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Social procurement a “game-changer” for tackling inequality

The Southern Initiative media release

Monday, May 13, 2019

Social procurement a “game-changer” for tackling inequality

While New Zealand is recognised as a leader in race relations, it is lagging behind the rest of the world in specific measures to create equal opportunities for developing indigenous owned businesses.

In countries such as Canada, Australia, Britain, the United States and South Africa, government policy and corporate procurement approaches have seen a significant rise in the number of indigenous or minority-owned businesses, and as a result improved socio-economic conditions.

The leaders of two indigenous ‘supplier diversity’ networks in Canada and Australia will be sharing their experience in achieving this at the Creating Shared Prosperity Conference, at GridAKL in Auckland’s CBD on May 14.

These speakers, Cassandra Dorrington from Canada, and Laura Berry from Supply Nation in Australia will join other key note speakers including, the Minister of Māori Development Nanaia Mahuta and Auckland Councillor, Penny Hulse.

Sessions at the conference will outline how New Zealand can develop social procurement practices to catch up with what has become common practice in other countries.

Social procurement is the inclusion of specific targets in the procurement process to create social impacts, including equal opportunities for Māori and Pacific businesses, an approach known as supplier diversity.

In Australia, there is a federal government policy that sets targets for contracting aboriginal and Torres Strait Islander owned businesses. However New Zealand is yet to have such a policy.

Conference convenors, The Southern Initiative (TSI) have been working directly with the Auckland Council and its council-owned organisations to change their procurement practices to include specific opportunities for Māori and Pacific businesses, and to outline specific social and environmental outcomes in their procurement.

TSI’s Tania Pouwhare says social procurement policies have the potential to not only grow New Zealand’s economy but also tackle the country’s growing inequality issues.

“How we make sure Māori and Pacific businesses get a piece of the action could be a game-changer,” she says.

“Countries around the world have had these practices embedded in their policies for many years. In the past two years, the amount of services procured from indigenous owned businesses in Australia rose from $6 million to almost $2 billion.

“Due to these policies, the number of aboriginal owned businesses in Australia has risen in the past nine years to 1473.

“This is the flip-side to welfare. And it builds on the innate skills within our people and brings them into the mainstream economy.”

TSI has partnered with Auckland Transport (AT) from the start of this initiative. One of the most recent collaborations is the $100 Eastern Busway project. Contractors will be required to meet targets for increasing female participation in the industry, close the gap between Māori and Pacific Peoples’ wages to the rest of Auckland and increase the number and quality of business opportunities for Māori and Pacific-owned enterprises.

Auckland Transport chief executive Shane Ellison says building social procurement practice into infrastructure projects can have many benefits.

“Embedding this practice into our thinking and more importantly our contracts ensures greater social and economic value can be delivered back into our communities," he says.

"For the individuals involved, and for their whanau these sorts of initiatives are truly life-changing."

TSI has worked to establish He Waka Eke Noa, a Māori and Pacific Business network to meet the need for more suppliers. The network currently has 54 member businesses, mostly in the construction industry, employing more than 850 staff, of whom 80 percent are Māori and Pacific, with many more businesses wanting to join.

Key facts

• Since the commencement of Australia’s Indigenous Procurement Policy in July 2015, 1473 Indigenous businesses have won 11,933 contacts valued in total at over $1.83 billion.

• In 2017-18 alone, 335 businesses won their first Australian Government contract, creating jobs, and building wealth and opportunities for indigenous Australian families.

• In addition to Australia, the Canadian, American, South African and UK governments all implement supplier diversity strategies for minority and women-owned businesses and small-medium-sized enterprises.

• Eastern Busway 1 is a circa $100 million-dollar, two-year project which is part of the first stage of the Auckland Manukau Eastern Transport Initiative (AMETI) and TSI has brokered an agreement with the prime contractor for over 30 jobs to be created for South Aucklanders, West Aucklanders, Māori and Pacific people as part of the social procurement outcomes for the Eastern Busway 1.

• Over 2018, TSI has brought a social procurement approach to almost 20 Council and CCOs’ projects.

• 54 Māori and Pacific-owned businesses have joined He Waka Eke Noa with plans to expand this nationally.

• The Southern Initiative is a team within Auckland Council providing a place-based innovation platform that champions, stimulates, facilitates and enables social innovation in South Auckland.

The Creating Shared Prosperity Conference is at GridAKL in Auckland’s CBD from
9am-4.45pm on Tuesday 14 May. Go to www.csp.nz/ for more information.

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