Social Procurement trends around Australia

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We discuss some of the social procurement trends across Australian states and territories, and outline ways businesses can get themselves social procurement ready.

social procurement

Governments have, for some time, recognised that public sector buying power can be used to support economic and/or social outcomes (e.g. purchasing from local businesses). There have been small steps made by our federal and state governments in the past to leverage this buying power for social good. However, it wasn’t until 2018 that a structured social procurement approach started to take shape with the Victorian Social Procurement Framework and federal initiatives such as the Modern Slavery Act and the workplace gender equality agency.

We have written a lot about government social procurement policies and initiatives in recent years – mainly with reference to the Victorian framework and specific federal policies.

In this post we’ll look at some of the trends we’re seeing across all states and territories around Australia, and outline ways businesses can get themselves ‘social procurement ready’.

NOTE: It’s beyond the scope of this post to detail the individual policies of Australia’s other states. However, we have summarised each state and territory’s main social procurement requirements on a separate page. (See the bottom of this post for a list of our past blog posts related to social procurement.)

Social procurement trends

In April 2017, the International Standards Organisation (ISO) released guidance on a new global standard called Sustainable Procurement (ISO 20400:2017). This standard created a global framework to stimulate the integration of social, economic and environmental objectives into a strategic procurement practice for all organisations.

The following year, the Victorian government released its Social Procurement Framework. This was the first time an Australian government jurisdiction comprehensively put together all its social and environmental objective commitments, and defined how they were going to use procurement as a basis to achieve these outcomes.

Since then, governments across Australia have started adopting social procurement principles.

Victoria continues to have the most comprehensive approach towards social procurement in Australia, and compliance with Victoria’s framework is a good starting point for any business. However, there are some shared themes across Australian government jurisdictions: most notably Indigenous procurement through supporting local employment and/or local Indigenous businesses, and gender equality. More jurisdictions are also highlighting the importance of employing people with a disability or engaging disability businesses within a supply chain.

It will also come as no surprise that all state governments and the federal government have a commitment towards supporting local employment and businesses. For some this is a separate ‘buy local’ policy, while for others it’s integrated within a social procurement framework.

Almost all local governments have local procurement as part of their social procurement framework. Note that the definition of ‘local’ can vary between local government, state government, regional councils and federal government.

What does social procurement mean for you?

Meeting social procurement objectives within organisations plays out in three ways:

  • Your organisational policies
  • Your practices, and
  • Your commitments, which are often linked to a higher value procurement.

For example, a tender might simply ask a series of questions around your workforce (which relate to social objectives):

  • Do you have a family violence / equal opportunity policy? (Policy)
  • What is the gender breakdown of your workforce? Males, Females, Other? (Practice)
  • What is the gender and diversity representation of your workforce at an executive level? (Practice)
  • What is your commitment to gender equality employment under this contract? (Commitment)

Thus, even given the wide variability in the adoption of social procurement principles across Australia, there are ways you can get ‘social procurement ready’.

Firstly, if you comply with Victoria’s Social Procurement Framework, your business will be well positioned to comply with other jurisdictional requirements.

If not, we recommend at a minimum that you get ‘policy-ready’:

  • Have a policy or statement around gender equality (sometimes called equal employment opportunity)
  • Have a policy around equal employment opportunity that encompasses race, gender, disability, sexuality and religion
  • Include family and domestic violence leave somewhere in your HR policy (whether as a separate policy or as part of a broader leave policy)
  • Have a policy or statement around Indigenous commitments (whether that is employment and/or supporting local Indigenous businesses).

Consider your corporate social responsibility program and how this demonstrates your practices (i.e. do you walk the talk?)

And, to get ready to meet social procurement commitments, consider engaging with umbrella organisations like Social Traders, BuyAbility and Supply Nation to understand what opportunities may exist to include a social enterprise into your supply chain.

The following sections provide more details around what to do to meet the minimum requirements outlined above. We’ve also given you some ideas for what you can do further to bolster your response to any questions related to social or economic objectives.

Gender equality and diversity

As a business, you’re likely to already have standard policies for the workplace (such as Occupational Health & Safety (OH&S), and anti-discrimination and harassment).

Given the recent focus around domestic and family violence, consider whether you need to update current existing policies or develop workplace policies specific to this issue. In August 2018, the government updated the minimum entitlements of the National Employment Standards to include family and domestic violence leave. All employees (including part-time and casual employees) are entitled to 5 days unpaid family and domestic violence leave per year.

Also consider any work-related gender violence. In March 2020, Worksafe Victoria included sexual harassment as an occupational hazard covered by workplace health and safety regulators.

