreneurs Incubator Program launched

Target set to achieve 10% electric vehicles in government fleet (NDC, LEDS)

Stakeholder consultations to develop minimum vehicle and fuel emission standards

Goals on energy efficiency, e-mobility and waste management set in NDC, LEDS and other energy policies

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 public procurement

Energy-efficient procurement is recognized by the Government of Vanuatu as a key policy tool in the implementation of its National Energy Efficiency Strategy and Action Plan 2022-2030. Objective 10 focuses on introducing “procurement standards for Government Buildings and Offices” to adopt energy efficient equipment and appliances by 2025.

To achieve this objective, planned activities include establishing a centralized procurement system for energy efficiency equipment and appliances, reviewing international best practices in sustainable procurement, stock-staking the status of sustainable procurement across government organizations and preparing a draft Public Procurement standard. This Plan is the sole government document that recognizes procurement as an implementing tool - no standalone policy or action plan on sustainable public procurement exists at this time.

National Development Vision

The National Sustainable Development Plan 2016 to 2030 sets out the country’s development aspirations. It prioritizes a pristine natural environment that serves the peoples’ needs as well as equitable, sustainable growth that creates jobs accessible to all people. Sustainable procurements can be designed to support the achievement of several stated policy objectives including:

• Reduce reliance on food imports through import substitution for food products that can be produced domestically;
  
• Ensure new infrastructure and development activities cause minimal disturbance to the natural land and marine environment;
  
• Promote renewable sources of energy and promote efficient energy use;
  
• Reduce waste and pollution through effective waste management and pollution control;
  
• Empower and support people with disabilities;
  
• Provide opportunities for youth as valued members of society;
  
• Increase the number of decent, productive employment opportunities, particularly for young women and men and people with disabilities;
  
• Ensure the health and safety, employment rights and skills development of the workforce.
  

The NSDP also prioritizes efforts to coordinate donor resources to align with national objectives (Social Policy Objective 6.8). Discussions can be held to explore the Government's interest in aligning domestic spending to national objectives as well, through sustainable public procurement.

Energy Efficiency - Buildings

The Government of Vanuatu has set an ambitious target in its Nationally Determined Contribution of reaching 100% renewable energy for electricity production by 2030. This will require 5% energy savings through energy efficiency measures in the commercial and residential sectors.

The Vanuatu National Energy Road Map (NERM) 2016 - 2030 recognizes that energy efficiency has tended to receive less focus than renewable energy. The Government commits to achieving a balance between the two, including by promoting energy efficiency in the public sector. An energy audit programme has been established for all government buildings and agencies are encouraged to implement cost-effective energy efficiency actions

identified by the audits (p. 10). The Energy Efficiency of Electrical Appliances, Equipment and Lighting Products Act (Act No. 24 of 2016) sets out minimum energy performance standards for six different product categories including air conditioners, refrigerators and lighting.

The NERM promotes specific energy interventions that can be integrated into sustainable procurements. Solar mini-grids are proposed as a solution for energy access for households, cooperatives and public buildings such as schools and health centers (p. 25). Other priority actions are adopting energy efficiency technologies in the water sector and consolidating and expanding the use of locally produced bio-fuels. Substitution of fossil fuels with Coconut (Copra) Oil based Electricity Generation is seen as an area of high potential.

The Government plans to explore options to relax taxes on the import of energy efficient appliances and products to make them more affordable. It has also created a National Green Energy Fund to channel financing from various sources and plans to conduct awareness raising campaigns on the benefits of energy efficiency and renewables.

Sustainable Transport

Land vehicles, airplanes and marine vessels are the largest consumers of petroleum fuel in Vanuatu, accounting for two-thirds of national consumption. The Vanuatu National Energy Road Map 2016 - 2030 recognizes that these sectors offer good potential for feasible and cost-effective energy efficiency improvements. It notes that the public sector can lead by example in the shift to more sustainable transport by examining the composition of its vehicle fleet, its maintenance practices and how it uses its vehicles (p. 22). To reduce the early disposal of vehicles, the Road Map aims to encourage the import of spare parts for vehicles and marine vessels (p. 9).

The country’s updated 2022 Nationally Determined Contribution sets targets to advance adoption of electric vehicles in the country by 2030:

• Introduce e-buses for public transportation (10% of total public buses);
  
• Introduce e-cars in Vanuatu (10% of government fleet); and
  
• 1000 electric two wheelers (e-bikes)/three wheelers (e-rickshaw).
  

The NDC also plans for the introduction of mileage and emission standards for vehicles by 2030. Stakeholder consultations commenced in August 2022 to inform the development of two policy briefs: a Vehicle Emissions Policy Brief and Fuel Quality Policy Brief. These briefs are designed to inform the development of a regulatory framework for future vehicle and fuel emission standards in Vanuatu.

