Indige­nous Con­trac­tors

The Australian Mining Review - - NEWS - JES­SICA CUM­MINS

The num­ber of Indige­nous Aus­tralians work­ing in the min­ing in­dus­try has more than dou­bled since the 1990s. The Aus­tralian Min­ing Re­view speaks with WA Abo­rig­i­nal Af­fairs min­is­ter Ben Wy­att and PwC about the chal­lenges and ma­jor devel­op­ments that have shaped the sec­tor.

GOV­ERN­MENT ini­tia­tives such as the Fed­eral Indige­nous Pro­cure­ment Pol­icy and the WA Abo­rig­i­nal Pro­cure­ment Pol­icy have played a key role in fa­cil­i­tat­ing the pros­per­ity of Indige­nous busi­nesses.

Com­pris­ing three main parts, the Fed­eral Pro­cure­ment Pol­icy en­sured a tar­get of three per cent of Com­mon­wealth con­tracts were awarded to Indige­nous busi­nesses; en­sured a manda­tory was set aside for re­mote con­tracts and con­tracts val­ued be­tween $80,000 and $200,000; and a min­i­mum Indige­nous par­tic­i­pa­tion re­quire­ment in con­tracts val­ued at or above $7.5 mil­lion in cer­tain in­dus­tries.

Within its first two years of op­er­a­tion from 1 July 2015 to 30 July, 2017, 4880 con­tracts were awarded to 956 Indige­nous-owned busi­nesses with a to­tal value of $594 mil­lion.

This cu­mu­la­tive fig­ure in­cluded $24 mil­lion in con­tracts awarded to Indige­nous busi­nesses in 2015–16 that was not re­ported un­til 2017.

The lat­est cen­sus data re­vealed a 22 per cent growth in the num­ber of Indige­nous Aus­tralians work­ing in the min­ing in­dus­try – with num­bers ris­ing from 5435 in 2011 to 6654 in 2016.

The Prime Min­is­ter’s 2018 Clos­ing the Gap re­port con­firmed that al­though the min­ing boom and bust cy­cle saw sig­nif­i­cant dis­par­ity in eco­nomic con­di­tions across States and Ter­ri­to­ries, the min­ing in­dus­try it­self was em­ploy­ing sig­nif­i­cantly more Indige­nous Aus­tralians than in pre­vi­ous years.

PwC WA State di­rec­tor Kate Ge­orge said Indige­nous busi­nesses had been on a tra­jec­tory since the 1990s after the first Abo­rig­i­nal train­ing pro­gram was formed – be­fore Na­tive Ti­tle and the Mabo de­ci­sion was en­acted.

“We have come a long way since those days of dis­trust – in­ter­est­ingly the first em­ploy­ment strate­gies came out of an en­quiry that the Com­mon­wealth gov­ern­ment com­mis­sioned look­ing at the em­ploy­ment, train­ing sit­u­a­tion and need for Abo­rig­i­nal em­ploy­ment in 1989,” Ms Ge­orge said.

“Ris­ing out of the Com­mon­wealth gov­ern­ment’s en­quiry, the gov­ern­ment be­gan pro­vid­ing fund­ing par­tic­u­larly for ma­jor em­ploy­ers to as­sist with train­ing Abo­rig­i­nal peo­ple to ap­ply for em­ploy­ment in the re­sources in­dus­try and out of those em­ploy­ment strate­gies the idea of con­tract­ing op­por­tu­ni­ties arose.”

While it was not manda­tory for min­ing com­pa­nies to award con­tracts to Indige­nous owned busi­nesses, com­pa­nies such as FMG, Rio Tinto and BHP were lead­ing the way.

FMG re­cently awarded more than $6 mil­lion in con­tracts to two WA Abo­rig­i­nal busi­nesses through its pi­o­neer­ing Bil­lion Op­por­tu­ni­ties pro­gram.

FMG chief fi­nan­cial of­fi­cer Ian Wells said the con­tracts showed the com­pany was com­mit­ted to sup­port­ing lo­cal busi­nesses in part of its pro­cure­ment process.

