Anthony Mundine, former professional boxer and rugby league footballer, has spoken out in support of an Indigenous Procurement Policy (IPP) overhaul, as the federal government considers ways to prevent ‘black cladding’.
Speaking to the National Indigenous Times, the Bundjalung man – who is the majority owner of Indigenous building company MGM Australia – said black cladding is “happening everywhere”.
This reflects a recent report from the Independent Commission Against Corruption (ICAC) South Australia, which revealed submissions had been received alleging some suppliers are misrepresenting their Aboriginal identity to obtain an advantage in procurement.
According to Australia’s leading supplier diversity organisation Supply Nation, black cladding is defined as “the practice of a non-Indigenous business entity or individual taking unfair advantage of an Indigenous business entity or individual for the purpose of gaining access to otherwise inaccessible Indigenous procurement policies or contracts.”
Indigenous business consultant Katja Henaway of Blax Capital and Politics in Colour recently told SBS’s Living Black that she had witnessed the devastating impact of black cladding.
“I have seen black cladding tearing families apart, because of the stress that it puts on to the Indigenous business owner,” she said.
“It can be incredibly traumatising, not just for the business owner, but the people they care for and the people that they support through their business.”
Currently, three percent of all government contracts and 1.75 per cent of the total $75 billion annual spend must be awarded to businesses who are at least 50 percent Aboriginal or Torres Strait Islander owned.
Mundine is supporting the idea of tougher standards that will help to crack down on the exploitation of the IPP system, which is a stance that is also held by First Australians Chamber of Commerce and Industry Chair Deb Barwick.
In its current configuration, statutory declarations are accepted as proof of Aboriginality, but Barwick believes stronger confirmation is available, such as via a land council, medical service or the Registry of Births, Deaths and Marriages.
Mundine said that MGM Australia, which he runs in partnership with lifelong friend Gosh Daher, is among many genuine Indigenous companies who are missing out on government contracts due to black cladding.
“Practices such as black cladding severely dent the chances of our business, and thousands of other authentic Indigenous businesses that want to support First Nations employment,” he told the National Indigenous Times.
“We want to train brothers and sisters up, where they get their own licences…and then we want to see them at the roundtable, competing against us to win the tender.”
In December last year, the government announced that it had opened public consultations on how to strengthen the IPP, which it closed on 1 March 2024.
It vowed to listen and learn from various stakeholder groups, including Indigenous business and non-Indigenous business, Indigenous Chambers of Commerce, business hubs, academics and various levels of government.
“The Albanese Government‘s priority is to ensure that the opportunities and benefits provided through the IPP are genuinely flowing to First Nations businesses as intended,” said Malarndirri McCarthy, the Minister for Indigenous Australians, in an official statement.
“Reviewing the eligibility criteria to access procurement opportunities under the IPP is the first step.”
The consultation sought to gather perspectives around several priority reform areas, including a proposed shift to change the definition from a minimum of 50 percent ownership to 51 percent ownership, management and control.
“Consideration is also being put into the issue and perception of ‘black cladding’ – when a business unfairly uses policies not intended for them, like the IPP, to access markets,” said McCarthy.
Supply Nation welcomed the proposed changes and said the potential new definition would help to combat the practice of black cladding.
Chief Executive Officer, Kate Russell, said she was very pleased the government had listened to Supply Nation’s concerns and is considering a “much-needed reform”.
“One percent is a small number but can make a big difference. Including standards of management and control will only strengthen the Indigenous economy and increase confidence in Indigenous business,” she said.
“This change would be very welcome because black cladding robs genuine Indigenous businesses of opportunities and damages the reputation of the vast majority of our businesses that are doing the right thing.”
Since it was launched in 2015, the IPP has awarded over 64,000 contracts worth more than $9.5 billion to more than 3,900 Indigenous businesses.
