Australia’s policy landscape is evolving when it comes to social procurement. On major infrastructure projects across the nation, in both private and public project settings, the importance of social licence is undoubtably growing. So too is the complexity of navigating policy requirements, understanding stakeholder expectations, and establishing, and importantly delivering outcomes that make a genuine difference to the social infrastructure and the economic prospects of the communities where projects are held.
While many social practitioners will tell you Australia has moved beyond policy compliance, and this is true, particularly of organisations with firm grip on ESG, our experience is that policy, whether government or internal, continues to play a critical role in creating the impetus for organisations to think differently about supply chains, employment and the opportunities they have to actively contribute to building Australia’s skilled workforce.
Regardless of the policy setting or whether your organisation is embarking on social procurement and people practices through the Social dimension of ESG, consistency in delivering high-value social outcomes can be achieved when you take a principled approach. This is why we’ve developed The Fair Co.’s 10 Principles for Success: From Policy to Practice©.
Policy is the lever. Its good practice that drives the outcomes.
Over the best part of the last decade, we’ve worked across different policy settings, client types and delivery environments, supporting government and industry to successfully generate social value through their procurement and people practices. The language changes. The evaluation criteria and targets vary. Public projects are shaped by procurement frameworks and local content obligations; private projects by investor expectations, ESG strategies and commercial risk; major projects by contractual commitments, workforce demands and community need.
But the organisations that deliver well and build genuine social licence tend to have one thing in common. They don’t treat social value as a tender obligation to be managed quietly after the deal is done. They recognise it as a key component in the overarching value proposition for the project they’re working on and why we should trust in their capability to deliver it.
Policy is the lever. It creates the mandate, sets the direction and establishes accountability. Good practice is what converts that mandate into outcomes.
Launched recently at the ESG Procurement Conference, these 10 principles are our guiding playbook when working with organisations to do exactly that.
- Recognise the Role Social Licence plays in the Value Chain. In project delivery, within the communities you operate and in the long term strategically for your business.
- Be clear about the expectations and requirements. Understand the requirements within the relevant strategic or policy setting, tender and contracts and the expectations of project stakeholders.
- Identify Impact by Place. What will have the most impact where the project is. Think jobs, housing, communications infrastructure, community need. Each geographical area and community are different. A tailored approach considered early goes a long way to building the trust needed for genuine social licence. Done well, creative initiatives built in consultation with the community can leave just as long a lasting legacy as the infrastructure built on the project itself.
- Take an Integrated Approach. Make social value part of procurement planning, not separate to, or an afterthought. Don’t wait until the bulk of the work packages are awarded before you consider how you’ll meet your social commitments. Likewise for workforce planning. Don’t plan “other roles” for people with barriers to traditional employment pathways. Be conscious in your overall recruitment to ensure the conditions are conducive to attract and retain team members. Think recruitment process, feedback mechanisms, organisational culture and career progression, along with practical matters that mean the difference between participation and a missed shift. Use partners to assist with dedicated programming and get creative in how you might create more than one opportunity at a time, e.g. using a social enterprise who provides transport to bring workers from disadvantaged backgrounds to and from site. You’ve just provided a paid contract for the social enterprise and practical support for someone who might otherwise not have been able to work.
- Build Trust and momentum by engaging early and often. With the community, with social benefit suppliers, with your own workforce and with stakeholders and shareholders alike. Aligning expectations and keeping people informed again feeds into trust. It also assists to alleviate issues later down the track that can arise were contractors and EPC’s contend with who’s responsible for what and how serious you are about meeting the commitments made in your bid.
- Be Realistic in your bid. Don’t set unattainable targets to win the work. This may seem tempting in the short term, but sustained non-delivery catches up to organisations in material ways e.g. at its most obvious and extreme its breach of contract, which may lead to request for rectification or impact on future bids. It also becomes a reputation risk for funders, investors, the public and your own people. While it may appear inconsequential, this compounds over time.
- Apply a Commercial Risk Lens. Social licence doesn’t sit in isolation. Recognise and understand its impact on risk: Contract, delivery, financial, reputation risk when social value commitments are ignored.
- Consider Contracts. The one you sign and the ones you pass down to suppliers. Solid contractual terms will help you manage expectations and delivery downstream. They establish accountability and provide clarity on what’s required. Then from diverse supplier perspective, consider flexibility in work package design, contract terms, payment terms and take a collaborative approach.
- Supply Chain Management Matters. Your commitments become their commitments and vice versa. Responsibility V Accountability. Establish effective systems for supply chain assurance and reporting early and ensure they’re communicated well.
- Demonstrate you’re true to your word. This is all about delivering on your commitments. Doing what you said you were going to do and it’s this trust and follow through that’s what social licence is all about. So how do the public and our stakeholders know we’ve delivered? Plan for Reporting Long before it’s due. This includes the data points, roles, responsibilities and how you’ll ensure integrity in the numbers. Again, reporting should be considered at the contract stage to ensure all parties are clear on what’s required. Harness your reporting data to share successful outcomes and tangible progress. Use it to demonstrate reliability and successful delivery in your next bid.
The Result : From Compliance focused, to Capable and Credible.
Building capability throughout the workforce and supply chain. Encouraging Economic participation and mobility, greater productivity, financial independence and resilience, and a more sustainable future in all its forms.
