Andrew Forest talks about indigenous employment, his decision to back Gina Rinehart's son in the court battle and his mother and his fight to end slave labour.

Transcript

EMMA ALBERICI, PRESENTER: Earlier this year, mining billionaire Andrew Forrest became the first Australian to join the global Giving Pledge. Like Bill and Melinda Gates, he and his wife Nicola are now dedicating most of their wealth to philanthropy. So far the Forrest Family Foundation has given more than $350 million.

But the man also known as "Twiggy" has another focus: ending slave labour around the world. Together with former British Prime Minister Tony Blair and former US Secretary of State Hillary Clinton, he's launched a global slavery index ranking 162 countries. The survey found that 29 million people were living in conditions of modern slavery around the world, including 14 million in India and three million in China. Both are countries with which Australia engages in significant two-way trade.

Tomorrow Andrew Forrest will chair his first meeting as head of Tony Abbott's Review of Government Indigenous Jobs and Training Programs. I spoke to him from Melbourne a little earlier.

Andrew Forrest, welcome back to Lateline.

ANDREW FORREST, BUSINESSMAN AND PHILANTHROPIST: Thank you very much, Emma.

EMMA ALBERICI: You've been speaking at a conference in Melbourne today about ending slavery in countries like China and India. How does an Australian, a British or an American business go about making real changes in those countries?

ANDREW FORREST: First of all by making the industry transparent by allowing governments to be able to judge from within their own borders how much slavery they have, what an issue it is, what the economic detriment is and raising it as something which they can manage. India's a great case in point. There's cultural slavery there, there's forced bondage for work, there's sex slavery, and to raise this as an issue which the population themselves consider they need their politicians and their corporate leaders to harness, to now manage and eliminate, that's how you help these countries.

EMMA ALBERICI: Tony Abbott says he wants a free trade agreement signed with China within 12 months. Does that level of urgency trouble you given what we already know about that country's human rights record?

ANDREW FORREST: No, look, I don't think so. China has a very, very small percentage as far as slavery numbers go, and while it's a large number 'cause you're talk about 1.2, 1.3 billion people, its percentage is small, but that doesn't mean you can't push against that open door. China I think will want it, Australia will certainly want it, whereby we ensure in that free trade agreement that there is no forced labour, there is no slavery, and of course when you're dealing at that political level, everyone's going to sign off and say, "Of course not." It's only when you get down into the weeds where you get slavery, where you get forced labour, but if you can look up and say, "Look, our government, even in the free trade agreement with Australia, or our government, even in the free trade agreement with China, is not going to in any way allow forced labour or slavery," then that starts to put the dampener on those slavery activities. It's exactly what you want the free trade agreement to do.

EMMA ALBERICI: China may well commit to greater freedoms for its workforce in any free trade agreement, but how does Australia go about ensuring that Beijing lives up to any pledge in this area, especially considering how secretive it is?

ANDREW FORREST: Well, look, I personally haven't found that. I must admit when I raised slavery as an issue and measuring slavery within China and around the world as an issue with the highest levels of leadership in China, they looked at me like, "Yes, of course, Andrew," and their response was exactly that. Perhaps in days passed with China, they might not have - wanted to limit information, but now the new government is all about economic efficiency, growing the tide of economic well-being to eliminate poverty and that of course means transparency. And slavery, as these world leaders know, actually is a major economic limitation on an economy, it's a withdrawal from an economy, it's not an addition. You're just having people use their bodies and not their brains. As soon as you free people to use their grey matter, then they become consumers and producers and the economic pie grows and that's exactly what China wants.

EMMA ALBERICI: We've recently seen the lengths some companies will go to to secure contracts with corrupt regimes, even allegations that some Australian businessmen have paid bribes. Won't Western companies ultimately act in the best interests of their shareholders, even if that means turning a blind eye to some bad behaviour overseas?

ANDREW FORREST: No, look, I think really, Emma, the reverse is true. We held this conference this morning with 450, 500 procurement officers from around Australia, chief executives amongst them, and it was clear in the room that they all understood that forced labour and slavery is really bad for their businesses. And if they're thinking of their shareholders, the last thing shareholders ever want to read is that their company has been involved in forced labour or slavery and it will impact their share price deleteriously, it'll be negative on a company's perception. So really, thinking of the stakeholders, you'll stamp out slavery and forced labour wherever you can in your supply chains and that's the red balloon going up and executives around Australia and around the world are watching that red ballon.

