By

Dr. Olaniyi Opanuga, FNIPM

Introduction

Procurement sustainability is a critical aspect of business operations, encompassing environmental, social, and economic factors to ensure responsible sourcing and associated practices.

 

Nigerian Institute of Production Management (NIPM) School of Quality, Health, Safety, Security And Environmental Management emphasizes the importance of balancing economic interests, cost, and profit with compliance, social, and ethical values to ensure a sustainable future. 

 

In this paper, we will explore the concept of procurement sustainability, its key components, and the importance of ethical standards in procurement. We will also discuss the Nigerian Institute of Production Management’s (NIPM) role in promoting procurement sustainability and the benefits of implementing sustainable procurement practices.

 

Nigerian Procurement Certification Programme (NPCP) is a collaborative effort between the Nigerian government and the World Bank, aimed at promoting professionalism and excellence in procurement practices.

 

The NPCP is similar to the Nigerian Institute of Production Management (NIPM) Centre for Procurement and Contract Management (CPCM) and Centre for Procurement Excellence (CPE) programs, with the proviso that NIPM programs are private-sector driven to meet the special needs of the industry and provide a solid framework for public and private sector procurement education, training, and practice.

 

What is Procurement Sustainability?

Procurement sustainability refers to the integration of environmental, social, and economic considerations into procurement decisions to ensure that the goods, services, and works procured meet the needs of the present without compromising the ability of future generations to meet their own needs. It involves considering the entire lifecycle of a product or service, from sourcing to disposal, and evaluating the potential impacts on the environment, society, and the economy.

 

Key Components of Procurement Sustainability:

– Environmental Sustainability:

Focuses on reducing carbon footprint, conserving natural resources, and protecting ecosystems through eco-friendly sourcing strategies and waste reduction.

 

– Social Responsibility: Ensures fair labor practices, ethical sourcing, and supplier diversity, promoting community engagement and human rights.

 

– Economic Viability: Balances financial goals with sustainable practices, driving innovation, efficiency, and cost savings.

 

– Transparency and Accountability:

Ensures that procurement processes are transparent, accountable, and free from corruption.

 

– Risk Management: Identifies and mitigates risks associated with procurement, including environmental, social, and economic risks.

 

– Innovation and Technology: Encourages the use of innovative technologies and solutions to drive sustainability in procurement.

 

– Stakeholder Engagement:

Engages with stakeholders, including suppliers, customers, and communities, to ensure that procurement practices meet their needs and expectations.

 

– Compliance and Governance:

Ensures that procurement practices comply with relevant laws, regulations, and standards, and that governance structures are in place to oversee procurement activities.

 

What is Procurement Ethics?

Procurement ethics refer to the moral principles and values that guide procurement decisions and actions. It involves ensuring that procurement processes are fair, transparent, and accountable, and that they promote the best interests of the organization and its stakeholders.

 

Procurement ethics include avoiding corruption, bribery, and other forms of misconduct, and ensuring that procurement decisions are based on merit and value for money.

 

Why is NIPM concerned about Ethical Standards for Procurement?

The Nigerian Institute of Production Management (NIPM) is a professional body that regulates and fosters the standards of professional practice of production and operations management in the Federal Republic of Nigeria.

 

Procurement Management is a critical component of operations management. 

NIPM focuses on capacity building of professionals involved in managing operations including production, manufacturing, procurement, logistics, supply chain, and operations managers across various sectors.

 

NIPM has impacted multinational, international, and indigenous organizations and many government agencies and parastatals for greater effectiveness and enhanced compliance in the last 35 years.

 

NIPM Corporate Members include manufacturers and suppliers of project services to private and public sector organizations.

 

Production and Operations Managers oversee and manage processes that create goods and services which are eventually supplied to organizations. Production and Operations Management Professionals have a key role to play in Procurement Sustainability Management.

 

NIPM is concerned about ethical standards for procurement because procurement professionals have a critical role in ensuring that procurement processes are conducted with integrity and transparency.

 

NIPM recognizes that procurement ethics are essential for promoting good governance, reducing corruption, and ensuring that procurement processes are fair and accountable.

 

NIPM is committed to promoting ethical standards in procurement and providing training and certification programs to help procurement professionals develop the skills and knowledge they need to make ethical procurement decisions.

