Last week ADM attended Connect 2018, a major tradeshow hosted by Supply Nation featuring Indigenous-owned small businesses from around Australia, including Defence suppliers and veteran-owned SMEs.
The stalls packed out the conference hall as Indigenous suppliers met with businesses and government representatives.
ADM spoke with Laura Berry, CEO of Supply Nation, about some of the opportunities available to small Indigenous businesses looking to engage with Defence and major industry primes.
“The Connect Tradeshow is the single largest showcase of Indigenous businesses in the country – and with over 1,000 buyers through the doors this year, the opportunities for making contacts and developing relationships is huge,” Berry said. “This year, we also had the Australian Government Link where five departments, including Defence, spent the day talking with Indigenous business owners about how they could better engage with government buyers.”
Senator Nigel Scullion, Minister for Indigenous Affairs, highlighted achievements made under the Indigenous Procurement Policy (IPP). "The IPP has been a game-changer for the Indigenous business sector," Sen Scullion told ADM. "6,850 federal government contracts worth $1.085 billion have been awarded to over 1000 Indigenous businesses across the country, compared to just $6.2 million worth of contracts to around 30 Indigenous businesses in FY 2012-2013."
"Defence has been a leader in the IPP. As the Prime Minister announced in his 2018 Closing the Gap speech, Defence has recently awarded a $213.6 million contract for the Bayinguwa project – which is the Aboriginal name for Garden Island in Sydney – to design the refurbishment of the Garden Island naval base."
Whilst these achievements and the government's IPP have certainly increased Indigenous access to business opportunities, there are still challenges to be overcome.
“Indigenous Australians face significant social, health, and demographic challenges that should be, and are, totally unacceptable in our society. The United Nations Human Development Index ranks Australia second in the world – but Indigenous Australians would rank 122nd,” Berry said.
One challenge in particular is finding a common understanding of what exactly an Indigenous business is.
Supply Nation, for example, has two tiers – businesses that are at least 50% Indigenous-owned achieve ‘recognised’ status, whilst those that are majority Indigenous-owned and fulfil strict criteria in internal management achieve ‘certified’ status.
“Supply Nation is the only organisation to recognise two levels of Indigenous ownership,” Berry said. “Registered businesses are 50% or more Aboriginal and/or Torres Strait Islander ownership. This caters for equal partnerships with non-Indigenous owners. Certified Suppliers are 51% or more Aboriginal and/or Torres Strait Islander owned, managed and controlled.”
“Many organisations prefer to work with Certified Suppliers as the management and control dimensions mean that the Indigenous business owner is making all the decisions about the company.”
The government's IPP policy, however, only uses the ‘registered’ benchmark. This opens a loophole known as black-cladding, in which suppliers seeking access to contracts through the IPP present as Indigenous-owned, but use legal technicalities to sideline Aboriginal employees from decision-making processes.
“Black cladding – or the use of an Indigenous ‘front person’ to the business - is certainly a big concern in this sector,” Berry said.
“We have extremely strict policies around investigating and auditing any business that we suspect may be ‘black clad’. While all those checks are taking place, we remove the business from the directory. It’s a very big deal to us.”
So how can government and Defence industry know whether their Indigenous engagements are genuine and having a meaningful impact?
One answer is to engage with suppliers listed in Supply Nation’s directory. This has flow-on benefits - research shows that certified suppliers deliver $4.41 in social return to their communities for every dollar of revenue. They are also 100 times more likely to employ Indigenous people.
Sen Scullion said the government is working with Supply Nation to strengthen the registration and verification process. "The definition recognises that in some family businesses just one member of a couple is Indigenous and that private sector investment is critical to support growth of the Indigenous business sector," he added.
"The record investment in the defence industry provides a unique opportunity for Defence businesses to examine their recruitment and purchasing practices and consider ways to connect with Indigenous businesses and Indigenous job seekers including early engagement pre-tender as part of a supplier diversity plan," Sen Scullion said.
Berry highlighted the importance of developing face-to-face relationships and forecasting opportunities ahead of time to give small businesses time to prepare.
“Firstly, my advice would be to genuinely consider all the various contracts and actually look to see if there are Indigenous businesses that can deliver. The depth and breadth of the sector is huge, and growing,” Berry said.
“Secondly, I think events like the Connect Tradeshow really do make a difference, because buyers can come along and meet new suppliers to find out everything that they do.
“I’d also love it if large companies could do more work forecasting out the opportunities that are upcoming, and working with Indigenous businesses to help them scale and prepare.”