On 6 June, Rio Tinto en­tered into a part­ner­ship with Pil­bara busi­ness North West Al­liance (NWA) with a multi-mil­lion con­tract that will see the con­trac­tor un­der­take waste man­age­ment ser­vices across 16 of Rio’s mine sites.

Ms Ge­orge said it was a “known fact” that Indige­nous busi­nesses have gained their largest op­por­tu­ni­ties from the re­sources sec­tor.

“There is pol­icy in­cen­tive now and en­cour­age­ment like we have never seen be­fore – the foun­da­tional build­ing blocks have come out of the re­sources in­dus­try, which has ex­posed Indige­nous con­trac­tors to the com­mer­cial world,” she said.

“We didn’t have any of that be­fore the 1990s, it has re­ally been quite phe­nom­e­nal.”

WA Abo­rig­i­nal Af­fairs min­is­ter Ben Wy­att en­forced the State Abo­rig­i­nal Pro­cure­ment Pol­icy on 1 July this year, which aims to achieve three per cent of con­tracts awarded to Indige­nous owned busi­nesses by 2021.

“This pol­icy cre­ates the po­ten­tial for joint-ven­ture part­ner­ships be­tween Abo­rig­i­nal and non-Abo­rig­i­nal busi­nesses to cre­ate scale and en­able par­tic­i­pa­tion in some of the State’s larger con­tracts,” Mr Wy­att said.

Mr Wy­att said the gov­ern­ment had seen sev­eral suc­cess­ful Abo­rig­i­nal busi­nesses emerge on the back of the min­ing boom, with the sup­port of the sec­tor.

One such busi­ness was lead­ing WA Indige­nous con­trac­tor and win­ner of the 2018 Aus­tralian Mines and Met­als As­so­ci­a­tion (AMMA) Na­tional Indige­nous Em­ploy­ment and Re­ten­tion award, a joint ven­ture be­tween Nja­mal Ser­vices and Pil­bara Re­source Group (NPJV).

After ini­tially start­ing with only three em­ploy­ees, the com­pany had grown to more than 60, with $15 mil­lion in con­tracts un­der its belt in two years.

The busi­ness has also helped to es­tab­lish four other busi­nesses run by Tra­di­tional Owner fam­i­lies with the aim of each com­pany even­tu­ally be­ing a stand­alone busi­ness.

“We have gov­ern­ment poli­cies such as the WA Abo­rig­i­nal Pro­cure­ment Pol­icy which helps get­ting more Indige­nous com­pa­nies off the ground; they might get their first break through pro­vid­ing a ser­vice for the min­ing in­dus­try,” Ms Ge­orge said.

“But we also have re­gional poli­cies such as the WA Jobs Act where the pri­vate sec­tor has to re­lease a lo­cal par­tic­i­pa­tion plan in their ten­der re­sponses.”

How­ever, Mr Wy­att said while min­ing com­pa­nies had paved the way in en­gag­ing with Indige­nous busi­nesses, chal­lenges still ex­isted.

“One of the chal­lenges, both for gov­ern­ment and for in­dus­try when en­gag­ing Abo­rig­i­nal busi­nesses is to pro­vide ad­e­quate sup­port and guid­ance to nav­i­gate their way through com­pli­cated ten­der­ing pro­cesses,” he said.

“The McGowan Gov­ern­ment has also com­mit­ted to work­ing with Abo­rig­i­nal busi­nesses to as­sist them in in­creas­ing their ca­pac­ity and al­low­ing them to com­pete for large con­tracts, both with gov­ern­ment and the pri­vate sec­tor.”

Ms Ge­orge said con­tract­ing op­por­tu­ni­ties were writ­ten within the le­gal agree­ments min­ing com­pa­nies have with Indige­nous groups for land ac­cess agree­ments.

“There is an in­cen­tive there for op­por­tu­ni­ties to be pro­vided, but more im­por­tantly it has been demon­strated that Indige­nous con­trac­tors are more likely to em­ploy Abo­rig­i­nal peo­ple,” she said.

“It’s a win win-win sit­u­a­tion — there is a snow ball ef­fect in all of this.”


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