9. Appendix 2: International Agreements
Australia New Zealand Government Procurement Agreement (ANZGPA)
In Article 11 of the CER Agreement, the Australian Commonwealth Government and the New Zealand Government agreed that the maintenance of domestic purchasing preferences was inconsistent with the objectives of CER, and agreed to treat Australian and New Zealand content equally in their government purchasing. Subsequently, the Australian State and Territory Governments joined with the Commonwealth and New Zealand in the Australia New Zealand Government Procurement Agreement (ANZGPA).
Under the ANZGPA, the Australian (Commonwealth, State and Territory) and New Zealand Governments are committed to giving Australian and New Zealand goods, services and suppliers equal treatment and opportunity to compete on the basis of value for money in a "single trans-Tasman government procurement market".
New Zealand's CER/ANZGPA commitments are consistent with the Government's globally non-preferential procurement policy. Some Australian jurisdictions maintain preference margins which may be applied against third country suppliers, but not New Zealand suppliers.
Entity Coverage
The ANZGPA commitments apply to procurement by New Zealand departments and statutory authorities directly controlled by the Government. New Zealand has also undertaken that the Government will use its best endeavours to encourage wider application of the Agreement, consistent with good commercial practice, by other authorities and bodies, SOEs and local government bodies, for example. Similar obligations have been undertaken in respect of New Zealand suppliers, goods and services by Australia at federal and state/territory government levels.
Monitoring/Complaints
The ANZGPA includes monitoring and complaints procedures, through designated bodies in each government, to investigate and try to resolve any claims of discrimination. New Zealand's Designated Body is the Ministry of Economic Development (Government Procurement Development Group).
Review
The ANZGPA is subject to 5-yearly review, and may be revised at any time, as agreed between the signatories. Up to date copies of the Agreement are available from the Government Procurement Development Group of the Ministry of Economic Development. The text is also available on the Internet at the APCC website.
New Zealand/Singapore Closer Economic Partnership (CEP) Agreement
Part 8 of the CEP Agreement is based on the concept of a "single New Zealand/Singapore government procurement market". Accordingly, New Zealand and Singapore agree to provide to each other's suppliers, goods and services equal opportunity to compete on the basis of value for money. Procuring entity coverage is similar to that in the ANZGPA. The New Zealand/Singapore commitments, however, explicitly apply only to procurement above a value threshold of 50,000 SDRs (IMF Special Drawing Rights), which in 2002 equates to NZ$134,500. (The SDR threshold is expressed in fixed New Zealand and Singapore currency equivalents which are subject to periodic review).
New Zealand and Singapore also undertake that their procurement procedures shall be conducted in a manner consistent with the APEC Non-Binding Principles on Government Procurement and good commercial practice. This includes a commitment to advertising invitations to tender, or to register interest, in a publicly accessible medium. Post-award contract information, and supplier debriefing are to be made readily available on request. The Parties will enhance transparency at all stages and endeavour to provide a single point of publication for opportunity and contract award information, e.g. on the internet.
The Ministry of Economic Development (Government Procurement Development Group) is New Zealand's "designated body" for investigation of complaints by Singaporean suppliers that New Zealand Government agencies have not complied with their CEP Part 8 obligations. Any unresolved complaints may ultimately be subject to the formal Dispute Settlement chapter of the CEP.
The CEP Agreement, including Part 8, is subject to periodic review, and may be revised from time to time. The current text is available on the Ministry of Foreign Affairs website. Hard copies may also be obtained from the Ministry of Economic Development (Government Procurement Development Group).
Trans-Pacific Strategic Economic Partnership Agreement (P4 FTA)
This free trade agreement between New Zealand, Brunei, Chile and Singapore, which entered into force in 2006, includes a government procurement chapter based on the WTO principles of non-discrimination (national treatment) and transparency, and is consistent with the APEC Non-Binding Principles. The coverage of the chapter is largely defined by reference to schedules which contain lists of the central government purchasing entities each Party has agreed to include, and any specific goods, services or sectoral exclusions. Procurement of goods and services below the value threshold of 50,000 SDRs (IMF Special Drawing Rights) is not covered, and the corresponding threshold for construction services is 5 million SDRs.7
The Parties agree to provide each other's covered goods, services and suppliers treatment no less favourable than that provided to their domestic goods, services and suppliers. Offsets (conditions requiring domestic content, licensing of technology, investment, counter-trade or similar requirements to encourage local development or improve the balance of payments) are prohibited.
