When businesses work together – for whatever reason – they run the chance of breaching competition laws enforced by the national regulator, the Australian Competition and Consumer Commission (ACCC).
The purpose of those regulations is to prevent anti-competitive practices that will harm Australian consumers, comparable to cartel activities and abuse of market power.
But corporations also can join together for the best reasons, comparable to making their operations and provide chains more sustainable. If done well, it advantages society as a whole and ought to be encouraged.
To help businesses navigate this difficult terrain, the ACCC last month published guide project on cooperation in sustainable development. The final version is predicted this yr.
The aim of this activity is to enable corporations to collaborate on projects with environmental objectives, comparable to reducing greenhouse gas emissions, improving water systems and reducing waste.
But by focusing solely on the environment, it seems to have alarmingly omitted the social elements of sustainability – people, equality and communities. Here’s why that’s a problem.
A step in the best direction
ACCC is guide project goals to help businesses understand whether a project is probably going to infringe competition law and the way they will obtain an exemption if there’s a risk of an infringement.
Announcing this, Acting Chairman Mick Keogh illuminated the necessity for such legal protection:
In developing this Guide, we wanted to clarify that competition law mustn’t be seen as an insurmountable obstacle to sustainable development cooperation that may deliver public advantages.
So where might businesses be struggling today?
Imagine two competing corporations that share common environmental concerns and agree to only purchase environmentally friendly products from a specific supplier.
This may simply reflect the undeniable fact that this particular supplier was the one one which applied best environmental practices. However, such cooperation could probably mean cartel behavior if it limited the amount or form of goods those businesses were to offer.
Under the brand new ACCC guidelines, competing businesses can apply for an exemption by demonstrating that their collaboration reflects a positive environmental impact.
Sustainability is greater than just the environment
Such legal safeguards for corporations that want to cooperate on environmental goals are a vital step forward. However, in its actions, the ACCC seems to ignore a vital aspect of sustainable development – its social dimension.
Key social objectives of business cooperation may include respect for human rights and the fight against modern slavery.
However, to barely modify our earlier example, two competing corporations could agree to only buy goods from specific suppliers who’ve anti-slavery certifications – or avoid suppliers known to practice modern slavery.
This would have clear social advantages but wouldn’t be protected under the approach currently proposed by the ACCC.
Zoriana Zaitseva/Shutterstock
Unfortunately, this oversight reflects a broader trend within the discourse on sustainable development.
Sustainable development has a long history. In 1987, the UN Brundtland Commission defined it as “meeting the needs of present generations without compromising the ability of future generations to meet their own needs.”
It is predicated on three pillars: economic, social and environmental, or less formally: profit, people and planet.
But tests stated that the social pillar is the weakest within the context of sustainable development.
This is basically due to difficulties in measurement, which can end in their exclusion from measurement systems and policies. Current accounting systems are higher equipped to track and measure environmental and economic data.
We cannot ignore the social pillar
IN submitted work During consultations on the draft guidelines, New South Wales Anti-Slavery Commissioner James Cockayne argued that the oversight would “almost certainly chill – or perhaps freeze – the numerous responsible business conduct initiatives already underway.”
The correct formation of the social pillar can be key to achieving environmental sustainability.
It isn’t that Australia isn’t making progress on the social problems with sustainable development. Legislation It was introduced In 2018, certain organisations were required to report on the risks of contemporary slavery of their supply chains.
Australia National Sustainable Development Strategy and our country’s compliance with the International Labour Organization conventions also demonstrates our commitment to an integrated approach.
But more work is required. Expanding the ACCC’s definition of sustainability can be one such step.