ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT PREPARED FOR WESTPAC NOVEMBER 2014 ACKNOWLEDGEMENT OF URBIS STAFF RESPONSIBLE COUNTRY AND TRADITIONAL FOR THIS REPORT WERE: OWNERS Project Director Linda Kurti Westpac Group acknowledges the Traditional Owners Principal Author Sara Hudson as the Custodians of Australia, recognising their connection to land, waters and community. We pay Contributing Author Ryan McKenzie our respects to Australia’s First Peoples, and to their Advisors Princess Ventura and Karen Milward Elders, past, present and future. WESTPAC GROUP STAFF VISIT OUR ONLINE ‘LIVING’ INVOLVED IN THE DEVELOPMENT RECONCILIATION ACTION PLAN OF THIS REPORT WERE: Stories and content related to our Reconciliation Action Plan can be found Brian Hartzer online at www.westpac.com.au/westpacweave Ainslie Van Onselen FEEDBACK Carolyn McCann We welcome feedback on our Enabling Prosperity Siobhan Toohill report. Please email us at [email protected] Jade Clarke If you’re on Twitter, please join the conversation using @WestpacSustain #westpacweave Felicity Duffy Brett Gale ABOUT WESTPAC GROUP Founded in 1817, Westpac Group was Australia’s first bank and has contributed to the prosperity of Australia over the course of almost two centuries. Snapshot • Provides banking services, wealth management, wealth administration and insurance services • Around 36,000 employees • More than 12 million customers across Australia, New Zealand and the Asia Pacifc region • Around 580,000 shareholders • One of the top five listed companies on the ASX by market capitalisation • Recognised as one of the world’s most sustainable companies.

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You must read the important disclaimer appearing within the body of this report. 1 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT ENABLING PROSPERITY

A vibrant economy is fundamental to the sustainability of any community. By providing jobs and investment returns – from both business and home ownership – a strong private sector economy helps give people the opportunities they need to create the life they deserve.

And yet in Indigenous affairs, the The result is Enabling Prosperity, which focus on developing solutions to identifes a number of critical success important social issues has seldom been factors that need to be in place to create complemented by a similar emphasis on a vibrant local economy in Indigenous how successful businesses are enabled areas. While some of these factors—like in Indigenous communities. the importance of education, access to capital and markets, and sound The good news is that, right across infrastructure are self-evident, there are Australia, hundreds of Indigenous also valuable insights about the role of enterprises are emerging to create land and title reform, leadership capacity, opportunities for local people. Indeed, and cultural links. These will no doubt Australia’s top 500 Aboriginal and Torres provide policy makers and Indigenous Strait Islander corporations generated communities alike with important a combined income of $1.71B in 2012- considerations as they look to empower 2013—a 6.2% increase on the year before. their communities. And the impact of the resources boom and land reform means that Indigenous As Australia’s First Bank—and oldest Australia is in an unprecedented position company—Westpac feels a particular to build its economic base. obligation to help empower Australia’s First People. I’d like to thank the Urbis But there’s a long way to go to make team for their help in conducting this that good news great. important study, and commend it to Encouraged by the fresh thinking the attention of all who seek a brighter being generated by the Empowered future for Indigenous communities. Communities Steering Committee, we With best wishes, at Westpac saw an opportunity to build economic sustainability into the program’s agenda. With that in mind, we Brian Hartzer commissioned Urbis to study the factors Chief Executive that support economic development Australian Financial Services and entrepreneurship in Indigenous Westpac Group communities across Australia, New Zealand, the United States, and Canada. 2 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT CONTENTS

Key terms used in report 3 Executive Summary 4 Summary of case studies 10 Introduction 12 2 A framework for regional economic development 14 2.1 Factors in economic development 15 2.2 Summary 16 3 Enabling Indigenous prosperity 18 3.1 What does success look like? 20 3.2 Factors that enable economic success 23 3.3 Case studies 25 3.4 Summary 31 4 An authorising environment 32 4.1 Policies and programs 32 4.2 Mentorship and business incubators 34 4.3 Tax incentives 34 4.4 A nation building approach 35 4.5 Governance 36 4.6 Summary 36 5 Human capital and social infrastructure 38 5.1 Human capital 38 5.2 Social infrastructure 39 5.3 Education and skills development 39 5.4 Indigenous leadership 40 5.5 The place of culture in business 41 5.6 Winning attitude 41 5.7 Strong networks and partnerships 42 5.8 Summary 43 6 Access to infrastructure, capital and markets 44 6.1 Location 44 6.2 Land ownership – creating a useable land base 45 6.3 Ownership of resources 46 6.4 Access to capital 47 6.5 Access to markets 49 6.6 Infrastructure 49 6.7 Summary 50 7 Conclusion 52 7.1 Creating the conditions for success 52 7.2 Key drivers of change 52 7.3 Creating the climate for business 56 7.4 Conclusion 57 References 59 Disclaimer 63 Appendix A Data on Indigenous entrepreneurs by Indigenous region 64

FIGURES Figure 1 The three spheres of economic development and contributing factors 6 Figure 2 Top 500 Aboriginal and Torres Strait Islander corporations in Australia 19 Figure 3 Indigenous entrepreneurs by Indigenous region 20 Figure 4 Factors affecting enterprise development and degree of personal control 24 Figure 5 The ‘nation-building’ approach in an Indigenous community context 36 Figure 6 A virtuous cycle of economic development 55 Figure 7 Factors and models of economic development 56

TABLES Table 1 Drivers of economic development 17 Table 2 Factors that contribute to Indigenous business success 23 Table 3 Drivers of Indigenous economic development 54 3 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT KEY TERMS USED IN REPORT

TERM DEFINITION

Access to capital The ability to access cash to generate income.

Access to markets The ability to market and sell goods and services in a given market.

Agglomeration The economic efficiency gains from the spatial concentration of economic activity.

Community governance The evolving processes, relationships, institutions and structures by which a group of people, community or society organise themselves collectively to negotiate their rights and interests.

Corporate governance The processes whereby decisions important to the future of an organisation are taken, communicated, monitored and assessed.

Entrepreneur Individual owner of a commercial business that is run for a proft.

Human capital The knowledge, expertise and abilities of local workers.

Infrastructure Physical facilities such as transport (mass and road), water, sewerage and communication lines.

Institutions Organisational rules and routines, formal laws, and informal norms.

Nation building The process of constructing or structuring a national identity using the power of the state, with the aim of unifying people within the state so that it remains politically stable and viable in the long run.

Social enterprise An organisation driven by a public or community cause (eg social, environmental, cultural or economic) that derives most of its income from trade and uses the majority of its profts to work towards its social mission.

Social infrastructure Assets that accommodate social services; examples of social infrastructure assets include schools, universities, hospitals, prisons and community housing. 4 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT EXECUTIVE SUMMARY

The last twenty years have seen Indigenous Australians play an increasing part in Australia’s economy through education, employment and enterprise.

The number of Indigenous university What factors lead to successful A literature review was undertaken graduates in Australia has risen to more economic development and job utilising a cross-jurisdictional analysis of than 25,000. Based on the steady creation in Indigenous communities? four countries: Australia, New Zealand, growth in enrolments and completions, Canada and the United States. These these numbers are projected to swell to Recognising that remote locations face jurisdictions were chosen due to the more than 50,000 by 2020 and more unique challenges, and that metropolitan presence of Indigenous populations than 100,000 by 2050. locations have enhanced opportunities within a dominant non-Indigenous and networks, this research primarily society and their common historical A growing number of Indigenous focussed on economic development experience of British colonisation and Australians are now thriving in in rural and regional areas, interpreting displacement from traditional lands. business and other sectors. In 2011, that broadly to accommodate different 12,500 Indigenous individuals were defnitions of rural and regional used in This report has taken a success- self-employed in a range of industries the four countries under discussion. orientated approach and, as a including agriculture, arts and tourism, result, has not focussed in detail hospitality and professional services, Many defnitions of economic on the barriers facing Indigenous compared with only 4,600 in 1991. development exist; however, the term economic development. generally describes sustained and Indigenous Australians own or control concerted actions to improve the To develop a framework for successful approximately 20 per cent of land in standard of living and economic health Indigenous economic development, the Australia and the resources associated of a locality to an acceptable level. following three areas were examined: with that land, including access to Generally in Australia a community minerals, water and biodiversity. is considered to have an acceptable • drivers of regional economic The combined income of the top level of well-being when they meet development in any context 500 Aboriginal and Torres Strait certain social norms. The Empowered • factors that may be unique to the Islander corporations for 2012 to 2013 Communities project has defned these Indigenous approach to economic was almost $1.71 billion. An estimated norms as: children attending school development (for example, a strong $40 billion is also held by 6,000 and being safe and cared for; capable emphasis on enterprises that provide Indigenous organisations in trusts. adults participating in either training or economic and social returns to work; people abiding by tenancy laws communities on Indigenous land) This is a promising story of increasing and maintaining their homes; and the economic security and success. • factors required for successful creation of safer communities (with Indigenous enterprise (for the purposes However, further opportunities remain people not committing violent and to be realised. of this report, an Indigenous-owned alcohol and drug related offences). business is defned as one that has Westpac commissioned Urbis to 51 per cent or more of the share capital undertake research to understand the owned by Indigenous people). key drivers of economic development The economic literature provides for Indigenous Australians. The aim clear evidence of fve factors which of the research was to provide an support economic development in evidence-base analysis of factors that Indigenous communities and individual support entrepreneurship and economic Indigenous entrepreneurship. development, building on Australian and international literature and research. The overarching research question was: 5 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

SOUNDS OF SILENCE – ENTERED INTO THE AUSTRALIAN TOURISM HALL OF FAME. SOURCE: VOYAGES INDIGENOUS TOURISM 2014

These are: These factors are interconnected and Assets and increased 1. An authorising environment which do not necessarily ft neatly into discrete includes: categories. For example, access to wealth alone are not - governance and institutions which capital often relies on human capital are culturally legitimate and sound and the development of successful enough to create - government policy and regulation partnerships, while ownership of land sustainable outcomes. which facilitates development and resources requires human capital and leadership to realise its potential. In Knowledge, skills and 2. Human capital including leadership practice, Indigenous-owned businesses leadership are also and social infrastructure (in the succeed because of more than one Indigenous context the role of culture factor; there is also a synergistic effect needed. as a resource is particularly important) of different factors working together. 3. Access to capital and markets (the Assets and increased wealth alone literature suggests that Indigenous are not enough to create sustainable people face more signifcant barriers outcomes. Knowledge, skills and than others in gaining access to loans leadership are also needed. and other fnancial assets) The diagram (overleaf) illustrates 4. Infrastructure the relationship between Indigenous enterprises, community development 5. Geography and agglomeration (this and regional economic development. includes the location and resources Individual and social enterprises are available to a community to enable supported by community development economic development). initiatives and regional economic conditions. However, individual businesses and social enterprises also help to improve the social and economic conditions of communities and contribute to the economic development of regions. These three spheres are influenced by the fve factors discussed above, which help to create an enabling climate for business and economic development. 6 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

The literature suggests that Indigenous economic Regional Economic development initiatives Development are more successful when led by, or involving, Government Government policy and institutions Indigenous communities.

The success of Indigenous-led economic An authorising development appears to be due to environment Indigenous decision makers having better insight into the challenges unique Human capital Infrastructure to a particular community and location. Greater responsibility for decision Community making also means they are more Development likely to experience the consequence of decisions (thereby enhancing accountability). Examples from the four countries, Access to discussed in this report, demonstrate Geography and that Indigenous communities are most capital and successful when they are provided with markets agglomeration Individual an opportunity for real empowerment, and social including management of resources enterprises and designing their own policies and institutions. There are also opportunities for the FIGURE 1 – THE THREE SPHERES government to contribute to Indigenous OF ECONOMIC DEVELOPMENT business success by examining the AND CONTRIBUTING FACTORS regulatory environment and the extent to which it is either enabling or disabling Indigenous business efforts.

An authorising environment The ‘nation building’ approach outlined Human capital Economic progress in communities in Canada, the US, and New Zealand appears to have provided a greater Any economic investment in Indigenous is contingent on social stability and communities, including infrastructure, legitimate and effective governance authorising environment for self- determination and entrepreneurialism will have limited impact without a structures, including: the maintenance concurrent investment in human capital. of law and order; a clear and transparent than the policy environment of the past decades in Australia. In this Human capital embodies the range judicial system and accountability of capabilities that people possess, to a local constituency. context, ‘nation’ refers to a particular Indigenous tribe or community. A level such as their leadership abilities, their Although the governance arrangements of political sovereignty and control attitude and their ‘cultural capital’. of successful communities vary over local decision making is required Social infrastructure, including education immensely they all have one thing to allow communities to strengthen services and social norms, contribute in common: cultural legitimacy unifcation, including a shared identity, to the capabilities of individuals and in the eyes of the community. common understanding of issues their ability to make the most of their Furthermore, in Canada, the United and establishment of long-term opportunities. Without the necessary States and New Zealand, community goals and objectives. human capital, the benefts of land leaders have recognised that good ownership and access to resources governance and management The literature suggests that Indigenous may not be able to be realised. requires a separation between economic development initiatives are more successful when led by, or Regional areas tend to have lower community politics and business. human capital than more metropolitan One key mechanism for this is the involving, Indigenous communities. Government is most helpful by providing areas, which is a barrier to attracting establishment of an independent board investment and new business. of directors. Another is independent a policy environment that engages Indigenous communities in the policy Improving access to education is dispute resolution processes for essential. In addition, businesses can resolving conflicts. process and enables locally-driven responses to regional challenges. play an increased role in mentoring, training and creating leadership pathways for Indigenous staff. All these elements are crucial in creating a labour force for Indigenous businesses to grow and be self-sustaining. 7 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

Where individuals or communities lack For example, the Gumatj Clan the capabilities themselves, partnerships Corporation in East Arnhem Land and knowledge sharing can play a has integrated clan structure and law valuable role in providing the necessary into the operational practices of their human capital to drive economic executive council to enable participation development. The meat processing in meetings by family Elders. This company, Fletcher International Exports has facilitated broad community (Fletcher), demonstrates the importance support for the pursuit of economic of partnerships between business and development opportunities, including communities to create the conditions timber, construction, housing and cattle required for Indigenous economic station businesses. development. For example, Fletcher supported Merriman Station which took The case studies in this report illustrate in its frst intake of Indigenous trainees that many Indigenous Australians are in 2009. Currently Fletcher has over establishing businesses that are both 300 Indigenous employees. ‘commercially viable and culturally affirming’. Culture is therefore not a Capabilities are also related to barrier to economic development, individuals’ attitudes and their approach but rather one of the keys to its success. to challenges. Across the literature INDIGENOUS DANCE AT THE 2005 certain characteristics of a ‘winning Indigenous economic development, as a particular model of economic WALKING WITH SPIRITS FESTIVAL ON attitude’ are identifed as important to JAWOYN LAND. SOURCE: PETER EVE 2008 the success of Indigenous businesses. development, has additional social, communal and cultural objectives. Strong leaders have played an important For example, Booderee National Park role in providing Indigenous business is jointly-managed by the Wreck Bay The creation of with a clear vision that aligns community Aboriginal Community Council. The needs with the market. Local leaders council has established a commercial successful Indigenous are uniquely placed to identify the entity which is delivering on long term businesses can create a community’s strengths and weaknesses, plans for conservation goals and benefts as well as educate and guide the for the community, including training ‘virtuous cycle’ that in community stakeholders towards longer and employment initiatives. term, broader economic aims. The itself can foster further importance of good leadership based on The creation of successful Indigenous economic development strong, culturally legitimate relationships businesses, particularly where a can therefore not be underestimated. critical mass of an educated and and wealth creation. capable workforce is located, can A strong cultural identity is often the create a ‘virtuous cycle’ that in motivation for Indigenous communities itself can foster further economic to explore and invest in business development and wealth creation. For opportunities. Culture can provide a example, Indigenous businesses can social infrastructure which acts as a play an important role in increasing foundation to drive business growth, human capital by providing training provide employment, and leverage and employment opportunities community strengths to meet family (particularly as they employ a high and community needs. It can also proportion of Indigenous employees). provide a number of different business This in turn has a multiplier effect, opportunities, particularly in the arts leading to a greater culture of and tourism, such as music and dance, employment and social contribution, visual arts and craft. Culture is an and an environment which can support important asset; both as a personal further innovation and new opportunity. support structure and as an artistic and knowledge asset that can be A thriving Indigenous business sector leveraged commercially. can also lead to reduced reliance on external sources of funding, including Often the success of an Indigenous government funding. For example, business is not only defned by the proft the top fve Indigenous corporations gained from the business, but also by its received 83% of their revenue from ability to preserve or affirm the culture self generated income. of the community, clan or family group. There are many examples of successful Indigenous organisations that have embedded cultural values into the values and governance structures underpinning their business. 8 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

Access to markets and capital Geography, agglomeration The economic literature In addition to trade liberalisation, and infrastructure also provides evidence providing physical access to markets is Geography has an impact on regional an important driver of poverty reduction development. Although Indigenous of the synergistic effects in agricultural communities. Australians own or control approximately of agglomeration in Networks between Indigenous 20 per cent of land in Australia and the and non-Indigenous businesses resources associated with that land, creating the critical and business support agencies will the vast majority of the land is located mass necessary for continue to be important to Indigenous in remote and regional areas. The entrepreneurialism. A key example isolation and fragmentation of remote sustainable development. is Supply Nation, Australia’s minority and regional areas mean there is less business supplier development council. opportunity to diversify income and occupation, a smaller number of people Partnerships can facilitate access to with business and professional skills, and new markets and diversifcation within fewer opportunities to access education a business through an increase in an and training. enterprise’s available resources, and help to foster cross-cultural understanding. However, the literature indicates that with the appropriate legislative Access to capital is a particular challenge environment and support it is possible for Indigenous people, given that many to establish successful Indigenous Indigenous people are unable to use corporations in regional areas, and for their land as collateral. The market- these corporations to become fully leading success of Indigenous businesses or nearly self-funding. The economic such as NANA in the US and Aotearoa literature also provides examples of the Fisheries in New Zealand demonstrates synergistic effects of agglomeration the importance of land and asset in creating the critical mass necessary ownership and an appropriate land titling for sustainable development. system, in combination with strong governance, leadership and fnancial International examples suggest that the management skills. Australian government and business community could do more to facilitate For businesses that do not satisfy regional investment and to counteract mainstream lending criteria there the challenges posed by distance such are other forms of support that as the greater cost of doing business exist, for example, loans and support and the lack of infrastructure compared available from Indigenous Business to metropolitan areas. For Indigenous Australia and Westpac micro-fnance businesses to grow in regional Australia loans available from Many Rivers in there needs to be continual investment partnership with Westpac. in transport, information technology, infrastructure, and education to develop New ways of introducing Indigenous and attract the requisite labour force. entrepreneurs to investors is also key to growing the Indigenous business sector. Other solutions to overcome the The development of the Indigenous challenges posed by remoteness and Stock Exchange is an example of an distance to markets are tax exemptions innovative approach to increase access on Indigenous land, such as those that to capital for Indigenous entrepreneurs. exist in the United States and Canada. The development of business partnerships between Aboriginal Developing land-use plans can help to social enterprises and non-Indigenous identify the strengths of locations. One investors is also essential, as ownership of the factors critical to the success of of land and resources often requires Whitecap Dakota First Nation in Canada capital to realise its potential. was hiring a professional land planner to do a land-use plan to identify the best use of the land on the reserve. Conclusion However, the international literature There is a synergistic suggests that community or social There is a synergistic effect arising enterprises can play a signifcant role from combining the success factors effect arising from in improving the social and economic identifed in this report. Internally, conditions of communities. combining the success Indigenous business success can be achieved by having effective institutions In addition to employment, successful factors identified in of governance and management community enterprises also bring this report. (both corporate and community) and business investment interest into sufficient community capacity (human their community by networking and capital). Where human capital is actively seeking partnerships. They lacking, hiring outside staff or providing also support small business owners in education, training and mentoring the community, with preferred supplier programs to enable knowledge transfer relationships, and by mentoring and can assist. providing fnancial assistance. Externally, there are opportunities Businesses are the key driver for for the government to contribute wealth creation, helping to provide to Indigenous business success by job opportunities and improve the examining the regulatory environment social and economic conditions of and the extent to which it is either communities. The question facing enabling or disabling Indigenous Indigenous leaders and policy makers business efforts. is how to ensure more Indigenous Australians are able to participate Current government policy frameworks, in Australia’s economy. Initiatives such as the Indigenous Economic that strengthen both individual and Development Strategy, are largely community business initiatives will, over focused on the importance of time, ensure that all the building blocks education and training and generating are in place for sustainable economic opportunities for private sector development and wealth creation for employment and enterprise. all Indigenous Australians.

