An arm of the Victorian construction union that represents First Nations workers claims non-Indigenous businesses are rorting Aboriginal companies out of millions of dollars through a practice known as "Black cladding".
Black cladding is when non-Indigenous companies boost their Indigenous shareholder base or claim to be First Nation businesses in a bid to win government contracts.
Last month, the National Indigenous Times reported on Black cladding after First Nations businesses, academics, politicians and lawyers raised their concerns about the unfair practice.
According to the federal government's Indigenous Procurement Policy (IPP), an Aboriginal business is defined as a business with at least 50 per cent Indigenous ownership.
Construction, Forestry, Mining and Energy Union (CFMEU) Koori construction division organiser Joel Shackleton said Black cladding was rampant in Victoria's construction industry.
He said businesses masquerading as First Nations companies were winning contracts under the IPP that were designed to increase economic opportunities for Indigenous people.
The Victorian government awarded $21.2 million in contracts to 129 local Aboriginal businesses and organisations in the 2020-2021 financial year, but the union claims that number is considerably larger given the government's recent Big Build infrastructure push.
"Aboriginal people are being exploited into being the front for 'Black cladding' businesses which are actually owned and operated by non-Indigenous bosses and rarely employ Aboriginal workers or subcontractors," Mr Shackleton said.
"It is the biggest rort, it's happening everywhere and it's disgusting".
The union wants a government-funded Victorian Aboriginal Construction Board of Integrity - which would include First Nations' union representatives - to be set up to weed out non-Indigenous businesses.
Currently, Supply Nation and the Kinaway Chamber of Commerce are the only two organisations in Victoria that are verifying if businesses are majority owned and controlled by Indigenous people.
Aboriginal lawyer and founder of AMK Law, Matthew Karakoulakis, previously told the National Indigenous Times, he wasn't convinced Supply Nation was doing enough to stamp out black cladding.
"Supply Nation has some checks and balances as well as a five-step verification process, but is Supply Nation really just a toothless tiger in this respect?" he said.
Mr Shackleton says it is currently "too easy to game the system" with some companies going as far as allegedly faking their First Nations identity to pass off as an Indigenous business.
He also claims many First Nations workers were distressed to discover they'd not been employed by legit Indigenous companies.
"We have simply been calling out the practice of 'Black cladding', which is a disgraceful abuse of a system that's supposed to help Aboriginal people," he said.
"Victorian social procurement is supposed to help right the wrongs of the past and to lift people out of disadvantage," Mr Shackleton says.
"It's not for non-Indigenous people to start dodgy labour hiring companies and dodgy cleaning companies and funnel non-Indigenous labour through them. It has to stop."
