Two of the more impressive Native Title agreements entered into nationally during 2005 took place in Western Australia, demonstrating the maturity of the Indigenous Land Use Agreement process.
Two of the more impressive Native Title agreements entered into nationally during 2005 took place in Western Australia, demonstrating the maturity of the Indigenous Land Use Agreement process.
Firstly, the ILUA entered into between Rio Tinto-subsidiary Argyle and the Mirriwung, Gidja, Wularr and Magnin people of the East Kimberley and, secondly, the Ord River agreement between the state government and the Mirriwung Gajerrong people.
While each agreement had its individual successes, it is the move towards an economic stake that each agreement contained that warrants the greatest attention.
Both the private and public sector have recognised that, to ensure the long-term involvement and support of local Indigenous groups, an element of ownership in the project is essential.
It is this economic stake that Indigenous people are taking up by use of the Native Title process that needs to be further developed. The only way that Indigenous Australians are going to move beyond the current status of poverty and marginalisation is to take up more equity in the economic activity of Australia.
This is where I hope to see the next five years take Indigenous business.
Ideally, there will be a dramatic rise in the number of Indigenous businesses operating across WA in next five years. Those involved in the ILUA process should consider a business outcome as the priority or, at the very least, the more sustainable method by which social outcomes can be achieved, maintained and increased.
Royalties have tended to operate simply as a form of private welfare, although much more destructive due to their short-term and unreliable nature. I would prefer to see equity taken up by local communities in the projects that take place on Indigenous land.
By providing Indigenous communities with a stake in whatever economic enterprises are being carried out there is incentive, ambition and aspiration to ensure the success of these enterprises.
The logical flow from the pursuit of such activities may well be an Indigenous-controlled diversified public company.
The success of Indigenous Business Australia (IBA), in effect, a Commonwealth statutory public equity company, is a strong indicator that such a concept can have significant success and that Indigenous businesses do not necessarily have to be focused on the resources sector.
IBA has had a number of large scale successes, with the prime examples being joint venturing with coal mining in Queensland and mine contracting with the creation of Ngarda Civil and Mining, which now employs more than 100 Indigenous employees in the Pilbara.
Beyond the mining sector, IBA has successfully partnered Indigenous groups with the private sector in commercial property projects, aquaculture and tourism to name a few.
Indeed, I am strongly of the view that Indigenous businesses need to diversify beyond resources and its related industries.
Both the state and federal governments have recognised that without a strategic economic stake there is no future for Indigenous peoples, no way to address the chronic poverty and its related problems.
Yet the systems in place actively discourage commercial activity. Considering the amount of land under Indigenous control, a much larger return on these assets needs to be demanded and created. Taking equity in the resources sector can, in part, deliver this. How else can we encourage the private sector in viewing Indigenous communities as business partners?
Perhaps a tax incentive akin to the flow-through share scheme for investors in Indigenous business or investors in joint venture arrangements with Indigenous organisations can be developed recognising the often commercially risky nature of such investments.
I see this as the commercialisation of Native Title. Native Title has not, as yet, been a success story and further consideration needs to be given to using Native Title as an instrument of commercial development to reduce the level of socio economic disadvantage experienced by Indigenous Australians.
More needs to be made of the Native Title system to obtain commercial benefits and the consequential social benefits that will come from such outcomes.
Indigenous Business Australia is actively pursuing many partnerships in Western Australia with public and private companies in all areas of the state.
I expect that, five years from now, these current negotiations will have given birth to many successful businesses. However, I want more than IBA chasing these projects. Private equity needs to follow the lead of IBA and perhaps be prepared to take a bigger risk than they would otherwise be willing to take, as IBA has found that with adequate support many of our riskier investments have provided the greatest returns.
Similarly, Indigenous groups need to develop greater commercial discipline and be prepared to play the strongest card we have, Native Title and land access, and to forgo a royalty stream for the chance to buy an equity stake in businesses. I expect this approach to take on greater prominence in the ILUA negotiation process.
As the state government moves to develop a state infrastructure strategy to ensure that WA’s infrastructure pressures over the next 10-20 years are addressed, the role of Indigenous groups needs to be considered.
Land access for the development of such infrastructure may pave the way for significant commercial opportunities for local Indigenous groups, whether by way of rentals or part-ownership of such infrastructure.
Such results are to the advantage of all Australians.
I would very much like to see more business partnerships between the private sector and Indigenous groups.
The private sector has, in the past, been nervous about entering into commercial arrangements with Indigenous organisations, often for very good reasons. The recent ILUAs, and IBA’s successes, show that such nervousness can be addressed to the commercial advantage of all partners.
• Ben Wyatt is a non-executive director of Indigenous Business Australia and a barrister and solicitor.