JUNIOR RANGERS WITH RANGER BERNIE MCCLOUD. SOURCE: RENEE NOWYTARGER 2006 10 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT SUMMARY OF CASE STUDIES

Six case studies were chosen to illustrate the range of factors that contribute to individual and community business success as well as the different ways in which Indigenous individuals and communities are creating new and innovative ways of doing business. These case studies are provided in detail in chapter 3 and summarised below.

Yaru Water: Indigenous-owned Outback Global: Indigenous- Fletcher International Exports: business and Indigenous/ owned business and Australian non-Indigenous non‑Indigenous partnership international partnership business having a positive Yaru Water is an Australian Indigenous- Outback Global Australia is an Australian impact on Indigenous owned business producing bottled Indigenous business specialising in communities water from an aquifer at the base of uniforms, work wear, personal protective Roger Fletcher is a self-made success Mount Warning, in the Tweed Heads- equipment, safety boots, apparel, story who has moved from droving Byron Bay hinterland of north-eastern luggage and promotional products. sheep to become the owner of one NSW. Yaru Water was established in Jasmin Herro and her husband Slay of Australia’s largest meat processing 2011 as a partnership between Shaun launched Outback Global (originally companies, Fletcher International Martin, his wife Tessa (owners of Mount known as Outback Apparel) in 2009. Exports. The company operates two Warning Spring Water Company) and Since then the company has grown to meat processing facilities, one located local Indigenous men Kyle and Josh become a global company, with offices in Dubbo, New South Wales, and the Slabb. Factors critical to the success in Shanghai and Denver, Colorado, in other near Albany in Western Australia. of Yaru Water are the fact that the addition to their Sydney office. Critical He also supported Merriman Station, local Indigenous community has a to the success of Outback Global was a sheep station in North West New majority share in the business and the the opportunity for Shay and Jasmin South Wales that was a venue for an partnership between the Martins and to access capital through a Fast Track innovative shearing school to train young the Slabbs. The partnership has been Loan from Indigenous Business Australia Indigenous people in the wool industry. mutually benefcial, not only increasing and the Australian Indigenous Minority The company now supports a program the percentage of sales under the Yaru Supplier Council (now known as Supply to provide students with traineeships Water label, but also strengthening the Nation), which provided Slay and and jobs. Fundamental to Roger’s local Indigenous community through Jasmin with the fnance to expand their success is his winning attitude and his Indigenous leadership programs. As business. Partnerships and networking focus on developing human capital. an Indigenous owned company, Yaru opportunities also helped to grow the As a result of his entrepreneurial vision, Water is eligible to be a member of business. Outback Global is the frst local Indigenous people have access to Supply Nation, which has helped them joint venture between an Australian vocational training and employment in secure signifcant distribution deals Indigenous business and a USA minority the meat and wool industries. Hundreds and provided them with networking business. In 2013 Outback Global of people have had employment opportunities. obtained minority business certifcation opportunities that would not otherwise in the USA which enables the company have been available to them. to access USA government contracts. Outback Global was the winner of the Supply Nation ‘Supplier of the Year’ and ‘Supplier to Supplier of the Year’ awards for 2013. 11 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

Booderee National Park: NANA Regional Corporation Osoyoos Indian Band Australian Indigenous (Alaska): International Development Corporation community-owned Indigenous community-owned (Canada): International natural resource social enterprise Indigenous community-owned Booderee National Park is located NANA is a shareholder-managed corporation on Bherwerre Peninsula in Jervis corporation that is guided by a Board The Osoyoos band from the Okanagan Bay Territory on the coast of south- of Directors, composed of Iñupiat Valley have built a thriving economy, eastern Australia, about 150km south shareholders, and a senior management based not on what the Chief terms of Sydney. The Park is owned by the team. Most of NANA’s approximately ‘rocking chair money’ from natural Wreck Bay Aboriginal Community 12,000 shareholders are Alaska Natives resources, but on a series of agriculture, Council and jointly managed by the of Iñupiat descent. As an Alaska Native eco-tourism, commercial, industrial, and Council and Parks Australia. Located Land Claims Settlement Act (ANCSA) residential businesses, including Nk’Mip within the Park is Booderee Botanic corporation, NANA has no publicly Cellars, the frst aboriginal-owned Gardens, Australia’s only Aboriginal- traded stock and its shares cannot winery in North America. The area owned botanic garden. Involving the legally be sold, though some stocks attracts about 400,000 visitors per Wreck Bay Aboriginal Community in can be inherited or gifted. NANA year, and at peak tourist season, there is caring for Booderee has assisted the Australia Pty Ltd is the wholly-owned essentially full employment among the community in determining long-term subsidiary of≈NANA Development more than 470 members of the Osoyoos conservation goals and benefts for the Corporation. Critical to NANA’s success reserve. The Osoyoos Indigenous Band community and the park. Key success is the ownership of land and resources; Development Corporation’s mission is to factors for the Wreck Bay Aboriginal however NANA has also used its assets achieve self-reliance through economic community were the establishment of to develop human capital. NANA development and to preserve their frst clear governance and management Australia partners with Australian nation culture through the creation of structures and the development traditional owner groups and Aboriginal jobs on their lands for future generations. of human capital. The community companies to share lessons learnt The Chief of the Osoyoos Band terms has established a commercial entity from 40 years of business experience. this approach ‘community capitalism’. to deliver service contracts and to NANA offers an internship program to The Osoyoos Indian Band reserve has increase the Indigenous participation its shareholders to provide them with the distinction of owning the most and employment in park management. on-the-job training, experience and businesses per capita of any frst nation A range of training initiatives also skills. This training offers students career in Canada, so many businesses in fact provide training opportunities to local insights, exposure to the workplace that it has imported workers from 35 Indigenous people and the extensive and networking opportunities. less-affluent bands. Nk’Mip Cellars Indigenous knowledge of natural NANA’s mentoring program also pairs has won awards as the top winery in resources around the Jervis Bay area shareholder employees with mentors British Columbia and proceeds from continues to grow with the Wreck Bay who are managers in professional the winery go towards helping the people using the bush as a natural felds and extends to developing reserve’s desert ecosystem. Recently the classroom for young people. ‘teaming’ relationships with Australian Osoyoos Indian Band was successful in Indigenous corporations. securing a contract to build a maximum security jail, which will bring in 240 full- time permanent jobs for families in the Okanagan region. Key to the success of the Osoyoos Indian Band Development Corporation is the leadership provided by the Chief and the decision to enact tax jurisdictions over reserve lands which enabled the community to borrow capital for infrastructure and social and economic development. Clear governance structures and partnerships have also assisted the community to grow their businesses and to provide social and employment opportunities for community members. 12 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT INTRODUCTION

CHAPTER 1.

Enabling Indigenous prosperity has been a key priority of Australian governments over the last decade, with bipartisan support at both the Federal and the state/territory levels. National investments across governments to close the gap in a range of health and well‑being indicators have also focused attention not just on job creation but on Indigenous participation in influencing and shaping the Australian economic and business environments.

Westpac commissioned Urbis to undertake There is extensive literature on the economic research to explore the key drivers of economic development experiences of Indigenous peoples development for Indigenous Australians. in other parts of the world, for instance Africa, The aim of the research was to provide an Asia, and Latin America. However, this research evidence-based analysis of factors that support has focused on the literature of four countries, entrepreneurship and economic development, Australia, New Zealand, Canada, and the United building on Australian and international literature States. In general we felt that the experience of and research. Indigenous peoples in these four countries was most relevant to the topic at hand, given the The overarching research question was: similar history of British colonisation. What factors lead to successful economic As requested in the original brief, we have given development and job creation in more consideration to Indigenous enterprise Indigenous communities? in regional and rural geographic areas rather Additional sub-questions included: than either remote or urban areas, although we have included some examples from remote • What conditions and institutional elements locations where we felt there were lessons to facilitate success in Indigenous economic be learned. We have interpreted that broadly development? (For example, special economic to accommodate different defnitions of zones, proximity to infrastructure, availability of rural and regional used in the four countries social services, local cultural institutions, access under discussion. In addition, while prioritising to education and training etc.) Indigenous-owned enterprises, we have also • What are some examples of successful considered non-Indigenous Australian enterprises Australian regional, rural and remote Indigenous that demonstrate a commitment to provide and non-Indigenous enterprises? a range of economic and social benefts to • What types of initiatives have contributed Indigenous individuals and communities. to improved social outcomes? We began with a brief exploration of the general • What can be learned from the international economic literature to provide a context for literature regarding best practice in Indigenous discussing regional and Indigenous specifc business development and employment? economic development. From there we • How can these best practice examples be focused our analysis on Indigenous economic applied in the Australian context? development more specifcally, including Indigenous business development. 13 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

The research highlighted that there • Indigenous Business Australia – For the purposes are two distinct forms of Indigenous http://www.iba.gov.au businesses, social enterprises and • Office of the Registrar of of this report, an Indigenous entrepreneurialism. In Indigenous Corporations (ORIC) – Indigenous-owned this research, the term Indigenous http://www.oric.gov.au entrepreneurialism (or entrepreneur) business is defined has been used to refer to Indigenous- • Australian Government Department owned private and commercial of Employment – http://employment. as one that has businesses that are run for a proft. gov.au/ 51 per cent or The term Indigenous social enterprise • Aboriginal Enterprises in Mining, is used to refer to community-based Exploration and Energy Ltd (AEMEE) – more of the share enterprises that have a more communal http://www.aemee.org.au/ capital owned by purpose (these are sometimes also • Australian Indigenous Chamber referred to as Indigenous economic of Commerce – http://www. Indigenous people. development corporations in the indigenousjobsaustralia.com.au/ literature and many are legally structured • Indigenous Stock Exchange – as corporations under Australian law). http://www.isx.org.au/ A defnition of a social enterprise is an • The World Bank – organisation that: http://www.worldbank.org/ • “is driven by a public or community • First Nations Property Ownership cause, be it social, environmental, Initiative – http://www.fnpo.ca cultural or economic • Native Investment and • derive most of their income from trade, Trade Association – not donations http://www.native-invest-trade.com/ • use the majority of their profts to work • Aboriginal Affairs and Northern towards their social mission” (Social Development Canada – Traders 2014). http://www.aadnc-aandc.gc.ca/ In Australia, there are differing opinions • The Banff Centre – on whether an Indigenous business http://www.banffcentre.ca/ is one that has 51 per cent or more of This paper has taken a success- the share capital owned by Indigenous orientated approach and, as a people or whether 50 per cent is result, has not focussed in detail sufficient (ATO 2009; Foley 2006; on the barriers facing Indigenous Commonwealth Government of Australia economic development. 2008). The Australian Bureau of Statistics has a broader understanding The following pages provide an analysis and defnes small to medium privately of those factors that encourage owned Indigenous businesses as having economic development and job creation at least one Indigenous owner (ABS in a regional development context as 2012a:5). For the purposes of this report, well as in Indigenous communities in an Indigenous-owned business, or Australia and internationally, including enterprise, is defned as one that has the conditions and institutional elements 51 per cent or more of the share capital required for success. Selected case owned by Indigenous people. studies are included to illustrate Indigenous business ideas that have Our methodology has included proven successful in Australia and other conversations with key stakeholders countries. This report concludes with within Westpac, and a search of the a summary of drivers for Indigenous Australian and international literature. economic development. We have used several databases including SocIndex, the Australian and New Zealand Reference Centre, Indigenous Infonet and Google Scholar as well as a range of government and non-government websites, including: 14 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT A FRAMEWORK FOR REGIONAL ECONOMIC DEVELOPMENT CHAPTER 2.

KEY POINTS The economic literature provides clear evidence of factors to support effective regional economic development, such as stable government, an authorising policy and regulatory environment, access to markets, agglomeration, and location. These factors are briefly defined and described, and a basic framework for drivers of economic development is proposed.

The factors affecting regional economic Some of these factors are more important development have been the subject of extensive than others, while others have limited impact study by a number of academic and economic if implemented in isolation to other factors. institutions. These studies have been conducted There are also potential risks associated with across a number of different environments some factors; agglomeration, for instance, can including the European Union (EU), China, Latin be achieved in one location at the expense of America and the USA. other regional areas. In essence, a number of studies found that the impact of these drivers This chapter outlines a high-level framework for is contextual, and requires complementary regional economic development drawn from economic development strategies. empirical studies within the general economic development literature. It seeks to understand The importance of economic development to some of the key factors that influence economic regional areas is clear. Business attraction and development in rural and regional areas, and the creation has a multiplier effect, with additional extent to which they are able to attract economic workers creating demand for services, resulting development and jobs. in additional employment (Moretti 2012). Broadly, the key factors identifed include: • governance and institutions • government policy The importance of economic • human capital development to regional areas • infrastructure is clear. Business attraction • agglomeration and geography • access to markets. and creation has a multiplier effect, with additional workers creating demand for services, resulting in additional employment. MORETTI 2012 15 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

2.1 FACTORS IN ECONOMIC In addition to policy alignment between • Creation of knowledge and its DEVELOPMENT different levels of government, the conversion to commercial use plays following principles were identifed via a greater role in economic development Governance and institutions refers a review of relevant empirical studies. now than it has historically. As such, to the impact of political, public and the smaller population of regional legal governance frameworks that • National cross-subsidies of poorer areas presents a barrier to attracting influence economic activity and regions did little to improve investment and new business creation. development. The World Bank (2000:xii) sub-national regional economic defnes institutions as “organisational convergence. Case studies and • Uneven distribution of skills and human rules and routines, formal laws, and reviews of funding models amongst capital development are noticeable informal norms. Together they shape EU countries found that regions amongst regions, both in advanced the incentives of public policymakers, (within nations) achieved varying and developing economies. overseers, and providers of levels of convergence despite national • The attraction of workers in research public services.” subsidies, and were influenced more by and development (R&D) and tertiary existing path-dependent geographic education are important factors in Using this defnition, governance and agglomeration (Shankar and developing a ‘knowledge sector’. institutions may influence regional Shah 2009). Strong correlation was found between economic development in a number GDP growth and workers in information of ways, as summarised below. • Central government investment was found to be most effective when and communications technology (ICT) • The history of economic development regional governments were able to and R&D (‘knowledge-based’) sectors illustrates a number of basic influence where and how funding was within the EU (higher than capital and government functions that are required invested (Shankar and Shah 2009). labour factors in the study) (Izushi and Huggins 2004). In addition to this close before economic progress can be • Investment in human capital by the made (Magingxa and Kamara 2003): association, a correlation was found government has been an effective between the number of students in - rule of law (eg land titling system) regional economic development tertiary education and business R&D - anti-corruption / non-extractive strategy, improving the stock of human staff (Izushi and Huggins 2004). forms of government capital in a region (Department of Regional Australia, Local Government, • Attracting these higher order jobs - law and order Arts and Sport 2013). has signifcant multiplier affects. For - clear and transparent judicial system example, the majority of jobs in Silicon • Without concurrent investment in Valley in the US are in service-based - accountable to a local constituency. human capital (i.e. education) and industries. Subsequently, different • A national government focused on the involvement of local or regional industry sectors were found to have the maintenance of a ‘level playing government, investment in transport varying job ‘multipliers’, which is feld’ between different regions is a infrastructure had little impact on important when considering the key enabler of economic development a region’s economic development economic impact of different types of (Shankar and Shah 2009). (Shankar and Shah 2009). employment (Moretti 2012). Moretti • Regional and local governments that • Preferential treatment of specifc (2012) argues that the potential are accountable to a local constituency, regions or cities through Special multipliers for job creation vary widely ensuring that local priorities are Economic Zones (SPEZ) has created and are linked to the level of skills understood at a national level, are uneven regional income distribution and education that each job requires, needed to inform specialised assistance and economic growth in China (Jones, in this manner: or intervention where required. Li and Owen 2003). In this context the - 1 highly technical job may lead to use of SPEZ resulted in a ‘zero-sum’ 5 additional jobs Government policy refers to the trade-off between regions. type and degree of government - 1 skilled job may lead to intervention into a market. Government Human capital refers to the ‘knowledge, 2.5 additional jobs intervention can occur at all levels expertise and abilities’ of local workers - 1 un-skilled job may lead to 1 of government; however, successful (Department of Regional Australia, Local additional job. regional development policy relies on Government, Arts and Sport 2013). cooperation and partnership between The key factor found to have an impact all levels of government and with on regional economic development was relevant non-government organisations investment in human capital (Shankar (Department of Regional Australia, Local and Shah 2009; Izushi and Huggins Government, Arts and Sport 2013). 2004). Education and training tends to be lower in regional areas (compared to metropolitan areas), suggesting this is an important issue to address in facilitating regional economic development. 16 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

• There are ‘spill over’ effects associated fluctuations or contract negotiation. 2.2 SUMMARY with ‘knowledge-based’ jobs. It was This is a signifcant barrier in poverty Some of the key fndings of this chapter found that less educated workers in stricken areas, and would likely inhibit relate to the effectiveness of different cities with a higher educated workforce participation in or entrance into forms of government intervention earn more than comparable workers in markets by lower socio-economic and economic development drivers. other cities (Moretti 2012; Department workers or entrepreneurs. Regional development subsidies were of Regional Australia, Local • Access to information is another key found to be most effective when regional Government, Arts and Sport 2013). market barrier for regional areas. governments were able to influence Infrastructure includes physical Information is available, but may not and set the agenda. This indicates facilities, for example transport be equally distributed, with factors that central government intervention (mass and road), water, sewerage such as education, ethnicity, gender and subsidies have limited affect and communication lines. and other social factors influencing a without a local or regional political community’s ability to access markets institution’s involvement. Infrastructure can ‘unlock’ the (Magingxa and Kamara 2003). productivity potential of regions. At the same time, while national cross- However, this has limited impact without Agglomeration and geography refer subsidies from the EU Structural Fund concurrent investment in human capital to the economic efficiency gains from improved a country’s overall economic (Shankar and Shah 2009). the spatial concentration of economic development, they did little to accelerate activity. Economic development and the economic convergence between • Infrastructure and basic services (eg spatial agglomeration of economic poorer regions and more prosperous running water and electricity) increase activity are connected (Baldwin and regions within a country (Shankar and productivity (Patrinos and Skoufas Martin 2003). Shah 2009). This suggests that subsidies 2007), and are important enablers for alone will not promote convergence The economics influencing the attracting industrial development. in the absence of more targeted local location of capital investment also initiatives to grow economic activity. • Land value (in Mexico for example) underpin ongoing economic activity, depends on access to roads, affecting creating economies of scale. As such, A summary of the required drivers the value of Indigenous land holdings geography has an impact on regional for a theoretical regional economic in rural locations (Patrinos and Skoufas development and influences the development framework is outlined 2007), and reflecting demand for effectiveness of redistributive policy opposite. serviced land by the market. in the following ways. • Infrastructure investment can reduce trade costs within poorer regions, • Spatial distribution affects the ‘mobility’ increasing capital mobility and the assumption in neoclassical economic ability to attract new business. growth models, and can exacerbate disparities between regions. • While physical infrastructure is an important factor in the economic • Isolation and fragmentation can development of regions, in isolation lead to fewer opportunities for it may not result in the desired Indigenous people in rural areas to convergence between poorer regional diversify their income and occupations areas and wealthier metropolitan areas. (eg away from agricultural and non-wage income, and reliance on Access to markets is defned as ‘the private and public transfers). ability to market and sell goods and • While capital inequality between services in a given market’ (Department regions can lead to income disparities, of Regional Australia, Local Government, policies that reduce trade cost and Arts and Sport 2013). Regional areas are transport costs can reduce barriers for typically more removed from end-user frms locating into a particular region. markets and the global supply chain that provides suppliers with access • Improvements in telecommunications to markets. infrastructure or education can also contribute to reducing barriers for frms • Market access is an important to locate into a particular region. development barrier for regional areas to overcome. In addition to trade liberalisation, providing physical access to markets is an important driver of poverty reduction in agricultural communities. This can change with context. Magingxa and Kamara (2003) note that small-hold farmers in poorer rural communities in Africa, for instance, have a limited understanding of market pricing, 17 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

TABLE 1 – DRIVERS OF ECONOMIC DEVELOPMENT

Governance • Basic government functions are required before economic progress can be made: and institutions - rule of law (eg land titling system) - anti-corruption and non-extractive forms of government - law and order - clear and transparent judicial system - accountable to a local constituency • A national government focused on maintaining a ‘level playing feld’ between different regions • Regional and local governments that are accountable to a local constituency

Government policy • Transport infrastructure projects alone had limited impact, with some success found when this agenda was influenced by local or regional government • Investment in human capital by the national government was found to be a successful policy • National cross-subsidies of poorer regions did little to improve economic convergence • Preferential treatment of specifc regions and cities can result in uneven regional income distribution and economic growth

Human capital • Increasing independence and competition between regions for investment and businesses has made human capital an important factor in job creation • Higher order jobs and workers have been found to have a higher multiplier effect than lower skilled jobs • Uneven distribution of skills and human capital development are noticeable amongst regions, both in advanced and developing economies • Strong correlation was found between tertiary education and jobs in ICT and R&D (‘knowledge-based’) sectors within the EU

Infrastructure • While infrastructure and basic services (eg running water and electricity) increase productivity they have limited impact without concurrent investment in human capital • Infrastructure investment can reduce trade costs within poorer regions, increasing capital mobility, and regional ability to attract new business

Access to markets • In addition to trade liberalisation, providing physical access to markets is an important driver of poverty reduction in agricultural communities • A number of other issues restrict market access in developing countries such as: - lack of understanding of the market and price fluctuations - limited access to market information - lack of collective organisation - limited experience in market negotiation • These could be considered factors of education and human capital as well

Agglomeration • Geography has an impact on regional development, and the impact of redistributive and geography policies • Isolation and fragmentation can lead to fewer opportunities for Indigenous people in rural areas to diversify their income and occupations (eg away from agriculture and non-wage income, and reliance on private and public transfers) • While capital inequality between regions can lead to income disparities, policies that reduce trade costs and transport costs can reduce barriers for frms moving into a particular region 18 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT ENABLING INDIGENOUS PROSPERITY CHAPTER 3.

