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CS4E

The 13
th

International Convention of

the East Asian Economic Association

Grand Copthorne Waterfront Hotel

Singapore, October 19
-
20 2012


Convention Theme:

“Opportunities and Challenges for Asian Economies in the New Millennium”


Khairul Naim Adham
(National University of Malaysia)
, Chamhuri Siwar (National
University of Malaysia)



Government Green Procurement as an Instrument for Greening Malaysia’s Economy:

The Way Forward


Khairul Naim Adham

National University of Malaysia (UKM)

naimadham@gmail.com

and

Chamhuri Siwar

National University of Malaysia (UKM)

csiwar@ukm.my


ABSTRACT

Malaysia, being a country based on trade
-
reliant economy, undergoes great challenges to
remain its vibrant economic
development. This is especially so in the current situation of
global economic crisis and uncertainties. In fact, rapid economic development in Malaysia
has caused severe impact on its natural resources and environment. Nevertheless, various

approaches hav
e been implemented to

establish a
more environmentally friendly

or greener
economy. Implementation of government green procurement (GGP) is one of the approaches
in order to attain greener economy. GGP
refers to

the
procurement

of supplies,

services and
wo
rks

by the government that
takes into account

environmental

criteria

to conserve and
minimize the impact on the environment, accelerate the national economy development and
promote sustainable development.
T
he

Malaysian government has acknowledged the
importance of GGP and initial steps have been carried out towards its implementation
. The
paper discusses on how GGP could potentially contribute towards achieving green economy
in Malaysia, highlighting a number of GGP’s initiatives that have been impleme
nted and their
achievement.

Keywords:

government procurement, government green procurement, green economy,
sustainable development

JEL Classification Codes: H57

1.

INTRODUCTION

Malaysia, being a country based on trade
-
reliant economy, undergoes great chall
enges to
remain its vibrant economic development. This is especially so in the current situation of
global economic crisis and uncertainties. These challenges need to be addressed wisely to
ensure that Malaysia could achieve its aims to become a fully deve
loped and a high income
nation in the year 2020. In order to remain stead
-
fast, besides domestic economic growth
strategies and prudent spending practices, new economic approaches which are more creative
and resilient are critically important. Consequently
, fiscal policy must be designed to catalyze
current economic momentum and which could facilitate long
-
term economic growth. Climate
change issues which have affected the quality of life and limited economic growth are
amongst greatest challenges faced by
mankind today. However, it has also enhanced the
awareness among the people on the importance of protecting the environment, so that the
natural resources would not be neglected for the sake of development.


To deal with this situation, a paradigm shift in

the conventional way of economic
development is needed. Available evidences have shown that unsustainable economic
activities could lead to ecosystem pressures due to pollution and scarcity in natural resources,
which would be irreversible. The main issue

here is on how to attain a balance between
economic efficiency and environmental preservation to drive economic growth and
environmental sustainability. In this respect, development could not be taken separately with
social and environmental dimension as
they are correlated. In addition, the increase in
population contributes further pressure to the environment. It was estimated that the world
population will reach 9 billion by 2050 (WBCSD, 2008). Time of abundant and low
-
priced
resources that the people e
njoyed in the past decade is coming to a full stop. Thus,
mainstreaming
efforts to harmonize

economic development

with

social

and environmental

aspects

should not be taken for granted.


There are various instruments that could act as a tool
to achieve gre
ener economy
and o
ne
of the tools is through the implementation of government green procurement (GGP). In this
context, the implementation of GGP could serve as one of the solutions by utilizing the huge
government spending as a market force to stimulate production of green
er products and
services.


The paper focuses on GGP as
GGP is relatively new and not yet to be adopted in
Malaysia’s public sector. The paper

proceeds in seven (7) parts. Part 2 briefly discusses the
concept of green economy by numerous
organisations
. Par
t 3 highlights Malaysia’s
aspirations with regard to a greener economy while Part 4 explains the definition of GGP and
its importance towards achieving green economy objectives. Part 5 points out the Malaysian
Government initiatives in establishing GGP and

Part 6 highlights the present state of its
establishment.
Part 7 provides a number of suggestions to advance GGP
,

and
Part
8

concludes.



2.

