top of page
  • Erin Woolford

STARTING THE CLOCK ON INTERGENERATIONAL WEALTH EQUITY

To the six million Australians that voted Yes and are asking where to from here? Part of the answer must be Economic Reconciliation.


Economic Reconciliation is a commitment to make space for First Nation way of life where values, practices and sovereignty are respected. It is the inclusion of First Peoples, communities, and business in all aspects of economic activity.

First Nations communities continue to face multiple barriers to fully participating in the economy, despite recognition of rights and title to lands.


Lack of access to capital and the hurdles to generating own-source revenue are two well-known barriers as outlined by Institute for Sustainable Finance.


Henvey Inlet First Nation, Pattern Energy and First Nations Finance Authority case study:

We need to hear more success stories like this so critical decision makers inside of investment and financing bodies together with industry leaders can reimagine what’s possible!

My experience is success breeds success. I am, I work with, and I live amongst, Traditional Owners in Australia who are following a very similar approach; and after 28 years working to achieve Economic Reconciliation it’s exciting to hear from their Chairs and Directors the changing landscape and shift in power dynamics.

During my time at Australian National University as a visiting Honorary Aboriginal Fellow, Centre of Aboriginal Economic Policy Research I led and co-authored a research paper with Dr. Kirrily Jordan which studied the equity imbalance in Indigenous Land Use Agreements (ILUAs).


This included interviews with 7 Native Title Party Representative Corporations and industry representatives, to explore the issues associated with power imbalances in negotiations through to governance arrangements and how many ILUA commitments had been delivered post consent to disturb country.

The findings were staggering regarding the systemic industry non-compliance with the terms of agreements, and Traditional Owners having no mechanism to enforce or penalise the proponent - despite the damage to country already being done.


It also highlighted that whilst industry was mostly compliant with royalty payments, more innovative wealth creation through Economic Reconciliation initiatives were often not implemented in a meaningful way.

A contributing factor was certainly the lack of capacity and/or capital for Traditional Owners, however the Windfalls of Change case study offers the solutions which can be applied in an Australian context.

 

Aboriginal and Torres Strait Islander people are ready to go


There are an increasing number of "shovel ready" First Nations communities in Australia, who just need industry to genuinely partner - in similar ways to Pattern Energy.


There are First Nations led Alliances comprising highly effective and experienced Aboriginal and Torres Strait Islander people who can support navigate these strategic approaches, such as First Nations Clean Energy Alliance, First Nations Heritage Alliance and Dhawura Ngilan Business and Investor Initiative.


First Australians Capital provides a range of resources to First Nations businesses, including professional services, networking, and access to financial capital.


Their vision is

"To create a new economy driven by First Australians. A new economy driven by First Australian business is a powerful economic contributor to community and inter-generational wealth creation."

Indigenous Business Australia has provided business development, grants and loans, and business mentorship for decades.

There are many First Nations consultants such as Ninti Kata that work to support industry and First Nation stakeholders to co-design innovative, equitable and effective approaches and solutions.


There is a strong mandate on sustainable investment and a raft of investors and financial institutions who have changed the way they invest to support Economic Reconciliation.

Despite this, whilst there are many examples of pockets of good practices in Australia - it isn't systemic, financial exclusion remains a significant issue for Aboriginal and Torres Strait Islander peoples and there is a cyclical tendency towards failed, well intended attempts at achieving economic growth and equality.

 

Economic Reconciliation benefits all Australians

Australia’s First Nations business sector has grown significantly over the past five years, both in terms of size and scale.


The number of First Nations businesses is estimated to have increased by over 47 per cent in the five years preceding the 2021 Census with their collective contribution to the Australian economy increasing by at least 59%.


In real 2021 terms, this is a contribution in the range of $8.5bn to $12bn, accounting for roughly 0.4 per cent to 0.6 per cent of Australia's GDP in 2021.


These increases are, in part, driven by the scaling up of First Nations businesses (more First Nations businesses are also now employers) and their diversification (Aboriginal and Torres Strait Islander entrepreneurs are working in more varied and productive industries such as health care and social assistance and transport, postal and warehousing).


This provides greater opportunities for industry to diversify their suppliers and lift First Nations involvement in their operations Good practice in procurement


The Business Council of Australia (BCA) has developed a strategy that focuses on First Nations employment, and economic and cultural empowerment.


This includes their Raising the Bar initiative which commenced in 2019 and aims to see BCA members steadily increase their procurement spending with First Nations suppliers.

The initiative is on track to reach and exceed their target of $3 billion in cumulative influenceable spend on procurement from First Nations businesses by 2024/25.


BCA has conducted their Indigenous Engagement Survey of members on a biennial basis since 2009. The survey has collected quantifiable evidence over time in achieving a range of objectives regarding First Nations engagement, employment and procurement strategies.


This evidence includes the initiatives that companies have adopted to drive sustained improvements in the number of First Nations suppliers, which include:

  1. establishing First Nations supplier and procurement targets

  2. flexibility to improve First Nations business outcomes such as

    1. unbundling larger contracts

    2. preferring First Nations enterprises using weightings

    3. providing information sessions about emerging procurement opportunities

  3. defining and documenting local First Nations suppliers and engaging with those networks.

  4. surveying the First Nations supplier network to better understand the challenges they face and considering ways to ameliorate those challenges

  5. tailoring procurement learning events and master classes to First Nations businesses.

The International Council on Mining & Metals (ICMM) have issued the Good Practice Guide Indigenous Peoples and Mining which contains guidance on strengthening First Nations communities’ asset base.


This includes strategies to promote First Nations procurement in the supply chain, such as:

  1. requiring successful tenderers to have plans and programs for First Nations training and employment

  2. guiding and encouraging contractors to create business opportunities for First Nations peoples eg as their subcontractors

  3. recognition and investment into relationship building which is key to developing business opportunities with First Nations peoples

  4. creating business opportunities.

  5. ICMM also suggest a range of actions to build capacity and provide economic opportunities for First Nations including:

    • training First Nations groups on business and management practices

    • incubating and supporting new businesses

    • ensure tendering and procurement services provide opportunities for local First Nations business

    • assist local businesses to become compliant with operational requirements eg occupational health and safety

    • help with access to finance ranging from funding microcredit schemes to funding bank loans

    • identify suitable partners for joint ventures

    • formalise local procurement and capacity building of First Nations-owned business through legal agreements.


The Tier 1 Sponsorship Model which appears in ICMM’s Good Practice Guide was co-designed and implemented by Ninti Kata’s Managing Director Erin Woolford.

The socioeconomic benefits that flowed included a 400% year on year increase in spending with First Nations companies and $20 million in income flowing into regional and remote Aboriginal households.


Erin was awarded South Australian Woman in Resources and appointed as a First Nations Thought Leader on the Mineral Council of Australia Reconciliation Committee in recognition of this work.

If you are interested in Ninti Kata supporting your company to explore best practice economic reconciliation strategies, please contact Erin Woolford here

11 views0 comments

Comments


bottom of page