KEY POINTS There are common success factors for both Indigenous and non‑Indigenous business. However, Indigenous business commonly includes an additional factor of an Indigenous cultural approach to economic development and its contribution to the larger Indigenous community. Indigenous business in Australia contributes substantially to the Australian economy, in excess of $1.71 billion in 2012–13 for registered corporations alone, excluding sole traders and small business (ORIC 2014). The structures of Indigenous businesses vary, and include community-owned corporations, individually-owned businesses, for profit and not-for-profit enterprises and partnerships with majority Indigenous ownership. There are also non-Indigenous businesses that demonstrate a commitment to supporting Indigenous people or communities. Indigenous ownership is considered a significant factor in ensuring Indigenous people are able to control decision-making for the benefit of the community. Enabling Indigenous prosperity requires the establishment and growth of Indigenous businesses to

ensure wealth creation and fnancial self-reliance • proper fnancial management for Indigenous Australians. The underlying factors • good economic conditions that enable Indigenous business success are the same as the factors that contribute to any • good location of the business. successful business enterprise, including those An additional factor intrinsic to Indigenous mentioned in the previous chapter: enterprise is that of culture, which plays an • an authorising environment including important role in the success of Indigenous governance, institutions and government policy businesses (Cornell 2006a; Loizedies and Wuttunee 2005; Sisco and Nelson 2008; • human capital Canadian Council for Aboriginal Business 2012; • infrastructure Frederick and Foley 2006; Federation of Maori • agglomeration and geography Authorities 2006). • access to markets. The literature points to a uniquely Indigenous approach to economic development, Similarly, a recent study on Australian incorporating a strong emphasis on enterprises entrepreneurship found that there are common that provide economic and social returns to success factors for both Indigenous and non- communities on Indigenous land (Cornell 2006a; Indigenous small to medium sized enterprises Loizedies and Wuttunee 2005; Sisco and Nelson (Rola-Rubzen 2011), including: 2008; Canadian Council for Aboriginal Business • good management skills 2012; Federation of Maori Authorities 2006). While some argue that Indigenous culture is not • good staff compatible with mainstream business practices, • reliable suppliers there is evidence that culture can contribute 19 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

KEY POINTS There are common success factors for both Indigenous and non‑Indigenous business. However, Indigenous business commonly includes an additional factor of an Indigenous cultural approach to economic development and its contribution to the larger Indigenous community. Indigenous business in Australia contributes substantially to the Australian economy, in excess of $1.71 billion in 2012–13 for registered corporations alone, excluding sole traders and small business (ORIC 2014). FIGURE 2 – TOP 500 ABORIGINAL AND TORRES STRAIT ISLANDER CORPORATIONS The structures of Indigenous businesses vary, and include IN AUSTRALIA community-owned corporations, individually-owned businesses, Source: ORIC 2014, used with permission; this map for profit and not-for-profit enterprises and partnerships with shows the number and percentage of the top 500 Aboriginal and Torres Strait Islander corporations majority Indigenous ownership. There are also non-Indigenous in Australia for each state. businesses that demonstrate a commitment to supporting Indigenous people or communities. Indigenous ownership is considered a significant factor in ensuring Indigenous people are able to control decision-making for the benefit of the community. Enabling Indigenous prosperity requires the establishment and growth of Indigenous businesses to

to Indigenous business success by Even for the individual Indigenous As the case studies providing Indigenous people with a entrepreneur, family and community social and kinship support structure as considerations are often taken into in this report will well as artistic and knowledge assets account when beginning a business that can be used commercially (Schaper (Roness and Collier 2010). illustrate, many 1999; Cornell and Kalt 2003; Altman Indigenous Australians 2001; Federation of Maori Authorities This does not mean Indigenous 2006; First Peoples Group 2009). people are not concerned with proft, are establishing but that economic development has According to Hindle and Landsdowne additional social, communal and cultural businesses that are both (2005), while mainstream objectives (Roness and Collier 2010; ‘commercially viable and entrepreneurship focuses on the Schaper 1999; Cornell and Kalt 2003). ‘commercialisation’ of innovation, As the case studies in this report will culturally affirming’. the primary motives for Indigenous illustrate, many Indigenous Australians entrepreneurship are self-determination are establishing businesses that are and the preservation of culture. A both ‘commercially viable and culturally successful Indigenous business is not affirming’ (Commonwealth Government necessarily defned by the level of proft of Australia 2008:10). gained from the business, but rather by the benefts provided to the community, clan or family group (Commonwealth Government of Australia 2008). 20 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

FIGURE 3 – INDIGENOUS ENTREPRENEURS BY INDIGENOUS REGION Source: ABS 2012; Hunter 2013; this map shows the spread of Indigenous entrepreneurs across Australia as a percentage of local Indigenous population. The data for this graph are provided in Appendix A. Note that while Tasmania appears to have a high proportion of Indigenous self-employed and business owners, due to the small size of the local Indigenous population the number of entrepreneurs is small compared to other parts of the country.

3.1 WHAT DOES SUCCESS followed by Western Australia (24.4%) The statistics indicate that Indigenous LOOK LIKE? and Queensland (19.8%) (ORIC Australians (either as individuals or 2014). These corporations have been community based enterprises) are 3.1.1 INDIGENOUS BUSINESS established under The Corporations increasingly seeking out business SUCCESS IN AUSTRALIA (Aboriginal and Torres Strait Islander) opportunities and establishing their own A parliamentary inquiry into developing Act 2006 (CATSI Act) and are businesses (Commonwealth Government Indigenous enterprises in Australia noted usually not-for-proft organisations of Australia 2008). However, the that successful Indigenous businesses with community development goals concentration of Indigenous businesses contribute fnancially to the community (Morley 2014). in the south east corner of Australia through proft and employment while suggests that more work is needed to also providing role models and a Indigenous self-employment has more help Indigenous people in other parts conducive environment for skills and than doubled in the twenty years of Australia to establish their own ideas development (Commonwealth between 1991 and 2011 (Hunter 2013). businesses. Likewise, Aboriginal and Government of Australia 2008). As the Figure 3 shows that more Indigenous Torres Strait Islander corporations are text box opposite illustrates, Indigenous entrepreneurs live in the south east predominately located in the north corporations registered with the corner of Australia than in other of Australia, despite the fact that Office of the Registrar of Indigenous locations, in areas where education Indigenous Australians in other states Corporations (ORIC) are having a outcomes are better, there is higher also have signifcant landholdings. This positive impact on the economy of population density, and greater demand suggests that further work is needed Indigenous communities, by providing for goods and services (Hunter 2013). to explore the opportunities that economic development opportunities This is in contrast to overall business Indigenous corporations, including social and creating and sustaining a signifcant ownership in Australia, which according enterprises, could provide Indigenous number of Indigenous jobs (ORIC 2014). to the Australian Bureau of Statistics people in South Australia, Victoria and (ABS) is higher in regional Australia New South Wales. Figure 2 illustrates that the majority of than in metropolitan areas. In regional Aboriginal and Torres Strait Islander Australia, approximately 20% of income corporations are located in the earners own businesses; the fgure north of Australia (where Indigenous drops to about 14% when metropolitan land ownership is higher), with the areas are included (Regional Australia Northern Territory having the largest Institute 2014). percentage of corporations (32.8%), 21 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

KEY FACTS AND FIGURES ON INDIGENOUS ENTERPRISES AND ENTREPRENEURS IN AUSTRALIA

Indigenous Corporations • housing (n=70 – 14%) In 2012–13 the combined income of the top 500 • education (including child care) (n=66 – 13%) Aboriginal and Torres Strait Islander corporations was • other (n=126 – 25%) (ORIC 2014). almost $1.71 billion, an increase of 6.2 per cent from 2011–2012 (ORIC 2014). Note: As corporations operate in a number of sectors, the percentages above add up to more than 100. The average income of the top 500 corporations also increased in 2012-13 – from $3.22 million in 2011-12 to Indigenous Entrepreneurs $3.42 million (ORIC 2014). The number of Indigenous self-employed increased from In 2012-13 the top 500 Aboriginal and Torres Strait Islander 4,600 in 1991 to 12,500 in 2011 (Hunter 2013). corporations employed 12,200 people, an increase of The main categories of Indigenous MSMEs (micro, small 8.5 per cent from 2011-12 (ORIC 2014). and medium sized enterprises) include: The top 20 Indigenous corporations self-generated • agriculture 40.1 per cent of their income, more than the 36.9 per cent they received from government funding (ORIC 2014). • forestry and fshing In 2011-12 the top fve corporations acquired 83.1 per cent • arts and recreation (including tourism) of their income from self-generated sources compared • cafes and restaurants (Rola-Rubzen 2011). to 16.9 per cent from government funding (ORIC 2013). Indigenous businesses are a signifcant employer The main categories of enterprise conducted by Aboriginal of Indigenous people. Research suggests Indigenous and Torres Strait Islander corporations (by number and employment in Indigenous businesses is usually percentage) include the following sectors: higher than 50 per cent, which is much higher than • health and community services (n= 212 – 42%) employment of Indigenous people in non-Indigenous businesses (Black Business Finder website 2014). • employment and training (n=105 – 21%) • land management (n=87 – 17%) • art centres (n=77 – 15%) • shops (n=73 – 15%)

3.1.2 INDIGENOUS BUSINESS SUCCESS business investment interest into This builds≈confdence for both IN OTHER COUNTRIES their community by networking and internal and external investors as well In Canada, when corporations work actively seeking partnerships. They also as community members. When formal effectively and productively they help support small business owners in the governance structures are integrated meet community needs by empowering community, through fnancial assistance with Indigenous culture in practical and communities (Cornell 2006a; Loizides and mentoring (Canadian Council for meaningful ways, communities tend and Wuttunee 2005; Sisco and Nelson Aboriginal Business 2012). to be more successful; for example, 2008; Canadian Council for Aboriginal constitutional reform reinvigorated the Business 2012; Aboriginal Affairs and In the United States, successful Native Osage tribe’s economy, and changes to Northern Development Canada 2013). communities have institutions of local governance by the Navajo improved Successful corporations have led to new governance (such as the laws and social and economic indicators. In 2008 business opportunities for Indigenous organisation of tribal government) that the average income of Native American nations and their citizens. According to are stable, fair and legitimate in the Indians was reported to be rising faster a recent survey of Indigenous economic eyes of the people (Cornell and Kalt than the American average (Taylor development corporations in Canada, 2003). The research fndings of the 2008). “To advance the goals they care four out of ten (38%) are the main Harvard Project and Native Nations about, successful Native nations account employers in their community and Institute (Taylor 2008) also indicate for the demands of the outside world Indigenous people comprise (on average) that Native leaders make their nations without necessarily abandoning their 72 per cent of their employees (Canadian more powerful by restricting their own own priorities” (Taylor 2008:4). Council for Aboriginal Business 2012). power for the beneft of the group; In addition to employment, successful that is, they ensure that governance Indigenous businesses also bring is fair and equitable for all rather than subject to relational influences. 22 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

Within the New Zealand literature, However, while social enterprises have In addition to ownership structures, success in Maori business is reported an important role to play in improving economic development models vary to include indicators of both cultural economic outcomes they are just one and can be classifed into four general and commercial success, though how of several types of enterprise ownership types. The First Peoples Group (2009) this is achieved and the weight given that have an impact on Indigenous identifes three groups: public, public- to tikanga (Maori culture, customs and communities. Cornell (2006a) suggests private, and private; the latter can be tradition) varies (Federation of Maori that there are three types of enterprises: further divided into private for proft Authorities 2009). Although making a and private not-for-proft. proft is considered important, for many • non-Indigenous ownership (business Maori the use of profts to support their owned by outsiders although they may • Public development models are driven cultural values is even more important employ and serve Indigenous people) through government and include public (Federation of Maori Authorities 2009; • Indigenous ownership (business owned fnancing to provide business support Frederick and Foley 2006). A successful by the group – community, tribe, such as project funding and job business not only provides income for or nation) training, as well as sector support such the owner but increases their mana as labour development, technology and • ‘citizen entrepreneurship’ (Indigenous infrastructure improvements. (status) in the community (Federation individuals own the business of Maori Authorities 2009). Successful themselves). • Public/private models include Maori-owned businesses separate Indigenous corporations that receive commercial activities from non- Each of the three types of ownership government funding and also commercial activities to reduce risk. has advantages and disadvantages. generate their own funds. Some Many businesses have also established For example, non-Indigenous community-based enterprises are alternative corporate structures, such as ownership may provide access to strictly commercial and others operate wholly-owned subsidiaries, both for risk resources not otherwise available to as a form of social enterprise (non- management and to dedicate resources the Indigenous community, such as proft model). for specifc opportunities or partnerships particular knowledge, skills or fnance. • Private models include Indigenous (Federation of Maori Authorities 2009). Indigenous group ownership can entrepreneurs who through a mixture bring empowerment and confdence of autonomy, competitiveness, and 3.1.3 FEATURES OF SUCCESSFUL to a community as well as increasing technological knowledge/skill help to INDIGENOUS ENTERPRISE independence and autonomy through create jobs and transform capital. Overall, the literature indicates that decreased welfare dependence. a successful Indigenous enterprise Individual entrepreneurship can help • Private not-for-proft models include includes the following four features serve community needs (such as private voluntary associations (such (Cornell 2006a; Loizides and demand for a retail sector and other as the Koorie Women Mean Business Wuttunee 2005; Sisco and Nelson services), and also enables people to Incorporated) who help to create 2008; Federation of Maori Authorities create new opportunities and increase the climate for business through 2009; Hindle and Lansdown 2005; their own wealth. However, there networking and promotional activities. Commonwealth Government of needs to be sufficient support for Australia 2008): these types of enterprises to exist. In • Indigenous owned and operated order for people to establish their own (or majority Indigenous ownership) businesses they need to have access – there is general agreement to both fnancial and human capital. that economic development in Indigenous-owned social enterprises Indigenous communities requires require institutions of governance and meaningful control over decisions dispute resolution processes to be in at the community level and that place to avoid disagreements about how social enterprises contribute to the profts from the enterprise will be the preservation and maintenance used. Partnering with outsiders requires of culture negotiation regarding each partner’s rights and responsibilities, dispute • demonstrated growth of profts over resolution processes, and methods for a substantial period of time – social cooperation across ‘political and cultural enterprises that are economically boundaries’ (Cornell 2006a). sustainable • created jobs in the Indigenous communities in which they are based and/or the Indigenous community at large • improved the social conditions within the communities in which they are based and/or the Indigenous community at large. 23 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

3.2 FACTORS THAT ENABLE The factors that influence business competitors, the regulatory environment ECONOMIC SUCCESS development are varied and often and government policies, are generally beyond the control of entrepreneurs less easily influenced by the actions The following table outlines the key (Cornell 2006a). However, there are of individuals; however, individuals factors identifed in the literature from some factors that are more amenable are still able to respond to external Australia, Canada, USA, and New to control than others (see Figure 4). factors in ways which can enhance their Zealand that contribute to business Individuals have more influence over opportunities. Marketing and lobbying, success and economic development internal factors, such as their attitude, for instance, are avenues for influencing in Indigenous communities. There are good business practices, and clarity the broader external context, although common success factors across each about goals. While individuals have less their outcomes are unpredictable and of the four countries. Yet, in each country influence over community factors, if may not be evident in the short term different responses have emerged strong leadership exists and community (Cornell 2006a). to facilitate economic achievement. consensus can be reached, then it is Indigenous people are not homogeneous possible to have a degree of control over and approaches that are successful for some areas, such as the composition and one community may not necessarily power of corporate boards and dispute work for another community in a resolution processes. External economic different location with different political conditions, including the cost of capital, institutions, resources, infrastructure the spending power of consumers, and community capabilities. market behaviour, the number of

TABLE 2 – FACTORS THAT CONTRIBUTE TO INDIGENOUS BUSINESS SUCCESS

Authorising Access to Human Capital and Culture Environment Infrastructure Social Infrastructure and Capital

• Political sovereignty • Good location of • Sufficient community • A resource and asset to – control over local the business capacity with education leverage community and decision-making • Proximity to markets and industry experience cultural strengths • Effective institutions of • Natural resources • Education and • Mix of commercial governance with cultural social programs and cultural – business • A useable land base legitimacy • Knowledge transfer practices align with and • Good leadership – • Access to fnancial capital – through the hiring affirm cultural values leaders listen and respond • Reliable supplier of outside staff • Strong family and to community needs • Ownership and control where necessary community links provide • Management separates of assets • Mentorship programs networking opportunities commercial activities from • Good economic • Networking and joint • Strengthening and non-commercial activities conditions venture or business preserving culture is a or establishes subsidiary motivating factor in social • Market opportunity – partnerships companies or trusts enterprise initiatives including some form of • Joint venture or business • High quality and commercial concessions partnerships committed management or competitive market • Clear corporate vision including boards of niches management • Winning attitude and • Collective wealth of • Proper fnancial the use of creativity to members through long- overcome obstacles management and annual term wealth programs strategic plans and asset building • Transparent reports and open communication • Leaders separate ‘politics’ from business

Sources, Cornell 2006a; Loizides and Wuttunee 2005; Sisco and Nelson 2008; Canadian Council for Aboriginal Business 2012; Aboriginal Affairs and Northern Development Canada 2013; Federation of Maori Authorities 2009; Frederick and Foley 2006; Hindle and Lansdown 2005; Commonwealth Government of Australia 2008; Altman 2001; First Peoples Group 2009; Rola‑Rubzen 2011. 24 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT 3.3 CASE STUDIES

Internal Community External factors factors factors • Attitude – confidence • Separation of politics • Location to take risk & be & business • Access to markets innovative • Community capacity – • Economic conditions degree of education/ • Purpose – clarity about • Regulatory skills in the community enterprise objectives environment • Networks & • Good business • Government policies practices/financial partnerships management • Independent dispute arrangements resolution processes • Composition & power of corporate boards

FIGURE 4 – FACTORS AFFECTING ENTERPRISE DEVELOPMENT AND DEGREE OF PERSONAL CONTROL Source: adapted from Cornell 2006a. 25 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT 3.3 CASE STUDIES

In the following pages we provide a series of case studies to highlight the range of factors which contribute to business success as well as the different ways in which Indigenous individuals and communities are creating new and innovative ways of doing business. These case studies have been chosen from the many examples available in order to showcase the variety of sectors in which Indigenous businesses operate and the range of business models in use. Subsequent chapters of the report will discuss the factors which contribute to business success in more detail and provide examples of how individuals and communities have been enabled or constrained by the existence or absence of these factors.

