EAST ARNHEM REGIONAL ECONOMIC DEVELOPMENT COMMITTEE SUBMISSION TO: THE AUSTRALIAN SENATE’S JOINT SELECT COMMITTEE ON NORTHERN AUSTRALIA 21 MAY 2014 The East Arnhem Regional Economic Development Committee (REDC) welcomes the opportunity to input into the Joint Select Committee’s inquiry on Northern Australia development The REDC was formed as an advisory body in May 2013 under the Government’s Regional Economic Development Framework and includes members from key and non-Indigenous businesses and not-for-profit organisations operating across north east Arnhem. A full list of attendees is at Appendix A. East Arnhem: an untapped asset for Northern Australia development Covering a total of 33,425 square kilometres, the East Arnhem region spans the entire North Eastern corner of the NT mainland, excluding Groote Eylandt and Bickerton Island. It is arguably one of the last untouched regions of Australia, largely due to relative remoteness. The region is sits at the northwestern point of the Gulf of Carpentaria, and is bounded in the north by the Arafura sea. East Arnhem has a variety of geographical features including the pristine beaches, savannah woodland, monsoon forest, rocky escarpment and wetlands including the heritage listed Arafura swamp near Ramingining. The climate is tropical. In 2011, East Arnhem was home to around 16,000 people. At approximately 12,000 people, the majority of this population are Yolngu - the traditional owners of the region. Major Yolngu communities and homelands include Yirrkala, Gapuwiyak, Ramingining, Galiwink’u, Garrthalala, Baniyala and Gangan. The Yolngu of East Arnhem practice the longest continuous traditional culture in Australia. The township of serves as East Arnhem’s administrative and commercial service hub. Nhulunbuy was originally established in 1960s as a mining town, servicing the local bauxite mine and alumina plant. Since then, the township has expanded to service the entire region, with private retail, commercial and industrial operators and a growing private sector property market. The township and associated mining operations sit on Special Purpose Leases held by Rio Tinto Alcan and are maintained by the company as a condition of the mining lease. All land outside the Special Purpose Leases is held by the Aboriginal Land Trust, which is enacted under the Aboriginal Land Rights (Northern Territory) Act. To date, mining has contributed the bulk of wealth to the region in its recent history - $540 million in 2011-12. The entire region contributed around $1.3 billion or 7% to the NT Gross State Product. The other major industry is government administration. These two pillars presently support businesses in other key sectors including manufacturing, construction, tourism and retail. While the curtailment of the local alumina refinery will reduce the population of Nhulunbuy and gross regional product in the short to mid-term, the fundamentals for our region remain strong. The REDC has a shared, long term vision to build a more diversified regional economy that better engages the Yolngu labour market, provides new and expanded opportunities for businesses, and leverages the region’s considerable cultural, natural and mineral wealth and existing infrastructure base.

Nhulunbuy – a strong and well serviced regional hub After forty years as a mining town, Nhulunbuy and the surrounding region have a significant asset base from which to draw on for future development. The township of Nhulunbuy is maintained by Rio Tinto Alcan via the Nhulunbuy Corporation Ltd. We are presently well serviced by large commercial operators including Woolworths and Westpac and Australia Post. The town also hosts three schools and a hospital with medical, surgical, paediatric, respite and maternity services. We have two key retail areas with considerable space for businesses and government offices, an industrial centre, and a range of sporting and leisure facilities. Regional businesses, as well as Yolngu communities and homelands rely heavily on the township of Nhulunbuy for both social and commercial services including supermarkets, banking, healthcare, education, policing and housing. Yolngu leaders, including Galarrwuy Yunupingu and Wanyubi Marika, continue to emphasise the importance of a strong and well serviced township for the entire region. A new regional development corporation and fund is being established to facilitate industry development and attract new investors, jointly funded by the NT Government and Rio Tinto. Rio Tinto is directing 250 new houses to the corporation to assist in brokering new entrants and expanded activity. We have a natural coastal harbour at Melville Bay, with one of best equipped deep water ports on the northern coast of Australia. Its existing industrial and bulk goods handling capacity are a unique industrial asset in the heart of remote Northern Australia. Excluding Rio Tinto’s bulk terminal, wharf facilities include the general cargo terminal (depth 9m), the public wharf (depth 4.27m), and various boat ramps. As part of its transition plan for the alumina plant curtailment, the company has committed to opening up its general cargo terminal and other assets to multi- user access. The Gove port is therefore strategically positioned on the Gulf of Carpentaria and the Top End coast to expand its role as the front door to commercial fishing, and off shore oil and gas exploration and extraction across the Arnhem and Barkly regions. Comparatively, Bing Bong, Karumba and Wyndham ports are quite shallow and rely on the use of barges for bulk loading. Weipa is also fully occupied by bauxite exports.

