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MOVING TOWARDS MORE SOCIALLY RESPONSIBLE FMJo Teagle, Partner,
Clayton UtzBree O'Connell, Senior Associate, Clayton Utz
• What is socially responsible FM?• What do Governments expect
from FM suppliers?• What are the challenges?• What are some
practical ways of showing corporate social responsibility?
OVERVIEW
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WHAT IS SOCIALLY RESPONSIBLE FM?
• FM procured in a manner which addresses one or (preferably)
more social responsibilities
• Key areas of social responsibility:- Creating opportunities
for disadvantaged groups (i.e.
indigenous persons, disabled persons, refugees, youths)- Gender
equality- Future proofing skills base via apprenticeships-
Commitment against domestic violence - Environmental
sustainability
• Variety of State/Territory specific policies/frameworks
• No one size fits all approach
OVERVIEW OF SOCIAL PROCUREMENT POLICIES
• Queensland Procurement Policy• Queensland Indigenous
(Aboriginal and
Torres Strait Islander) Procurement Policy
• Victorian Social Procurement Framework
• NSW Procurement Policy Framework • Aboriginal Procurement
Policy• Aboriginal Participation in
Construction Policy (NSW)
• Sustainable Procurement Policy (WA)• Aboriginal Procurement
Policy (WA)• Western Australia Industry Participation
Strategy
• Social Procurement Guidelines (SA)• South Australian
Industry
Participation Policy
• Sustainable Procurement Policy (ACT)
• Zero tolerance towards violence against any person in the
workplace (Tas)
• Buy Local Plan (NT)• Aboriginal Contracting
Framework (NT)
• Indigenous Procurement Policy (Cth)• Workplace Gender
Equality
Procurement Principles and User Guide (Cth)
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SOCIAL PROCUREMENT POLICIES
Assist Commonwealth, State and Territory governments to meet
their "promises" regarding social responsibility such as:
• Queensland and Victorian Governments' aim to achieve net-zero
emissions by 2050
• NSW Government's aim for Aboriginal businesses to be awarded
at least 3% of the NSW Government's contracts and for 3000 FTE
opportunities for Aboriginal people by 2021
• Victorian Government's 21 actions to improve work, study and
business opportunities for Victorians with a disability
• Tasmanian Government's position of zero tolerance towards
violence against women and efforts to obtain White Ribbon Workplace
Accreditation, and position of zero tolerance towards violence
against any person in the workplace
VICTORIA'S SOCIAL PROCUREMENT FRAMEWORK
• Launched in April 2018
• Applies from 1 September 2018
• Intended to support and not replace, the broader legislative
and policy framework already in place:- Legislation- Supplier Code
of Conduct- Local Jobs First- Ministerial Directions for Public
Construction Procurement in Victoria- Aboriginal Procurement Target
(1% Aboriginal business procurement
target by 2019-2020)- Sustainable Procurement
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VICTORIA'S SOCIAL PROCUREMENT FRAMEWORK
VICTORIA'S SOCIAL PROCUREMENT FRAMEWORK
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VICTORIA'S SOCIAL PROCUREMENT FRAMEWORK
• Version 4 issued in July 2015• Includes policy regarding
sustainable procurement to achieve the Government’s commitment
to
spend public money efficiently, economically, and ethically•
Sustainable procurement considers issues such as:
Environmental management Ethical procurement Socio/economic
benefits
Pollution control, waste minimisation, recycling and disposal
options
Planning laws and asset design use and maintenance, including
heritage and culture
Social procurement and social investment
Energy efficiency and resourceconsumption
Manufacturing and production Skills development, workplace and
supply chain diversity
Adopting environmental technologies and biodiversity
Employee rights and conditions, unfair competition and ethical
behaviour.
NSW PROCUREMENT POLICY FRAMEWORK
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NSW PROCUREMENT POLICY FRAMEWORK
Requires NSW Government agencies in procuring goods or services
to:
Adopt strategies to avoid unnecessary consumption and manage
demand
Select products and services with lower environmental impact
across their lifecycle
Foster a viable market for sustainable products and services by
supporting businesses that support sociallyresponsible suppliers,
adopt ethical practices and demonstrate innovation.
NSW PROCUREMENT POLICY FRAMEWORK
• Guidance on implementation is provided by the Australian and
New Zealand Government Framework for Sustainable Procurement APCC
Sustainable Procurement Practice Note and Guides
• Agencies should require suppliers to:
Demonstrate a commitment to ethical behaviour and sound
governance structures and processes.
