Businesses like Woolworths don’t base decisions on morals

29 Feb 2024

As we’ve seen with recent media drama around Woolworths and Coles being accused of price gouging, Nat Cromb reminds us we shouldn’t pat companies on the back for doing the bare minimum (especially when they make business decisions instead of moral ones).

Nat Article Header Greed

There is always something in the lead up to January 26 that derails the real conversation. This year it was the Woolworths decision to stop selling Australia Day paraphernalia. The nationalistic outrage even had me sitting up to pay attention. Seeing people dismayed as though some flags mass produced and then reproduced on cups, plates, napkins and thongs somehow made the difference in their ‘celebrations’ was befuddling, if not humorous.

Thinking about the decision making, I wondered if perhaps it was the staff within the organisation that were pressing for a moral decision. I asked myself if a massive retailer was really capable of making a decision that sets a moral agenda on January 26?

Nope.

Morning news host Stefanovic labelled it “wokeness in aisle 3” but really, it was a commercial decision – not a moral one and this should not surprise us.

Although mob were posting on socials with positivity about the decision, the decision was made because Woolworths weren’t making enough  moolah from the flag wavers so it wasn’t worth stocking them anymore. In fact, Woolworths’ CEO came out and apologised, saying they are not cancelling Australia Day. In yielding to the faux moral outrage, he demonstrates how the right to be offensive and racist is held to be of greater importance than the right for mob to exist, grieve, mourn and protest. Apparently a recently leaked dress code memo has revealed the banning of Indigenous and LGBTQIA+ badges of Woolworths workers.

After all, majority rules right?

That is not to say that there are not incredible people, including mob, working for Woolworths who would have supported this decision for the right reasons and maybe some of those had to come up with a business case to support such a decision.

We are not strangers to corporates signing up to Reconciliation Action Plans or RAPs, patting themselves on the back when they do the bare minimum. Some businesses going so far as to accept government funding to ‘increase Indigenous employment’ and then doing the opposite of ensuring that they have respect and proper regard for our communities.

Here are just some examples of corporates with RAPs, showing us exactly how much value a RAP has in shaping the moral and cultural tapestry of a corporate:

  • Woolworths posted a profit of $1.62 billion for 2023 amidst a cost of living crisis and failing to pay farmers appropriately (now facing a price gouging enquiry) and planned to build a Dan Murphy’s near Aboriginal communities. 
  • Rio Tinto destroyed sacred sites on the land of the puutu Kunti Kurrama and Pinikura people that were 46,000 years old. History that cannot be replaced.
  • Telstra exploited Indigenous consumers across three states and territories and it took the Australian Competition and Consumer Commission bringing proceedings in the Federal Court against them, for them to be accountable.
  • Major news franchises with RAPs such as News Corp publish inflammatory columnists and articles that are damaging and destructive to our people and communities.

While our community was initially fairly supportive of RAP’s as a concept, the practice has been so disappointing that sentiment from our communities is no longer glowing when companies release their RAP’s. We know to look deeper.

Greenwashing, why not black cladding?

One area of focus in corporate Australia that could be looked at as a way to heighten the priority of corporate Australia’s prioritisation of their policies and practices that impact our communities and their place in addressing historical and contemporary wrongs and inequity is ‘ESG.’

The Environment, Social and Governance (ESG) focus has lead to companies developing sustainability strategies because that is what is being demanded by stakeholders and consumers alike. 

In fact, the Australian Securities and Investment Commission (ASIC) has issued information on greenwashing and why it is important. At a high level, it is the misrepresentation or inflation of the efforts companies are making to be environmentally sustainable in order to gain favour in the market with individuals keen to utilise ethical businesses. 

When companies are moving to implement these environmentally sustainable strategies, they need to be careful in how they represent their strategy and its impact or they may fall foul of the misleading and deceptive provisions of the Corporations Act.

ASIC has listed greenwashing as one of its priorities and wasted no time in taking action where they deemed greenwashing to have occurred, the case against Mercer their first and settled with payment of an $11.3 million penalty for misleading customers about the sustainability of its investments.

So if corporate Australia can move towards environmentally sustainable strategies, why then, are those with RAPs not being held to account for their failure to be ethical and accountable to their promises, beyond losing their RAP status. Generally the promises are employment parity, meaningful engagement etc. Tangible action is not something that is frequently referenced. If companies are not environmentally ethical, this can result in fines in the millions, as we saw with Mercer..Why are these levels of penalty not implemented for  companies that are dishonest about the ethics of their Indigenous strategies, RAPs and other policies?

Even if the company doesn’t necessarily prioritise Indigenous rights, in making space Indigenous people  may make up a small percentage of the consumer market but 3 percent growth is still significant for a company bringing in new revenue, and that is without the much larger market of our allies. Allies who are likely to spend in businesses that they know are contributing to our communities and likely to spend elsewhere if they find out big companies are not living up to their word.

To date, the RAP is the badge of honour that ‘proved’ companies cared about us. The reality is far more different to the narrative portrayed by clever PR execs. What we know is companies will pay money to movements that are about us, so that their brand is Blak adjacent and they seek to capitalise on that which is no different to the companies releasing their ESG reports on what they are doing for the environment.

We often see the term ‘black cladding’ used where Indigenous business(es) or individuals are taken advantage of in order for the non-Indigenous business for the purpose of gaining access to otherwise inaccessible Indigenous procurement policies or contracts (and this is far more widespread than we probably even realise). What term can we then use to describe the equivalent of greenwashing us and our communities?

Similar to the Corps Act provisions used by the ACCC in pursuing financial service providers for misleading and deceptive conduct for greenwashing; can’t the ACCC similarly investigate and pursue organisations whose self-congratulatory media releases or website news on their RAPs or Indigenous strategies and their impact in the community are not actually lining up with their output?

The Australian Consumer Law (ACL) prohibits conduct, in trade or commerce, that is misleading or deceptive or is likely to mislead or deceive. So this could be a possible avenue that would likely be more powerful than having companies simply having their RAPs suspended. Surely hitting their bottom line in the form of a fine and loss of consumer confidence would be enough to compel companies to start doing the right thing in material and meaningful ways. 

As a new year commences and we continue to recover from another January 26 where so many deliberately misunderstand or maintain their vehement right to be racist, perhaps we can work to have the 2024-2025 ACCC priorities turn towards companies that seek to capitalise on their proximity to, or exploitation of our people and communities.

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