The port’s capabilities are well matched by a well-functioning and comparatively large regional airport, capable of servicing both commercial and charter routes. A new terminal was completed in 2005. Together with the Gove Community Advisory Committee, the REDC is working with the NT Government and Rio Tinto to look at ways to sustain a sufficient population, services and skills base in Nhulunbuy so that it can continue to act as a strong regional hub. Successful early action will ensure that Nhulunbuy continues to act the foundation for emerging opportunities in industries including mines and energy, agriculture, tourism, forestry and fisheries. The region can be a strong contributor to the Northern Australia development agenda The REDC has identified a series of diversification opportunities for East Arnhem. These build on the considerable natural and built assets available within the region for expanded use by industry, governments and not-for-profits, and offer significant benefits for the regional and national economies. The majority of these opportunities have been projected by Deloitte’s Access Economics to grow at least 10 percent faster than global gross domestic product in coming years: gas; tourism; agribusiness; health and (international) education. Projects in some sectors, for example minerals and petroleum, may take some time to bear fruit. It will be important to prioritise action to seed development in these areas now, so that benefits can start accruing as soon as possible. In other areas, there are early wins to be made particularly through the further growth of micro-enterprise in Yolngu communities. Mines and energy As shown in the maps below, East Arnhem’s regional geology is considered to be highly prospective, extending into the northwestern part of the McArthur Basin. In addition to the Gove bauxite mine, the region contains significant manganese deposits (on the mainland and Groote Eylandt), as well as petroleum and base metals. However, the region’s relative isolation and the untested nature of suspected deposits mean that this sector has not yet reached its full potential. To date, exploration in the East Arnhem region has been largely focused on bauxite and manganese. Attracting exploration and investment in resources and extractive industries is one of our key priorities, with considerable benefits for regional jobs and revenue. STRATEGIC MINERAL AREAS KNOWN GAS POTENTIAL

Source: Department of Mines and Energy The majority East Arnhem continues to be the subject of various exploration licence applications, held in veto by traditional owners for a number of reasons. Nonetheless, there are recent examples where licences have been granted after considered Yolngu engagement by mining companies including BHP. There is a role for governments to play in assisting with geoscience research to provide adequate information to prospective miners, reducing costs to get to market through improved road infrastructure to the Gove port, and working with traditional owners to engage on those concerns that led to exploration licence vetoes in the first place.

Fisheries The REDC considers that the region is well placed to further expand fisheries activity, using increased access to Rio Tinto’s general cargo terminal and other port facilities for industry as the catalyst for growth. At present, there are only a number of small fishery and aquaculture operators based out of Melville Bay. The REDC notes the comments made by the National Seafood Industry Alliance (NSIA) in their March submission to this Inquiry on the great potential within Northern Australia for further development within both wild catch fisheries and aquaculture. Advice from the NT Seafood Council indicates that investment in upgrading the Gove port to facilitate more efficient access for unloading and re-supplying fishing operations will substantially increase activity in the Gulf of Carpentaria, with flow on revenue and job benefits for East Arnhem residents and businesses. Tourism The East Arnhem tourism industry was one of the early movers following the November curtailment announcement. A new regional marketing campaign has been launched and the Arnhem Land Tourism Association re-established. Considerable work has been undertaken by local operators to improve and better showcase their products and services, including eco-tourism and cultural tourism in the homelands.