 

Typical Cases of Procurement Sustainability Violations

1. Bribery and Corruption:

A procurement officer accepts a bribe from a supplier in exchange for awarding a contract.

 

2. Conflict of Interest:

. A procurement officer awards a contract to a company owned by a family member or friend without disclosing the relationship.

 

3. Bid Rigging:

A group of suppliers collude to fix prices or rig bids, depriving the organization of fair competition and value for money.

 

4. Environmental Damage:   A supplier disposes of hazardous waste improperly, causing environmental damage and harm to local communities.

 

5. Labor Exploitation:

A supplier uses child labor or exploits workers, violating human rights and labor laws.

 

6. Non-Compliance with Regulations:

A supplier fails to comply with relevant laws and regulations, such as tax laws or labor laws.

 

7. Lack of Transparency:

A procurement process lacks transparency, making it difficult to track decisions and actions.

 

8. Unfair Treatment of Suppliers:

A buyer unfairly treats suppliers, such as by imposing unfair contract terms or delaying payments.

 

9. Substandard Goods: Harmful to consumers and negatively impacting the environment, unsafe production processes.

 

10. Banned or Prohibited Goods:

Hazardous chemicals and general goods.

 

The Concept and Importance of SPESSE

The Sustainable Procurement, Environmental and Social Standards Enhancement (SPESSE) Project is a Nigerian initiative aimed at developing sustainable capacity in managing procurement, environment, and social safeguards in the public sector.

 

The project is being implemented by the National Universities Commission (NUC), Bureau of Public Procurement (BPP), Federal Ministry of Finance, Budget and National Planning, Federal Ministry of Environment, and Federal Ministry of Women Affairs and Social Development.

 

SPESSE is crucial for Nigeria as it:

– Enhances procurement sustainability and environmental management

 

– Promotes social responsibility and human rights

 

– Develops capacity in managing procurement, environment, and social safeguards

 

– Supports economic growth and development

 

Global Efforts on Procurement Sustainability Management

Globally, there are various initiatives and regulations aimed at promoting sustainable procurement practices. Some notable examples include:

– The European Union’s Corporate Sustainability Reporting Directive (CSRD): Requires companies to report on their sustainability impacts, including environmental, social, and governance (ESG) factors.

 

– The United States Securities and Exchange Commission (SEC):

Has proposed climate disclosures that require companies to disclose their climate-related risks and impacts.

 

– The World Bank’s Sustainable Procurement Guidance:

Provides guidance on integrating sustainability considerations into procurement processes.

 

– The International Organization for Standardization (ISO) 20400:

Provides guidance on sustainable procurement practices, including social and environmental responsibility.

 

Benefits of Sustainable Procurement

– Risk Mitigation: Reduces reputational and legal risks associated with unethical practices.

 

– Cost Savings: Drives efficiency through waste reduction and energy conservation.

 

– Innovation and Competitive Advantage: Fosters innovation and market differentiation.

 

– Enhanced Brand Reputation: Strengthens stakeholder trust through visible sustainability commitments.

 

Implementing Sustainable Procurement

1. Define sustainability targets and policies aligned with business objectives.
2. Develop a robust supplier selection approach prioritizing sustainability.
3. Agree on sustainability KPIs with suppliers.
4. Monitor and report sustainability performance.

Universities’ Collaboration with NIPM on SPESSE – CE

The National Universities Commission (NUC), Bureau of Public Procurement (BPP), Federal Ministry of Environment (FMEnv.), and Federal Ministry of Women Affairs (FMWA) are handling different components of the SPESSE project, with NUC acting as the lead coordinating agency. However, this arrangement has been criticized for being more public service-centric and academic-driven, rather than private sector-driven.

 

There is a concern that the World Bank funding will be used to support academic research and teaching, rather than facilitating sustainable procurement practices in both public and private sectors. Professional education and training are not the same as academic research and teaching.

 

To address this issue, it is essential to involve professional bodies like the Nigerian Institute of Production Management (NIPM) in the SPESSE project. NIPM has expertise in procurement and supply chain management education and training, and its involvement can help ensure that the project is private sector-driven and focused on practical, industry-relevant solutions.