The chapter prescribes in some detail procedures to be followed by covered entities in their procurement, to assure compliance with the commitments on non-discriminatory treatment and transparency. Open tendering is to be used in all but a specified range of exceptional circumstances. This includes publication of all invitations to tender, or opportunities to pre-qualify, contract award notices and any registered/qualified supplier lists in continuous use. In order to facilitate commercial opportunities, the Parties undertake to encourage the use of electronic communications in procurement, including a single electronic portal for access to comprehensive information on government procurement and supply opportunities.
The Parties agree to provide each other's suppliers impartial and timely access to domestic administrative or legal review of complaints of alleged breaches of the measures by which a Party implements the P4 FTA commitments on government procurement.
Note: New Zealand's commitments under the government procurement chapter of the P4 FTA are implemented through the Mandatory Rules for Procurement by Departments (2006).
World Trade Organisation (WTO)
Government purchasing is recognised in the World Trade Organisation (WTO) as an important area remaining outside the multilateral trading framework. Many countries restrict access to their procurement markets and discriminate against foreign suppliers.
The effect of the plurilateral WTO Agreement on Government Procurement (AGP) in terms of global liberalisation has been limited by its relatively small membership (most developing countries are not members), value thresholds and bilaterally negotiated exclusions of purchasing entities or industry sectors. New Zealand has not joined. To date it has been judged that AGP membership would entail a prescriptive approach to purchasing procedure at odds with New Zealand's deregulated and decentralised public sector management regime, and would be likely to increase administrative and transaction costs.
Other efforts have been made in the WTO to bring government procurement under multilateral rules. WTO Ministers agreed at their meeting in Doha in November 2001 that discussions should continue to lay the basis for negotiations to begin on a multilateral agreement on transparency of procurement policies and practices. Negotiations have also taken place on bringing government procurement of services under the WTO General Agreement on Trade in Services (GATS).
New Zealand's objective in such negotiations has been to reach agreement on a multilateral approach which would eventually integrate government procurement with the WTO system, without requiring countries such as New Zealand to introduce unnecessary regulation into procurement regimes which are already liberalised. New Zealand's unrestricted open market approach is already compatible with normal WTO principles of non-discrimination and transparency.
The case for New Zealand joining the GPA is however subject to review, in the light of international trade and domestic procurement policy developments. (A review underway at the time of this policy guide revision is also taking account of the revised GPA text provisionally adopted by the WTO GPA Committee on 8 December 2006).
New Zealand has also been active in WTO and other multilateral negotiations seeking to ensure a positive working relationship between international trade law and policies adopted to promote sustainable development and protect the environment.
Asia-Pacific Economic Cooperation (APEC)
Under the Osaka Action Agenda signed in 1995, APEC economies including New Zealand agreed to the following objectives in government procurement:
"(a) develop a common understanding on government procurement policies and systems, as well as on each APEC economy's government procurement practices; and
(b) achieve liberalisation of government procurement markets throughout the Asia-Pacific region in accordance with the principles and objectives of the Bogor Declaration, contributing in the process to the evolution of work on government procurement in other multilateral fora."
The APEC Government Procurement Experts' Group (GPEG), which was established in 1995 as a subgroup of the APEC Committee on Trade and Investment, has developed agreed Non-Binding Principles (NBPs) and illustrative best practice lists to guide APEC economies' work towards voluntary liberalisation of government procurement. The principles and practices adopted relate to transparency, value for money, open and effective competition, fair dealing, accountability/due process, and non-discrimination. The current NBPs text and the related APEC Transparency Standard on Government Procurement are available at the APEC website.
The Group has also established a process for individual APEC economies to review and report back to the Group on the consistency of their government procurement systems with the agreed non-binding principles. In addition, through their APEC Individual Action Plans (IAPs), the member economies set out their plans and timetables for voluntary alignment of their government procurement systems with the non-binding principles.
The New Zealand and Singapore Governments have, in their CEP Agreement, committed themselves to implement the APEC Non-Binding Principles on Government Procurement. The same principles are also recognised in the P4 FTA between New Zealand, Brunei, Chile and Singapore.
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