Yaru Water Indigenous-owned business, Achievements and Indigenous/non- In 2013, Yaru Water began supplying Indigenous partnership the Softel Hotel at Broadbeach on the Gold Coast. Softel is a luxury French Yaru Water is an Australian Indigenous- hotel brand, and is part of the wider owned business producing bottled water Accor Group. There are 130 Softel from an aquifer at the base of Mount hotels located in 40 different countries Warning, in the Tweed Heads-Byron worldwide. The partnership with Accor Bay hinterland of north-eastern NSW. Group has had an enormous impact Mount Warning holds deep signifcance on the company and the Bundjalung to the Indigenous people of the area and community. According to Kyle Slabb it across Australia, who call the mountain has given them credibility in the market Wollumbin, which means ‘cloud catcher’, and its success has inspired young and have known it for thousands of years Indigenous leaders and business people. as a place of cultural law, initiation and spiritual education. In September 2013 Coles supermarkets began stocking bottles of Yaru Water History nationwide. As a result the plant production increased from 15,000 to Yaru Water was established in 2011 as a SOURCE: YARU WATER partnership between Shaun Martin, his 22,000 litres per week to meet demand. wife Tessa (owners of Mount Warning The Yaru Water brand now accounts • – Softel were Spring Water Company) and local Indigenous culture for 71 per cent of Mount Warning Spring looking for opportunities within the Indigenous men Kyle and Josh Slabb. Water production. Indigenous community and, as a Due to the unique offer of a majority luxury brand, were after something share in the business by the Martins, Kyle Proceeds from the sales of Yaru Water unique for their guests that had a Slabb and his brother control 51 per cent help support education and training distinct Australian flavour. The Softel of the company. The Martin family programs for Indigenous youth. Profts management felt that Yaru Water have owned the property surrounding from the venture have also funded the offered what they were looking for. the aquifer since 1904 but it was not construction of an accommodation Coles capitalised on the fact that Yaru until 2004 that the bottling plant was and training centre on the Martin Water was an Indigenous label by established. The Martin family have a family farm where Kyle Slabb teaches running a promotional campaign which long history with the local Indigenous various groups, from Aboriginal focused on Yaru Water’s contribution people (the Bundjalung) and wanted to children to corporate visitors, about to the Indigenous community. do something to help the community. Bundjalung culture. Initially the Martins had considered • Partnerships – The partnership donating several cents of every bottle Success Factors between the Martins and the Slabbs has been mutually benefcial to both of Mount Warning Spring Water they • Indigenous owned – Shaun Martin the Mount Warning Spring Company produced to help with employment and decided to give Kyle Slabb and his and the Bundjalung people, as evident training initiatives for local Indigenous brother the majority share in the by the percentage of sales under the youth; however, they decided instead company because he had seen that Yaru Water label and in the Indigenous to establish an Indigenous label (Yaru donations rarely led to sustainable leadership programs that have been Water) and to direct some of the change: “I wasn’t real happy with implemented from its proceeds. profts of that label into community how the system is and how it works development programs. for indigenous people, how it can Sources: Allen 2008; Yaru Water website lead to government dependency.” 2014; Supply Nation website 2014. (Allen 2008) As an Indigenous owned company, Yaru Water is eligible to be a member of Supply Nation, which has helped them secure signifcant distribution deals and provided them with networking opportunities. For example, the General Manager of Softel frst came across Yaru Water at the Supply Nation Connect 2012 tradeshow. 26 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT CASE STUDIES

JASMIN HERRO (CHIEF EXECUTIVE OFFICER, OUTBACK GLOBAL) AND DONALD FAIRCONETURE (PRESIDENT, OUTBACK GLOBAL USA). SOURCE: SUPPLY NATION

Outback Global Indigenous-owned business, Success Factors • Partnerships and networking opportunities – Donald and • – Jasmin and international partnership Leadership and attitude Jasmin became partners after attributes her success to having clarity Outback Global Australia is an Australian being introduced to each other about her business purpose and the Indigenous business specialising in at the National Minority Supplier companies with which she wanted uniforms, work wear, personal protective Development Council (NMSDC) to conduct business. According to equipment, safety boots, apparel, Conference and Business Opportunity Jasmin, ‘doing your homework and luggage and promotional products. Fair held in Denver in October 2012. having a plan’ before approaching any Since then Jasmin has continued to potential business opportunities is History attend the annual National Minority very important. Jasmin Herro and her husband Slay Supplier Development Council launched Outback Global (originally • Access to capital – A Fast Track Loan Conference, and in 2013 led the largest known as Outback Apparel) in 2009. from Indigenous Business Australia delegation of Australian Indigenous Since then the company has grown to and the Australian Indigenous Minority entrepreneurs to San Antonio, Texas become a global company, with offices Supplier Council (now known as Supply in the United States. Recently, Jasmin in Shanghai and Denver, Colorado, in Nation) provided Slay and Jasmin with delivered a keynote address to addition to their Sydney office. the capital to expand their business. attendees of the Procurement and In 2013, Outback Apparel partnered with According to Slay: “This…opened Supply Australasia 2013 conference. up a world full of opportunities and Donald Fairconeture, President and CEO Sources: Karvelas 2012; Outback Global possibilities for us, whereas before of Unity Promotions in the United States, Australia website 2014; Supply Nation while we had the expertise and to form Outback Global. website 2014 the contacts to do it we never had Achievements the funds or the cash flow to do it” (Karvelas 2012). Outback Global is the frst joint venture between an Australian Indigenous • Education and mentoring – Slay and Slay and Jasmin Herro business and a USA minority business. It Jasmin Herro completed the Into completed the Into is hoped that Outback Global’s trailblazing Business Workshops run by IBA, which achievements will inspire other Australian helped them to refne their ideas into Business Workshops Indigenous entrepreneurs to seek a business proposal and provided run by IBA, which opportunities to partner with United mentoring and support. Jasmin is also States minority-owned businesses. a graduate of the Murra Indigenous helped them to refine Business Master Class offered by the In 2013 Outback Global obtained minority University of Melbourne. As a result of their ideas into a business certifcation in the USA which her success Jasmin is now encouraging enables Outback Global to access USA business proposal and and supporting other Indigenous government contracts. business owners to certify with Supply provided mentoring Outback Global was the winner of the Nation and become a part of the and support. Supply Nation ‘Supplier of the Year’ and growing Indigenous business sector ‘Supplier to Supplier of the Year’ awards of Australia. for 2013. In 2014 Jasmin Herro was named as a Westpac 100 Women of Influence and became the frst Indigenous Australian to receive a Melbourne Business school Alumni Award. 27 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

Fletcher International Exports Australian non-Indigenous Achievements business having a positive As a result of one man’s entrepreneurial impact on Indigenous vision, local Indigenous people have communities access to vocational training and employment in the meat and wool History industries. Hundreds of people have had employment opportunities which Roger Fletcher is a self-made success would not otherwise have been story who has moved from droving available to them. sheep to become the owner of one of Australia’s largest meat processing The creation of a dedicated sheep companies, Fletcher International station and training school provided Exports. The company operates two vocational training tailored to be meat processing facilities, one located culturally appropriate for local in Dubbo, New South Wales, and the Indigenous people. In the process, other near Albany in Western Australia. a culture of employment is being The company also exports sheep developed in the local region. meats, wool and grain to more than 95 countries worldwide, and farms sheep, Success Factors wheat and cotton. The two plants have • Winning attitude – Roger Fletcher is a combined processing capacity in known throughout the industry for excess of 90,000 sheep and lambs per his readiness to investigate new ideas week which equates to over 4.5 million and methods. According to Roger, head per year. Fletcher International successful entrepreneurs recognise currently employs over 300 Indigenous the importance of continuous employees (approximately 15 per cent improvement: “Always look to improve of their workforce). and don’t accept that if a thing is In the past Roger supported Merriman going well, it’s right. You’ve always Station, a sheep station in North West got to get that one step better” New South Wales that became a venue (Meat Trade News Daily 2013). for an innovative shearing school training • Developing human capital – Roger young Indigenous people in the wool has succeeded in providing jobs for industry. The training program involved a over 300 Indigenous employees by two week pre-vocational course followed actively seeking out new employees. by a 13-week practical training program. In most cases, it’s not enough to pledge Roger supported Merriman Station by jobs, advertise them, and then sit and providing the sheep and the cost of a wait for Indigenous people to apply resident stock manager. He also provided and start working. Staff from Fletcher additional funding in the establishment International Exports and the NSW phase for equipment and operating Department of Housing go to Dubbo costs. Roger and his company Fletcher housing estates and talk directly with International also played a major role in Indigenous people about working helping graduates secure employment in with Fletcher’s and what it means to SOURCE: FLETCHER INTERNATIONAL EXPORTS the wool and associated industries. have a secure job. Potential employees are also helped to complete job Today Fletcher International participates application forms. in the Get Real program with students from Dubbo College (both Indigenous Sources: Meat Trade News Daily 2013; and non-Indigenous) which offers Fletcher International Exports website students traineeships and part-time 2014; Victorian Economic Development employment while they are at school and Group 2010, Watson, personal full-time employment once they fnish communication 2014). school. Students sign a pledge to either be in school or employment and Fletcher Fletcher International International supports them with their pledge. Some students work towards Exports demonstrates Certifcate 2 in Meat Processing which the importance of counts towards 2 units in their HSC, while others work part-time after school actively seeking out in the meat processing factory. Fletcher new employees. International also supports other programs aimed at helping Indigenous youth and improving their employment opportunities, such as the Clontarf Foundation and NCAP (new careers for Aboriginal people). 28 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT CASE STUDIES

Booderee National Park Achievements Wreck Bay Aboriginal Booderee National Park attracts large Community provides Australian Indigenous numbers of Australian and international community-owned natural visitors. There are about 500,000 day training opportunities visitors and 75,000 people who camp resource overnight each year. to local Indigenous Booderee National Park is located people whether or on Bherwerre Peninsula in Jervis Success Factors Bay Territory on the coast of south- not they are currently eastern Australia, about 150km south • Indigenous ownership and of Sydney. The Park, which includes management – Involving the Wreck involved in park Bowen Island and a portion of the Bay Aboriginal Community in caring for management. Jervis Bay marine environment, is Booderee has assisted the community owned by the Wreck Bay Aboriginal in determining long-term conservation Community Council and jointly managed goals and benefts for the community by the Council and Parks Australia, the and the park. Australian government’s protected area • Clear governance and management management agency. Located within structures – The community the Park is Booderee Botanic Gardens, established a commercial entity Australia’s only Aboriginal-owned to deliver service contracts and to botanic garden. increase Indigenous participation and employment in park management. Booderee means bay of plenty or plenty of fsh in the local Dhurga language. • Development of human capital – The community has established a range of training initiatives that integrate History training activities across all the joint The Wreck Bay Aboriginal Community management partner organisations, Council was formed with the enactment and provide training opportunities of the Aboriginal Land Grant (Jervis Bay to local Indigenous people whether Territory) Act 1986 (Commonwealth).The or not they are currently involved Council operates as a body corporate; in in park management. addition to holding the title to Aboriginal • Preservation and maintenance of land and managing and maintaining the culture for future generations – land. The Council provides a number The extensive Indigenous knowledge of of benefts to community members natural resources around the Jervis Bay including the establishment of business area continues to grow with the Wreck enterprises for economic or social Bay people using the bush as a natural beneft, and assistance with housing, classroom for young people. social welfare, education, training and health needs. Sources: Agreements, Treaties, and Negotiated Settlements website 2014; Members of the Wreck Bay Aboriginal Australian Government Department of Community fought a long political Environment website 2014. and legal battle for ownership of land within Jervis Bay Territory, including what became Booderee National Park (formerly Jervis Bay National Park). In 1995 the Aboriginal Land Grant (Jervis Bay Territory) Act 1986 and the National Parks and Wildlife Conservation Act 1975 were amended to transfer freehold title of the National Park to the Wreck Bay Aboriginal Community Council on condition that the Park was leased to the Australian Government’s Director of National Parks for 99 years. At the same time, the Jervis Bay National Park Board of Management was established with the majority of members coming from the Wreck Bay Aboriginal Community. The Park was renamed Booderee National Park in 1998 and the frst Plan of Management for the Park was published in 2002. JUNIOR RANGERS WITH RANGER BERNIE MCCLOUD. SOURCE: RENEE NOWYTARGER 2006 29 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

NANA Regional Corporation (Alaska) International Indigenous protection of their heritage and culture) NANA’s mission is community-owned social and the Karlka Nyiyaparli Aboriginal Corporation (which represents its people to provide economic enterprise in matters associated with their native NANA is a shareholder-managed title claim). opportunities for its corporation that is guided by a Board more than 13,500 of Directors, composed of Iñupiat Achievements Iñupiat shareholders shareholders, and a senior management NANA Development Corporation team. Most of NANA’s approximately employs 11,500 people around the world and to protect and 12,000 shareholders are Alaska Natives from the Arctic Circle to Australia and of Iñupiat descent. As an Alaska Native is recognised as a leader in engineering enhance NANA lands. Land Claims Settlement Act (ANCSA) and construction; resource development; corporation, NANA has no publicly facilities management and logistics; traded stock and its shares cannot real estate and hotel development; legally be sold, though some stocks can and information technology and be inherited or gifted. telecommunications. NANA’s mission is to provide economic In 2012 NANA’s annual revenue was opportunities for its more than 13,500 $1.8 billion. Iñupiat shareholders and to protect and enhance NANA lands. NANA Australia Pty Ltd in partnership with Karlka Nyiyaparli Aboriginal NANA Australia Pty Ltd is the wholly- Corporation, has been granted an award owned subsidiary of NANA Development to proceed to tender to develop a Corporation. NANA Australia partners Mixed Business Precinct in the Newman with Australian traditional owner town centre. groups and Aboriginal companies to share lessons learnt from 40 years of business experience. Success Factors • Ownership of land and resources– History Under the ANCSA Alaska Natives relinquished claims to their ancestral NANA Regional Corporation, Inc. home in exchange for a settlement of COMMERCIAL FISHING IN THE PRINCE WILLIAM (NANA) is a Regional Alaska Native $1 billion and about 44 million acres, SOUND, ALASKA. SOURCE: BRYTTA corporation formed in 1971 under the little more than 10 per cent of the Alaska Native Land Claims Settlement entire state. At the same time, the Act (ANCSA). selection of lands was one of the most Until 1971, the issue of land ownership in important decisions NANA made, Alaska was divisive. Oil was discovered because the land provides subsistence on Alaska’s North Slope and Alaska resources in the NANA region, as Native peoples, including the Iñupiat well as the opportunity for natural of Northwest Alaska, worried about resource development. maintaining rights to traditional lands • Development of human capital – NANA and the ability to protect their valuable offers an internship program to its subsistence resources. The passage of shareholders to provide them with on- the Alaska Native Claims Settlement Act the-job training, experience and skills. (or ANCSA) helped resolve many of the This training offers students career issues surrounding land rights. insights, exposure to the workplace and networking opportunities. Today, NANA owns 2.28 million acres, NANA’s mentoring program also pairs or approximately 9.4 per cent of the shareholder employees with mentors 24.3 million acres that comprise the who are managers in professional NANA region. felds and extends to developing Founded in 1974, NANA Development ‘teaming’ relationships with Australian Corporation is the business arm of Indigenous corporations. NANA Regional Corporation, Inc. All of Sources: NANA website 2014; NANA NANA’s business operations are owned Australia website 2014. by NANA Development Corporation. NANA Australia Pty Ltd. has built ‘teaming’ relationships with SMI (a Western Australian Aboriginal- owned company that is committed to developing Aboriginal people and the 30 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT CASE STUDIES

Osoyoos Indian Band Development Corporation (Canada) International Indigenous Success Factors community-owned corporation • Leadership and attitude – Location The Osoyoos Band from the Okanagan and community ownership in and of Valley have built a thriving economy, themselves would not have resulted in based not on what the Chief terms the successful businesses. Someone ‘rocking chair money’ from natural had to see the inherent opportunities resources, but on a series of agriculture, in the circumstances and develop eco-tourism, commercial, industrial, and businesses to take advantage of these residential businesses, including Nk’Mip opportunities. The Chief of the Osoyoos Cellars, the frst aboriginal-owned winery Band has this entrepreneurial attitude. in North America. The area attracts One of the frst things he did when he about 400,000 visitors per year, and at was appointed was to remove signs peak tourist season, there is essentially that said “Keep out – no trespassing full employment among the more than Osoyoos Indian Reserve” and replace 470 members of the Osoyoos reserve. them with a sign “We’re open for business. Working with business to The Osoyoos Indigenous Band preserve our past and strengthen Development Corporation’s mission our future. Call with your business is to achieve self-reliance through ideas.” The Chief calls his approach economic development to preserve ‘community capitalism’. the culture and create jobs on their • Indigenous ownership and lands for future generations. management – In 2001 the Chief and Council of the Osoyoos Indian Band History enacted tax jurisdictions over reserve Forty years ago, the Osoyoos Indian lands to become the taxing authority Band was bankrupt and most for property on the reserve, which community members were reliant on allowed them to borrow capital for government social assistance. Now infrastructure and social and economic the Band has become a flourishing development. corporation that employs hundreds of • Clear governance and management people with an annual budget of more structures – The Chief restructured than C$17 million. the businesses for reporting and accountability purposes, for instance, Achievements hiring outsiders as senior managers. The Osoyoos Indian Band reserve has This created some tensions with the the distinction of owning the most Council but has contributed to the businesses per capita of any frst nation success of the enterprises. in Canada, so many businesses in fact • Development of human capital – that it has imported workers from 35 The Osoyoos Indian Band is committed less-affluent Bands. to being one of the major economic SOURCE: NK’MIP CELLARS Nk’Mip Cellars has won awards as the generators in the South Okanagan by top winery in British Columbia and increasing its self-generated revenue proceeds from the winery go towards by 50% and using the profts from helping the reserve’s desert ecosystem. its enterprises to further focus on capacity building in the Development Recently the Osoyoos Indian Band was Corporation and in the Osoyoos successful in securing a contract to community. build a maximum security jail, which will • Partnerships – Through joint ventures bring in 240 full-time permanent jobs for the Osoyoos Indian Band has built families in the Okanagan region. business relationships that have created social and employment opportunities for both aboriginal and non-aboriginal people in the South Okanagan. Vincor International owns 49 per cent of the Nk’Mip Cellars, while the Osoyoos Band owns 51 per cent. As a result of this partnership Vincor has invested C$40 million in vineyards, SOURCE: IAN LINDSAY, VANCOUVER SUN equipment and plant operations on the Band’s land. Sources: Anderson et al 2007, Rose 2013, Osoyoos Indian Band website 2013. 31 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

3.4 SUMMARY In summary, Indigenous businesses are influenced by the same factors that contribute to any business success. As with all businesses, successful Indigenous businesses are well managed, with good staff and reliable suppliers. However, culture also plays an important role in Indigenous business. This is particularly the case for Indigenous corporations on Indigenous land where the goal is to improve the social and economic outcomes of the whole community. In this situation, it is important that there are institutions of governance and dispute resolution processes in place to avoid disagreements about how the profts from the enterprise will be used. A number of key factors have been identifed as essential to create a climate of success, including an authorising environment, human capital and social infrastructure, and access to infrastructure, capital and markets. The next chapters explore these factors in greater detail. 32 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT AN AUTHORISING ENVIRONMENT CHAPTER 4.

KEY POINTS Government policy and regulation, including tax law and special economic zones, can contribute to successful business development by creating an enabling environment. In the US, Canada and New Zealand, a ‘nation building’ approach has created an authorising environment for self-determination and innovation, encouraging Indigenous communities to capitalise on their assets and resources. This approach has not been followed to the same extent in Australia, and the literature suggests that as a consequence Australia lags behind other countries in this regard. Successful Indigenous businesses have sound governance and management structures and also, where required, structures that separate community obligations from the everyday management of the business in order to reduce risk.

