MAORI SUSTAINABLE DEVELOPMENT IN TE PUKU O TE IKAMODULE 4 DEPARTMENT OF ECONOMICS and the SCHOOL OF MAORI AND PACIFIC DEVELOPMENT
OBJECTIVES • Applying Indicators • Social Accounting and Auditing methods • Environmental Accounting and Auditing methods • Cultural Accounting and Auditing methods • Triple Bottom Line • Quadruple bottom line
APPLYING INDICATORS • Indicators are used to benchmark performance of a system you are trying to manage, whether it be the environment, business, social, or cultural system. Indicators need to have an initial measurement starting at time 0, and then is measured periodically, analysed, interpreted, and reported. • Indicators can be used to see if you are making progress. • Indicators are developed according to a particular value system of importance. For example, Paua or pupu numbers, and size at your iwi Mataitai Reserve may be an indicator to your iwi, but may not be for non- Maori. • Indicators are important, because they help with decision-making, and if any damage occurs can be used to evaluate compensation, or mitigation. • There are several types of indicator frameworks for measuring sustainability. However, the most favoured framework in NZ is the Pressure-State-Response Indicator Framework developed by OECD (1994). • The Pressure-State-Response Framework is used by the Ministry for the Environment for its Environmental Indicators Program along with another the United Nations Media Framework called the which splits the indicators up into environmental media strands . PSR is cyclic in nature initially had five steps but has been reduced to three (see diagram in next slide). • Issues: • Cost in information gathering • Whether indicator is relevant and measures changes in behavior, or trends • Local scale versus regional, or global scale • Appropriate, and consistent units of measure, and valid
Human Activity or Natural Event Pressure Pressure Policy Response Environmental State State Socio-Economic Impact Response Five Step and Three Step Pressure-State-Response Framework (Patterson, 2002)
Pressure-State-Response Framework Statistics NZ (2000)
Individual indicator explanation template used by Statistics NZ and MFE (Statistic NZ, 2000)
Range of Sustainability Indicators Frameworks (Adapted From Patterson 2002)
CASE STUDY : CONTENTS OF THE GENUINE PROGRESS INDICATOR (GPI) • The GPI starts with the same personal consumption data the GDP is based on, but then makes some crucial distinctions. It adjusts for certain factors (such as income distribution), adds certain others (such as the value of household work and volunteer work), and subtracts yet others (such as the costs of crime and pollution). Because the GDP and the GPI are both measured in monetary terms, they can be compared on the same scale. • Crime & Family BreakdownSocial breakdown imposes large economic costs on individuals and society, in the form of legal fees, medical expenses, damage to property, and the like. The GDP treats such expenses as additions to well-being. By contrast, the GPI subtracts the costs arising from crime and divorce. • Household & Volunteer WorkMuch of the most important work in society is done in household and community settings: childcare, home repairs, volunteer work, and so on. These contributions are ignored in the GDP because no money changes hands. To correct this omission, the GPI includes, among other things, the value of household work figured at the approximate cost of hiring someone to do it. • Income DistributionA rising tide does not necessarily lift all boats -- not if the gap between the very rich and everyone else increases. Both economic theory and common sense tell us that the poor benefit more from a given increase in their income than do the rich. Accordingly, the GPI rises when the poor receive a larger percentage of national income, and falls when their share decreases. • Resource Depletion If today's economic activity depletes the physical resource base available for tomorrow's, then it is not really creating well-being; rather, it is just borrowing it from future generations. The GDP counts such borrowing as current income. The GPI, by contrast, counts the depletion or degradation of wetlands, farmland, and nonrenewable minerals (including oil) as a current cost. • PollutionThe GDP often counts pollution as a double gain; once when it's created, and then again when it is cleaned up. By contrast, the GPI subtracts the costs of air and water pollution as measured by actual damage to human health and the environment. • Long-Term Environmental DamageClimate change and the management of nuclear wastes are two long-term costs arising from the use of fossil fuels and atomic energy. These costs do not show up in ordinary economic accounts. The same is true of the depletion of stratospheric ozone arising from the use of chlorofluorocarbons. For this reason, the GPI treats as costs the consumption of certain forms of energy and of ozone-depleting chemicals. • Changes in Leisure TimeAs a nation increases in wealth, people should have increasing latitude to choose between more work and more free time for family or other activities. In recent years, however, the opposite has occurred. The GDP ignores this loss of free time, but the GPI treats leisure as most Americans do -- as something of value. When leisure time increases, the GPI goes up; when Americans have less of it, the GPI goes down. • Defensive ExpendituresThe GDP counts as additions to well-being the money people spend just to prevent erosion in their quality of life or to compensate for misfortunes of various kinds. Examples are the medical and repair bills from automobile accidents, commuting costs, and household expenditures on pollution control devices such as water