Without the support of Fortescue Metals Group, Nygumarta businessman Ricky Osborne’s business wouldn’t be where it is today.
Mr Osborne owns Jatu Clothing and PPE with his daughters Yvonne Kelly-Osborne and Jummana Osborne. He has supplied clothing and personal protective equipment to the mining company for six of the eight years his company has been in operation.
“One of the most important things for me, and not just for our business, for Aboriginal businesses across the board, is the very strong corporate citizenry push the likes of (FMG chair) Andrew Forrest has promoted to go with Aboriginal people,” he said.
“That commitment has had a very significant impact in opening up opportunities for Aboriginal businesses, particularly in WA.
“Back in the early days of FMG, their commitment to training local Aboriginal people I think was unparalleled in Australia.”
FMG’s leadership in the Aboriginal business space has flown under the radar, but Fortescue’s communities senior manager Heath Nelson has been working tirelessly to build the capacity of Aboriginal businesses for the past 10 years.
The company’s Aboriginal engagement strategy is focused on training, employment, and business development. When Mr Nelson came on board in 2011, FMG had two Aboriginal businesses in their supply chain, with only $20 million in contracts awarded.
Stretch goals are true to FMG’s style, so the company set a target of awarding $1 billion to Aboriginal businesses in two years. This year, on its 10th anniversary, Billion Opportunities passed $3 billion in contracts awarded.
Mr Nelson said though there were doubts that enough Aboriginal businesses existed to take up the work on offer, setting the targets allowed market supply and demand forces to fill the gap.
“The Aboriginal electrician who works for someone goes, ‘There’s now an opportunity. There’s a market that the public and private sectors want me as an Aboriginal tradesperson if I start my own business’,” Mr Nelson told the National Indigenous Times.
With this goal in mind, FMG came up with a clever solution to build the capacity of new Aboriginal businesses to take on bigger and better contracts.
“Contracts awarded under the program weren’t handouts, these were real operational contracts, so they had to have the (health, safety and environmental plans), they had to be commercial. It was a huge learning curve,” Mr Nelson said.
A joint venture model allowed Aboriginal businesses to take on contracts that would normally be far outside their scope. By partnering with a larger, more established company, a new Aboriginal business could service the part of the contract within their capacity while learning both trade and business skills from the larger partner.
“The advantage of joint ventures is the Aboriginal businesses aren’t just attending their own internal board meetings, but they’ll attend Fortescue’s contract performance meetings, and they’ll have a seat at the table, understanding the whole scope (of the contract),” Mr Nelson said.
“You’re learning from your joint venture partner but you are also learning how the full contract is being managed; contract management, project management and financial management.”
FMG remains involved with a joint venture once it is established; if the Aboriginal business isn’t actively involved through the contract, the contract is terminated, though it’s a clause Mr Nelson says FMG has never had to use.
“The business can deliver what the mine site requires; you can water and grade the road, but if the Aboriginal business partner isn’t building capability, then Fortescue and the Aboriginal partner is not achieving what is required from the joint venture,” Mr Nelson said.
But not everyone in the industry is on board with the joint venture model.
“There’s comments about particular Aboriginal businesses being labelled black cladding, but building capability takes time — as long as the Aboriginal business is building capability, participating in the delivery of the contracted services, Fortescue is monitoring and measuring it, then there is no black cladding.”
Mr Nelson is emotional when he talks about walking through a mine site and seeing equipment bearing the logos of Aboriginal businesses incubated by Fortescue.
“You know, it just gives you a kick, because 10 years ago many of the Aboriginal businesses Fortescue engages with didn’t exist,” he said.
“It’s hugely rewarding, changing people’s lives. We’re creating an industry that previously didn’t exist at this scale.”
By Sarah Smit