Government policies and regulation can play a (such as the Australian Government’s supportive or constraining role when it comes Opportunities Policy) to economic development. Land legislation has • business mentoring and business development prevented Indigenous people from capitalising on assistance (see section 4.2 overleaf) their land (see section 6.2). However, governments have also implemented policies and legislation • connections to other businesses and markets that have had an enabling effect on Indigenous (for example Supply Nation discussed in communities, such as the First Nations Land section 6.5) Management Act (FNLMA) 1999 in Canada, the • land acquisition and land management (see Maori Fisheries Act 2004 in New Zealand, and text box on the Indigenous Land Corporation The Corporations (Aboriginal and Torres Strait overleaf). Islander) Act 2006 (CATSI Act) and the Native Specifc local policies that can make a difference Title Act 1993 in Australia. to Indigenous regional economic development are regional plans which assess the strengths and 4.1 POLICIES AND PROGRAMS weaknesses of regional economies. An example In Australia a wide range of federal and state/ of a regional plan, profled in the Australian territory government policies and programs offer Government’s Regional Development Guide, is support to Indigenous businesses. A number the tourism diversifcation project in Far North of statutory authorities have been established Queensland (FNQ). to assist Indigenous socio-economic outcomes and to administer these programs, for example A region long dependent on tourism, recent Indigenous Business Australia and the Indigenous events such as global economic changes and Land Corporation. changes in weather patterns had reduced income from tourism. A regional plan for FNQ focusing on Examples of the types of services provided by diversifcation of the tourism sector is expected government agencies include: to build on natural, cultural and built environment assets while identifying opportunities to reach into • grants and low cost loans (discussed in new markets (Department of Regional Australia, section 6.4) Local Government, Arts and Sport 2013). • procurement policies and processes that encourage the use of Indigenous business 33 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT AN AUTHORISING ENVIRONMENT

STOCKMAN AT HODGSON DOWNS STATION. SOURCE: MICHAEL FRANCHI 2013 34 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

Business support networks and business SNAPSHOT: HOW incubators offer a range of services such as THE INDIGENOUS networking and promotions, access to training, LAND CORPORATION mentoring, coaching and other development IS BENEFITING activities to support and grow a vibrant COMMUNITIES Indigenous business sector. The Australian Government established the Indigenous Land Corporation (ILC) as an independent statutory authority 4.2 MENTORSHIP AND • The Darebin Enterprise Centre in 1995. The aim of the ILC is BUSINESS INCUBATORS established its Indigenous Business to assist Indigenous people to Incubator in 2006, and supports acquire and manage land to Business support networks and business individual business owners and achieve economic, environmental, incubators offer a range of services community organisations to build and social and cultural benefts. such as networking and promotions, strengthen Indigenous businesses The ILC runs two programs, access to training, mentoring, coaching (Commonwealth of Australia 2008; the Land Acquisition Program, and other development activities to Darebin Enterprise Centre 2012). which acquires and grants land to support and grow a vibrant Indigenous Indigenous corporations, and the business sector. The literature suggests In Australia the unique creation of Land Management Program which that these types of services provide an Indigenous Stock Exchange (ISX) assists with the management and an important and necessary level of website, with a free market for listing development of land. support for entrepreneurs, particularly Indigenous business ideas, products, in areas where they may not have and investment opportunities, furthers The ILC operates 14 agricultural a high level of experience such as Indigenous economic development businesses on land it either owns marketing, legal matters and fnance through bringing together entrepreneurs or leases from Indigenous land (Poutama Trust 2014; Canadian and sources of funding (Frederick owners and where Indigenous Council of Aboriginal Business 2012; and Foley 2006). The ISX website has people have sought the ILC’s Commonwealth Government of continued to produce new ideas and has assistance with enterprise Australia 2008). led to the development of a number of development. The ILC Board has regional ‘trading floors’ (ISX 2014). also established a wholly-owned In Australia there are a number of subsidiary company, Voyages organisations that support and 4.3 TAX INCENTIVES Indigenous Tourism Australia Pty encourage Indigenous businesses, Governments also use a variety of Ltd (Voyages), to manage and ranging from government agencies to tax incentives to encourage business operate the ILC’s tourism business Indigenous chambers of commerce development. Within the Australian portfolio and to act as a vehicle and business support networks tax system a range of incentives have to assist in the development of more broadly. been created to foster innovation and Indigenous tourism across the • Indigenous Business Australia (IBA), development in such sectors as farming, nation. “through its Business Development infrastructure development, mining, The tourism portfolio consists and Assistance Program, assists entertainment, and environmental of three resorts, Home Valley eligible Indigenous Australians to protection. However, the Australian Station, in the Kimberley, Ayers establish, acquire and grow viable Government has not to date established Rock Resort in Central Australia, small to medium businesses, by tax incentives to encourage Indigenous and Mossman Gorge Centre at providing, or facilitating access land development (Stanley 2002). Mossman Gorge in Queensland. to, business support services and Other countries, notably the United In 2012-13, these three resorts business fnance” (IBA 2014). States and Canada, do use tax employed a total of 250 Indigenous • Indigenous Business Council of structures to encourage productive employees, 19 Indigenous sub- Australia (IBCA) promotes the interests use of Indigenous land for business contractors and provided training of Indigenous business through development. The United States federal opportunities for 178 Indigenous advocacy, leadership development, government has established a program people (Commonwealth partnerships and research (IBCA 2014). called the Empowerment Zone and Government of Australia 2008; • Koorie Women Mean Business (KWMB) Enterprise Community Program (EZ/ Indigenous Land Corporation Incorporated, an organisation of EC Program) to encourage business website 2014). and for Indigenous women living development in low socioeconomic in regional, rural, and metropolitan rural and urban areas. There are also Victoria, provides services to tax exemptions for both individuals and support Indigenous women in businesses on lands of some Native their business. The organisation is American Nations, and some Nations responsive to women’s needs and have been able to impose their own assists in partnerships and business taxes on businesses operating on the development (Commonwealth Nation’s land (Stanley 2002). Canada Government of Australia 2008; Koorie has enacted some similar policies (see Women Mean Business website 2004). snapshot opposite). 35 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

While Australia has SNAPSHOT: INDIGENOUS TAX LEGISLATION a number of policies Canada designed its Canadian First Nations Fiscal and Statistical Management and programs to assist Act, later named the First Nations Fiscal Management Act (FNFMA), to Indigenous people encourage economic development for Canadian First Nations. The Act allows First Nations to impose property taxes and make use of other revenue- it lags behind other generating mechanisms within their boundaries. This has increased the ability countries, such as to access and invest capital. The Act is optional and Bands apply to participate; once a Band is accepted onto the Act’s schedule, they have access to a Canada, the United number of statutory support organisations (Aboriginal Affairs and Northern Development Canada 2014). As an example, the Whitecap Dakota First Nation, States and New Zealand a rural community, has been able to charge goods and services taxes on various in its overall approach items such as fuel and alcohol, and has used this revenue to invest in a number of social and physical infrastructure projects to beneft the whole community towards Indigenous (Loizides and Wuttunee 2005). Australians.

4.4 A NATION BUILDING • welfare policies and government Physical infrastructure is important; APPROACH programs have been overly however, beyond the basic structures of paternalistic and have abrogated roads, water and power, infrastructure While Australia has a number of policies personal responsibility (Altman 2001; needs are determined by the community and programs to assist Indigenous Hughes & Hughes 2012). so that a strategic approach is essential people it lags behind other countries, (Cornell and Jorgensen 2007). such as Canada, the United States and One of the factors that differentiates An example of a ‘nation-building’ New Zealand in its overall approach Canada and New Zealand from approach in the Indigenous community towards Indigenous Australians. These Australia is that both countries development context can be seen in the latter countries have adopted what negotiated historical treaties allocating NANA Regional Corporation (Alaska) has been termed a ‘nation building’ land and resource rights. As a result, case study in chapter 3. approach based on humanistic economic Indigenous Australians have less development theory, as the governments bargaining power and capacity to create When economic development is driven have shifted from assimilation to economic development policy than by communities, rather than through fostering self-directed Indigenous Indigenous people in Canada and New government-imposed programs, it is development (Wilkins 2007; Cornell Zealand (First Peoples Group 2009; usually more successful. Indigenous- and Jorgensen 2007). In the context Durette 2007). driven development does not mean discussed here, the word ‘nation’ refers development has to occur without A key feature of the ‘nation building‘ to an Indigenous tribe or nation rather outside assistance, but it means or community strengthening approach than to the larger nation-state, and is that external support is sought as adopted internationally is Indigenous conceptualised as building Indigenous an enabler to assist communities to governance. This concept is much community and institutional structures achieve their goals and is not imposed broader than corporate governance of to strengthen the self-determination as a means of ensuring externally- Indigenous businesses, and relates to of tribes or nations. Although Australia devised goals are met (Hunt 2011). Indigenous community relationships adopted self-determination policies Likewise, Cornell (2006b:13) argues (see section 4.5 overleaf). in the 1970s these have not been as that “the most consistent predictors effective as they could have been for Nation-building in its broader defnition of sustainable economic development a number of reasons: refers to the process of constructing on Indian reservations [in the US] are or structuring a national identity using not economic factors such as location, • many Indigenous people, particularly the power of the state, with the aim of educational attainment or natural those in remote areas, lacked the unifying people within the state so that resource endowments but rather knowledge and training for self- it remains politically stable and viable in largely political ones”. The extent to management within the mainstream the long run. According to Cornell and which structures of governance align Australian legal and regulatory Jorgensen (2007), there are six steps to with Indigenous social and political environment a nation building approach to economic norms, what Cornell (2006b:14) calls “a • land rights legislation has led to development (see fgure 5 overleaf). congruence between formal governing conflicts over who is a ‘traditional The frst step is to claim jurisdiction institutions and Indigenous political owner’ and factionalism which (decision-making power); the next step culture”, influences the sustainability has inhibited decision making and involves building capable governing and effectiveness of economic prevented social cohesion and stability institutions. This step underpins all other development activities. • education policies, particularly activities. Unless the nation (eg the in homeland communities, have Indigenous tribe or community) deals prevented Indigenous children with its own governance infrastructure from receiving decent standards it is unlikely to attract skilled people or of education fnancial capital. 36 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

FIGURE 5 – THE ‘NATION-BUILDING’ APPROACH IN AN INDIGENOUS COMMUNITY CONTEXT Source: adapted from Cornell and Jorgensen 2007.

4.5 GOVERNANCE common: cultural legitimacy in the 4.6 SUMMARY eyes of the community. If people in Two types of governance are discussed There is clear evidence that governments the community do not support the in the literature: corporate governance can provide effective support for governance arrangements, then leaders and community governance. Corporate Indigenous business and economic in the community will become objects governance refers to the processes development through various programs of political opportunism and conflict by which organisations ensure and services and, as the international (Cornell 2006a). In Canada, the United accountability and sound management. literature indicates, the most effective States and New Zealand, community way governments can contribute to leaders have recognised that good Community governance, in contrast, Indigenous economic development is governance and management require refers to the evolving processes by creating an authorising environment separating community politics from and structures by which a group of which empowers rather than constrains business. Owners of successfully people, community or society organise individuals and communities. This managed enterprises recognise themselves collectively to negotiate can be achieved through policy, the threat community politics and rights and interests, and determine: legislative and regulatory structures; factionalism can have on the proftability through a philosophical approach to • how they are constituted as a group of a business, and either isolate business ‘nation-building’ to encourage self- (who are members and who are not) managers from those forces or establish determination and accountability; • who has authority within the group, independent boards of directors (Cornell and through promotion of business and about what and Kalt 2003; Cornell 2006a). incubators, mentoring and other • agreed rules to ensure authority is While an ongoing commitment to business development mechanisms. All exercised properly and their decision- Indigenous traditions and culture is four countries have used these enablers makers are held accountable often a key objective of Indigenous to promote Indigenous business and • how decisions are enforced economic development initiatives, economic growth, although Australia • what arrangements will best help the cultural measures must be balanced appears to have lagged behind New group to achieve their goals (Hunt and with sound management principles Zealand, Canada, and the US in Smith 2007). to prevent inefficiency and ensure the creating an environment supportive viability, legitimacy and sustainability of Indigenous entrepreneurship and The Australian and international of economic development strategies economic development. literature provides evidence that those (Peredo and Chrisman 2006; Stevenson Having an external environment communities with successful economic 2007; Loizides and Anderson 2006). conducive to innovation and business development initiatives were those that Cultural and economic goals are development, however, is only part of had frst developed strong, culturally not necessarily in opposition to one the equation for success. The evidence legitimate, and effective governance another; management structures and is clear that human capital is the (Hunt 2011; Taylor 2008; Cornell and accountability mechanisms can ensure most signifcant factor in the success Kalt 2003; Cornell 2003; Loizides and that any profts from the business are of economic enterprise, whether Wuttunee 2005; Sisco and Nelson 2008; used appropriately while also meeting Indigenous or non-Indigenous. The next Canadian Council for Aboriginal Business communities’ cultural or social goals chapter discusses the role of human 2012; Aboriginal Affairs and Northern (Altman 2001). Development Canada 2013; Federation capital and social infrastructure in of Maori Authorities 2009; Hindle and While business always entails risk, economic development. Lansdowne 2005). Indigenous communities can improve the odds for success by managing their Although the governance arrangements community governance arrangement of successful communities vary and businesses effectively, as the immensely they all have one thing in snapshot opposite illustrates. 37 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

4.6 SUMMARY There is clear evidence that governments can provide effective support for Indigenous business and economic development through various programs and services and, as the international literature indicates, the most effective way governments can contribute to Indigenous economic development is by creating an authorising environment which empowers rather than constrains individuals and communities. This can be achieved through policy, legislative and regulatory structures; through a philosophical approach to ‘nation-building’ to encourage self- determination and accountability; and through promotion of business incubators, mentoring and other business development mechanisms. All four countries have used these enablers to promote Indigenous business and economic growth, although Australia appears to have lagged behind New JAWUN EMERGING LEADERS CHRIS INGREY AND JAMES FA’AOSO WITH DJAWA YUNUPINGU Zealand, Canada, and the US in (DEPUTY CHAIRMAN, GUMATJ CORPORATION). SOURCE: DANIEL LINNET 2014 creating an environment supportive of Indigenous entrepreneurship and economic development. Although the governance Having an external environment conducive to innovation and business arrangements of SNAPSHOT: GOVERNANCE REFORM development, however, is only part of successful communities The Confederated Salish and Kootenai Tribes of the Flathead Reservation in the equation for success. The evidence Montana made changes to their governance structures in the 1980s which is clear that human capital is the vary immensely they helped to improve their community’s economic prospects. Key reforms most signifcant factor in the success all have one thing in included stabilising their tribal government, introducing the rule of law of economic enterprise, whether as well as separation of powers. These changes helped to establish the Indigenous or non-Indigenous. The next common: cultural necessary political and social institutions for the tribe to manage their own chapter discusses the role of human affairs and to become independent of the United States government. The capital and social infrastructure in legitimacy in the eyes governance reforms introduced by the Confederated Salish and Kootenai economic development. of the community. Tribes, including judicial reforms, have helped them develop a thriving private economy and become one of United States most sustainable and economically successful communities (Cornell and Kalt 2003) 38 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT HUMAN CAPITAL AND SOCIAL INFRASTRUCTURE CHAPTER 5.

KEY POINTS Human capital is a fundamental necessity for successful economic development. Nurturing this resource through strong and stable social infrastructure, including access to education and training, contributes to and supports economic participation in communities. The presence of leadership capabilities and positive attitudes within individuals and communities can be decisive in the success of a business and in fostering innovation and creative entrepreneurship. Formal and informal networks and partnerships can play an important role in supporting Indigenous businesses and creating economic development opportunities. Successful Indigenous business owners have made use of a wide range of partnership models and business structures to meet their needs. It is important that the model fits the needs of the business and the community.

Many of the factors that contribute to economic While investment in development have limited impact if there is not the social structure to support them. For infrastructure can increase example, while investment in infrastructure can increase productivity it has limited impact productivity it has limited without a concurrent investment in human impact without a concurrent capital. General education, vocational training, business management and leadership skill investment in human capital. development are all crucial in creating a labour force to meet the demands of the 21st century and, specifcally, creating an Indigenous business influence on the capacity of a community to foster community which is growing and self-sustaining. and grow their economic potential (Department In this regard, human capital is one of the most of Regional Australia, Local Government, Arts important factors influencing successful economic and Sport 2013). development initiatives. ‘Capacity building’, a term common in the literature of economic development, is defned 5.1 HUMAN CAPITAL as “the specifc objective of developing Human capital refers to the ‘knowledge, expertise competencies and employment skills that are and abilities’ of local workers (Department of directly related to the facilitation of economic Regional Australia, Local Government, Arts and growth” (Cairns 1996 cited in First People’s Group Sport 2013:4). Human capital is essential for 2009). Capabilities, the factors or qualities that establishing a positive environment for business give a person their capacity to take action, have development and entrepreneurship, including the been defned as including “a person’s education, extent of networks, constructive social norms, their health, their job status, their income, their and strong community capacity (or capabilities). security, and so forth” (Cape York Institute 2005). Labour mobility, workforce participation levels, As the Cape York Institute notes, “the wellbeing and levels of education and training will all have an of a community can then be defned to be the THE FIRST APPRENTICES OF THE WARRIGAL PROGRAM – A HOSPITALITY BASED COURSE CREATED BY WESTPAC GROUP AND COMPASS GROUP. SOURCE: GARY COMPTON 2014

aggregate of the capabilities of its Social infrastructure typically includes 5.3 EDUCATION AND members” (Cape York Institute 2005:3). the physical assets that are required SKILLS DEVELOPMENT The ability to foster the capabilities of to operate social services; examples a community in order to build capacity of social infrastructure assets include As noted above, education is a key within a local workforce is a key schools, universities, hospitals, prisons capability in the development of component of business success. It is a and community housing (New Zealand human capital and, subsequently, of synergistic process; businesses need Social Infrastructure Fund 2014). One of economic wellbeing. As a result, social qualifed and able workers to grow; the reasons for the reduced capabilities infrastructure in the form of schools likewise, workers need opportunities to of people in many remote, and even is necessary to provide educational contribute their skills and to grow their regional and rural communities, is the opportunities for advancement, own potential (Department of Regional absence of an acceptable standard Increasing the educational attainment Australia, Local Government, Arts and of mainstream services (or social of Indigenous Australians is a key Sport 2013). infrastructure), for example: primary component of the nation’s Closing the schools that teach numeracy and literacy Gap initiative to improve social and In addition to benefting local and skills, police services to maintain law and economic opportunities for Indigenous regional economic development, order, and health services (Hughes & children and young people (Australian building human capital allows a Hughes 2012; Altman 2001; Cape York Government 2014). An individual’s community to become sustainable Institute 2005). Although government ability to engage in the labour market without dependence on others – what has a responsibility to provide a certain is influenced by their level of education the Cape York Institute refers to as level of services to all its citizens, it (see benefts of education on labour ‘economically viable’ (Cape York Institute is not usually economically viable force participation in text box overleaf). 2005:3). to have the same access to services The more educated a person is, the more likely they are to gain and maintain Human capital does not exist in a available to people living in rural parts employment, and to contribute to new vacuum, and the viability and social of Australia as there are in urban areas and growing business opportunities infrastructure of a community and region due to issues of remoteness and scale. (Deloitte Access Economics 2013). will enable or inhibit the development This can begin a cycle of decline over and strengthening of local human time as people move to access services Although there is a gap between potential, as discussed further below. and opportunities not available locally, Indigenous and non-Indigenous making it harder to sustain local services education outcomes, there are positive 5.2 SOCIAL INFRASTRUCTURE (Department of Regional Australia, Local signs that Indigenous education Government, Arts and Sport 2013). The Cape York Institute (2005) argues outcomes are improving (see text box that the assessment of viability needs Thus, the presence or absence of social overleaf). With a stronger foundation to be made by the community, based infrastructure may have a signifcant in basic education skills (such as literacy on a balance between acceptable impact on the ability of a community and numeracy skills) more Indigenous levels of wellbeing and acceptable to develop economically. Educational people will be able to take up post- levels of external support, with those attainment has been linked inversely school training and qualifcations. levels being determined again by the to levels of poverty (Hughes & Hughes Unfortunately, many of the training community. Viability also depends on 2012; Vinje 1996). Vinje (1996) argues programs delivered to Indigenous the level of outside support provided to that, in the Native American context, people (especially those in rural and the community by the government and increasing educational attainment does regional areas) have failed to provide whether this is considered acceptable. not necessarily lead to a loss of culture a stepping stone to employment. In other words, a community is or community cohesiveness. Indeed, in The report by GenerationOne (2011), economically sustainable when it has a Australia there are a number of examples Walk in My Shoes, found that many sufficient mix of business activities and of Indigenous people who have left their Aboriginal people are trapped in a social services to support the well-being communities to receive an education, training cycle where they move from of the community without dependence later returning to provide benefts to one training program to another without on welfare (Cape York Institute 2005). their community (either locally or more ever fnding employment. The most These in turn contribute to the social broadly); one example is Waverly Stanley successful training initiatives for infrastructure which supports or from Cherbourg, founder of Yalari (First Indigenous people without high school enhances a positive environment for Peoples Group 2009; Yalari 2014), qualifcations tend to be on on-the-job economic development. described overleaf. programs which combine an element of pre-employment training and mentoring (GenerationOne 2011). 40 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

SNAPSHOT: YALARI – THE BENEFITS OF EDUCATION Yalari is a not-for-proft organisation in Australia that offers Indigenous children from remote, rural and regional communities education scholarships at some of Australia’s top boarding schools. Yalari was founded in 2005 by Waverley Stanley and his wife Llew Mullins. Waverley’s life experiences inspired him to help improve the education opportunities for Indigenous children. Waverly was born in Cherbourg, a small town 300 kilometres north-west of Brisbane. While he was at primary school one of his teachers recognised his potential and helped him gain a scholarship to attend Toowoomba Grammar School for his high school education. Waverly realises that this opportunity helped to shape and determine his future success and wants other Indigenous children to receive the same opportunities he had. Yalari receives fnancial support from individuals, companies, philanthropic foundations and government departments and currently has more than 185 students across 32 schools. More than 60 students have also graduated from high school (Yalari 2014).