While tourism will not be the panacea to the region’s current economic situation, with untouched natural and rugged beauty and Australia’s longest continuous traditional culture, the sector has the potential to grow significantly beyond its existing boundaries. Opportunities include new and expanded product and package development in eco-tourism, cultural tourism, sport fishing, art purchase and cultural education exports for markets including cruise ships, air touring, self-drive and visiting friends and relatives. Tourism services will also need to expand, including caravan parks, alternative accommodation and fuel stations. The historical barriers for this sector include the seasonal nature of top end tourism and access (including road condition and permit systems as well as air route reliability and cost). It is here that governments can play an integral role in facilitating further industry growth, with both Yolngu and Balanda businesses. Forestry, horticulture and agribusiness The region remains relatively underdeveloped in forestry, agribusiness and horticulture. There is a number of existing micro or small scale ventures including a cattle farm, banana plantation and market gardens, many operated in Yolngu communities by Yolngu businesses. Future horticultural and agricultural developments are likely to be local or small scale, servicing nearby communities and homelands to boost food security and economic participation. In niche and high value markets, there are also emerging opportunities to pursue larger scale operations (for example, in buffalo farming for Vietnam). The forestry sector could play a larger role in the regional economy into the future. There are emerging opportunities to regenerate the Rio Tinto mine site with high value timber, for example, and extend forestry operations onto Aboriginal land. There is a role for governments to play in undertaking pre-competitive soil and water testing to reduce risk for potential investors and assist in targeting appropriate sites across the region. As per the mines and energy sector, road infrastructure to the Gove Port would be required to reduce costs to market and induce new investment. As the majority of these opportunities will occur on Aboriginal land, governments must also assist Yolngu entrepreneurs to explore opportunities to engage their land for new ventures, including through sole and joint approaches. Education and training The township of Nhulunbuy presently provides education and training via two childcare centres and one preschool, three schools (including one private Christian College) and a regional training centre for adult education and short courses. A new Flinders University medical training centre has just been built next to the Gove District Hospital. The Gove Peninsula also operates as a base for homelands schooling. The quality of education at Nhulunbuy’s schools has been long recognised and can be built upon for the benefit of the wider regional population through the addition of a boarding facility for Yolngu students, as well as a new trade training centre for VET students. There are also a range of tertiary programs that already operate in East Arnhem to service the township and the wider Yolngu population. These can be expanded further to increase the number of participating students and graduates, for example in medical and allied health. Other opportunities include emergency services and mining centres of excellence, and an expansion of industry-based work readiness training for Yolngu in particular. Development will benefit the entire regional population The benefits of regional development will flow through to the entire East Arnhem population. Yolngu communities and homelands in East Arnhem rely heavily on the township of Nhulunbuy for both social and commercial services including supermarkets, banking, healthcare, education, policing and housing. Yolngu leaders continue to emphasise the importance of a strong and well serviced township for the entire region in terms of transport links, food security and employment. Our region has a long and proud history of trade and commerce, with interactions between Yolngu and Macassans (now Indonesians) tracing back centuries. But at present, too many Yolngu are jobless. We note the submission made by the East Arnhem Regional Council to this Joint Select Committee Inquiry, reporting that only 7% of the wider regional population earns a wage or salary. With 66% of this population of working age, there are around 6,000 to 7,000 individuals not in paid work. The clear alternative to spending $80 million in unemployment benefits or similar each year is to invest in industry development to help create new jobs for people in communities and homelands. A relatively moderate investment now will provide future generations of Yolngu with the opportunity to participate in the real economy, and the national economy will also reap the gains from unlocking the potential human capital and natural wealth of the region. The Australian Government has a role in facilitating private investment in the region