EMMA ALBERICI: Tomorrow you'll chair the first meeting of the Federal Government's Indigenous Employment and Training review. Now you've asked everyone to come with a blank piece of paper. That would suggest that you think an entirely new approach is needed.

ANDREW FORREST: Look, I think an entirely new approach is needed, Emma. The existing system has been tried and disproved for decades and decades, and one thing we all know politicians are great at is spending money. Now, if we have a government which is determined to end the disparity, then they must be equally determined to realise that the old model has produced old results. If we want a new result, i.e. an elimination of all the causes which have led to Australia's disparity, then we're going to have to try a new model and it's our job to work out what that model is.

EMMA ALBERICI: What's the old model you're referring to that doesn't work?

ANDREW FORREST: I think it's a welfare-driven model. It's basically a feather-bedding model. If you look hard at it, if you look hard at the bleeding heart attitude to always throw money at issues, throw money at problems, what you're in fact probably saying is you're exercising a prejudicism of low expectations. You're actually saying, "Well, we don't expect you to succeed, so we're going to probably pay you not to," and that just isn't right. Indigenous people from around Australia know that they can go blow for blow and compete in any sport, in any professional environment if they're given the opportunity and certainly if they're given the expectation to succeed and that's what we're looking forward to.

EMMA ALBERICI: The new Indigenous Affairs Minister, Nigel Scullion, has talked about breaking that reliance on welfare, but it would seem the battle is not in finding people jobs, but keeping people in those jobs.

ANDREW FORREST: Look, I think - I think there are solutions. Certainly the existing model of Job Services Australia has a record of around 24 per cent of people still in the same job after six months. Now, that means you've got incredibly high turnover. Where you've got a demand-led model, where you've got the employees searching for the right skills in an Indigenous person to keep them, then you've got 80 per cent, like, three or four times - 80 per cent retention at six months and that means you've broken that welfare mentality in that individual. Statistically after six months, if an Indigenous or non-Indigenous person has come off welfare, even long-term welfare, and has stuck in that's job for six months, then they've really broken in their own psychology the welfare reliance mentality. They're up on their own two feet. They're away and they're paying tax and they're contributors to society.

EMMA ALBERICI: As an employer yourself, what have been the challenges of trying to find long-term jobs for Aboriginal people in the mining sector?

ANDREW FORREST: Look, challenges are significant, but they're not insurmountable. Because we've suffered, if you like, this welfare-driven racism of low expectations, we've got young adults now with very poor literacy and numeracy levels, so we recognise that; we don't shy away from it. We say, "Right, you might have poor literacy and numeracy. We're going to teach those first. Right, you've now got those skills. Let's go second for a driver's licence. Let's get driver's licence. Right, now you've got numeracy, literacy and driver's licence, you've got maturity, you're a young adult, let's give you work experience." When you're so motivated that you're coming off welfare and you're seeing for the first time the opportunity of an income which you've made yourself, not which someone else has given to you because they think you probably can't cut it on your own, but you've made that money yourself and you can see a rising level of income in front of you if you stick at it, you start thinking about the car you might want to buy, the house you might want to live in, where you might want to send your own children to school, not have someone choose it for you, and the incentive to stick with it becomes very strong. And that's where we know we can end the disparity.

EMMA ALBERICI: The ambition is laudable, but how do we get there? You talked about the fact that under the current government jobs scheme, only 24 per cent of people are still in jobs six months after they get those job those, so where is it going wrong?

ANDREW FORREST: I'm not trying to leap ahead of the review, but all I can speak to you, Emma, is from my own personal experience. Where it goes wrong is where you have a kind of a supply push, "Please take this Indigenous person. He's got this training, he's got that training. You might not have a spot for him, but come on, be a good guy and employ him." We don't want any of that. We don't want employees to be making philanthropic decisions, charity-driven decisions on employing Indigenous people. They are way too good for that. We want a demand-led approach where we've got employees saying, "Hey, we really need good employers, we really need them to have these skills, those skills and those skills on day one," so they feel useful like they are useful on their first day at work. So it's a demand-driven model where the employees say what they need and we supply into that need. We don't try and invent the market, we fill the existing market. That's where we've been going wrong.

EMMA ALBERICI: A group of business people have been appointed to advise the Government on ways to rein in the budget. Do you agree with the Treasurer Joe Hockey when he says the age of entitlement needs to end?