5.4 INDIGENOUS LEADERSHIP The literature suggests that strong INDIGENOUS EDUCATION STATISTICS leadership is an important element of successful economic development in Indigenous communities and that In the 2011 Census: capacity building initiatives are more • 61% of Aboriginal and Torres Strait Islander people aged 15 to 17 years were likely to be successful when they are attending secondary school, up from 53% in 2006 Indigenous-led (Cornell 2006; Loizides • more than one in three (37%) Aboriginal and Torres Strait Islander people aged and Wuttunee 2005; Sisco and Nelson 15 years and over had attained Year 12 or equivalent and/or Certifcate II or 2008; Federation of Maori Authorities higher qualifcation, up from 30% in 2006. 2009; Hindle and Lansdowne 2005). Strong leaders tend to have a clear vision that aligns market needs with Highest year of school completed community capacity. In communities where successful Indigenous enterprises In the 2011 Census, one-quarter (25%) of Aboriginal and Torres Strait Islander have been developed, leaders have people aged 15 years and over reported Year 12 or equivalent as the highest generally assessed the business year of school completed, compared with about half (52%) of non-Indigenous possibilities available to the community people (ABS 2012). in consultation with community stakeholders, taking into account the Post school qualifications community’s strengths and weaknesses and any identifed capacity building In the 2011 Census, about one-quarter (26%) of Aboriginal and Torres Strait needs. As a result, a large number of Islander people aged 15 years and over reported a post school qualifcation Indigenous tribes and social enterprises compared with about half (49%) of non-Indigenous people. The most common are successfully improving community post-school qualifcation for Aboriginal and Torres Strait Islander people was well-being and economic outcomes, at the Certifcate level (65%). Of these, 77% were Certifcate III or Certifcate IV for their people and for society more qualifcations (ABS 2012). broadly. Three examples are Primco Dene and Goodfsh Lake Development Corporation in Canada and the Ngāi University statistics Tahu tribe in New Zealand. By the end of 2010, there were around 25,000 Indigenous graduates in Australia. According to Reconciliation Australia if the steady growth in enrolments and completions continues, these numbers could increase to more than 50,000 Indigenous graduates by 2020 and more than 100,000 by 2050 (Reconciliation Australia 2011).

Benefits of education on labour force participation (2011 Census) • Indigenous persons with Year 12 or equivalent – 76 % in labour force • Indigenous persons with a diploma or above – 84 % in labour force • Indigenous persons without school qualifcations or certifcates – 45% in≈labour force.

SOURCES: ABS 2012; ABS 2014; RECONCILIATION AUSTRALIA 2011. ABORIGINAL AUSTRALIAN ACADEMY DIRECT LEARNING PROGRAM. SOURCE: ELISE DERWIN 2014 41 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

• Primco Dene, the economic has also separated its administration, The Maori in New Zealand align business development corporation of Cold fnancial and development practices with Maori values and consider Lake First Nation in Canada, owns responsibilities into three distinct that this contributes to their success and operates a number of successful entities. The Ngāi Tahu Development (Federation of Maori Authorities 2009). businesses that offer a range of Corporation is responsible for the In Australia, the Gumatj Clan have services including logistical and educational, social and cultural embedded their cultural values into business supports. The company development of the Ngāi Tahu people. their business practices by developing has made a commitment to sustain a It aids in developing the Ngāi Tahu pragmatic rules that enable Indigenous minimum of 80 per cent Indigenous people’s assets and wellbeing through Elders to contribute to decision-making employment. The approximately 300 educational scholarships and fnancial (see text box overleaf). Indigenous employees belong to grants for special projects, health the Cold Lake First Nation as well as schemes and cultural ventures, all 5.6 WINNING ATTITUDE 40 other Indigenous communities. of which are funded by the surplus Capabilities are also related to the Primco Dene invests in the training earnings of the commercial assets individuals’ attitudes and their approach and development of its staff as well of the Ngāi Tahu. In 2012 the Ngāi to challenges. Across the literature as the economic development of the Tahu tribe distributed NZ$25 million certain characteristics of a ‘winning community by working with other in educational, social and cultural attitude’ are identifed as important to businesses owned by Cold Lake activities, NZ$953,000 of which was the success of Indigenous businesses members (Canadian Council for provided to help with recovery efforts (Cornell 2006; Loizides and Wuttunee Aboriginal Business 2012). after the Christchurch earthquake. 2005; Sisco and Nelson 2008; Canadian Since settlement the Ngāi Tahu tribe • Goodfsh Lake Development Council for Aboriginal Business 2012; has allocated NZ$254 million to iwi Corporation in Canada was established Aboriginal Affairs and Northern (tribe) members through development in 1978 by the Chief and leaders of Development Canada 2013; Federation activities (Paul 2007; Ngāi Tahu 1996). the Band to create self-reliance and of Maori Authorities 2009; Frederick employment for a rural First Nation 5.5 THE PLACE OF CULTURE and Foley 2006; Hindle and Lansdowne community that was losing members 2005; Commonwealth Government to distant employment opportunities IN BUSINESS of Australia 2008; Altman 2001; First in the mining sector. In response, the Human capital is also related to a Peoples Group 2009; Rola-Rubzen 2011). Corporation created a dry cleaning group or communities’ ‘cultural capital’. These include confdence and strong business to support the oil and gas Within the literature there are several self-presence, the ability to facilitate industry, and now manages four ways in which culture is used and knowledge transfer, expert networking subsidiary businesses that provide a viewed in the context of Indigenous skills, community advocate skills, and range of services to workers in the economic development. Culture may calculated risk-taking abilities. oil and gas industry. By keeping the be “a resource, a goal or objective, a businesses located on the reserve, measurement of success and or part of a the Corporation has reached its process” (First Peoples Group 2009:40). goal of providing employment for First Nations people and improving Culture as a resource: having a strong SNAPSHOT: economic wellbeing. Good structures cultural identity can be a useful asset BLENDING TRADITION of governance and strong leadership and provide a number of different have contributed to the Corporation’s business opportunities, including arts WITH TECHNOLOGY such as music and dance, visual art and success (Sisco & Nelson 2008). Wayne McGinness is the owner and craft, and tourism activities, as well as operator of Aboriginal Steel Art or • The Ngāi Tahu tribe in New Zealand providing leverage in the sharing of ASA, an art business located in a was the frst tribe to reach a full and cultural knowledge and wisdom. An small town called Kuranda in the fnal settlement with the New Zealand example of a successful Indigenous rainforest of North Queensland. government for Treaty of Waitangi business in Australia using culture as His business is a contemporary injustices. Having campaigned for years a resource is Steel Art (see text box). art supplier which specialises prior to reaching settlement, they were A further example of using culture as in corporate gifts, fne art and careful to make wise investments and resource is the Yaru Water case study in awards and trophies. All of his monitor the fnancial activity of the Chapter 3. tribe closely to guarantee its future artwork is created in marine grade fnancial sustainability. For example, Culture as an objective and process: stainless steel. Wayne draws on his through purchasing considerable preservation of cultural heritage family heritage of both Aboriginal volumes of land soon after the can be a motivating factor guiding Australian and Torres Strait Islander settlement and then selling again very Indigenous communities’ economic and his artwork ‘blends tradition with quickly at market price they were able development plans (Tapsell and Woods technology.’ Wayne’s fne art pieces to increase substantially the initial 2008; Wuttunee 2007; Warriner 2007). are supplied to galleries around NZ$170 million claim and today the Culture can be embedded in Indigenous Australia. Artworks range in size tribe’s assets exceed NZ$809 million. businesses in various ways including from a hand held frill necked lizard Annually, the Ngāi Tahu tribe having an approval process for cultural that travelled to London with the contributes over NZ$200 million to issues, in the values underpinning Australian Paralympians to a 3 metre New Zealand’s South Island economy, the business and in the governance steel crocodile for the Territory through job creation, purchasing and structures of the business, as discussed Wildlife Park located at the Top End spending profts locally. The tribe in section 4.5. of Australia (Aboriginal Steel Art website 2014). 42 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

Once a successful SNAPSHOT: EMBEDDING CULTURAL VALUES business has been INTO BUSINESS PRACTICES established, it also The Gumatj Clan Corporation, established in 2007, aims to develop a sustainable plays an important economy for the local community. The corporation operates a timber and role in increasing construction business on the Gove Peninsula in East Arnhem Land in the Northern Territory, and has initiated a number of additional activities to support human capital by its cattle station business and the community, such as using its timber to provide providing training station and community housing. The corporation’s success is attributed to its blending of modern and traditional decision-making and governance structures, and employment incorporating Yolgnu cultural norms and establishing an executive council made opportunities. up of Yolgnu elders (Morley 2014).

Another hallmark of a successful Indigenous small business is their use of creativity and innovation (Sisco and Nelson 2008). In a Canadian Business survey, businesses that were successful had introduced new products or services, or new processes, in the past three years (Canadian Council for Aboriginal Business 2011). According to Sisco and Nelson (2008), the key to success is not to plan for perfection, but to address challenges, not only with well ‑considered and effective strategies but with creativity. An example of the importance of a winning attitude and creativity is demonstrated by Kiwa flms in New Zealand (see text box opposite).

5.7 STRONG NETWORKS AND PARTNERSHIPS Human capital is also related to establishing networks and partnerships; if people do not have the capabilities within their own community then they have to seek them elsewhere. Indigenous businesses are using partnerships with other businesses – Indigenous and non- Indigenous – to build capacity in their enterprises and facilitate sustainable community development (Cornell 2006; Loizides and Wuttunee 2005; Sisco and Nelson 2008; Federation of Maori Authorities 2009; Hindle and Landsdowne 2005). According to Roness and Collier (2010:2), there are a wide variety of partnership arrangements, which are created to meet the needs of the partners. Some example of partnership structures include: • “shared ownership • contractual partnerships • joint management of a company BRIAN HARTZER, CHIEF EXECUTIVE – AFS, WESTPAC GROUP AND • strategic alliances among separate IAN TRUST (EXECUTIVE DIRECTOR, WUNAN) IN EAST KIMBERLEY. and distinct companies • cooperative business agreements • highly formalised arrangements supported by legal agreements 43 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

• informal ‘verbal’ agreements to work together • the creation of new legal entities SNAPSHOT: ANYTHING IS POSSIBLE WITH • business-to-business partnerships THE RIGHT ATTITUDE • public-private partnerships” (Roness The owner of Kiwa Films, Rhonda Kite, grew up in Otara, one of the poorest suburbs and Collier 2010:2). in Auckland, the largest city in New Zealand. Rhonda is the eldest of nine children, While the motivation for many business whose Maori mother died when she was young. She left school when she was 15 and partnerships is increasing revenue, became pregnant at 16. Yet, Rhonda has been able to overcome these challenges to Indigenous people are often motivated become the only Maori businesswomen to own and manage a multimedia enterprise. to form partnerships because of a desire Rhonda has co-produced an award winning television drama series and has also to improve the economic conditions won awards for her documentaries. She is also known in the IT sector as the inventor of their community. Non-Indigenous of a software program that speeds up the process of ADR (automatic dialogue business partners may also be motivated replacement), a central component of flm production. Rhonda developed this by a sense of social responsibility in process after winning a contract to convert American cartoons into Maori language to contributing to enterprises which beneft make it easier and more fnancially viable to dub the programs. Rhonda attributes her Indigenous people. For Indigenous success to being Maori and having the right attitude: “With Maori, everything is wide businesses, there can be many benefts open and anything’s a possibility. We don’t shut the door when someone says ‘no’ but Another hallmark of a successful to partnerships with non-Indigenous are more likely to look for other ways of getting there and that’s one of the roles of Indigenous small business is their use businesses, including: an entrepreneur”. The company is now called Kiwa Digital Ltd and has expanded into of creativity and innovation (Sisco and other media forms including digital publishing. (Henry 2007; Kiwa website 2014). Nelson 2008). In a Canadian Business • the potential to qualify for contracts survey, businesses that were successful otherwise not accessible had introduced new products or • the potential to access new markets, services, or new processes, in the past capital, technology or employment three years (Canadian Council for • knowledge transfer and skills SNAPSHOT: PARTNERSHIPS AS A STRATEGY Aboriginal Business 2011). According development (Roness and Collier 2010). to Sisco and Nelson (2008), the key to FOR SOCIO-ECONOMIC SUCCESS success is not to plan for perfection, For non-Indigenous businesses the but to address challenges, not only with benefts of partnering with Indigenous To improve economic development in their community, the Lac La Ronge Indian well‑considered and effective strategies businesses are that partnerships can: Band formed the Kitsaki Development Corporation (KDC) in 1981. From the but with creativity. beginning, the KDC‘s strategy for improving the socio-economic status of its • diversify their business and contribute people was to form sound, secure partnerships with other Indigenous groups An example of the importance of to the regional economy and successful businesses, in order to generate income and employment for its a winning attitude and creativity • enhance their reputation and chance community members. As a result KDC has created a number of business ventures, is demonstrated by Kiwa flms in for future land access and partnerships some that they wholly own and others as partnerships. As of 2004, these businesses New Zealand (see text box opposite). with Indigenous businesses employed almost 450 people and had an annual payroll of almost C$6 million. In • create efficiencies through the 1997 the Kitsaki Management Limited Partnership was named Aboriginal Economic 5.7 STRONG NETWORKS local knowledge and expertise of Developer of the Year by the Council for the Advancement of Native Development AND PARTNERSHIPS Indigenous businesses Officers. In 2001 one of the Kitsaki companies, Kitsaki Meats, was the recipient of a Human capital is also related to • increase Indigenous involvement Canada Export Award in recognition of the “spirit of innovation and the excellence establishing networks and partnerships; in their company – as Indigenous of its goods and services.” Only ten companies receive this award per year if people do not have the capabilities businesses tend to employ more (Hindle et al 2005). within their own community then they Indigenous people than non- have to seek them elsewhere. Indigenous Indigenous businesses businesses are using partnerships with • provide new and innovative ideas, other businesses – Indigenous and non- different approaches, and access Indigenous – to build capacity in their of Australia’s largest companies, with the human capital, the benefts of land to additional solutions that respond enterprises and facilitate sustainable aim of identifying, promoting and sharing ownership and access to resources to customer needs community development (Cornell the experiences of member companies may not be able to be realised. Where 2006; Loizides and Wuttunee 2005; • provide ‘accidental’ or informal in supporting economic development individuals or communities lack the Sisco and Nelson 2008; Federation cultural diversity training by increasing among Aboriginal and Torres Strait capabilities themselves, partnerships of Maori Authorities 2009; Hindle knowledge of Indigenous culture Islander Australians. There is evidence and knowledge sharing can play a and Landsdowne 2005). According • provide an opportunity to learn ‘soft of an increasing number of partnerships valuable role in providing the necessary to Roness and Collier (2010:2), there skills’ such as being a good listener and being established between companies human capital to drive economic are a wide variety of partnership negotiator (BCA 2013; Yazbeck 2014). and Indigenous-related organisations. development. Once a successful arrangements, which are created Reconciliation Australia’s Reconciliation business has been established, it also to meet the needs of the partners. In Australia there has been a notable Action Plan Program has been one plays an important role in increasing increase in the number of non- way of creating effective engagement human capital by providing training Some example of partnership Indigenous businesses wishing to help between Indigenous and non-Indigenous and employment opportunities. This in structures include: provide employment and economic organisations (Constable et al 2013). turn has a multiplier effect, leading to development opportunities for a greater culture of employment and • “shared ownership Indigenous Australians. For example, 5.8 SUMMARY social contribution, and an environment • contractual partnerships in 2008 a national industry-led initiative which can support further innovation Human capital embodies the range called the Australian Employment and new opportunity. The next chapter • joint management of a company of capabilities that people possess, Covenant (AEC) was launched, with discusses the roles that location, access • strategic alliances among separate such as their leadership abilities, their the ambition of providing those to markets, infrastructure, capital and and distinct companies attitude and their ‘cultural capital’. Social Indigenous Australians who are able markets play in creating the conditions infrastructure, including education • cooperative business agreements to work with the opportunity to do so for successful enterprises. services and social norms, contribute (GenerationOne 2014). In the same year, • highly formalised arrangements to the capabilities of individuals and the Business Council of Australia (BCA) supported by legal agreements their ability to make the most of their established an Indigenous Engagement opportunities. Without the necessary Taskforce comprising CEOs from some 44 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT ACCESS TO INFRASTRUCTURE, CAPITAL AND MARKETS CHAPTER 6

KEY POINTS Factors such as location, access to markets, infrastructure and natural resources including land ownership have a major influence on the creation of a successful enterprise. Indigenous ownership of land is a contested issue in Australia and overseas. However, a number of Indigenous communities have developed creative responses to the challenges of legal restrictions, access to capital and infrastructure requirements in order to build substantial businesses and institutions. For example, some Indigenous communities have initiated land codes to retain the notion of communal ownership while allowing individual access to the use of land as collateral, while others have established their own credit unions and banks.