GREEN ECONOMY

Green economy concept has emerged as a universal hero and became a theme for the Rio +20
conferenc
e, recently. Though, the concept has become a popular topic for the last few years,
the authors find that there are various terms and concepts which refer to green economy and
there is no international consensus of what a green economy constitutes at this
point of time.
Other common terms used interchangeably green economy include ‘clean economy’, ‘green
growth’ and ‘low
-
carbon economy’
. For United Nations Environment
Programme

(UNEP), a
green economy is an economic model based on sustainable development an
d knowledge of
ecological economics that result in improved human well
-
being and social equity while
significantly reducing environmental risks and ecological scarcities. In order for green
economy to be put in place, it

involves a reconfiguring businesses

and infrastructure process
that could deliver better returns in terms of economy, social and environment
. UNEP further
illustrates green economy in a simplest expression as one which is low carbon, resource
efficient and socially inclusive (UNEP, 2011).


The
Organisation

for Economic Co
-
operation and Development (OECD) refers green
growth as an economic approach towards fostering economic growth and development while
ensuring that natural assets continue to provide the resources and environmental services

to
meet human needs (OECD, 2011). OECD highlights imperative efforts to boost investment
and innovation that will result in greener and resilience economic development and create
new economic opportunities. Apart from that, OECD has highlighted a number o
f green
growth’s potentials in addressing economic and environmental challenges and in creating
new sources of growth as shown in
Table 1
.


United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP)
outlines basic principles namely to

promote quality and eco
-
efficiency of economic growth
and environmental performance. Furthermore, UNESCAP identified four pillars for the
transition to a greener growth, which are eco
-
tax reform, sustainable infrastructure, greening
of business and sustai
nable consumption (UNESCAP, 2008). On the other hand, United
Nations Conference on Trade and Development (UNCTAD) recognizes green economy as a
new growth trajectory that is more socially inclusive and responsive to poverty eradication,
and economic divers
ification objectives (UNCTAD, 2011). According to UNCTAD (2011), a

transition to a green economy involves expanding green production and markets; reducing
depletion of natural resources and degradation of ecosystems caused by economic activity;
and increas
ing reliance on low
-
carbon energy supply to mitigate climate change.
In general
terms, the authors define green economy as an economic approach which promotes economic
growth and social inclusiveness, thus conserving the natural environment and resources.


3.

MOVING TOWARDS LOW CARBON ECONOMY: WHERE DOES
MALAYSIA STANDS?


The ‘low
-
carbon economy’ terms were used in several Malaysian Government documents
such as 10
th

Malaysia Plan (10MP; 2011
-
2015), New Economic Model (NEM), National
Green Technology Policy
(NGTP) and National Clime Change Policy (NCCP).
Malaysia has
recognized the significance of low carbon economy in
enhancing its global competitiveness
and attains environmentally sustainable socio
-
economic growth

(KeTTHA, 2009; MNRE,
2010). Low carbon econ
omy practices could strengthen Malaysia’s efforts to become a high
income and developed nation in 2020 (NEAC, 2010). For this reason,
Malaysian government
is currently undergoing massive economic transformation programme under its Economic
Transformation P
rogramme (ETP) besides actively promoting the concept of low carbon
economy.


In approaching low carbon economy
, the Ministry of Energy, Green Technology and
Water (KeTTHA), established in 2009 and has been given the mandate to encourage the use
of green t
echnologies particularly in four sectors, namely energy, buildings, water and waste
management and transportation. Subsequently, NGTP was formulated to promote the
adoption of green technology and sustainable development while accelerating Malaysia’s
econo
mic progress. NGTP outlines the vital of green technology as a driver for low carbon
economy (KeTTHA, 2009). Additionally, an inter
-
ministerial council known as the National
Green Technology and Climate Change Council chaired by the Malaysia’s Prime Minist
er
was established to spearhead Malaysia’s green agenda. A focal point to enhance the
development and to promote green technology has also been formed by restructuring the
Pusat Tenaga Malaysia (Malaysia Energy Centre, PTM) to Malaysian Green Technology
Co
rporation (also known as GreenTech Malaysia).