 

The Bureau of Public Procurement (BPP) and Nigerian Universities can benefit from collaboration with NIPM, which operates through multifaceted approaches, including professional membership, industry practice and consultancy networking, professional certification examinations, industrial visitation and advisory, and other programs.

 

Procurement Managers are part of the Supply Chain and Operations Management Team, and Production organizations, including manufacturers, as well as Production, Supply Chain, and Operations Managers, play a pivotal role in championing and supporting procurement sustainability initiatives.

 

NIPM’s cutting-edge and innovative programs, involving comprehensive curriculum, are world-class, combining modules for soft and hard skills intended to provide competencies for effective professional performance. NIPM’s involvement in the SPESSE project can help ensure that the project is successful and sustainable, and that it benefits both the public and private sectors.

 

Conclusion

In conclusion, procurement sustainability is a critical aspect of business operations that requires careful consideration of environmental, social, and economic factors.

 

NIPM is committed to promoting ethical standards in procurement and providing training and certification programs to help procurement professionals develop the skills and knowledge they need to make sustainable procurement decisions. Organizations should implement sustainable procurement practices to reduce risks, drive innovation, and enhance their brand reputation. By doing so, they can contribute to a more sustainable future for all.

 

Nigerian Institute of Production Management (NIPM) is dedicated to promoting procurement sustainability and ethical standards in procurement. NIPM’s Centre for Procurement and Contract Management (CPCM) and Centre for Procurement Excellence (CPE) offer various programs and training initiatives to help procurement professionals develop the skills and knowledge they need to make sustainable procurement decisions.

 

NIPM’s involvement in the SPESSE project can help ensure that the project is successful and sustainable, and that it benefits both the public and private sectors. The Institute’s expertise in procurement and supply chain management education and training can help ensure that the project is private sector-driven and focused on practical, industry-relevant solutions.

 

In summary, procurement sustainability is a critical aspect of business operations that requires careful consideration of environmental, social, and economic factors. NIPM is committed to promoting ethical standards in procurement and providing training and certification programs to help procurement professionals develop the skills and knowledge they need to make sustainable procurement decisions.

 

Recommendations

1. Organizations should implement sustainable procurement practices to reduce risks, drive innovation, and enhance their brand reputation.
2. Procurement professionals should develop the skills and knowledge they need to make sustainable procurement decisions.
3. NIPM should continue to promote ethical standards in procurement and provide training and certification programs to help procurement professionals develop the skills and knowledge they need to make sustainable procurement decisions.
4. The SPESSE project should involve professional bodies like NIPM to ensure that the project is private sector-driven and focused on practical, industry-relevant solutions.

ABOUT THE AUTHOR

■ Dr Olaniyi Opanuga, PhD, MBA, MLS, PGD Eng.Mgt., PGD SCM, DMS, FNIPM, FCIAM, FIMC, CMC, FCMAI, FSCAPMP, FSCLSCMP, FSCQMP, FSCPMP.

 

Dr Opanuga is a Professor of Supply Chain and Operations Management at the College of Production & Operations Management (COPOM), Faculty Lead, School of Logistics And Supply Chain Management, Nigerian Institute of Production Management (NIPM), Founder, Operations, Logistics And Supply Chain Management Leaders Academy (OLSCLA) and National Co – Ordinator, The Society for Certified Procurement Management Professionals (SCPMP).

 

Dr Opanuga established the Centre for Procurement and Contract Management (CPCM) and the Centre for Procurement Excellence (CPE) as change facilitators; to develop and support the procurement professionals and the supply chain industry.

 

He is a Certified International Management Consultant with over 35 years’ experience in public service, industry and consulting practice, a Preeminent Supply Chain and Operations Management Professional, Procurement Management Strategist and Sustainability Expert, Leading Authority and Examiner, Industry Veteran, Educator and Trainer of repute whose clientele include Multinational, International, Indigenous Manufacturing Companies, NGOs and Federal Government Agencies.

 

Dr Opanuga is a Chairman and Director of several corporate boards. He introduced sustainability values, operational excellence and ethics into his lectures on Industrial Production Management as a Resource Person and Consultant to the Manufacturers Association of Nigeria (MAN) in the 2000s. He has helped many organizations to build capacity for enhanced Quality, Health, Safety, Security And Environmental Management.