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Contracts to help improve Indigenous opportunity

28 January 2011

Australian Financial Review: Tender Watch

Christopher Jay 

Businesses that tender for reasonably sized Australian government contracts in areas with substantial indigenous populations after July this year will be required to involve indigenous workers and suppliers.

The new requirements were outlined at Connect 2010, the inaugural business opportunity fair and conference of the Australian Indigenous Minority Supplier Council (AIMSC) , held in Sydney late last year.

They will apply to construction contracts worth more than $6 million, or to general contracts worth more than $5 million, according to the federal Minister for Finance and Deregulation, Penny Wong, and the Minister for Indigenous Employment and Economic Development, Mark Arbib.

The stipulation to employ and train local indigenous people and use local indigenous suppliers is billed as the enhanced Indigenous Opportunities Policy (IOP) under a commitment to close the gap on indigenous disadvantage, and halve the gap in indigenous unemployment.

A federal government map shows areas affected could include inner Sydney, Blacktown and south-west Sydney, south-west NSW and most of Victoria including Melbourne, a ring of outer suburbs around Brisbane and coastal areas to the north, the whole of greater Adelaide and south-west Western Australia.

January 28 is the closing date for the latest round of applications for a supplier to be certified by AIMSC as at least 51 per cent indigenous-owned, with a principal executive officer who is indigenous and indigenous control of key business decisions.

After site visits in February, the AIMSC board will decide on March 4 who qualifies.

There will be a meet-the-buyer event in Melbourne on March 24.

After extensive public consultation, the federal government accepted that organisations needed some time to prepare and submit indigenous training plans in advance of formal enforcement of the new approach.

“The July 2011 start date will help maximise the positive impacts for indigenous Australians, with the final guidelines and implementation set to be released early in 2011,” Senator Wong said. Government activities such as information sessions in the first half of 2011 will support the introduction.

Senator Arbib said “government procurement could help bring about change, particularly in regional and remote communities”.

“The government welcomes the comments received and encourages people to continue to provide feedback as the IOP is implemented.”

The new tenders policy will complement operations of the Australian Indigenous Minority Supplier Council, formed in September 2009 to facilitate, encourage and promote business between corporate Australia, government agencies and indigenous-owned businesses.

AIMSC is funded by the federal Department of Education, Employment and Workplace Relations with Industryand Investment NSW. It is based on the United States National Minority Supplier Development Council.

In its first 12 months it more than doubled its targets, reporting $2.1 million in transactions between indigenous-led business suppliers and Australian organisations.

It could not have asked for a better debut year, said CEO Natalie Walker. Its website now lists 54 corporate and government members and 67 suppliers.

“Participation in the program has been superb and we are very impressed with the number of companies that are helping create a stronger indigenous business sector,” she said. “The calibre of both members and indigenous suppliers who have joined our supplier diversity program has gone well beyond expectations.

“We are also pleased to report that the indigenous employment rate across our suppliers is 72 per cent. We are seeing a ripple effect where AIMSC’s suppliers are further strengthening indigenous economic growth by employing and creating job opportunities for other indigenous Australians,” said Ms Walker. Suppliers include graphic design, multimedia web and film production, corporate gifts and merchandise, legal, print, catering and food, human resources, recruitment, marketing and communications and cultural training.

There are also information technology and telecoms, construction and maintenance, facilities management, commercial and industrial lighting, motoring and consumerproducts.