How do Australia, South Africa and the UK compare in their use of public procurement for equality?
Tessa Wright, Hazel Conley and E.K. Sarter
Australia, South Africa and the UK have all adopted policies to encourage the use of public procurement to reduce gender, race and socio-economic inequality. But each country has taken a different approach to the regulation of public procurement (purchasing by the public sector from private and third sector contractors of goods, services and works). Here we examine these varied legal and policy frameworks and assess their effectiveness, presenting key findings from a book chapter Using public procurement to promote equality in employment: assessment of the evidence from Australia, South Africa and the UK, published in the Research Handbook on Inequalities and Work.
Legal and policy frameworks
In one sense South Africa provides the strongest legal framework of the three countries for using procurement policy to achieve equality by including human rights, equality and procurement obligations in its constitution and supporting legislation. Section 217 of the constitution states that national, provincial and local governments must implement a preferential procurement policy to protect or advance those affected by unfair discrimination, which is supported by the 2017 Preferential Procurement Regulations. Public procurement is, therefore, at the heart of its strategy to redress racial disadvantage following the apartheid period, linked to a policy of Broad-Based Black Economic Empowerment (BBBEE), which seeks to strengthen small businesses that are majority owned by black South Africans. It also uses procurement to address gender inequality and adopts an intersectional approach that recognises the interconnections between socio-economic, racial and gender inequality by setting specific targets for businesses owned by black women, by black young people and by black disabled people.
The Australian federal state has adopted two separate procurement approaches for indigenous populations and for gender equality. Australia’s Indigenous Procurement Policy, introduced in 2015, sets a target to increase contracts from indigenous-owned businesses. A different approach to gender equality was taken, with the Workplace Gender Equality Act 2012 requiring private sector employers to report on various gender equality indicators in order to compete for government contracts. At state level, the Victoria and New South Wales governments are using procurement to promote change in the construction industry – Australia’s third largest employment sector and the most male-dominated – through an industry taskforce involving government and construction companies that encourages family-friendly working hours and greater employment diversity.
In the UK there is no unified approach to the use of public procurement to create social outcomes due to the devolution of powers over procurement to the governments of Scotland, Wales and Northern Ireland. Therefore different legal frameworks apply to procurement in each nation of the UK (England, Scotland, Wales and Northern Ireland). Scotland, Wales and Northern Ireland have introduced stronger legislation and policy on the use of procurement for social objectives, in particular the reduction of socio-economic inequality, including measures to promote fair work and well-being, as the Buying Social Justice project report highlights.
Effective implementation
Based on an examination of published studies on how public procurement has been adopted for the pursuit of employment equality objectives in Australia, South Africa and the UK, our chapter identified five themes that contribute to effective implementation. These are:
- Enabling legislation and enforcement
- Political leadership
- Monitoring
- Involvement of civil society
- Support and training
Enabling legislation and enforcement: prior research highlights the importance of enabling legislation that permits and encourages the use of public procurement for additional social objectives rather than simply pursuing value for money, as in the legal frameworks adopted in South Africa, Australia and the different nations of the UK. One criticism is that ‘soft law’ enabling approaches – such as non-legally binding targets – often do not contain sufficient force to require equality actions, with the result that contractors take a minimal, compliance-only approach to the law, resulting in little real change. However, analysis from Australia found that ‘naming and shaming’ companies that did not comply with the Workplace Gender Equality Agency reporting requirements was an effective tool.
Political leadership: the willingness of political leaders to use the existing legal frameworks was highly significant in the countries examined. South Africa provided the strongest example of leadership from the top as the only country to include equality commitments in its constitution supported by regulatory mechanisms for pursuing equality through procurement over a period of 20 years. While Australia’s gender equality reporting requirements for government contractors showed federal level commitment to equality, it has been argued that targets for increasing women’s representation were routinely neither enforced nor underpinned by an implementation strategy. In the UK leadership at national level was evident in the legislation put forward by the Welsh and Scottish governments, and in policy to address unemployment in Northern Ireland. Legislation affecting England was primarily focused on social value in procurement with no specific duty implemented under the Public Sector Equality Duty provisions of the Equality Act 2010 for public authorities to pay attention to public procurement decisions. However regional or local government did produce examples of political support for equality and procurement linkages.
Monitoring: the research consistently highlighted the importance of monitoring outcomes against objectives set, but showed in all three countries that this was often lacking. In the UK, for example, clear systems of contract monitoring were established under the West Midlands Common Standard that required contractors to address race equality, including a three-yearly review of equality policies, however in practice this often did not occur. In contrast, the reporting requirements of the Australian Workplace Gender Equality Act 2012 provided valuable data from contractors on gender equality policies covering recruitment, retention, promotion, governing bodies, action on gender pay gaps, and workforce data including remuneration.
Involvement of civil society: the chapter highlights that trade unions, as a part of civil society, have a vital role in ensuring fair treatment in the workplace and therefore in making sure that agreed procurement targets are met. In Australia an example of trade union involvement was a programme in the state of Victoria to improve labour standards and service quality in school cleaning contracts, which established a system of accreditation for firms bidding for contracts involving the state, business and employee representatives. In the UK, trade unions were involved in the establishment and monitoring of labour standards in the large-scale project to build the site for the London Olympic games in 2012. In South Africa the Congress of South African Trade Unions (COSATU) was critical of the approach to procurement and BBBEE because it sought primarily to build a black capitalist class through supporting business, but did not sufficiently include the interests of black workers. Furthermore COSATU has highlighted the level of corruption that continues in relation to public procurement and set up a non-profit organisation, Corruption Watch, to collate reports of corruption from the general public, largely in relation to public procurement.
Support and training: ensuring adequate training in order to qualify for available jobs was identified as necessary for the success in some of the examples we reviewed. A criticism of the BBBEE policy in South Africa was that it led to tokenism, with the inclusion of women in positions for which they were not trained, together with lack of support for capacity building among the targeted groups. In contrast, the UK, an assessment of the Women into Construction project, initially established to offer opportunities on the London Olympic Park build, highlighted its success in providing ongoing support to women on placements or in work, that contributed to the retention of women in construction jobs.
Conclusion
The evidence from the three countries examined in the chapter shows that there is greater potential for including EDI aims in procurement policy and strategy, based on the examples of effective practice identified, although improvements were needed. Both political will and enabling legislation are necessary, alongside enforcement, monitoring and training and support. The findings shown here from practice in South Africa, Australia and the UK are reinforced in the report of the Buying Social Justice project, which found that good practice in the inclusion of equality within procurement required political and leadership commitment, a ‘golden thread’ throughout procurement stages, collaboration and partnership, and supplier engagement.
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