ANDREW FORREST: Look, Emma, I probably wouldn't be drawn into that. What I would say is governments need assistance to run their organisations more efficiently just like businesses do. And it brings me back, Emma, to a story which Tony Blair, the previous British Prime Minister, told me where he just pointed out that the skills it takes to get elected are often nothing like the skills it takes to run a country well. And he told this story that he'd run this excruciatingly difficult campaign, he'd won government, he'd won himself the position of being British Prime Minister. He walked into 10 Downing Street for the first time, walked up the corridor into the living room and met the butler and the butler said, "Well done, Sir. What now?" And it was this striking question 'cause, "Oh, my God, I'm in government; what now?" And just 'cause you've got those skills to get yourself elected, don't be worried about bringing in external skills to help you run this country as efficiently as you possibly can, and if that's what the Abbott Government is doing to realise, "Look, I don't have all the answers, but I'm going out to get the best answers," then I applaud anyone who's acting for you and I, Emma, going out to get the best answers.

EMMA ALBERICI: Federal-state relations will form a big focus of the audit commission's work. In your experience, is there too much duplication between the two levels of government?

ANDREW FORREST: Yes, I do think there is too much duplication and it would be wonderful if we can have a Federal Government sit down with the state governments and delegate the responsibilities between them and save the taxpayer that enormous waste. And it's not just the crime of wasting all that money, it's wasting all that time and when you've got companies and projects, environmental movements and things which really improve the nation which get slowed up because of additional bureaucracy where everyone's wanting to be seen to be doing the right thing instead of doing the right thing, then I would say let's remove that duplication.

EMMA ALBERICI: Now you seem to be spending much less time on your business and much more of your efforts on national causes. Is the next step to join your fellow miner Clive Palmer in the Parliament?

ANDREW FORREST: No, it's not, Emma, at all. I'm absolutely strung-out busy as a - busy as a bee doing what I'm doing, which is - look, it's about 10 per cent business because I think Fortescue's a great company, but it's 90 per cent philanthropic because there are just things out there which need energy and which need leadership which I hope I can, in my small way, help with.

EMMA ALBERICI: Your great-great uncle John Forrest was WA's first premier, so there is a political pedigree there.

ANDREW FORREST: There is a political pedigree and I'm very proud of what those old explorers and pioneers have done, but, Emma, I'm not drawn into it myself. I really do think I can make a contribution in helping eliminate the disparity here in Australia and doing my small bit to help eliminate slavery around the world. These are huge issues for our fellow countrymen and our fellows in the world where slavery is growing at an alarming rate and it needs to be arrested.

EMMA ALBERICI: Are you ruling out a future career in politics?

ANDREW FORREST: Look, I don't rule anything in or out, Emma, but I have absolutely no thoughts of it at all. I'm completely preoccupied with the massive challenges in front of me.

EMMA ALBERICI: I can't let you go without asking you about the extracts of your unauthorised biography, which have been printed on the front page of The Australian today. John Hancock is quoted as saying that your enthusiasm and vision remind him of his late grandfather Lang Hancock. What can you tell us about your relationship with John Hancock?

ANDREW FORREST: Well John Hancock, Jnr, look, it goes back about 10-odd years. I can't say we're in any way close, but when he rang me up and said, "Look, I really need some help. People aren't prepared to speak up. They're unwilling or frightened," and I just thought of on old adage which we've been taught as kids, "You help someone if you can, not if it's convenient." So I don't know if it's wise or not, but we put up our hand to say, "Look, this guy's a decent bloke. He doesn't deserve the vilification. He's out there just trying to make his way in the world like everyone else."

EMMA ALBERICI: Some people might find it baffling that you would actually choose to become involved in someone else's family feud. I mean, why did you decide to back John Hancock in that court battle against his mother?

ANDREW FORREST: Look, I don't think it was that at all. I think it was a guy who couldn't find someone to reference him because of who he was against. I think his case is not good or bad. I was just asked: would I stand up in court and say, "This bloke is a reasonable bloke and tells the truth," and I was prepared to do that.

EMMA ALBERICI: And finally, there's also claims that you borrowed millions of dollars from a convicted drug dealer to keep you financially afloat during your time with Anaconda. Is that true?

ANDREW FORREST: Oh, look, I have no idea to this day if he's convicted of anything at all. I certainly have had my own ups and downs. This has not been a honeymoon walk to get to where I am. I'm kind of seen, Emma, as an overnight success which took 25 years. But, look, if people who I've dealt with have had convictions in the past and I don't know about it, it gets dragged out in some poorly-referenced book, I can't do anything about it.