The 10MP has clearly indicated Malaysia’s aspirations towards achieving low carbon
economy and sustainable development (EPU, 2010).
Malaysia aims to embrace a leadership
role in the green revolution and
become

a strategic niche player in high value green industries
and services

(NEAC, 2010).
The Green ‘
Gross Domestic Product (GDP)
’ concept was
introduced under the NEM to take into account the impact of economic growth on the
environment throughout the development processes. In order to achieve this, Malaysian
Government is committed to allocate adequate financing and appropriate te
chnology to
promote low carbon economy via market mechanisms, financial plus fiscal incentives and
disincentives, mobilizing public private partnerships, involvement of financial and insurance
sectors (MNRE, 2010).


NEM proposes a number of possible policy measures towards green economy as shown
in
Table 2
. By doing its talk, Malaysia has voluntarily committed to reduce its CO
2

emissions
intensity of GDP up to 40 percent by 2020 as compared to 2005 levels, subject to
financial
and technological assistance from developed countries. The pledge was made by Malaysia’s
Prime Minister during the United Nations
Climate

Change

Conference (COP15
)
in the
Copenhagen

in the year 2009.


One of the initiatives in achieving Malaysia’
s low carbon economy targets is by
transforming its energy sector. In this respects, National Renewable Energy Policy and
Action Plan (NREPAP) has been launched in 2010 followed by the establishment of the
Renewable Energy Act (Act 725). Then in 2011, Sust
ainable Energy Development Authority
Act was introduced, where Feed in Tariff (FiT) mechanisms were introduced to catalyze the
generation of renewable energy.


The Green Technology Financing Scheme (GTFS) as a mean to provide financial
assistance to produ
cers and users of green technology with a view to promote and advance
green technology, and attract private sector participation in green technology
entrepreneurship was launched in 2010.
T
he government
bears
2 percent of the total interest
charged and pro
vides a guarantee of 60 percent on the financing amount via Credit Guarantee
Corporation Malaysia Berhad (CGC), while the remaining 38 percent financing risk to be
borne by the financial institutions. In between the year, 2010
-
2012, RM1.5 billion was
alloc
ated and the amount will be increased to RM2 billion for the period of 2012
-
2015 as
announced in the 2013 Federal Government Budget recently to further boost the production
and utilisation of green technology
-
based products

(MOF, 2009a; MOF, 2012)
. As of
O
ctober 2012, RM828 million has been approved and GTFS is expected to encourage
investments in green technology, construction and innovation in the energy, waste
management, building and transportation sector.


4.

GOVERNMENT GREEN PROCUREMENT

Government pro
curement, which refers to the acquisition of supplies, services and works in
accordance with government rules and regulations, plays a crucial role as a catalyst for
economic and social development in particular to stimulate innovation, enhance
competitive
ness of local companies, encourage investments and instill business confidence in
Malaysia (Adham & Siwar, 2012a). The government procurement has become vital as it
represents 24
-
33 percent of GDP (Adham & Siwar, 2011) and the proportion
is higher than
som
e other countries (Adham & Siwar, 2012b). The expenditures are projected to

grow to
meet the socio
-
economic development demands (MOF, 2009
b
)
.

Figure

1

illustrates the
overall

components of

the Malaysian Government
's procurement system.


G
overnments could potentially use its huge purchasing power to spur
the use of
environmentally friendly products and services
by participating in the market as purchasers.
Apart from that, the government as the biggest consumer group could use regulatory
in
struments to regulate its practices. The use of government procurement for environmental
protection purposes is being promoted under various terms such as government green
procurement (GGP), green public procurement (GPP) and environmentally
-
preferable
pur
chasing (EPP). In addition, there are other related terms such as environmental responsible
public procurement, sustainable public procurement, and environmental product procurement
(Adham & Siwar, 2012b; IGPN, 2010; M
ichelsen & Boer, 2009).


Bouwer et al
. (2005) define

GPP as the approach by which Public Authorities integrate
environmental criteria into all stages of their procurement process, thus encouraging the
spread of environmental technologies and the development of environmentally sound
products,
by seeking and choosing outcomes and solutions that have the least possible impact
on the environment throughout their whole life
-
cycle.
GGP has been defined as
the
procurement

of supplies,

services and works

by the government of Malaysia that
takes into
account

environmental

criteria

to conserve and minimize the impact on the environment,
accelerate the national economy and promote sustainable development (Adham & Siwar,
2012b)
.


