Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697633091060.pdf (Australia)
SUBMISSION Inquiry into the role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific region Terms of Reference: A.

The role Australian and international businesses could play to support development and inclusive growth in partner countries B.

Risks related to current and possible future approaches to enhancing the role of the private sector in development, and their management.
C. Additional partnerships, activities or financial instruments the Australian government could use to enhance the role of the private sector in development in the Indo-Pacific region.

D. The current role of the private sector in accelerating the pace of economic growth and in reducing poverty in poor countries in the Indo-Pacific region.

E. The role of public-private partnerships in leveraging private sector investment in developing countries.
F. Current Australian Government support for private sector development through bilateral and multilateral investments.
1 The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 117 GHD’s extensive forty years of international development experience, combined with our experience across Australia, informs us as to some successful approaches in promoting economic growth in developing countries through private sector activities – approaches that can be considered in appropriate circumstances.

In the brief material below we provide some relevant examples and comment.
1.1.

Private Sector Contribution in the Development Assistance Sector (Application to Terms of Reference A, B, C & D) The role of private sector in the development of the Asia-Pacific region has been at the core of many international development assistance practices in Australia and elsewhere for many years.
The nature of this role has evolved through the years, and it is evident that the relationship between development activities and private sector activities is currently being explored more comprehensively to identify mutually beneficial objectives and actions.
For many years, private sector organisations involved in the delivery of aid projects have understood the many benefits of being involved in this sector: Contributing to the development of recipient countries and improving the living conditions of people in their communities; Development of an understanding of the people and work environment in a variety of countries in the Asia-Pacific region; Development of long term relationships with public and private stakeholders which supported further business opportunities; Development of an understanding of the risks associated with working in various countries around the region in order to better manage these risks when reviewing other business opportunities in both the public and private sector; Liaison with the private sector in the recipient country; Support to the development of local consultants and public servants in the recipient country who can then go on to support the private sector following completion of the aid activity; Identification of resources in a particular country who could assist with the delivery of other projects/business opportunities; Provision of opportunities for staff to be involved in the delivery of these projects; A contribution to their bottom line, and an ability to support other development and business opportunities.
These are only a few examples of the benefits that have sustained the involvement of many private sector companies for many years, and benefited the private sector in both the donor and recipient country.

It is important to recognise the role that this element of the private sector has contributed to the development of the Asia-Pacific region.
Many current consulting practices have built local practices in numerous countries around the Asia-Pacific as a result of their involvement in international development assistance.

These practices have both local and international employees.

While the majority of the above benefits remain, a changing marketplace and procurement environment have introduced many challenges to operating in the development sector.
These have resulted in the consolidation of many development practices, withdrawal from 2 The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 117 the market by some firms, as well as new players entering the market from a more diverse range of countries, to name a few.

While these many changes will have an impact on development assistance going forward this is not the focus of this paper.
The discussion so far has focussed on one element of the private sector and the potential benefits of their contribution; those involved directly in the development assistance sector.

But this is only one component of the private sector which also includes large multi-national companies providing a broad range of goods and services (ie.

computers, food, accounting, appliances, equipment, infrastructure supplies, etc.
), resource development companies, speciality service organisations, small equipment suppliers, and local goods and service providers.

This list would need to be further elaborated to capture all the private sector players.

The private sector is multi-faceted and the various roles it plays across an economy needs to be properly understood in any development context.
Not fully understanding this complexity is one of the risks going forward as the role of the private sector in promoting economic growth and reducing poverty is explored.

It will be important to develop matrices of activities to effectively engage the private sector, both in Australia and in the Asia-Pacific region, and produce successful results.
Many of the commercial imperatives of the private sector also need to be fully understood to develop approaches that operate sustainability within these constraints.

By understanding the complexities and constraints of the private sector more effective delivery strategies can be developed.
Within the context of maximising the role of the private sector in promoting economic growth and reducing poverty, many organisations around the world have been exploring a range of ideas to identify potential approaches.

Identifying and reviewing activities and projects where the private sector has contributed to development outcomes needs to be collated to provide a base of knowledge.

New opportunities and approaches, and their inherent risks need to be tested to ‘push the envelope” on what is possible.
As an example of a consulting practice, GHD is also exploring opportunities within its own operations.

We have historically recognised the important connection between development assistance and our own development as a private sector organisation, and the support to public and private sector clients in the Asia Pacific, and have applied a range of approaches through the years to create effective coordination and development of both sectors.
Most recently we have been exploring how we can link our relationships with private sector resources companies in PNG, with activities in the development sector to identify ways to maximise the impacts of both approaches, and maximise development outcomes in areas of PNG.

We will continue to explore these opportunities over the months ahead.
Building on this type of thinking, it may be pertinent for the Australian Government to explore and support these types of partnerships, where different stakeholders within the private sector are encouraged to partner to maximise development outcomes.
Some companies may not have development outcomes as a core business activity, but by partnering with other companies, including development practitioners, may be able to contribute significantly to the improved development ie economic development and poverty reduction.
New pathways for growth and successful development in the region may be developed by: Building on the successful development of existing private sector practices in Australia and the Asia-Pacific, and 3 The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 117 Creating new private sector partnerships within the development assistance sector where the desired development outcomes are articulated and shared by all partners.
GHD has been applying such a partnership approach with selected Indigenous communities in Australia with a high degree of success.

Some of these examples are shared in the following section as ideas to be explored throughout the Asia-Pacific.

1.2.
1.2.

