How New Zealand is using procurement to benefit indigenous businesses
New Zealand Government,
4 minute read
The New Zealand government has used an innovative procurement approach to include indigenous businesses in public sector projects.
Summary
- it's possible to help indigenous people using inclusive procurement
- early community engagement is essential
- verification of indigenous businesses needs careful consideration
- it's possible to help indigenous people using inclusive procurement
- early community engagement is essential
- verification of indigenous businesses needs careful consideration
The problem
Despite its reputation for positive relations with its indigenous Māori and Pasifika (Pacific Islands) communities, New Zealand still sees significant inequality between these groups and the majority Pakeha (white) population.
In the digital and technology sector the disparity is even starker. Just 2.5% of the Māori workforce are employed in the IT and communications industry and only 1% of Māori are studying technology subjects in college.
Government procurement projects, although open to all, are often seen as out-of-reach for the small and medium-sized enterprises (SMEs) that make up much of the indigenous economy. This is made worse by:
- complex procedures, including lots of form filling, which can favour larger and more experienced suppliers
- poor communication: for example only advertising contracts online may be missed by community groups or smaller suppliers
- a lack of data - meaning government departments don’t know which contracts were won by Māori or Pasifika businesses
Despite its reputation for positive relations with its indigenous Māori and Pasifika (Pacific Islands) communities, New Zealand still sees significant inequality between these groups and the majority Pakeha (white) population.
In the digital and technology sector the disparity is even starker. Just 2.5% of the Māori workforce are employed in the IT and communications industry and only 1% of Māori are studying technology subjects in college.
Government procurement projects, although open to all, are often seen as out-of-reach for the small and medium-sized enterprises (SMEs) that make up much of the indigenous economy. This is made worse by:
- complex procedures, including lots of form filling, which can favour larger and more experienced suppliers
- poor communication: for example only advertising contracts online may be missed by community groups or smaller suppliers
- a lack of data - meaning government departments don’t know which contracts were won by Māori or Pasifika businesses
The approach
In 2019 the New Zealand government began including detailed social and environmental goals as part of its 'broader outcomes' procurement approach.
Departments were told to consider how they could create opportunities for Māori, Pasifika and regional businesses, as well as social enterprises.
Official guidance (PDF, 279KB) outlined how to do this, including:
- sharing information early and designing services collaboratively with Māori and Pasifika groups
- simplifying procurement documents and avoiding the use of complex technical requirements
- considering Maori concepts such as whānau, or ‘extended family’ when designing services
In 2019 the New Zealand government began including detailed social and environmental goals as part of its 'broader outcomes' procurement approach.
Departments were told to consider how they could create opportunities for Māori, Pasifika and regional businesses, as well as social enterprises.
Official guidance (PDF, 279KB) outlined how to do this, including:
- sharing information early and designing services collaboratively with Māori and Pasifika groups
- simplifying procurement documents and avoiding the use of complex technical requirements
- considering Maori concepts such as whānau, or ‘extended family’ when designing services
For Māori to succeed in the 21st century we must build capability in digital technology and support a diverse, knowledge-intensive economy that will create new jobs in new industries.
The results
A range of initiatives across the country have applied the broader outcomes strategy, including:
- The Southern Initiative - a social innovation project based in South Auckland that has used co-design workshops with Māori to design public services
- Youth Justice – Oranga Tamariki - used a communication strategy including newsletters and events to engage with Maori community groups when commissioning a new remand service
A range of initiatives across the country have applied the broader outcomes strategy, including:
- The Southern Initiative - a social innovation project based in South Auckland that has used co-design workshops with Māori to design public services
- Youth Justice – Oranga Tamariki - used a communication strategy including newsletters and events to engage with Maori community groups when commissioning a new remand service
The challenges
One of the main challenges around prioritising indigenous groups is to do it fairly and transparently. How, for example, do you define a Māori or Pasifika business? And how can you stop businesses falsely claiming indigenous ownership just to win a government contract?
To deal with these questions the New Zealand government has looked to its neighbour, Australia, which runs a similar scheme for its Aboriginal and Torres Strait Islander businesses.
Under this scheme an independent organisation verifies that businesses are at least 50% owned by indigenous people. New Zealand now plans to implement a similar policy as part of its broader outcomes approach.
One of the main challenges around prioritising indigenous groups is to do it fairly and transparently. How, for example, do you define a Māori or Pasifika business? And how can you stop businesses falsely claiming indigenous ownership just to win a government contract?
To deal with these questions the New Zealand government has looked to its neighbour, Australia, which runs a similar scheme for its Aboriginal and Torres Strait Islander businesses.
Under this scheme an independent organisation verifies that businesses are at least 50% owned by indigenous people. New Zealand now plans to implement a similar policy as part of its broader outcomes approach.
Next steps
One intermediary, He Waka Eke Noa, has already shown success in linking Māori and Pasifika to procurement opportunities in the Auckland area. Its ethos has been to enable indigenous businesses through networking and training opportunities.
As they put it: ‘He Waka Eke Noa does not win you the work, you do, through your products, pitch, pricing, compliance and ability to provide a high quality service’.
Including Māori and Pasifika businesses in public sector procurement has also been prioritised as part of New Zealand’s response to Covid-19.
One intermediary, He Waka Eke Noa, has already shown success in linking Māori and Pasifika to procurement opportunities in the Auckland area. Its ethos has been to enable indigenous businesses through networking and training opportunities.
As they put it: ‘He Waka Eke Noa does not win you the work, you do, through your products, pitch, pricing, compliance and ability to provide a high quality service’.
Including Māori and Pasifika businesses in public sector procurement has also been prioritised as part of New Zealand’s response to Covid-19.