Environmental criteria in the given definition refers to products, equipmen
t or systems
that minimize degradation to the environment, have zero or low green house gas (GHG)
emission, safe for use and promote healthy and improved environment for all forms of life,
conserve the use of energy and natural resources, and promote the u
se of renewable resources
as outlined in the NGTP (KeTTHA, 2009).
According to Geng & Doberstein (2008), the
effective implementation of GGP could offer greater impacts for the developing countries
where many of them are facing natural resource scarcities.

Hence, GGP shall further be
introduced as high

demand of environmentally friendly products and services from the
government would influence the private sector to adopt green private procurement practices.


Benefits associated with the implementation of G
GP are not only limited to environment
but also
on the economic and social aspects. Empirical studies have found that GGP
has the
potential to reduce carbon dioxide (CO
2
) emissions

and operating costs by the government in
the long run (PWC, 2009; EC, 2004)
.


5.

COMMITMENT OF THE MALAYSIAN GOVERNMENT TOWARDS GGP

GGP practices
have been implemented in many countries throughout the world and have
been regarded as an effective means of reducing environmental burdens. For this reason,
more and more countries hav
e established GGP policies at national levels to integrate
environmental considerations in their government procurement decisions.

However, GGP is
still a new concept in Malaysia (Adham & Siwar, 2011; 2012a; 2012b). As GGP has not been
formally adopted, th
ere is no such policy, regulation and legal framework with regards to
GGP at this point of time (Adham & Siwar, 2011b; 2012a; 2012b).


While Malaysia is somewhat behind
the

line in term of GGP implementation, as
compared to its
neighbouring countries
, the

Malaysian Government has acknowledged the
importance of GGP and initial steps have been taken towards its implementation. The
Malaysian government commitments have been
outlined in 10MP, NEM, ETP, NGTP,
NREPAP, Small and Medium Enterprises Masterplan (SME
MP) and Annual Federal
Government Budget.
Under the ETP, the Government has made GGP as one of its Entry
Point Projects (EPP).
Table 3

shows details of the commitments. The Malaysian government
targeted
50 percent of goods and services procured across mini
stries will have
eco
-
label

certification

by the year 2020 (PEMANDU, 2010).


In establishing GGP, Malaysian g
overnment
has implemented

a number of

initiatives
such as

Malaysia Green Labelling Programme (MyHijau Pelabelan; MyHijau refers to
Bahasa Melayu te
rms which means Malaysia Green),
Malaysia

Green

Directory (MyHijau
Direktori)
, Capacity Development for Green SMEs (MyHijau PKS & Usahawan), Low
Carbon Cities Framework (LCCF) and Assessment System, and
International Conference and
Exhibition

Green Technol
ogy and

Eco
-
Products (
IGEM
)
.



6.

PRESENT STATE OF GGP ESTABLISHMENT IN MALAYSIA

The Malaysian government intentions in implementing GGP have been announced since
2010 during the 2010 Federal Government Budget. The budget states that priority will be
given to environmentally
-
friendly products and services that
comply

with

green technology
standards in government procurement (MOF, 20
09a
). However, preference to
environmentally
-
friendly products and services in the public sector could not be implemented
due to absence of
clear
guidelines and regulations to enforce its implem
entation. In order for
GGP to be in place, environmental criteria need to be integrated in the current government
procurement procedures. In addition, there was no such mechanism established to kick
-
start
GGP.


ETP which was launched in the year 2010 for t
he first time has outlined
path

towards the
implementation of GGP. ETP states that green public procurement policy will be formulated
to boost demand for green products and services. The policy which supposedly launched by
October 2011 is meant to achieve
at least 50 percent of goods and services procured by the
public sector across ministries will be eco
-
labeled by 2020

(PEMANDU, 2010)
. However,
the mentioned policy has not been realized up till now. Moreover, eco
-
label certification has
not yet caught muc
h attention from the local industries as so far only 114 products have been
certified. Due to low take up on eco
-
labelling which results in relatively small number of eco
-
labeled products and services, the authors suggest that the present GGP’s targets to
be
reviewed to make it more realistic.