Waste Management

The NDC prioritizes actions to put in place measures to compost municipal organic waste; collect, sort and export recyclable materials and develop a national plastics strategy. Since 2018, the Government has banned the use of single use plastic bags, polystyrene takeaway boxes and plastic straws and put in place penalties for littering.

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 Vanuatu is regulated by the Government Contracts and Tenders Act (Amendment) Act 44 of 2019 and the Government Contracts and Tenders Regulation (Consolidation Edition 2021) Order No.160 of 2021. The Procurement framework sets up different rules and procedures for four thresholds of procurement: high value procurement (VT 10,000,000 and above) and three categories of low value procurement.

Non-price criteria

The 2021 Regulation, Article 15, requires that tenders be evaluated on the basis of value for money. Price is not the sole factor when assessing value for money. Other costs and benefits must be considered such as:

• environmental sustainability of the proposed goods or services;
  
• any preference for suppliers within Vanuatu;
  
• any broader benefits to the economy
  
• whole of life costs such as the initial purchase price of the goods, services or works, maintenance and operating costs, licensing costs, the cost of additional features after initial procurement, consumable costs and disposal costs.
  

Computers and Vehicles

IT equipment and vehicles are commonly prioritized for sustainable procurement by countries at early stages. In Vanuatu, procurements for these goods are coordinated centrally by the Office of the Chief Information Office (computer hardware, software and accessories) and the Fleet Management Committee of the Public Service Commission (vehicles). These institutions create lists of approved vendings from which procuring entities can purchase from. Such lists could be expanded to include suppliers with energy/fuel efficient options.

Division into lots

Article 13A of the Procurement Act allows government agencies to divide procurements into several lots, an approach that can accommodate participation by small and medium enterprises.

Pillar 3: Institutions & Capacity

Procurement Institutions

The Central Tender Board (CTB) is responsible to coordinate and manage the Vanuatu Government's tender process for higher value procurements valued above VUV 10,000,000. Low value procurements are managed directly by each contracting authority.

Other Institutions

Implementation of sustainable public procurement can involve a wide range of government ministries and stakeholders. Interministerial collaboration can help catalyze a whole-of-government approach to implementation, however no interministerial body has been constituted to date to promote sustainable procurements. However, the National Advisory Board on Climate Change and Disaster Risk Reduction in Vanuatu (see Figure 1) outlines a range of government agencies that may also have an interest in promoting sustainable procurement.

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.

Two-stage tenders

The Procurement framework allows procuring entities to create two stage tenders when it is not feasible to fully define fully the technical or contractual aspects in order to elicit competitive tenders. Only suppliers that submit acceptable technical proposals in the first stage may submit tenders in the second stage. This approach has been used in other countries to dialogue with the market to dialogue with suppliers to inform the design of realistic criteria in sustainable procurements.

Support Programs

Various initiatives exist in the country to advance green entrepreneurship in the country, including:

• A 2018 Guide to Green Entrepreneurship in Vanuatu provides links to tools and resources available and highlights existing green enterprises in the country.
  
• The Greenpreneurs Incubator Program was launched in 2021 with 11 participating businesses over two years operating in the farming, waste services and ecotourism sectors.
  
• A Blue Economy ClimAccelerator program promote innovative ideas to support the growth of maritime activities.
  

These programs are run in partnership with the Vanuatu Chamber of Commerce and Industry. Its mission is to support the private sector in making a unique and significant contribution to the achievement of the National Sustainable Development Goals. Another relevant association is V-Lab, a charitable Association that accompanies young entrepreneurs and social change actors in their business growth with a focus on innovation, green economy and social entrepreneurship. This initiative is designed to boost climate solutions in the region, with a special emphasis on maritime activities. Among the selected start-ups are Organic Fish + Farm Mariculture Enterprise from Vanuatu, which is dedicated to the sustainable farming and harvesting of sea cucumbers, creating job opportunities for women.

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.

Procurement Guidance

The Ministry of Finance and Economic Management (MFEM) released “Guidelines for the Procurement of Goods and Services” in June 2005. However, no updated guidelines have been uncovered in this desk review. The Department of Water Resources produced their own Procurement Procedure Guideline in August 2019. These documents do not offer specific guidance related to sustainable public procurement.

Energy Efficiency

Many tools exist or are under development in Vanuatu that can inform the design of energy-efficient procurements. The Department of Energy maintains a list of Approved Energy Efficient Appliances to facilitate the importation of six appliances including air conditioners, freezers, refrigerators and lighting for use in the country. An instructional website and sample energy audit report is made available to promote energy audits in public institutions.