Meet their employment obligations as required by relevant
legislation and other related instruments.
Consider relevant government employment policy objectives that
relate to particular community sectors, including apprentice
training, opportunities for disabled or injured workers returning
to work, Aboriginal and Torres Strait Islander people.
Comply with applicable regulatory and legislative requirements
of occupation health and safety.
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NSW PROCUREMENT POLICY FRAMEWORK
Supporting businesses that employ people with disabilities -•
Agencies are authorised to buy goods and services from approved
Australia Disability Enterprises via a single
written quote (section 5 of the Public Works and Procurement
Regulation 2014 (NSW)
Supporting Aboriginal businesses: • Agencies are allowed to
purchase goods and services valued up to $150,000 (including GST)
from a
recognised Aboriginal business provided the supplier’s rates are
reasonable and consistent with normal market rates, and the agency
obtains at least one written quotation (Board Direction
2013-04).
• Under the Aboriginal Procurement Policy, Agencies are
authorised to:
Give first consideration to Aboriginal owned businesses on
prequalification schemes before proceeding to market for
procurements valued up to $250,000 (excl. GST), where
appropriate.
Directly negotiate with suitably qualified Aboriginal owned
businesses that can demonstrate value for money and delivery of
quality goods and services for procurements valued up to $250,000
(excl. GST)
Apply an Aboriginal participation non-price evaluation criteria
in relevant tenders where opportunities exist.
NSW ABORIGINAL PROCUREMENT POLICIES• Under the Aboriginal
Participation in Construction Policy
(APIC), Agencies are required to apply a minimum 1.5 % ofproject
spend for Aboriginal participation to relevant construction
projects (subject to certain exclusions):
Projects nominated by an Agency that are primarily directed to
one or more Aboriginal communities. This includes projects where an
Aboriginal community is the sole or predominant beneficiary, a key
user group or a predominant stakeholder.
All other construction projects where the estimated value is
over $10 million.
All other construction projects where the estimated value is
over $1 million.
• Project spend for Aboriginal participation must be for
Aboriginal employment, engagement of Aboriginal owned businesses,
education and training, and engagement or consultation with
Aboriginal organisations or businesses
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NSW ABORIGINAL PROCUREMENT POLICIES
• Under the Aboriginal Participation in Construction Policy
(APIC), Agencies are also authorised to apply additional
measures:
Directly negotiate with suitably qualified Aboriginal owned
businesses that can demonstrate value for money and delivery of
quality construction goods and services for procurements valued up
to $250,000
Run a closed tender with prequalified Aboriginal owned
businesses that can demonstrate value for money and delivery of
quality construction goods and services for procurements valued up
to $1 million
Increase the percentage for Aboriginal participation
Introduce incentives to recognise suppliers where they exceed
policy requirements, and consequences for suppliers unable to fully
allocate to eligible spend by distributing any remainder of
eligible spend to approved bodies
QUEENSLAND PROCUREMENT POLICY
• Came into force on 1 June 2018
• One of the policy aims is to support disadvantaged
Queenslanders –by increasing procurement with genuine, quality
social enterprises.
• One of the policy principles is the advancement of government
objectives – providing the procurement framework to advance
economic, environmental and social objectives.
• Procurements of goods and services seek to:- Achieve best
value for money outcomes, pursuing economic,
environmental and social objectives as well as price- Do
business with ethically, environmentally and socially
responsible suppliers
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QUEENSLAND PROCUREMENT POLICYGovernment targets and
commitments
Social • Increase spend with genuine, quality social
enterprises, providing award base wages and pathways to mainstream
employment for disadvantaged Queenslanders.
• Take into account workplace policies and practices aimed at
ending domestic and family violence as part of supplier evaluation
and selection
• Ensure all procurements comply with Disability Discrimination
Act 1992 (Cth).
Environmental • Procure Australian-sourced, environmentally
accredited paper products• Achieve net zero emissions by 2050.•
Achieve one million rooftops or 3000 megawatts of solar
photovoltaics (PV) in
Queensland by 2020.
Economic • Increase government procurement with Aboriginal and
Torres Strait Islander businesses to 3% if addressable spend by
2020.
QUEENSLAND INDIGENOUS (ABORIGINAL AND TORRES STRAIT ISLANDER)
PROCUREMENT POLICY
• Commenced on 1 September 2017
• Applies to all Queensland budget sector agencies but does not
apply to Government owned corporations or statutory bodies.