7.

GOVERNMENT GREEN PROCUREMENT: THE WAY FORWARD

Content analysis of Treasury Instructions (Arahan Perbendaharaan; AP) shows that the
current government procurement laws and regulations is emphasized on the most fa
vorable
offer in terms of price and quality, but no specific determination of environmental criteria
(Adham et al., 2012). Therefore,
e
xisting government procurement laws and regulations
should be reviewed to enable implementation of the GGP.
Besides Treas
ury Instruction

(MOF,
2008a)
, r
elated laws and regulations with regard to Government procurement include
Financial Procedure A
c
t 1957 (Amendment 1972), Ministerial Functions Act 1969,
Government Contracts Act 1949 (Revised 1973), Delegation of Powers Act
1956, Treasury
Circular Letters (SPP), Federal Central Contract Circulars (PKP), Treasury Circulars (PP),
Treasury Instruction Letters (SAP), Manual and Guidelines
.


Interestingly the authors find that there are several existing initiatives that could sup
port
the establishment of GGP in Malaysia. The adoption of prudent spending practices for
instance, could be considered as one of the relevance practices which in line with GGP
principles. Over the years, prudent practices in managing public expenditure we
re
emphasized in government procurement as stipulated in various Treasury instructions and
directives such as Treasury Instruction Letter (SAP) dated 15 July and
1
7
December

2009

(MOF,
2009c;
2009d)
; Treasury Circular (PP) No. 2/2009

(MOF, 2009e)
; Treasur
y Circular
Letter (SPP) No. 1/2008

(MOF, 2008d)
; PP No. 7/2008

(MOF, 2008e)
; PP No. 9/2008

(MOF,
2008f)
; and SAP dated 24 April 2008

(MOF, 2008c)
.


In

addition,

t
he requirement of 70 percent Industrialized Building System (IBS) content in
Government proje
cts (SPP 7/2008 dated 31 October 2008) could be one of the
fine
examples
as well

(MOF, 2008b)
.

T
he use of IBS offers minimal wastage, fewer site materials, a cleaner
and neater environment, controlled quality and lower total cost of construction (Hamid et
al.,
2008; Pan et al., 2008).


The establishment or GGP could also be integrated with Green Lane Policy and
Green
ICT Guidelines
. Green Lane Policy was introduced
in 2011
to acknowledge the contribution
of competitive and innovative local SMEs.
I
ncentives
provided under the Green Lane Policy
cover

financing, tax incentives, priority in
the
government and
the
Minister of Finance
(Incorporated)

procurement
. Among other
privileges

under the policy
are (i)
additional bonus
points on technical assessment;
(ii) p
riority to
take part

in
the
g
overnment
o
ffset
p
rogrammes;
and
(iii) special c
onsideration to be
appointed as government c
entral
/panel

c
ontract
or

(MOF,
2011).


The
guidelines on procurement of
Green ICT were
issued

on August 2010 as one of the
mechanism
s

in promoting the use of environmentally friendly
ICT
devices
in the public
sectors
.
The
document
has outlined several
characteristics
of
Green
ICT
to be considered
namely

(i) saving energy use, (ii) production of low carbon, (iii) low heat production, (iv)

minimum use of toxic substances such as ink printers (ink) and toner, (v) component in the
product can be reusable, and (vi) can improve environmental performance for non
-
ICT, such
as energy control systems and environmental monitoring systems in building
s

(MAMPU,
2010)
.


The authors suggest a number of measures that could be taken into
account

to kick
-
start
GGP in Malaysia such as
(i) Establishing
steering committee at the national level
(i
i
)
Implementing products/services stewardship scheme for manufacturers/producers under the
government c
entral
/panel

c
ontract

(i.e.
food,
furniture
, envelope
); (ii
i
) Giving price
preferences
at certain percentage
for local producers of environmentally friend
ly products
and services; (i
v
) Giving preference
s

to local suppliers that comply with the environmental
management systems (EMS)

certification
; (
v) Giving preference to environmentally friendly
products and services
in

technical assessment based on the Wei
ghted Point Evaluation
Method (WPEM); (v
i
) Enhancing the implementation of electronic procurement

and (vii)
Integrating GGP with
the
current
electronic procurement

system
.