Several fundamental external factors that act as Even in regional and rural areas, some Indigenous enablers or barriers for economic development communities are advantageously located within were identifed in chapter 2, including geography proximity of mining operations or a big city, (discussed here more specifcally as location), others are not. Yet, while community members and access to infrastructure, capital and markets. or residents have little control over the location This chapter explores several of these factors in of their community or regional town, the decision relation to their influence on Indigenous economic development, and provides examples of the to capitalise on the advantages of a location is ways in which individuals and communities have up to individuals. There are numerous examples addressed challenges and overcome barriers. where Indigenous communities have used the location of their community to their advantage, 6.1 LOCATION and others where communities have not. For Economic participation is influenced by a number example, Whitecap Dakota First Nation have of factors, including geographic location and capitalised on their proximity to Saskatoon, a associated proximity to employment, the size city with approximately 300,000 residents, to and stability of the employment market, services, become one of Canada’s Indigenous success infrastructure, attitude and education (Australian stories. On the other hand, the Yarrabah Government 2011). community in Queensland (located approximately As outlined in the Indigenous Economic 30 minutes from Cairns) have struggled to take Development Strategy (Australian Government advantage of visiting cruise liners and tourists 2011), three-quarters of Indigenous Australians live as they do not have access to the capital for in urban and regional centres (32 per cent in major development (ABC News 2013). cities, 21 per cent in rural or inner regional areas and 22 per cent in outer regional areas), while There are also successful Indigenous enterprises 25 per cent live in remote Australia. This suggests in seemingly inhospitable locations without easy that, while the majority of Indigenous Australians access to infrastructure or resources. For example, potentially have access to economic enablers, as discussed in Chapter 3, one of Canada’s most there is still a large minority who do not by virtue successful Indigenous reserves is located near of their location. the desert in the Okanagan Valley. The community 45 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

(the Osoyoos Band) and their Chief One of the factors critical to the success of have built a thriving economy, based not on what the Chief terms ‘rocking Whitecap Dakota First Nation was hiring a chair money’ from extractive natural professional land planner to do a land-use plan to resources, but on a broad and diverse business base, including Nk’Mip Cellars, identify the best use of the land on the reserve. the frst aboriginal-owned winery in ABORIGINAL AFFAIRS AND NORTHERN DEVELOPMENT CANADA 2013 North America (Anderson et al 2007, Rose 2013). The choice of business location can land, in terms of title, decision making This has not stopped people from be critical to success. Donna Cona Inc, processes and zoning restrictions. The operating farms, ranches and other a Canadian Indigenous corporation, decision making processes of land businesses based on those customary decided to locate their business off ownership were outlined in chapter 4. rights. At the same time, because reserve land to respond to the market the customary property rights are Due to the communal ownership of for their information technology not enshrined in law, the holders of Indigenous land, people have been services (Sisco and Nelson 2008). If customary rights have no legal recourse unable to capitalise the land and there a community or individuals decide to if the Band decides to re-possess lands are very few private businesses. Most establish a business on Indigenous (Stephenson 2010). of the enterprises on Indigenous land land then developing a land-use plan are communally owned and reliant Indigenous communities are also can help them identify the strengths of on government funding (Hughes et al overcoming the restrictions on private their location. One of the factors critical 2010). Recent legislative changes have ownership on Indigenous land by to the success of Whitecap Dakota attempted to address barriers to private developing their own Indigenous First Nation was hiring a professional ownership on Indigenous owned land in business prototype – the community land planner to do a land-use plan to the Northern Territory and Queensland, development corporation. In many ways identify the best use of the land on the but these legislative changes have not a community development corporation reserve (Aboriginal Affairs and Northern led to signifcant practical change. resembles a quasi-Crown corporation Development Canada 2013). Likewise, With the exception of a few isolated acting as the business arm of the local in New Zealand many Maori have examples of private home ownership in government by providing a range of diversifed their assets as a result of land the Tiwi Islands and Queensland, many services to its community members use assessments and are moving away people living on Indigenous land still (Loizides and Wuttunee 2005). from traditional primary industries such fnd it difficult to own their own home or as farming to establish wine and food private business, insure their property, In Australia, The Corporations companies, retirement villages and even or leave it in their will to their children (Aboriginal and Torres Strait Islander) thermal energy companies (Federation (Hughes et al 2010; Michael 2011). Act 2006 (CATSI Act) allows Indigenous of Maori Authorities 2009). people to form Indigenous owned and Similar themes of ‘inalienability’, controlled corporations on Indigenous 6.2 LAND OWNERSHIP – ‘collective’ and ‘communal’ ownership land. For many corporations, the CREATING A USEABLE occur in North America (Stephenson majority of their capital is secured 2010). Under the Indian Act, Canadian through government grants available LAND BASE First Nations people cannot use land for the provision of key services (such One-ffth of the land in Australia, and as collateral when applying for a loan, as healthcare, education and land- the resources associated with the land and are often categorised as higher risk management). However, the larger the (including minerals, water and biological borrowers by conventional banks and corporation, the greater the capacity for resources) is owned or controlled by lending institutions (Aboriginal Affairs self-generated income – with the top 20 Indigenous Australians (Australian and Northern Development Canada splitting their funding allocation roughly Government 2011). 2013). However, some First Nations 50/50 between self-generated and grant Land ownership influences the degree people have sought to overcome secured and the top fve self-generating to which Indigenous people have access the restrictions of the Indian Act by 83 per cent of their income (ORIC 2014; to resources, capital and markets (see allocating land as customary private ORIC 2013). following sections 6.3, 6.4. and 6.5). property to families who have lived However, the opportunities available there for a period of time. Such land from land ownership vary due to the allocations give the person lawful influence of the following three factors: possession of the land in the reserve but land location, the nature of the land they cannot be sold or left as inheritance (discussed above in section 6.1), and the as neither the Indian Act or the Federal extent of ownership and control over the Government recognise such title. 46 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

6.3 OWNERSHIP OF RESOURCES SNAPSHOT: INDIGENOUS LAND MANAGEMENT Natural resources such as minerals, In Canada in the early 1990s a number of chiefs approached the Indian Affairs water, timber, fsh, and wildlife play an Minister about the possibility of developing their own land-management important role in Indigenous economic administrative regimes under a new legislative framework. In 1999 the federal success. Examples include mining government passed the First Nations Land Management Act (FNLMA) which in Australia and North America, and enables First Nations to develop their own land codes for administering their fshing in New Zealand (Commonwealth lands according to their own rules and customs. Located 65km northeast of Government of Australia 2008; Langton Toronto, the Mississaugas of Scugog Island First Nation was one of the original 2012; Argyle mine website 2014; Durette signatories to the FNLMA. The Band’s land base is small (240 hectares) and 2007; Aotearoa Fisheries Limited 2013). its on-reserve population is only 65 members. However, the FNLMA has had a In Australia, the formation of Indigenous positive effect on the community’s economic development. Under its land code Land Use Agreements under the Native the Band now has the authority to move more quickly on business proposals. Title Act 1993 enables communities For example, the code was crucial in the construction and management of a to negotiate with industry (such as casino on the reserve. According to the former chief the land code helped them the mining sector) to receive fnancial to secure a loan that they would not have been able to access under the Indian or other associated benefts in return Act, and this enabled them to enter into a partnership arrangement for the for access to land (Commonwealth construction of the casino (Flanagan et al 2011). Government of Australia 2008). As a result, in Australia the mining sector has played an important role in improving economic outcomes for Indigenous people. For example, in 2004 the Argyle Diamond Mine in the East Kimberley signed an Indigenous SNAPSHOT: THE DIFFERENCE OWNERSHIP Land Use Agreement and Participation Agreement with the traditional owners. OF RESOURCES CAN MAKE Under the agreements, the Argyle The Maori of New Zealand have been particularly successful in capitalising Diamond mine has committed to deliver on their rights to commercial fshing assets. Until 2004 Maori commercial not only long-term economic benefts fshing assets were owned and managed by the Treaty of Waitangi Fisheries to the East Kimberley communities, Commission or Te Ohu Kaimoana. The Maori received the fshing assets in the but to ensure that key cultural and late 1980s and early 1990s after an agreement with the Crown was reached to environmental aspects of Indigenous settle historical Treaty of Waitangi breaches by the Crown. After negotiation, culture and practice are maintained while Maori received a proportion of fshing quota in New Zealand’s Quota mining operations continue. Currently, Management System (QMS), shares in fshing companies and cash to settle all 25 per cent of the mine’s total workforce commercial fshing claims under the Treaty. This settlement was enshrined in is Indigenous (Langton 2013; Argyle the Maori Fisheries Act 1989. However, it was only an interim settlement and mine website 2014). in 1992, all commercial fsheries claims under the Treaty were fnalised when the Nelson-based Sealord Products was put up for sale. Maori were given NZ$150 million, part of which was used to buy a half share in Sealord, as well as receiving a guarantee for future fshing quota through the QMS. The deal was given effect through the Treaty of Waitangi (Fisheries Claims) Settlement Act 1992, which constituted the Treaty of Waitangi Fisheries Commission. The former Fisheries Commission then undertook a 12 year process to develop a process by which these fsheries assets were equitability shared among all iwi (tribes) in New Zealand. This process concluded with the passing of the Maori Fisheries Act 2004. This Act established Aotearoa Fisheries Limited to manage the commercial arm of certain settlement assets into the future and Te Ohu Kaimoana to act as a governance body for those Maori interests in the marine environment. Today, Aotearoa Fisheries business comprises Moana Pacifc Fisheries, OPC Fish and Lobster, Prepared Foods, Pacifc Marine Farms and Kia Ora Seafoods, as well as owning 50% of Sealord Group Limited. Through careful investments and business management, Maori control an estimated 40 per cent of the New Zealand seafood industry, including processing and aquaculture operations (Durette 2007; Aotearoa Fisheries Limited 2013).6.3

OPENING OF THE RIO TINTO ARGYLE UNDERGROUND DIAMOND MINE. SOURCE: COLIN MURTY 2013 47 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

6.3 OWNERSHIP OF 6.4 ACCESS TO CAPITAL RESOURCES Indigenous communities use a variety Natural resources such as minerals, of strategies to gain access to capital. SNAPSHOT: A UNIQUE WAY TO ACCESS CAPITAL water, timber, fsh, and wildlife play an As discussed above, some Indigenous Caisse Populaire Kahnawake in Quebec is an Indigenous operated fnancial important role in Indigenous economic communities create development institution with a unique trustee agreement that has enabled the community success. Examples include mining corporations to gain access to specifc to access capital from their land. “To overcome the limitations imposed by in Australia and North America, and sources of government funding, while the Indian Act, and to allow the institution to operate like any mainstream fshing in New Zealand (Commonwealth others enter into joint ventures with bank, a ‘trustee agreement’ was developed with the consultation of legal Government of Australia 2008; Langton other businesses corporations for equity professionals and the support of Indian and Northern Affairs Canada, the 2012; Argyle mine website 2014; Durette capital (see section 5.7); some have Mohawk Council of Kahnawake, and Caisses Populaires Desjardins Federation 2007; Aotearoa Fisheries Limited 2013). even established their own fnancial institutions (Loizides and Wuttunee (also known as the Movement Desjardins)” (Sisco and Nelson 2008:20). The In Australia, the formation of Indigenous 2005), as described in the text box. ‘trustee agreement’ allows community members to act as third-party trustees Land Use Agreements under the Native when loans are granted. To secure a loan, the bank requires three community Title Act 1993 enables communities In Australia, the Traditional Credit Union members to sign the agreement. If the loan recipient defaults, the trustees are to negotiate with industry (such as in the Northern Territory is Australia’s able to sell the land to reimburse the bank. The trustees have an important the mining sector) to receive fnancial only Indigenous-owned and operated role in ensuring the interests of the borrower and the bank are met. Since its or other associated benefts in return credit union. “The idea was originally creation, Caisse Populaire Kahnawake has grown to have over C$130 million in for access to land (Commonwealth conceived by a group of Aboriginal assets. At the end of the 2013 fscal year the Caisse Populaire of Kahnawake Government of Australia 2008). Elders to provide fnancial services to announced a surplus of C$2,065,000; of that C$874,347 was distributed to its As a result, in Australia the mining residents of Arnhem Land communities owner-members. In addition, the members voted to contribute C$60,000 to sector has played an important role who were disadvantaged by a lack of the Community Development Fund, C$150,000 to future member dividend in improving economic outcomes for banking and other fnancial services... reserve and C$782,154 to the General Reserve (Sisco and Nelson 2008; Indigenous people. For example, in Through the tireless efforts of a Kahnawake411 website 2014). 2004 the Argyle Diamond Mine in the number of Aboriginal Elders and the East Kimberley signed an Indigenous Arnhemland Progress Association we Land Use Agreement and Participation were incorporated as a credit union on Agreement with the traditional owners. the 5th December 1994” (The Traditional Under the agreements, the Argyle Credit Union 2014).The TCU was initially • The Indigenous entrepreneur Diamond mine has committed to deliver established with grant funding from who does not satisfy mainstream not only long-term economic benefts the former Aboriginal and Torres Strait bank lending criteria can access to the East Kimberley communities, Islander Commission (ATSIC) and the fnance through Indigenous Business but to ensure that key cultural and Arnhemland Progress Association. Australia (IBA), or through micro- environmental aspects of Indigenous The frst branch opened in Milingimbi in fnance schemes such as Many Rivers culture and practice are maintained while 1995 and TCU now has ffteen branches Microfnance Limited, a not-for-proft mining operations continue. Currently, (The Traditional Credit Union 2014). organisation that supports aspiring 25 per cent of the mine’s total workforce There are also various government business owners with small repeat is Indigenous (Langton 2013; Argyle and non-government forms of support unsecured Westpac business loans mine website 2014). which provide Indigenous people in that enable them to establish a small Australia with capital to establish their business; see text box overleaf for own businesses. more information (Indigenous Business Australia 2014; Many Rivers n.d.). • For community-based enterprises there is Indigenous Social Enterprise Funding (operated through IBA), which provides grant funding on flexible terms of up to 5 years to Indigenous- owned non-proft organisations that are in start-up stage (SVA 2014). 48 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

SNAPSHOT: MANY RIVERS Many Rivers was established in 2007 as a result of a series of pilot programs that were led by global microfnance leader Opportunity International Australia and has expanded to 14 offices across NSW, WA and QLD. In that time it has provided 590 loans totalling $3.2 million and supported 650 business owners, of which 359 were Indigenous, to establish and or expand 563 businesses. Of these, 386 (69%) are still operating. Since 2009 all loans have been funded by Westpac. Many Rivers success is attributed to the following four factors: 1. Local Enterprise Development – Unlike other economic stimulus packages that exist and are often fly-in –fly-out arrangements, Many Rivers feld officers live and work in the communities in which they operate, enabling them to develop relationships with the local community. 2. Practical Business Support – Many Rivers feld officers focus on what has to happen to get the business started. The business plans they develop are only one to two pages, not 100 page documents. Other practical support they provide is advising clients to have separate business and personal bank accounts. 3. Access to Finance – Many Rivers provides Westpac business loans based on mutual trust and no security is required. Their philosophy is to lend the least amount of money required to get the business started so clients are not burdened with large loan repayments. 4. Journey with People – Many Rivers approach is not just about providing seed funding but working with clients over a period of 3–5 years to help establish the business. The same feld officer works with clients from the initial meeting and business planning stage until the business is fully operational. Many Rivers has built a network of aligned organisations (philanthropic, corporate, and government), and each organisation brings its own capabilities and resources. Due to their transport networks Many Rivers are able to help client’s access markets by transporting products to capital cities (Perth and Sydney). Recently at two pop-up stores in Perth and Sydney, over $22,000 worth of product was sold (Many Rivers website 2014; Burn 2014).

JOHN BURN (CEO MANY RIVERS MICROFINANCE) WITH CLIENT BRAD WILSON, OWNER OF GREEN HILLS PET WAREHOUSE. SOURCE: TOMASZ MACHNIK 49 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

6.5 ACCESS TO MARKETS Indigenous businesses in Australia are able to gain access to markets through SNAPSHOT: BUILDING AN INDIGENOUS minority business supplier development SUPPLY CHAIN councils (SDCs). SDCs are “not-for-proft Supply Nation, formerly known as AIMSC (the Australian Indigenous Minority organisations which open opportunities Supplier Council), is a business-to-business membership body committed to for small to medium-sized minority- increasing diversity within the supply chain. Supply Nation’s goal is to connect owned businesses to compete to supply Australian corporate and government organisations with Indigenous business large corporate entities” (Commonwealth suppliers who are already achieving success or have the potential to develop into Government of Australia 2008:94). successful businesses (the body certifes Indigenous businesses with turnover of The SDCs provide an intermediary role more than $50,000 a year). Supply Nation provides small to medium Indigenous between minority–owned business and businesses with opportunities to be included in the supply chains of Australian corporations. The model benefts all companies and government agencies (Supply Nation 2014). three parties – the supplier, the supplier council, and the corporation – in different Supply Nation was established in 2009 with funding from the then ways. The small business gains access Commonwealth Department of Education, Employment and Workplace Relations. to markets otherwise difficult to enter, However, since then it has moved to a fee for use service which has reportedly had as well as a legitimacy inferred through a positive impact on the level of engagement of its members. Since its inception in a process of certifcation or approval 2009, Supply Nation has recorded more than $78.8 million in purchases and more by the SDC, and access to business- than $45.6 million in contracts between member organisations and Indigenous building support. The supplier council businesses (Morley 2014; PwC 2011). gains strength as an organisation through the quality of its services and The Business Council of Australia’s 2013 survey of its member companies found success in bringing businesses together. that there had been an increase in the number of non-Indigenous companies The corporation gain access to new using an Indigenous business in their supply chain from 16 companies in 2009 to suppliers they might not otherwise have 49 companies in 2013. Overall, the Business Council stated that its members had known about, as well as risk protection spent more than $2 billion on Indigenous business and joint ventures in the past in working with businesses certifed by 12 months (BCA 2013). the SDC (Commonwealth Government In February 2014 Supply Nation and the Business Council of Australia (BCA) of Australia 2008). signed a memorandum of understanding. The memorandum signals an intention for BCA and Supply Nation to work closely together and it is hoped that this will 6.6 INFRASTRUCTURE increase the number of BCA members linked to Supply Nation and the value Infrastructure development contributes of contracts awarded (Morton 2014). to investment and growth through An example of one of Supply Nation’s success stories is Yaru Water (discussed increases in productivity and efficiency in chapter 3). as it links resources to factories, people to jobs and products to markets. Investment in infrastructure can contribute a number of bene fts, including: • reducing transaction costs and facilitating trade flows within and across borders • enabling individuals, businesses and governments to respond to new types of demand in different places • lowering the costs of inputs for entrepreneurs, or making existing businesses more proftable • creating employment • enhancing human capital, for example by improving access to schools and health services • improving environmental conditions, which link to improvements in social outcomes (Department of Regional Australia, Local Government, Arts and Sport 2013). Infrastructure improvements such as the National Broadband Network (NBN) have the potential to contribute to economic development in Indigenous communities by connecting dispersed, small communities to business development support, although in itself it will not address some of the issues inhibiting low use of electronic technology in rural and remote areas ABORIGINAL OWNED AND RUN COMPANY IMAN OPERATION WHICH HAS WON A CONTRACT TO CLEAN AT THEISS COAL SEAM GAS CONSTRUCTION SITES. SOURCE: LYNDON MECHIELSEN 2014 50 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

SNAPSHOT: COMMUNITY DRIVEN INFRASTRUCTURE IMPROVEMENTS The Gumala Aboriginal Corporation (GAC) is an Indigenous corporation, serving the Bnyjima, Innawonga and Nyiyaparli people of the Pilbara region in Western Australia. GAC was created in 1996 to represent the traditional owners of the Pilbara region of Western Australia in their negotiations with Hammersley Iron Pty Ltd (a subsidiary company owned by Rio Tinto). A large number of transformative programs are being implemented by GAC for the beneft of its people, including a capital works and maintenance program. The focus of Gumala’s capital works and community maintenance projects is to maintain and improve existing facilities and install new facilities in the region’s remote communities, which include Wakuthuni, Bellary Springs, Youngaleena, Wirrilimarra and Peedamulla. Projects include: community housing maintenance, community capital works and liaison with government for service and infrastructure improvements. As part of its liaison with government GAC hired a consultancy frm to undertake a scoping and costing exercise of government-related services and infrastructure in remote Indigenous communities in the Pilbara. The subsequent report has been submitted to government and GAC is working closely with government to ensure it adopts its recommendations (Gumala website 2014).

(ARC Centre of Excellence for Creative Improvements in infrastructure can Access to markets is an increasing Industries and Innovation 2011). At the contribute to Indigenous economic focus of business support agencies, same time, a 2006 survey of Indigenous- development not only by providing such as Supply Nation, which are owned small arts enterprises suggested people with jobs, but also by assisting Indigenous businesses to that tools such as email, digital video increasing pride within a community. position themselves within a larger and photography have offered Community-driven development sector of Indigenous-identifed business. improved efficiency to Indigenous arts enables communities to identify their organisations, especially those outside own infrastructure needs and promotes As the visibility of the Indigenous- metropolitan areas (Cardamone and greater community leadership and identifed business sector grows, the Rentschler 2008). social cohesion. collective power of the sector to access and influence markets will also grow, Some Indigenous community-owned increasing further opportunities to enterprises are capitalising on their 6.7 SUMMARY gain market share. assets to build new infrastructure for While the location of a business the beneft of the wider community. or community and its access to Investments in resource management In Nova Scotia, Canada, the Millbrook infrastructure can determine the and infrastructure provide a number Mi’kmaq First Nation has harnessed economic opportunities available, of benefts for entire communities, the synergies of strong leadership and there are some Indigenous communities establishing systems and structures good location to create a portfolio of who have managed to access capital for future enterprise, as shown by the businesses with the aim of achieving and develop thriving businesses in example of the Gumala community. fnancial independence and sustainability isolated and fragmented regions. for the Nation. The key to success appears to be the ability to access capital, whether this is The Truro Power Centre, a 68-acre through land ownership or ownership of business park on a major arterial road, resources, so that even if the community has been able to attract new business is not in a favourable location they can into the area due to its proximity to make infrastructure improvements to major infrastructure such as airports increase their access to markets or, as and highways. Millbrook is using the in the case of Donna Cona Inc, establish profts of its enterprise successes to a business where the market is located. improve its own infrastructure, building a new administration building and health Access to capital is a key feature in the centre, and also distributing profts to Indigenous business literature, although Nation members (Loizides and Wuttunee not so highly profled in the general 2005; Truro Power Centre 2014). economic literature. This may suggest that access to capital is more difficult for Indigenous businesses; addressing this barrier is a key factor in supporting business development. 51 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

Access to markets is an increasing focus of business support agencies, such as Supply Nation, which are assisting Indigenous businesses to position themselves within a larger sector of Indigenous-identifed business. As the visibility of the Indigenous- identifed business sector grows, the collective power of the sector to access and influence markets will also grow, increasing further opportunities to gain market share. Investments in resource management and infrastructure provide a number of benefts for entire communities, establishing systems and structures for future enterprise, as shown by the example of the Gumala community.