Private Sector Alignment with Local Enterprises (Application to Terms of Reference A, D & F.) Over the past three years GHD has been a leader in the growth of Indigenous Australian businesses as a means of replacing poverty with wealth creation, welfare with enterprise, and desperation with aspiration.

This has been done while achieving our own commercial goals.
This same paradigm involving private sector alignment with developing communities in need has already shown itself to be economically viable and transferrable.

The following is an explanation and examples of the way we support development and inclusive growth domestically with significant capability to replicate in developing countries.
Fundamentally, an Australian company delivering to their client in a developing country can comfortably establish and capacity develop local community enterprises, which in turn meets some of the supply demands of the client.

The Australian company aligns itself with local community enterprises for reciprocal commercial opportunities.

4 The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 117 1.3.
Private Sector Alignment – Examples of Our Experience with Indigenous Australia Consistent with Minister Julie Bishop’s new paradigm of allowing private sector to drive growth, GHD analysed its own supply chain in infrastructure, energy and resources, environment and property and buildings, and their potential relationship to Indigenous communities.

Many of our clients were increasingly seeking to engage local communities through not only employment, but as suppliers of goods and services.
By GHD establishing, capacity developing and advising new Indigenous owned enterprises we could introduce them into our supply chain and have them engaged by our established and new clients.

In 2011 GHD invited the Marra Worra Worra Aboriginal Corporation, of the West Kimberley, and the Waanyi Aboriginal Corporation, of the Queensland Gulf Country, to partner in establishing a new construction business, the National Aboriginal Construction Partners (NACP).
Not having commercial capacity or capability, NACP was partnered with Badge Construction, a national family owned non-Indigenous construction company.

Today NACP is being considered for several large State and Australian Government construction contracts.

The vision for the NACP is similar to many local community owned enterprises, economic opportunity and self-determination for future generations.
Another recent case is the Federation of Victorian Traditional Owner Corporations (FVTOC) which was officially launched at Victorian Parliament House in May 2014.

GHD led the FVTOC to consider the commercial developments in their regions and how they were leveraging economic opportunities for future generations.

GHD aligning itself with FVTOC included identifying a suitable joint venture partner, in this case Cockram Construction.
Majority owned by FVTOC, they recently established Barpa Construction which will be officially launched at the Melbourne Museum in late June 2014.

Barpa has a vision to employ and train Aboriginal people in technical, administrative and leadership roles as they grow their share of the market.

Pacific Services Group Holding (PSGH) is an Indigenous owned business based in NSW providing a range of technical services in construction, facility management, security, traffic management and labour hire.
GHD has a close relationship with PSGH and fully support their commercial aims and Indigenous enrichment program.

Together PSGH and GHD have been investigating the market to identify commercial opportunities and a client base which recognises value in what PSGH have to offer.

GHD’s alignment with PSGH has aided to drive growth with projects funded by private companies, State and Australian Government.

PSGH is currently being considered for a large construction contract with the Department of Defence.
1.4.

GHD Approach and an Example of Support to Foster Growth in Developing Partner Countries The approach outlined above involving Indigenous Australian communities can be comfortably mirrored in communities in developing countries.

This is not micro-finance, but the realisation of growing large commercial businesses by partnering with experienced and viable Australian and foreign capacity partners to deliver services into the market.
5 The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 117 Within each community in a developing country in the Indo-Pacific region is a marketplace and consequently the demand for, and supply of, goods and services.

Foreign companies, such as resources, energy, tourism, infrastructure, etc.

investing in developments adjacent to these communities have a demand for goods and services.
As with Indigenous Australian communities, companies like GHD would work with these local communities and the foreign companies, to establish and capacity develop businesses which align with their own service offerings.

As the local enterprise supplying to the foreign investor grows, so do the commercial opportunities for all the partners.

Often the private sector investor is neither aware nor experienced in cultivating a local supply chain.
In many cases they import much need supplies directly when they could have facilitated the growth of a local importer to supply them.

This local supplier may very well be an Indigenous person, but not necessarily.

As an example, GHD has an operating centre office in Manila in the Philippines delivering a range of services to local clients.

The T'boli people are indigenous to the Philippines and one of the poorest communities in the country.
Ironically their traditional lands are minerals rich with copper, gold and silver.

Caden Resources Corporation (Canadian) has been mining for gold and silver for a few years and GHD is in a position to offer professional services to Caden Resources.

With assistance from DFAT, GHD could assist with connecting Caden Resource’s demand with the potential for T’boli people to supply – just as we have done with communities in Australia.
This requires GHD consulting with Caden Resources to determine their appetite for a local supplier, advocating the benefits to the company including social licence to operate and the types of suppliers that may be required.

To ensure the ‘trade’ component, GHD would advise the local community, build capacity and seek to align its service offerings with those of the local businesses.
The above examples illustrate the broad application of this approach in a number of situations, and provide useful insights into the ability of relevant private sector partnerships to deliver successful development outcomes across the region.

1.5.

About GHD Founded in Australia, GHD is one of the world’s leading engineering, architecture and environmental consulting companies.

The cornerstone of our business is our client-centred culture and teamwork based approach known as One GHD.
Wholly-owned by its people, GHD is dedicated to solving our clients’ challenges in the global markets of water, energy and resources, environment, property and buildings, and transportation.

Our global network of 8000+ professionals collaborates to improve infrastructure, economies and communities.

GHD is committed to safety, environment, quality and integrity.
We put our clients first, care for the wellbeing of our people, assist communities in need and conduct business in an ethical and environmentally responsible manner.

www.ghd.com 6 The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 117