filters. The GPI counts such "defensive" expenditures as most Americans do: as costs rather than as benefits. • Lifespan of Consumer Durables & Public InfrastructureThe GDP confuses the value provided by major consumer purchases (e.g., home appliances) with the amounts Americans spend to buy them. This hides the loss in well-being that results when products are made to wear out quickly. To overcome this, the GPI treats the money spent on capital items as a cost, and the value of the service they provide year after year as a benefit. This applies both to private capital items and to public infrastructure, such as highways. • Dependence on Foreign AssetsIf a nation allows its capital stock to decline, or if it finances its consumption out of borrowed capital, it is living beyond its means. The GPI counts net additions to the capital stock as contributions to well-being, and treats money borrowed from abroad as reductions. If the borrowed money is used for investment, the negative effects are canceled out. But if the borrowed money is used to finance consumption, the GPI declines. Source: Redefining Progress (2003) http://www.redefiningprogress.org/projects/gpi/gpi_contents.html
GROSS PRODUCTION VS. GENUINE PROGRESS, 1950 to 1999 In 1996 Dollars • You've seen the headlines, "GDP Up!" Good news, right? Not really. The gross domestic product simply adds up all the money we spend, and calls the results economic growth. Yet for years, economists, policymakers, reporters, and the public have relied on the GDP as a shorthand indicator of progress. • In 1995, Redefining Progress created a more accurate measure of progress, called the Genuine Progress Indicator (GPI). It starts with the same accounting framework as the GDP, but then makes some crucial distinctions: It adds in the economic contributions of household and volunteer work, but subtracts factors such as crime, pollution, and family breakdown. We continue to update the GPI on a yearly basis to document a more truthful picture of economic progress.
ACCOUNTING, AUDITING, AND REPORTING • “Indicators” can be used in resource inventories, report cards, or road maps to determine if progress has been made in efficient use or improvements. • “Accounting” refers to the practice of keeping account or “tabs” through measuring and monitoring economic, financial, social, environmental, and cultural resources, and to ensure resource efficiency and integrity in the monitoring process. • “Auditing” refers to the verification and validity of information that has been gathered in the accounting or monitoring stages. There are usually two methods of auditing: (1) self audit or internal audits; and (2) Third party verification from an accredited body. • “Reporting” relates to how those performance results are communicated to the public, shareholders, or stakeholders. This is sometimes referred to as “transparency” or openness. However, depending on how these results are reported are basically left up to the companies marketing professionals. • Such results are published in either the annual report, environmental report, triple bottom line report, or a quadruple bottom line report.
SOCIAL ACCOUNTING AND AUDITING METHODS • Social Accounting is a method to measure the social capital and social indicators in a community or organisation. • Social capital includes: • Networks, relationships, institutions, and policies that help society to function correctly (eg. Number or trusts, or Memmorandums of Understandings) • But may include human capital (skills, education, leadership, people), cultural capital (set of values, history, traditions, and behaviours that link a specific group). • Human rights abuses, participation in decision making, health and safety, employment of minorities are usual indicators for socially responsible businesses and governments. Example: • SA 8000 (International Standard) • Transparency International • Fair Trade
Maori Social Capital • Importance on extended families • Values of • Whakapono (Trust) • Tika (integrity) • Pono (Truth) • Manaaki (nuturing) • Tautoko (support) • Hapai (uplift) • Knowledge in maintaining a specific place in Maori society • Informal Association than formal organisation • The holistic integrating nature of relationships and networks • Close links with social capital and cultural capital • The process of moving from iwi based social capital to briding social capital where one iwi can connect to work with another • Cultural Capital a sense of belonging • The defense, preservation, and expansion of existing iwi/hapu communities • The positive and negative effects of government reforms • (source Spellberg et al 2001)
SOCIAL INDICATORS IWI BASED INDICATORS OF IMPORTANCE
SOCIAL INDICATORS IWI TRUST BOARD INDICATORS OF IMPORTANCE
ENVIRONMENTAL ACCOUNTING AND AUDITING METHODS Environmental Accounting Systems measure environmental performances such as resource, and energy use, remediation. They run on a similar bases to other accounting systems in which a business or organisation has to meet a certain specific set of criteria performance indicators, based on how they operate their organisation and on the environmental policies. Only a few environmental management systems are accepted internationally. So for trade reasons it is necessary to ensure that you are using a system that is appropriate for the tarket market. Examples • ISO 14000 • Eco Labels- Biogrow, • EnergyWise • Forestry Stewardship • EcoFish
Iwi Environmental Indicators Examples • Area of Native Forest • Reserve Land Area • Water quality • Number of tuna in the river • Number of tribal properties with Kaitiaki • Quantity of mineral resources • Concentration of a pollutant in a water supply. • Number of Marae with Renewable Energy Systems.