• Provides a whole-government framework to increase procurement
with Indigenous businesses to be 3 per cent of government
procurement contracts by 2022.
• Acknowledges that not all government procurement spend is in
markets that are serviceable by Indigenous businesses and the
baseline for measuring progress against the target does not include
all procurement activities
• Procurement approaches include:- Set-aside approach -
reserving certain Government procurement contracts for
specified Indigenous businesses (unless no suitable Indigenous
business can be identified in the market analysis stage)
- Selective offer process with Indigenous businesses
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WA SUSTAINABLE PROCUREMENT POLICY • Gazetted 27 June 2014•
Similar approach to NSW• Guidance provided by the Australian and
New Zealand Government Framework for Sustainable
Procurement APCC Sustainable Procurement and the Department of
Finance Sustainable Procurement Practice Guidelines
• Agencies should require suppliers to:
Demonstrate a commitment to ethical behaviour and sound
governance structures and processes.
Meet their employment obligations as required by relevant
legislation and other related instruments.
Consider relevant government employment policy objectives that
relate to particular community sectors, including apprentice
training, opportunities for disabled or injured workers returning
to work, Aboriginal and Torres Strait Islander people.
Comply with applicable regulatory and legislative requirements
of occupation health and safety.
WA SUSTAINABLE PROCUREMENTIn procuring goods and services
Agencies should consider the following:
Environmentalimpacts
• Improved air quality by reducing or eliminating emissions to
air (e.g. greenhouse gases, such as carbon dioxide, and other
pollutants)
• Reduced use of water (e.g. water saving or efficiency)•
Improved water quality by reducing or eliminating releases to water
(e.g. chemical
pollution of water courses)• Reduced demand on raw materials and
natural resources (e.g. sustainable forestry,
biodiversity)• Improved soil quality by reducing or eliminating
releases to land (e.g. chemical
fertilisers)
Social impacts • considering human health impacts• supporting
the use of local and emerging small businesses• supporting socially
inclusive practices, such as employment and training focused on
disadvantaged groups• assessing the impact of occupational
health and safety concerns
Economic impacts • Job creation (e.g. green technologies)
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WA SUSTAINABLE PROCUREMENT• Sustainability may be addressed by
including: Minimum accreditations that respondents must have in
order to pass through the desk top assessment stage of an
evaluation; e.g. possessing a license to operate a high temperature
incinerator or having an ISO 14001 certified Environmental
Management System.
Requirements that encourage respondents to offer items that meet
or exceed the sustainability specifications and/or special
conditions of contract; e.g. white goods must have Energy Star
rating above a specified threshold.
A requirement that respondents provide information on a range of
sustainability related criteria in order to allow their
sustainability credentials to be scored and/or compared; e.g.
provide evidence of any program or initiative your organisation has
in place to minimise/reduce the amount of packaging used.
A contractual requirement that respondents should move to the
provision of more sustainable products over time, should they be
awarded a contract; e.g. the supplier to increase the proportion of
products covered by a certain class of environmental label over the
term of the contract.
Contract clauses and/or key performance indicators that aim to
achieve a specified level of sustainability performance; e.g.
quarterly reporting on the proportion of products offered covered
by a recognized environmental label.
WA SUSTAINABLE PROCUREMENT POLICIES
• Australian Disability Enterprises and Aboriginal businesses
supported via the State Supply Commission's Open and Effective
Competition policy - allows Agencies to procure from a registered
Australian Disability Enterprise or a registered Aboriginal
business without undertaking a competitive procurement
process
• Reduction in greenhouse emissions and offset CO2 emissions of
WA Government Fleet vehicles achieved via the Greening WA
Government Vehicle Fleet policy.
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WA ABORIGINAL PROCUREMENT POLICY
• The Aboriginal Procurement Policy (APP) applies to any
contracts awarded from 1 July 2018 and applies to all state
governmental agency.
• Under the APP, Agencies are required to award a target
percentage of government contracts to registered Aboriginal
businesses. The targets apply to all contracts for goods, services,
community services and works.