The National Energy Efficiency Strategy and Action Plan 2022-2030 (NEESAP) sets out several priority actions and tools that can support sustainable procurements:

• Develop green public procurement (GPP) criteria for energy efficient equipment and appliances, starting first with the six appliances prioritized
  

• in 2017 and expanding to a further 27 product categories, including computers, water heaters, induction motors, LEDs, street and public lighting (see Table 1 for the full listing);
  
• recognize energy efficiency standards and labels from other countries, beyond Australia and New Zealand);
  
• develop a web-based mobile application to inform buyers on potential costs savings of energy efficient appliances and products;
  
• introduce Extended Producer Responsibility to better manage e-waste at product end-of-life;
  
• phase out incandescent and compact fluorescent (CFL) lights;
  
• introduce guidelines to regulate a default temperature setting of 24 degree Celsius for air conditioners in government, commercial and institutional buildings;
  
• develop domestic capabilities (i.e. testing laboratory) to test compliance with energy efficiency standards.
  

Green Public Buildings

The Government of Vanuatu is making progress in electrifying public buildings with renewables including:

• The Vanuatu Rural Electrification Project (VREP) which aims to provide plug and play solar systems to 230 aid posts;
  
• The Biofuel Rural Electrification Project, which will connect two hospitals, four dispensaries, and 10 schools in Penama and Torba provinces;
  
• The Talise Hydro Project, which aims to increase electricity services in Maewo, including one health center and three schools.
  

The Government plans to conduct a walk through and detailed energy audit in 5% of Government buildings by 2025, to be conducted by a newly formed Energy Audit and Green Building Unit. A Green Building guideline will be developed and endorsed to guide the design of new government, institutional and commercial buildings and retrofits of old buildings (NEESAP, Objective 12).

Vehicle Emission Standards

The Department of Energy commenced consultations to develop vehicle emission and fuel quality standards in Vanuatu in August 2022. The findings have been summarized in two policy briefs, a Vehicle Emissions Policy Brief and a Fuel Quality Policy Brief that were under deliberation by government and private sector stakeholders with a validation workshop expected to be held in mid-June 2023.

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.

The Central Tender Board is responsible for presenting an annual report to the Government regarding the overall functioning of the public procurement system (PPA, Article 11A(i))

The Procurement Regulations, Article 71(6) requires that all Government agencies submit a report to the Central Tenders Board within 60 days of the end of the year. The report must provide details on the actual procurements undertaken in the year with a comparison to the agency’s annual procurement plan. No information was found in this review on the level of compliance with this reporting requirement.

Projects Supported by ADB

Other Initiatives supported by National/International Agencies

In 2021, Vanuatu was ranked as the world's most vulnerable country to disasters triggered by natural hazards. The project portfolio, both under preparation and implementation, aims to strengthen the sectors of public fiscal management, transport, urban infrastructure, renewable energy, disaster risk management, water and sanitation, finance, health, and education.

Sustainability criteria could be piloted in procurements the construction of two multipurpose emergency shelters planned under the Greater Port Vila Urban Resilience Project.

The Vanuatu Rural Electrification Programme launched in 2015 subsidizes the initial cost of solar photovoltaic (PV) systems for households and public facilities in off-grid areas.

The Vanuatu Vehicle Emission and Fuel Standards Project is funded through the Low Emission Carbon Development (LECRD) Programme of the New Zealand Government, it is administered in Vanuatu by Global Green Growth Institute and is executed by the Government of Vanuatu through the Department of Energy and the National Air Quality Taskforce under the Ministry of Climate Change.

References

Government of Vanuatu, 2022. National Energy Efficiency Strategy and Action Plan 2022-2030.

Government of Vanuatu, 2022. Vanuatu Infrastructure Strategic Investment Plan (2015-2024).

IRENA, 2015. Vanuatu Renewables Readiness Assessment.

Pacific Regional Environment Programme (SPREP), 2020. Assessment of Legislative Frameworks Governing Waste Management in Vanuatu.

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

ADB Member Fact Sheet, 2023. Vanuatu.

Government of Vanuatu, 2015. National Sustainable Development Plan 2016 to 2030 (Vanuatu 2030 The People's Plan).

Government of Vanuatu, 2016. National Waste Management, Pollution Control Strategy and Implementation Plan 2016-2020.

Government of Vanuatu - Department of Energy, 2017. Vanuatu National Energy Road Map 2016 - 2030.

Government of Vanuatu - Department of Energy, 2017. Energy Efficiency of Electrical Appliances, Equipment’s and Lighting Products Act No. 25 of 2017.

Government of Vanuatu, 2019 - Department of Water Resources. Procurement Procedure Guideline.

Government of Vanuatu, 2019. Government Contracts and Tenders Act (Amendment) Act 44 of 2019.

Government of Vanuatu - Central Tenders Board, 2021. Procurement Procedures Matrix.

Government of Vanuatu, 2022. Vanuatu Revised and Enhanced 1st Nationally Determined Contributions 2021-2030.

Government of Vanuatu, 2022. Low Emissions Development Strategies (LEDS) and Long-Term Strategies (LTS).

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