If you haven’t already, start collecting data on your workforce in terms of gender and cultural background. It can be a good idea to collect this data against executive/leadership level and operational staff. As we noted above, basic tender questions ask for a breakdown of your workforce in terms of gender and diversity.

If you can see there is an inequality (whether at executive level or operational staff) in your workforce, at a minimum consider what your statement will be around why this exists. Also consider what steps you can take to change this (whether it is targeting new positions at a particular cohort or working with an educational institution to encourage more diversity, especially if this is a systemic problem).

Indigenous participation

If you’re interested in working across government jurisdictions (whether that is state, federal or at a local level), it is important that you have some commitment for Indigenous participation. At a minimum, you should have a policy statement that stipulates what you as a business are committed to.

This can either be building a pathway for employing more Indigenous people in your workforce and/or engaging Indigenous businesses in your supply chain. Whether you currently have existing Indigenous employees or not, try to set yourself a target (for example, 1% of your workforce in 2 years’ time), and a mechanism to monitor this target (e.g. assign someone in your business the responsibility to monitor and meet the target, a leadership meeting, etc). This will position you well when you’re applying for any government opportunities (regardless of contract value size).

Also, consider whether you can integrate an Indigenous employee, apprenticeship, trainee or graduate program into your organisation.

If you’re an Indigenous business, then you should be talking to government directly, or through recognised associations such as Supply Nation, Kinaway (Victorian) to see how they can support you.

Local content (employment and/or supporting small to medium businesses)

The official definition of ‘local’ remains Australia and New Zealand. However, lately (and possibly as a consequence of the pandemic), we’ve seen more prescribed definitions of local being the state or jurisdiction that the work is being conducted in, or just Australia.

For example, if it is a building being constructed in Ballarat, Victoria: the tender will likely prescribe supporting local employment in the region (being Ballarat and surrounds). At a minimum, there will be an expectation for local Victorian employment. Some tenders, particularly those in the larger contract values, may even stipulate that you have to support employment through a specific government employment portal. Many of these exist in most states as a result of the pandemic: e.g. Working for Victoria (Victoria), or JobActive (Federal).

Consider also if your business can support apprentices, trainees or graduate employments. You could also work with a tertiary institution (tertiary or TAFE) to see if you can establish a work-integrated learning or industry-based learning program.

Also consider whether you can support local businesses, particularly those who are small to medium (defined as <200 employees). You may already be supporting local businesses as part of your supply chain, or there may be opportunities for you include more local businesses. Think also about your business activities, perhaps you can do training with a local business, or get your catering from a social enterprise (such as STREAT). If you can include local businesses that are also social enterprises, Indigenous or disability businesses, that will also strengthen your overall response for social procurement.

Environmental objectives

At a minimum, you need to have a statement around your environmental management policies and practices. Broadly speaking, your response should cover two areas:

  • Within your business: what environmental practices do you adopt as part of your business operations, and what are your environmental management policies? (e.g. minimum use of printing, using recycled paper, offsetting travel)
  • As part of the contract: what will you do to minimise environmental impact during the delivery of the services?

There might even be the potential to align the environmental objectives of your business with local content or other social procurement objectives. For example, Tasmania has an initiative to support the use of responsibly sourced timber that has a positive social and economic impact. If, as a business, you require timber (such as in construction) and you work with a local Tasmanian forestry business, you could potentially be meeting both an environmentally sustainable objective as well as supporting local economic commitments! There are also disability enterprises that work in recycling and other environmental practices.

We suggest looking at the products and services you use as part of your business service delivery. Consider whether you can adopt more environmentally friendly practices or encourage it in your supply chain. Consider also whether you can purchase products that use recycled materials. There may also be processes in your business that can be more environmentally sustainable (for example, you may be able to use the waste in one process for another purpose).

What about Corporate Social Responsibility (CSR)?

Finally, a note on Corporate Social Responsibility (CSR). Many businesses confuse CSR with social procurement. They are different things.

Social procurement is using government’s spend on a product or service to create a direct or indirect social impact. This is primarily through employment and business support.

Corporate Social Responsibility demonstrates a business’s corporate values, their ethics and their focus. As an example, under Mia’s CSR we support enterprises with a mission centred on working with victims of domestic violence. A business may spend significant amounts under their CSR but as this spend is not directly linked to a specific procurement it can’t be classified as social procurement.

However, your CSR does demonstrate your broader commitment to social justice and social procurement so it’s always good to describe your CSR program. Just make sure to also answer the questions on social procurement as well!

Also check out our past posts about social procurement:

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