Financial Year APP Targets
2018 - 2019 1% of the number of awarded contracts
2019 - 2020 2% of the number of awarded contracts
2020 - 2021 3% of the number of awarded contracts
SA SUSTAINABLE PROCUREMENT POLICY • Issued September 2016
• Similar approach to NSW and WA
• Guidance is provided by the Australian and New Zealand
Government Framework for Sustainable Procurement Sustainable
Procurement
• Agencies should:
In the context of whole-of-life value for money, select goods
and services which have lower environmental impacts across their
life cycle compared with competing goods and services
Foster a viable Australian and New Zealand market for
sustainable goods and services by supporting businesses and
industry groups that demonstrate innovation in sustainability
Support suppliers to government who are socially responsible and
adopt ethical practices
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SA PROCUREMENT POLICIES
• Under the Industry Participation Policy, Agencies can procure
directly from eligible Aboriginal businesses, up to the value of
$220,000, where that business meets certain criteria set out in the
procedural guidelines supporting the policy, and provides value for
money.
• For contracts above $220,000, industry participation weighting
can be increased above the 15% minimum and accompanied by tailored
measures for Aboriginal participation which are directly relevant
to raising economic participation for Aboriginal businesses and
employees.
• A Tailored Industry Participation Plan has been developed for
large contracts in the Anangu Pitjantjatjara Yankunytjatjara Lands
to meet the minimum requirement of 30% total on-site labour hours
filled by Anangu personnel.
TASMANIAN PROCUREMENT POLICIES• Climate change and environmental
policies• Agencies must give consideration to (but not above VFM
considerations):
Energy Conservation and Greenhouse Emissions
Waste Water efficiency
• energy efficient goods and mechanical services, including
vehicles;
• goods manufactured using energy efficient practices and
processes which will contribute to minimal greenhouse gas
emissions;
• goods which will contribute to minimal greenhouse gas
emissions during operation;
• video or telephone conferencing as an alternative to vehicle
and air travel; and
• 'green power' (energy sourced from renewable sources).
• recycled/recyclable goods with recycled composition or
components;
• reclaimed materials, eg crushed concrete aggregate;
• goods which have less packaging than alternatives;
• goods with a take-back scheme at end-of-life;
• goods which guarantee longevity or are reusable; and
• equipment that can use consumables made from
recycled/recyclable materials.
• water efficient goods;• goods manufactured with water
efficient practices and processes which do not contribute to
water pollution; and
• goods manufactured with water efficient practices and
processes which do not contribute to decreased environmental
flows
• Agencies may: - require products to meet environmentally
sustainable specifications as specified on the Australian
Procurement and
Construction Council website. - may consider it necessary to
seek details of appropriate certification of companies and products
against relevant
environmental standards
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TASMANIAN PROCUREMENT POLICIESPurchasing from businesses that
employ persons with disabilities• To facilitate purchasing from
these businesses, the Department of Treasury and Finance has
entered into
a Head Deed with National Disability Services Limited. The Deed
operates essentially as a non-mandatory whole of government common
use contract
• Agencies can choose to either seek quotations or purchase
directly, at their discretion, from businesses that predominantly
exist to provide the services of persons with a disability provided
that the process undertaken is consistent with the intent of the
Government's procurement policies and the principles contained in
the Treasurer's Instructions 1101 and 1201
Zero Tolerance Towards Violence Against Any Person in the
Workplace• Government procurement and associated contractual
documents are required to contain specific clauses
supporting the Government's position of zero tolerance towards
violence against women and zero tolerance towards violence against
any person in the workplace. Template clauses include:- The
Contractor acknowledges and undertakes to uphold a zero tolerance
policy towards violence
against any person in the workplace in its interaction with
employees, agents and subcontractors of the Principal and in
delivery of the Works.
- The Contractor must and will ensure that its employees, agents
and subcontractors will at all times in delivery of the Works act
in a manner that is non-threatening, courteous and respectful.
ACT SOCIAL PROCUREMENT POLICY
• ACT government has established a social enterprises panel to
supply a range of services to government
Established landscape maintenanceLitter-pickingWeeding in
sensitive environmentsPlanting, landscape establishmentMaintaining
dog parksHabitat fuel reductionLetterboxing and envelope stuffing
etc"Table hands", in-house copying/scanning of
documentsCateringRecyclables sortingSmall scale sorting
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ACT SUSTAINABLE PROCUREMENT• The policy seeks to value-add,
using procurement to require social and environmental
standards,
encourage suppliers to adopt socially responsible and ethical
practices and support innovation in the market.