Economic Accounting • May also include Financial Accounting methods, plus the measurement of socio-economic indicators such as: • income levels for male and female, • whether they own their own home, telephone, transportation, • And for different geographical regions or age groups. • On a macro scale GDP • Tax paid per capita • Financial Accounting methods make sure that the: • Organisations resources are being utilised efficiently, is making a profit, and paid the required tax. • Is making a return or having growth in equity. • Financial auditing is usually done by a charted accounting firm. • An Audited Financial Report is created regularly
Cultural Accounting • Cultural Accounting relates to the monitoring of policies, actions, decisions in relation to an organisations values, visions, missions or policies, but also include monitoring cultural assets and taonga. • Cultural Accounting for Maori is not new concept given that many people before have undertaken audits in organisations on the Treaty or Waitangi and adhering to Maori cultural values. • Issues of social equity are usually included as well as adherence to customs. • Cultural safety is another aspect which can be incorporated into any cultural accounting system. • Typical Cultural indicators may include: • Number of Te Reo Speakers • Number of Kaumatua with a specific cultural skill • Number of publications about the iwi • Number of Marae • How many iwi members employed in a business • Yearly maintenance cost of the preserving a taonga • Number of Korowai weavers
TRIPLE BOTTOM LINE • The Triple Bottom Line is a concept designed by John Elkington of the consultancy SustainAbility.com • It incorporates three types of accounting and reporting for corporations and businesses. These include: Social, Environmental, Economic • Although the Triple Bottom line is a start towards sustainable reporting it is not really suitable for indigenous people, or various other cultures and religions. • Some other examples of environmental accounting and reporting include: • Balanced Scorecard • GEMI • GRI
Sustainability Trends • Socio-cultural trends • Transparency throughmedia & connectivity • Healthy – living • Divergent demographicdevelopments • Increasing imbalances • Alternative lifestyles • Increasing awarenessof social inequalities • Environmental trends • Environmental degradation • Global climate instabilities • Water problems • Loss of biodiversity • Decreasing capacity of natural sinks • Increasing ecological risk-awareness • Economic trends • Increasing speed of technological innovation & product life cycles • Information is key factor • Technological Connectivity • Globalization & liberalization • Shift to demand-side markets • Increasing influence of multinationals
Maori Sustainable Development Model-Quadruple Bottom Line • The Quadruple Bottom Line concept is not new to Maori or other indigenous people, who have tried to maintain their culture amongst the forces of colonisation, industrialisation, and post modernism. • Many examples of Maori accounting for resources and loss can be seen through the many claims in the Waitangi Tribunal Commission. Other examples include the roles and responsibilities placed on Maori Trust Boards since the 1950’s to account of social, economic, cultural, and other things (including the environment) to the Government. • Within the Maori Sustainable Development Computer model opportunities exist to undertake various forms of accounting, auditing, and reporting. • Investment Viability Model – allows you to undertake social, cultural, environmental, and economic audits based on your values to the questions asked about an investment • The Beneficiary Database- allows you to query for particular cultural, social, and economic indicators relating to your beneficiaries. • The Resource Inventory – allows you to monitor and keep track of environmental, economic, social, and cultural resources/assets/capital. • Essentially the Maori Sustainable Development Computer model allows you to look at your four bottom lines regarding social, culture, environment, and economic capital.
Cultural Accounting for Iwi Values • Multiple objective decision making • Inclusive in the IVM model • Audits on: • Iwi human capital development • Equality in decision making for iwi • Cultural understanding • Partnerships • Reciprocity
Iwi Sustainability • ... is a business approach to create long-term • shareholder value • ... by embracing opportunities and managing risks • ... derived from economic, environmental social, and cultural developments
Sustainability Assessment Example • Questionaires • Verification • Trust documents and policies • Publicly available information/ expert network • Contact to trust • Media • Stakeholder analysis and Engagement
Sustainability Monitoring Example • Verification • Impact analysis • Quality of Crisis Management • Third party Auditing • Sustainability Design Media • Criteria • Illegal practices • Accidents • Health and Safety External Stakeholders Beneficiaries Can lead to risk to reputation and exclusion from the investment community