Indigenous funds a wealth prospect

Activist investors are nothing new to corporate Australia.

For example, the annual general meetings of Woodside Energy, Mineral Resources and Rio Tinto are regularly subjected to a few curly requests from those with more than profit on their mind.

Those companies and others operating in the resources industry face similar challenges navigating the issues of Indigenous consent and determination in Western Australia.

To date, it has mainly been those in the Pilbara who have benefited from large rivers of cash from miners as compensation for the scarring of their lands.

With $136 million worth of cash in the bank and $325 million in total assets as of June 2023, the General Gumala Foundation is the state’s largest Indigenous trust.

IBN Charitable Foundation held $212 million in assets at the end of the 2023 financial year. The Banjima Charitable Trust had $165 million, and the Noongar Boodja Trust $158 million.

Those amounts offer just a glimpse of the kind of wealth held in trusts for the benefit of Indigenous people in WA.

Now, questions are being asked about how best to use the vast sums of money piling up in these and other Aboriginal trust accounts.

For example, Gumala has enough cash on hand to get on the top 20 shareholder registers of Rio Tinto, Fortescue and Woodside.

It is a worthwhile prospect for Aboriginal trusts to consider, according to former Martu native title boss Tony McRae.

“The people in the West Pilbara, collectively, right now are sitting on and administering trusts holding more than $2 billion of investment funds,” Mr McRae said.

“If they all got themselves together, they could probably take control of BHP or Rio Tinto with a couple of billion dollars.

“They are not operating like that yet, but I can think that in ten, twenty, thirty or forty years’ time, Aboriginal people and those giant investment trusts will be starting to act in a cohesive way saying, ‘How are we going to make investments that reflect our values in our country?’.

“Aboriginal wealth funds – trusts – won’t be as big as Australia’s national superannuation funds, but the Pilbara is going to be a real hotspot.”

A minister in the Gallop government and later Aboriginal corporation executive, Mr McRae sat down with Business News in June on his last day at the helm of Jamukurnu Yapalikurnu Aboriginal Corporation, which oversees the Martu Charitable Trust and the $6.8 million it holds for the people of the Western Deserts.

Small cheese in comparison with its Pilbara neighbours, the Martu trust is an ambitious group, nonetheless.

Prior to JYAC, Mr McRae was chief executive at IBN Corporation, the $212 million trust that is paid royalties from BHP’s Mining Area C for the Banjima, Nyiyaparli and Yinhawangka people.

All three groups now have their own trust bodies set up with direct control and designed from the ground up by Aboriginal people.

“Aboriginal people are having to reimagine the body politic they operate within,” Mr McRae said.

“They have been subjugated by gun and Crown in the first 100 years or 200 years, and now native title rights are flipping that and creating an opportunity to rebuild a new ... body politic.

“Give it time, but Aboriginal people will redesign these things to suit themselves and in response to the Western law.”

Strata lessons

A key criticism of native title has been its role in removing the ability of individuals to generate private wealth, instead lumping its holders into a collective wealth agreement.

But there are lessons in existing Western systems, Mr McRae says.

Strata schemes – where the block is owned by an entity but individual apartments are owned privately – are a good example.

“You can own that flat inside, you can trade it and sell it,” Mr McRae said.

“So we already have in contemporary Western economic law a tool that Aboriginal people could probably manipulate and change a little bit and generate some private wealth and opportunity.

“I think that’s coming.”

Mr McRae said land, resources and inherited wealth were critical to grant Indigenous people the same opportunities enjoyed by other Australians.

So too is a more concerted effort from governments to give Aboriginal people the means to engage with their body politic.

“If you have been alienated and stuck on a mission for a couple of generations and not been able to participate in Western law, how are you then instantly going to become a genius business administrator of a corporation?,” Mr McRae said.

“They need the capacity and the skills to be able to engage in those decisions ... and discussions.

“With the Mabo decision and Native Title Act, it seems like Australia said, ‘Well, bugger off, you’ve got what you’re after now get on with it’.”

Land use

Martu have long flown under the radar on the Indigenous wealth and rights debate, but the remote people have been busy determining the future of their Ngurra. Some of that work has been purposeful, some has been opportunistic. A fleeting interest by Rio Tinto in 10,000 square kilometres of land for a potential wind and solar farm was noticed by the Martu people.

“It is not the first place you’d go, given the distance. It is maybe the second or third place,” Mr McRae said.

“It will be in five to ten years where that becomes a wind farm and a solar farm and it will generate electricity.

“And Martu, as a result of Hamersley Iron being a little bit sneaky, now know how and where all their hotspots are, and will be moving in the next year or so to make sure that they have got control of those spaces.”

That patch is just a fraction of Martu’s 150,000 square kilometre tract of desert country, which includes the Canning Stock Route, three communities in disrepair, and the heart: Karlamilyi National Park.

Martu are developing a land-use plan for their entire estate, which will in essence operate like a local government zoning document to determine what can be built and where.

“We have only just started that work in the last year,” Mr McRae said.

“Realistically it will take ten years or more to emerge … but it will be an extraordinary tool for land management, cultural management, environmental management, and economic development.

“Martu have to be like the local government authority, they have to act like a government for their own country.”

And on the topic of government, there are bouquets and brickbats for the Western powers that be.

The long road to have Karlamilyi – Martu Ngurra’s heart – returned to its traditional owners continues.

Mr McRae said the current state government had been good at coming to the party but frustratingly slow at getting the job done.

He said the defeat of The Voice referendum last year was the result of government pushing too hard and fast for such a big change.

“I think the referendum should have been on recognition first, voice later, and voice in another way,” Mr McRae said.

“It could have been done administratively and incrementally.

“I think Aboriginal people want to return to the Uluru Statement from the Heart, because if there was one thing young people could do it would be to read the [statement] and think about why those things are said.”