• Agencies should consider the following impacts on
sustainability:
Impact Issues
Climate change • Climate change impacts associated with the
production, distribution, use and disposal of the goods • Specific
focus on Greenhouse gases: carbon, methane (CH4), HFCs, PFCs, SF6,
NO2 and low level ozone
Energy • Energy use and efficiency. • Use of renewable energy
e.g. solar, wind, wave, tidal
Water use and quality
• Water use and efficiency• Water recycling• Impact on water
pollution, and measures to reduce discharges
Waste • Volume and type of waste created associated with the
production, distribution, use and disposal of the goods• Hazardous
or toxic waste• Reusability and/or recyclability• Product
efficiency and longevity: options for reuse, repair, upgrade or
modification to increase product life• Environmental pollution that
reduces fertility and diversity of wild species
Impact Issues
Toxic substances/pollutants/emissions
• Substances that adversely affect human health or the
environments associated with the production, distribution use and
disposal of the goods. Such substances include:
• heavy metals, (e.g. lead, mercury, cadmium)• ozone-depleting
chlorinated compounds such as CFCs• organic solvents, (e.g.
chlorinated and aromatic hydrocarbons)• carcinogens, mutagens,
teratogens• volatile organic compounds (VOCs)• phosphorous•
phthalates (additives in PVC)• substances that can bioaccumulate•
substances that result in acute or chronic toxicity
• Consider reactivity, corrosiveness, flammability, irritation
potential of toxic substances and pollutants
Resources use and intensity (incl. natural landscapes,
habitats)
• Volume and type of raw material and consumables associated
with the goods• Sustainability of utilising the resources
(renewability of resources)• Product efficiency and longevity:
options for reuse, repair, upgrade or modification, to increase
product life• Impacts on land use e.g. land clearance for farms,
factories, mines, plantations causing habitat degradation and
modification (linked to climate change impacts)• Impacts on
important habitats• Recycled content of goods (reduces demand for
virgin resources)
Social responsibility and ethical practices
• Impact on human health• Impact on fair working conditions•
Promotion of social enterprise• Abolition of compulsory labour and
child labour• Impact on local communities• Other social
priorities
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NT PROCUREMENT POLICY• Local content assessment criteria
typically includes:
- Employment- Upskilling- Aboriginal development initiatives
• Worth a minimum of 40% in tender evaluations
• NT Government currently developing an Aboriginal Contracting
Framework to support Aboriginal employment and business
opportunities
WHAT DO GOVERNMENTS EXPECT FROM FM SUPPLIERS?
• Ranges from encouraging compliance to mandatory requirements
and prescribed targets
• The more complex, higher value the procurement, the more
stringent the social obligations become
• Seek suppliers that will assist them to meet their own social
obligations
• Commitment to relevant social obligations
• Targets:- Employment/apprenticeship targets- Carbon
targets/Energy usage reductions
• But… Value for Money is paramount
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WHAT ARE THE CHALLENGES?
• How does a supplier establish a commitment to social
objectives?- Written policies are good- Evidence of policy
implementation is better
• Balancing social obligations against value for money
considerations:- Value for money remains paramount for Government-
Commitment to social obligations form part of the VFM assessment
but do not override economic
considerations
• Meeting obligations when contracts don’t guarantee volumes of
work- Particularly difficult for strict targets- Focus needs to be
on actions designed to achieve obligations rather than actual
outcomes
WHAT ARE THE CHALLENGES?
• Difficulties in measuring performance against social
obligations- Measuring a supplier's social obligation commitments
usually achieved via confirmation of compliance
with its own social policies (supplier confirms via statutory
declaration, compliance subject to audit/inspection)
- Measuring performance against targets easier - still have to
consider what is included/excluded from calculation
- Taking into account intervening/extraneous factors
• How to drive performance against social obligations - is there
room for sanctions?- Governments generally not inclined to impose
sanctions for failures to perform against social
obligations (unless part of an overall scorecard approach, and
even then such performance usually given low weighting)
- More likely to be imposed where specific targets are set
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PRACTICAL WAYS OF SHOWING CORPORATE RESPONSIBILITY
• Develop written social obligation policies and make them
easily accessible
• Undertake regular review of policies/processes to ensure
social procurement objectives are addressed
• Publish reports on/maintain records of achievement of social
objectives
• Engage a dedicated 'social obligations engagement' officer
• Meet applicable targets:- Employment/engagement targets-
Carbon footprint/energy cost targets
KEY THINGS TO REMEMBER
• Governments are looking beyond the bottom line when conducting
FM procurements
• FM providers are expected to be good corporate citizens to
assist Governments to achieve their broader social objectives
• FM providers need to take practical steps to ensure they can
meet social obligations required by Governments
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