8.

CONCLUSION

G
reen
or low carbon
economy is
an
effort

to integrate economic progress with environmental
preservation

to spur economic growth, eradicate poverty and create job opportunities.

In this
regard, Malaysia has set on the path
way

towards low carbon economy and GGP has been
identified as one of the in
struments to underpin Malaysia’s efforts to transform its economy
into a green
er

economy.
The transformation could be viewed as a strategic move to
strengthen
Malaysia’s economic

growth and at the same time preserve its natural assets.
Available evidences
have shown that the implementation of GGP leads to waste reduction
and can even optimize the use of public funds.

Additionally,
GGP could
potentially help
Malaysia

to
meet its

COP15 targets,

cost savings of RM295 billion,
increase Gross National
Income
(GNI) of

RM7.2 billion and create over 47,000 jobs (PEMANDU, 2010).

However,
GGP implementation
requires proper planning

as its implementation
does not fit to one size
fits all approach
.
S
trong government commitment in advocating GGP would provide

favourab
le

surroundings to mainstream GGP in Malaysia.



ACKNOWLEDGMENT


This study is sponsored by the Malaysian government under the Federal Training Award
Scheme.




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Table 1: The potential of green growth


Potentials

Descriptions

Productivity

Incentives for greater efficiency in the use of resources and natural
assets: enhancing productivity, reducing waste and energy
consumption and making resources available to highest value use

Innovation

Opportunities for innovation, spurred by policies and framework
conditions that allow for new ways of addressing environmental
problems

New markets

Creation of new markets by stim
ulating demand for green
technologies, goods, and services; creating potential for new job
opportunities

Confidence

Boosting investor confidence through greater predictability and
stability around how governments are going to deal with major
environmental

issues

Stability

More balanced macroeconomic conditions, reduced resource price
volatility and supporting fiscal consolidation through, for instance,
reviewing the composition and efficiency of public spending and
increasing revenues through the pricing
of pollution

Source: OECD (2011)







Table 2: Possible policy measures towards green economy


Policy purpose

Possible Policy Measures

Preserve natural resources



Use appropriate pricing, regulatory and strategic policies
to manage non
-
renewable
resources sustainably



Encourage all sectors to embrace ‘green technology’ in
灲潤pc瑩潮⁡湤⁰n潣e獳敳



Develop a comprehensive energy policy

Leverage on comparative
advantages for high value
added products and
services



Increase focus on downstream high
value added
production and services



Develop a comprehensive energy policy

Meet international
commitments



Reduce carbon footprint in line with government
commitment



Enforce clean air and water standards in utilising natural
resource, i.e. pollution mitigat
ion

Facilitate bank lending and
financing for ‘green
investment’



Develop banking capacity to assess credit approvals for
green investment using non
-
collateral based criteria



Liberalise entry of foreign experts

specialising

in
financial analysis of viability of green technology
projects



Support green technology investment with greater
emphasis on venture capital funds

Ensure sound public
finances



Use appropriate pricing, regulatory and strategic policies
to manage non
-
renew
able resources sustainably



Reduce wastage and avoid cost overrun by better
controlling expenditure

Source: NEAC (2010)



Figure 1: Malaysian Government procurement


























Source: Adham & Chamhuri (2012a)





LEGISLATIONS & REGULATORIES

Financial Procedure Act 957 (Revised 1972), Ministerial
Functions Act 1969, Government Contract Act 1949, Delegation of Powers
Act 1956, Treasury Instructions, Treasury Circular Letters, Treasury Circulars, Treasury Instruction Letters, Federal Centra
l Contract
Circulars, Guidelines & Manual


