The Indigenous Procurement Policy (IPP) needs additional reforms, all of which boil down to better oversight and public accountability, according to new research conducted by University of Queensland Lecturer Gaala Watson.
Published in the first edition of the International Journal of Indigenous Business, Watson’s research examines ‘black cladding’, which refers to the fraudulent or superficial inclusion of Indigenous people or entities in business structures, often designed to exploit economic benefits.
Pointing to the millions of dollars lost to businesses that misrepresent themselves as Indigenous, Watson argues that the Indigenous Procurement Policy needs stronger protections and penalties, including robust whistleblower protections and enforceable consequences to ensure real accountability.
She also examines the need for an independent investigative arm – staffed with cultural and commercial experts – to properly investigate fraudulent claims of Indigeneity, as well as a process for cross-checking claims through community-controlled bodies or cultural authorities.
“Black cladding doesn’t only divert contracts; it erodes the identity and values of Indigenous enterprise,” said Watson in an exclusive article for The Conversation.
“Many Indigenous enterprises don’t exist solely to maximise profit. They work to meet community needs and aspirations, guided by culture, shared responsibility and custodianship of Country.
“When systems reward Western commercial models over those grounded in culture, the distinctiveness of Indigenous enterprise is erased, and its social and cultural value is lost in the process.
“The solution is not to abandon the Federal Government’s procurement reforms, but we do need to transform those reforms, meaningfully, in genuine collaboration with Indigenous communities.”
Currently, the Federal Government is set to increase its Indigenous procurement target from July 1 this year, taking it from 2.5 percent to three percent of all contracts in 2025-2026, which will rise to four percent by 2030.
From this date, businesses will also be required to be at least 51 percent Indigenous-owned and controlled – up from the current 50 percent – or registered with the Federal Office of the Registrar of Indigenous Corporations.
The National Indigenous Australians Agency also plans to make it easier to report suspected black cladding.
Recent research has shown that half of all contracts over $10,000 were awarded to just 11 organisations during the first eight years of the IPP, while 18 businesses accounted for 50 percent of the total value of all contracts.
Canberra also stood out as a particular hotspot, accounting for more than 40 percent of the number and 30 percent of the value of contracts awarded.
Catch up on PASA’s exclusive interview with Supply Nation CEO Kate Russell to learn about her views on black cladding and the challenges that exist.