Former Sydney bar and restaurant owner Toby Osmond, pictured with his indigenous staff at Café Gali, which he now runs in the western NSW town of Moree. Source: Tim Hunter 2011 52 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT CONCLUSION CHAPTER 7

7.1 CREATING THE CONDITIONS FOR 7.2.1 AN AUTHORISING environment SUCCESS Chapter 2 states that having a degree of law and order is important for creating the environment This report has explored a number of factors that for successful business, as well as anti-corruption contribute to business success. These factors are and non-extractive forms of government and a interconnected and do not necessarily ft neatly in clear and transparent judicial system. the discrete categories outlined here. For example, access to capital often relies on the development Communities where there are stable and secure of successful partnerships, while ownership of social institutions are more likely to create land and resources requires human capital to the conditions where successful economic realise its potential. development initiatives can occur. Separating the ‘politics’ from business is one way Indigenous In practice, businesses succeed because of more social enterprises are minimising the risks of than one factor; there is also a synergistic effect nepotism and corruption. Communities are also of success factors working together. However, ensuring that there are independent dispute fundamentally the literature clearly suggests resolution processes to resolve conflicts. that creating an enabling climate for business through constructive policy, legislation, and A land titling system is an important component regulatory environments assists in Indigenous of economic development. One of the barriers of business development, providing a foundation economic development on Indigenous land, both for other essential factors such as human capital in Australia and internationally, is the absence development, leadership, governance, and culture. of a land titling system that enables Indigenous people to capitalise their land. Without the ability The framework discussed in chapter 2 identifes to use their land as collateral many Indigenous critical elements to support regional economic people have been prevented from establishing development and subsequent chapters affirm private businesses and improving their social and the need to address issues of geography and economic circumstances. agglomeration, the nurturing of human capital, and access to markets. The Indigenous business A key fnding of chapter 2 is the effect of different literature supports the importance of investing forms of government intervention on regional in human capital, and also adds an additional development. For instance, development essential factor of access to capital, a factor less subsidies were found to be most effective when prominent in the mainstream economic literature, regional or local governments were able to perhaps demonstrating the signifcant barriers influence and set the agenda. This suggests that that Indigenous people face, more than others, in central government intervention and subsidies gaining access to loans and other fnancial assets. have limited effect without the involvement of local or regional political institutions. There is evidence of a burgeoning Indigenous business sector in Australia and this can be Similarly, Indigenous economic development further supported by ensuring that the external initiatives were found to be more successful environment is as flexible and open as possible to when they were led by or involved Indigenous enhance entrepreneurial creativity and innovation. communities. The evidence suggests that government is most helpful by providing a policy 7.2 KEY DRIVERS OF CHANGE environment that enables locally-driven responses to regional challenges. As noted in chapter 2, there are a number of factors driving regional economic development. Encouraging partnerships and cooperation within The evidence demonstrates that these drivers the business community (between businesses and are equally applicable to Indigenous economic with government) to foster regional development development, and that two additional essential activities appears to be advantageous in factors for Indigenous economic development sustaining and increasing regional growth. This are access to capital and culture. To illustrate this, has implications for the Indigenous business we have combined the factors outlined in chapter community, which could beneft from and 2 with the evidence of succeeding chapters to contribute to a shared vision for local and regional identify key drivers for Indigenous economic development. development. These are discussed below. 53 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

7.2.2 HUMAN CAPITAL AND 7.2.3 ACCESS TO CAPITAL Some examples have been provided SOCIAL INFRASTRUCTURE AND MARKETS of such solutions, for instance the (INCLUDING CULTURE) Indigenous entrepreneurs have use of land codes in Canada (eg the As chapter 2 identifed, knowledge innovative and creative ideas, but are Mississaugas of Scugog Island First and its conversion to commercial use often prevented from realising their Nation, see section 6.2) and the play an increasing role in economic business aspirations because of a lack partnerships with non-Indigenous development. Regional areas tend to of capital. There is a need to develop resource companies in Australia have lower human capital than more new and innovative ways of assisting (eg the Gumala Aboriginal Corporation, metropolitan areas, which is a barrier to established businesses and emerging see section 6.6). attracting investment and new business. entrepreneurs to access capital, such This is reflected in the fact that most as the ISX, the Traditional Credit Union The factors described above have Indigenous entrepreneurs live in areas in Arnhem Land, or the Canadian Caisse emerged from an examination of the with good education outcomes, a higher Populaire Kahnawake. economic and Indigenous business population density, and greater demand literature. The table overleaf is refned for goods and services. Supply Nation is still growing as an from the table provided in Chapter 2 to organisation, however the evidence summarise the drivers for Indigenous The evidence strongly indicates suggests that it is having a positive economic development as identifed that access to education and other impact on Indigenous Australians by through the literature. opportunities to develop knowledge, introducing Indigenous entrepreneurs to skills and aptitudes is an essential corporate partners and providing access Individual capabilities and organisational criterion for participation in the to capital and markets (as evident in the capacity are strongly linked. Increasing economic life of Australia, and the statistics and in the Yaru Water case the human capital of a community or national efforts to close the gap in study). There is a need for further growth region through education and training educational attainment may improve, of entities that provide business support will improve community outcomes over time, access to education and and assist Indigenous businesses to grow which will in turn lead to increased training for Indigenous Australians. through sound business planning to gain business opportunities. Once a domestic However, in addition to these large-scale market share and enter new markets. business increases and grows to policy movements there is a specifc become an export business the beneft need for business management and 7.2.4 AGGLOMERATION AND for individuals and communities is leadership training for Indigenous people GEOGRAPHY compounded, as made evident by the seeking success in business. While isolation and fragmentation may Ngāi Tahu tribe in New Zealand and the have led to fewer opportunities for Iñupiat in Alaska. This has a multiplier There are a number of networks and Indigenous people in rural areas there effect, leading to further job creation business support agencies created by is evidence to suggest that with the and business development for the and available to Indigenous people appropriate legislative environment community and the region as a whole. seeking to develop their skills and and support it is possible to establish As highlighted in chapter 3, Indigenous contacts. In addition, a focus on successful Indigenous corporations businesses employ a high proportion of partnerships has allowed a number of on Indigenous land, and for these Indigenous employees. businesses to venture into new markets corporations to become fully or nearly or new lines of business by increasing the self-funding. The economic literature The creation of Indigenous businesses, available resources within an enterprise. also provides evidence of the synergistic particularly where a critical mass of Partnerships between Indigenous and effects of agglomeration in creating the an educated and capable workforce non-Indigenous businesses also seem critical mass necessary for a sustainable is located, can create a ‘virtuous cycle’ to provide mutual benefts by increasing economic environment. that in itself can foster further economic market opportunities, increasing internal development and wealth creation, as resources, and fostering cross-cultural Even given the extreme distances illustrated in Figure 6 overleaf. understanding. across regional Australia, there are numerous examples of successful and The importance of culture to Indigenous thriving Indigenous-run businesses business cannot be ignored. Culture despite their location. The evidence provides both a value proposition and an from the international literature suggests asset to leverage. An emphasis on social that the Australian government and benefts appears to be fundamental in business community could do more an Indigenous approach to business, to facilitate regional investment with a focus on meeting family and through creative solutions to the community need, providing employment challenges posed by distance such as opportunities for family and community the greater cost of doing business and members, and affirming cultural values, the lack of infrastructure compared above and beyond any fnancial rewards. to metropolitan areas. Investment in Policy or structural mechanisms to transport and information technology support Indigenous business must take infrastructure will assist, as will continued into account this priority on the social, investment in education in order to non-fnancial benefts of business. develop the requisite labour force in regional locations. 54 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

TABLE 3 – DRIVERS OF INDIGENOUS ECONOMIC DEVELOPMENT

Governance and institutions • Basic government functions are required before economic progress can be made – rule of law (eg land titling system) – anti-corruption and non-extractive forms of government – law and order – clear and transparent judicial system – accountable to a local constituency • A national government focused on maintaining a ‘level playing feld’ between different regions • Political sovereignty – control over local decision-making • Strong and transparent governance and management

Government policy • Success is more likely when the agenda is influenced by local Authorising environment Authorising or regional government • Investment in human capital by the national government is a successful policy for economic development

Human capital • The use of networking and professional associations has been noted to strengthen business capability • Investment in education and training supports local job creation • The use of partnerships, including joint ventures and business partnerships between Indigenous and non-Indigenous businesses, has facilitated knowledge transfer and capacity building • Culture is a social infrastructure which can drive business growth to meet family and community needs, provide employment, affirm values, and leverage community strengths

Access to capital and markets • In addition to trade liberalisation, providing physical access to markets is an important driver of poverty reduction in agricultural communities • Access to capital is crucial, including use of land and natural resources • The ownership and control of assets is a contested issue and impedes economic development

Agglomeration and geography • Geography has an impact on regional development, and influences the effectiveness of redistributive policy • Isolation and fragmentation can lead to fewer opportunities for Indigenous people in rural areas to diversify their income and occupations (eg away from agriculture and non-wage income, and reliance on private and public transfers) • While capital inequality between regions can lead to income disparities, policies that reduce trade costs and transport costs can reduce barriers for frms moving into a particular region 55 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

FIGURE 6 – A VIRTUOUS CYCLE OF ECONOMIC DEVELOPMENT Source: Adapted from the Federation of Maori Authorities 2006 56 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

7.3 CREATING THE CLIMATE This report has explored the factors FOR BUSINESS identifed in the literature to foster success in business and job creation. The literature identifes a number A number of internal and external of models for investment in Indigenous factors have been identifed, and business, including Indigenous these will influence the choice of individual ownership, Indigenous business model and structure for and non‑Indigenous partnerships, economic development. Figure 7 public‑private partnerships, and below summarises the ways in Indigenous-owned social enterprises. which these interrelate, with both In some sectors Indigenous businesses internal and external factors exerting have been recognised as market continual and fluid pressure on the leaders, for instance NANA and way a business develops and responds Aotearoa Fisheries. These businesses to new challenges. have achieved their success through combinations of land and asset ownership, good governance, sound fnancial management, and strong leadership.

FIGURE 7 – FACTORS AND MODELS OF ECONOMIC DEVELOPMENT 57 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT

7.4 CONCLUSION ownership of and responsibility for land This report is not exhaustive and there and natural resources to Indigenous is much more that could be said about There is considerable evidence of a owners can provide signifcant economic the way in which Indigenous individuals growing Indigenous business sector benefts as well as social, spiritual and and communities are creating social and in Australia. There are many success other benefts for the local community. communal wellbeing and prosperity stories which could be showcased through economic activity. What we to demonstrate Indigenous business Likewise, constructive policy and have tried to do is to provide a glimpse success. Contrary to a continuing strain regulatory structures that enable of what factors contribute to successful in Australian media and public discourse business innovation will also create Indigenous business development and representing all Indigenous Australians as an authorising environment for the job creation. Each of the four countries socially and economically disadvantaged, development of new business ideas and we have examined have utilised there are a growing number of educated initiatives. The ‘nation building’ approach similar approaches at the national and and professional Indigenous Australians outlined in Canada, the US, and New regional level to create an environment who are thriving in business and in Zealand appears to have provided a conducive to productive economic other sectors. greater authorising environment for self- activity. Much can still be learned determination and entrepreneurialism Indigenous companies, in Australia and about the way in which governments, than the policy environment of the past overseas, have generated considerable communities and individuals are decades in Australia. wealth and distributed economic creating a more prosperous future for benefts to individuals and communities. It is important to recognise, as with any Indigenous peoples. In addition to the factors which provide business initiative, that the capabilities Finally, there is a synergistic effect arising a framework for economic development and characteristics of individuals will from combining the success factors for all businesses (both Indigenous and have a deciding influence on the success identifed in this report. Initiatives that non-Indigenous), the literature suggests or failure of a new enterprise. For that strengthen innate individual capabilities that maintaining and nurturing culture reason, investment in human capital through education and training, that and community are important drivers development including education create a positive policy and regulatory for economic development among and training, vocational and business environment, that build capacity in Indigenous individuals and communities. mentoring, and leadership training, are as governance and management, and that important for Indigenous individuals and The evidence suggests that land promote access to capital and markets communities as for anyone else. Specifc ownership and access to capital continue will, over time, ensure that all the building business development supports such as to be barriers to economic development blocks are in place for sustainable Indigenous business councils, training both in Australia and in the three other economic development and wealth and networks for new business owners, countries profled here. There is clear creation for all Indigenous Australians. and supply chain organisations will evidence, highlighted in the examples continue to strengthen the Indigenous provided in this report, that returning business sector. 58 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT REFERENCES

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This report is dated November 2014 and In preparing this report, Urbis may rely incorporates information and events on or refer to documents in a language up to that date only and excludes any other than English, which Urbis may information arising, or event occurring, arrange to be translated. Urbis is after that date which may affect the not responsible for the accuracy or validity of Urbis Pty Ltd’s (Urbis) opinion completeness of such translations and in this report. Urbis prepared this report disclaims any liability for any statement on the instructions, and for the beneft or opinion made in this report being only, of Westpac (Instructing Party) inaccurate or incomplete arising from for the purpose of reporting on factors such translations. influencing Indigenous economic Whilst Urbis has made all reasonable development (Purpose) and not for any other purpose or use. To the extent inquiries it believes necessary in permitted by applicable law, Urbis preparing this report, it is not responsible expressly disclaims all liability, whether for determining the completeness direct or indirect, to the Instructing Party or accuracy of information provided which relies or purports to rely on this to it. Urbis (including its officers and report for any purpose other than the personnel) is not liable for any errors Purpose, and to any other person which or omissions, including in information relies or purports to rely on this report provided by the Instructing Party or for any purpose whatsoever (including another person or upon which Urbis the Purpose). relies, provided that such errors or omissions are not made by Urbis In preparing this report, Urbis was recklessly or in bad faith. required to make judgements which may be affected by unforeseen future events, This report has been prepared with due the likelihood and effects of which are care and diligence by Urbis and the not capable of precise assessment. statements and opinions given by Urbis in this report are given in good faith and All surveys, forecasts, projections in the reasonable belief that they are and recommendations contained correct and not misleading, subject to in or associated with this report are the limitations above. made in good faith and on the basis of information supplied to Urbis at the date of this report, and upon which Urbis relied. Achievement of the projections and budgets set out in this report will depend, among other things, on the actions of others over which Urbis has no control. 64 • ENABLING PROSPERITY: SUCCESS FACTORS FOR INDIGENOUS ECONOMIC DEVELOPMENT APPENDIX A DATA ON INDIGENOUS ENTREPRENEURS BY INDIGENOUS REGION

TOTAL OF INDIGENOUS INDIGENOUS INDIGENOUS INDIGENOUS INDIGENOUS MALE EMPLOYER MALE SELF FEMALE FEMALE SELF SELF EMPLOYED/ STATE REGION (%) EMPLOYED (%) EMPLOYER (%) EMPLOYED (%) EMPLOYERS NSW Dubbo 1.2 1.4 0.7 0.8 4.1 North-Eastern NSW 1.4 2 0.8 0.5 4.7 North-Western NSW 0.9 1.4 0.8 0.5 3.6 NSW Central and North 2 2.4 0.9 1.2 6.5 Riverina-Orange 1.5 1.9 0.8 0.8 5 South-Eastern NSW 2.2 3.2 1.2 0.9 7.5 Sydney-Wollongong 2.9 2.3 1.3 0.9 7.4 Vic Melbourne 3.5 3.2 1.2 1.5 9.4 Victoria – 2.2 2.6 1 1 6.8 excluding Melbourne Qld Brisbane 2.6 2.9 1.2 1.3 8 Cairns-Atherton 0.9 1.2 0.6 0.5 3.2 Cape York 0.3 1.1 0 0.4 1.8 Mount Isa 1 1.1 0.7 0.8 3.6 Rockhampton 1.3 1.3 0.9 0.8 4.3 Toowoomba-Roma 2.2 2 0.9 1 6.1 Torres Strait 0.7 2.8 0.2 0.6 4.3 Townsville-Mackay 1.2 1.1 0.7 0.7 3.7 SA Adelaide 1.6 2.2 0.7 1.1 5.6 Port Augusta 0.5 0.6 0 0.2 1.3 Port Lincoln-Ceduna 0.7 2 1 0.4 4.1 WA Broome 0.9 1.4 0.5 0.5 3.3 Geraldton 1.7 1.1 0.3 0.7 3.8 Kalgoorlie 1.1 0.7 0.5 0.3 2.6 Kununurra 0.8 0.8 0 0.4 2 Perth 1.8 1.7 0.9 0.9 5.3 South Hedland 1 0.5 0.8 0.2 2.5 South-Western WA 2 1.6 0.7 0.8 5.1 West Kimberley 1 0.3 0.6 0.3 2.2 NT Alice Springs 1 1.9 0.6 0.2 3.7 Apatula 0.2 0.5 0 1 1.7 Darwin 1.5 1.8 0.7 0.9 4.9 Jabiru-Tiwi 0.1 0.3 0 0.6 1 Katherine 0.5 1.2 0.4 0.8 2.9 Nhulunbuy 0.1 0.3 0 0.6 1 Tennant Creek 0.6 1 0.3 0.7 2.6 ACT ACT 3.2 3.4 0.9 1.1 8.6 TAS Tasmania 3.6 3.8 1.6 1.4 10.4 SOURCE: ABS 2012; HUNTER 2013 V TOTAL OF INDIGENOUS INDIGENOUS INDIGENOUS INDIGENOUS INDIGENOUS MALE EMPLOYER MALE SELF FEMALE FEMALE SELF SELF EMPLOYED/ STATE REGION (%) EMPLOYED (%) EMPLOYER (%) EMPLOYED (%) EMPLOYERS NSW Dubbo 1.2 1.4 0.7 0.8 4.1 North-Eastern NSW 1.4 2 0.8 0.5 4.7 North-Western NSW 0.9 1.4 0.8 0.5 3.6 NSW Central and North 2 2.4 0.9 1.2 6.5 Riverina-Orange 1.5 1.9 0.8 0.8 5 South-Eastern NSW 2.2 3.2 1.2 0.9 7.5 Sydney-Wollongong 2.9 2.3 1.3 0.9 7.4 Vic Melbourne 3.5 3.2 1.2 1.5 9.4 Victoria – 2.2 2.6 1 1 6.8 excluding Melbourne Qld Brisbane 2.6 2.9 1.2 1.3 8 Cairns-Atherton 0.9 1.2 0.6 0.5 3.2 Cape York 0.3 1.1 0 0.4 1.8 Mount Isa 1 1.1 0.7 0.8 3.6 Rockhampton 1.3 1.3 0.9 0.8 4.3 Toowoomba-Roma 2.2 2 0.9 1 6.1 Torres Strait 0.7 2.8 0.2 0.6 4.3 Townsville-Mackay 1.2 1.1 0.7 0.7 3.7 SA Adelaide 1.6 2.2 0.7 1.1 5.6 Port Augusta 0.5 0.6 0 0.2 1.3 Port Lincoln-Ceduna 0.7 2 1 0.4 4.1 WA Broome 0.9 1.4 0.5 0.5 3.3 Geraldton 1.7 1.1 0.3 0.7 3.8 Kalgoorlie 1.1 0.7 0.5 0.3 2.6 Kununurra 0.8 0.8 0 0.4 2 Perth 1.8 1.7 0.9 0.9 5.3 South Hedland 1 0.5 0.8 0.2 2.5 South-Western WA 2 1.6 0.7 0.8 5.1 West Kimberley 1 0.3 0.6 0.3 2.2 NT Alice Springs 1 1.9 0.6 0.2 3.7 Apatula 0.2 0.5 0 1 1.7 Darwin 1.5 1.8 0.7 0.9 4.9 Jabiru-Tiwi 0.1 0.3 0 0.6 1 Katherine 0.5 1.2 0.4 0.8 2.9 Nhulunbuy 0.1 0.3 0 0.6 1 Tennant Creek 0.6 1 0.3 0.7 2.6 ACT ACT 3.2 3.4 0.9 1.1 8.6 TAS Tasmania 3.6 3.8 1.6 1.4 10.4 SOURCE: ABS 2012; HUNTER 2013 V