Our challenge now is to build on this to develop new opportunities and jobs by tackling the impediments typical of any remote and relatively undeveloped region. Specifically, the East Arnhem region requires Australian Government support to be targeted at enabling and accelerating new industry and diversification through: A. Improving land use information The Australian Government can assist the region in attracting private sector investment and improving opportunities for Yolngu to develop new ventures and jobs on their own land by supporting land owners and investors to identify key economic opportunities on Aboriginal land. To date, development has been constrained in part by the unavailability of localised pre-competitive data on mineral and gas deposits, as well as soil quality and water supply. Simply put, although there is a strong will from Yolngu to create businesses and engage in employment, there is a limited understanding of the specific industry opportunities that may exist in communities and surrounding homelands.

B. Infrastructure investment The Australian Government can assist in reducing development impediments and cost barriers for private sector engagement in key industries including mines and energy, fisheries and forestry through focused investment in strategic road and port upgrades. Our first priority is sealing the Central Arnhem Road, which will cost around $500 million or $50 million staged over ten years. This project would open up tourism, agricultural, forestry, pastoral and mining opportunities for remote communities, and increase export potential via the deep water port at Nhulunbuy. It would also reduce freight costs through increased competition, with related benefits in terms of the cost of basic goods and services for all regional communities. Finally, it would result in increased employment and training opportunities for the regional population, particularly if phased over several years. C. Facilitating land use The Australian Government can assist Yolngu land owners and communities to maximise the economic value of their land, as one of their key assets. This can be pursued under existing land tenure arrangements, with Yolngu land owners utilising their own lands or providing long term transferable interests to third parties to support private and public investment. The (NLC) has a key role to play in assisting Yolngu land owners to identify and pursue their economic needs and aspirations, including through the use of statutory funds and efficient land access processes. Priority should be given to a close examination of potential improvements to existing land access processes. This will benefit the many Yolngu already seeking to develop businesses on their own land, and increase employment and enterprise opportunities for others. Where Yolngu landowner aspirations are compatible with new and strategic opportunities, consideration should be given to fast-tracking negotiations and decision-making processes. This will address both the real and perceived risks to investment for investors looking to start-up sole and joint ventures across the region. The length of leases should also be extended where consistent with Traditional Owner goals. This will increase opportunities for Yolngu and other investors to raise capital through private equity, and reduce current reliance on government grants or philanthropic support. D. Yolngu labour market capabilities and participation The Australian Government can assist Yolngu to participate in the labour market and the real economy by: • providing support for individuals through practical and industry-based skills development and training, • assisting regional businesses to adapt appropriately to cultural requirements through flexible and innovative work practices, and • gearing the Australian Government’s Indigenous employment and training programs to remove existing disincentives to actively participate in the economy. This will benefit future Yolngu employees and employers, as well as other businesses operating in the region. Underpinning this will be continued efforts to achieve a higher level of educational outcomes for Yolngu to increase the choices and opportunities available to young people. There is urgency to our regional agenda The curtailment of the local alumina refinery will conclude in early August 2014 – eight months after the initial announcement. Notwithstanding the retention of Rio Tinto’s bauxite mining operations, the township will go from over 4,000 people in 2011, to just over 2,000 people at end December 2014. Unmitigated, the curtailment and associated population loss will have implications for the viability of town-based businesses and community clubs, the local property market, the availability of key trades and skills, and the number of school aged children in the township. For example, around half of the local businesses rely on the refinery for almost 60% of revenue. The transition may also impact the future service plans of major operators including airlines and supermarkets. All of this will have flow on impacts for the region’s 12,000-strong Yolngu population. Given the curtailment timeframe, we invite the Australian Government to consider opportunities pilot or trial new programs or incentives in the region that may be adopted as part of this Inquiry or the parallel White Paper process, including in the areas outlined above. We also note the potential for further growth in the Australian Government presence in the region, particularly through defence and customs. We believe that the availability of industry housing via the new development corporation and increased access to airport and port infrastructure warrants a further examination by relevant agencies and would be happy to facilitate this on request. Thank you once again for inviting our input into this important Inquiry.