POLICIES

ST
RATEGIES




Registration requirement of
suppliers/contractors



Priority to local products &
services



Control of imported products &
services



Transfer of technology for local
industries



P
riority to Bumiputera companies



Ensure continuous supply of
products & services



Best value for money



Encourage local industries growth



Encourage technology of transfer



Encourage alternative sources

MALAYSIAN GOVERNMENT PROCUREMENT

Good governance practices


PRINCIPLES

Public accountability, Transparency, Best

Value for Money, Open and Fair Competition, Fair Dealing


OBJECTIVES



Promote the growth of local
industries



Encourage the participation of
Bumiputera entrepreneurs



Enhance the capacity of local
industries



Encourage service based local
industries



Accelerate economic growth

PROCUREMENT CATEGORIES

Supplies, Services, Works


PROCUREMENT METHODS

Petty Cash, Direct Purchase, Quotation, Tender, Federal Central Contracts/Panel Contracts, Requisition, Communal Work, Emerg
ency,
Consulting Services,
Use of Contract from other Ministries/Departments, Procurement through Technical Department, Direct

Negotiation


Table 3: Malaysian government commitments towards GGP


Documents

Commitments

10MP




There will be a push towards green technology through the
National Green Technology Policy, in preparation for green
products and services becoming the preferred choice for public
procurement (p. 83)



KeTTHA together with SIRIM Berhad, will develop a
national
eco
-
labeling scheme and standards for our products and services
that match international standards. This will in turn support the
government’s green procurement initiative as well as assist local
manufacturers to export their products. Increased l
abeling of
environmentally friendly goods and services such as Energy
Efficiency Star Rating, Low Carbon Footprint Products and Green
Building Index will increase Malaysia’s competitiveness (p. 299)



Implementing value
-
management analysis and life
-
cycle cos
t
evaluation for procurement.
Development programmes and projects
costing RM50 million or more will be subject to value
-
management analysis. This approach requires consideration of
various options to arrive at the optimal project design aligned to the
desi
red outcomes. Life
-
cycle cost evaluation will ensure cost
optimization and value
-
for
-
money while meeting required
performance levels. Ministries and agencies implementing projects
costing less than RM50 million will also be encouraged to conduct
similar an
alyses (p.338)

NEM




Ensure public procurement supports local innovation (p.28)



A more efficient procurement process will address wider issues
covering long
-
term economic and social viability, environmental
impact, and the residual contingency risks that
government may
have to bear (p. 93)

ETP




Boost demand for green products and services.
Government will
take the lead in raising efficiency and growing the green
technology industry. First, the KeTTHA will set efficiency targets
stipulating that all minist
ries must reduce electricity and water
consumption by 10 percent per year from 2011 to 2013. Second,
KeTTHA will set the target across ministries that 50 percent of the
goods and services purchased by the public sector should be eco
-
labeled by 2020. To thi
s end, a green public procurement policy
shall be put in place by October 2011, to give preference to local
producers, establish buying guidelines for eco
-
labeled products and
specify the required energy efficiency certification for specific
products (p. 4
17)

NGTP




Short
-
term goals: 10
th

Malaysia Plan (ii) Widespread availability
and recognition of Green Technology in terms of products,
appliances, equipment and systems in the local market through
standards, rating and labeling programs, (p. 7).



Mid
-
term
goals: 11
th

Malaysia Plan (i) Green technology becomes
the preferred choice in procurement of products and services, (ii)
Green Technology has a larger local market share against other
technologies, and contributes to the adoption of Green Technology
Documents

Commitments

in re
gional market, (ii) Increased production of local Green
Technology products (p. 10)



Long
-
term goals: 12
th

Malaysia Plan and beyond (ii) Widespread
adoption of Green Technology reduces overall resource
consumption while sustaining national economic growth,
(v)
Malaysia becomes a major producer of Green Technology in the
global market (p. 10)

NREPAP



Government should use its strategic public procurement power to
spur Regeneration and industry growth (p.57)

SMEMP



In many countries, government have played a major role in
supporting SME product through specific government procurement
policy (p.100)

Annual
Federal
Government Budget




2010
-

give priority to environmentally
-
friendly products and
services that comply w
ith green technology standards in
government procurement (p. 19)



2013


The Government will also ensure that the Federal
Government debt will not exceed 55% of the GDP and a fiscal
deficit continues to decline to 3% by 2015. Among the measures
taken to ens
ure sound public finance are enhancing revenue
collection by strengthening the tax system, and ensuring all
procurement and purchases by the Government are based on the
value for money principle
(p. 25)

Source: Adapted from Adham & Siwar (2012a); SME
(2012)
, MOF (2012)

& KeTTHA
(2010)