A new Parliamentary report released last Monday has recommended that Supply Nation tighten their definition of an Aboriginal business to prevent black cladding.

The Standing Committee on Indigenous Affairs’ Report on Indigenous Participation in Employment and Business made 17 recommendations aimed at eliminating black cladding and enhancing the effect of the Indigenous Procurement Policy on Indigenous communities.

Recommendation 3 called for Supply Nation’s definition of an Aboriginal and Torres Strait Islander Business to include “proportion of Aboriginal and Torres Strait Islander employees, skills transfer, the use of company profits and whether the business has been able to attract work from the broader commercial marketplace”.

Committee Chair Julian Leeser said the recommendations are intended to make the requirements around Supply Nation Certification slightly stricter, to ensure that the benefits of the IPP go to Indigenous communities.

“Having richer criteria … addresses some of the allegations black cladding,” he said.

“It’s harder to make an allegation of black cladding if a company has to demonstrate some of those additional things like [Aboriginal] employment and skills transfer.”

Leeser said if the recommendation is implemented, it would ensure that only businesses whose work is genuinely benefiting Aboriginal people and Aboriginal communities would have access to the IPP.

Yuin businessman Rhys Butler owns construction company, Butler WA.

He said he believes tightening Supply Nation’s definition of an Aboriginal business would be a good move.

“I definitely agree with having a better system in place to prevent black cladding,” he said.

“At the minute, for any one of these government jobs, people are just going and setting up, using some Aboriginal person they know to sign on as a director of 50 percent of the company and them having no input at all towards the job.”

The report also recommends random audits of Supply Nation Certified businesses to check for black cladding.

Butler said he would strongly support audits, calling it a “fantastic” recommendation.

“That’s a good process — there needs to be something because the Supply Nation process is very simple,” he said.

Butler believes though the process of certification is rigorous, Supply Nation registration is extremely simple, and said he sees many instances of non-Aboriginal contractors winning IPP jobs.

“Have a look at the contractors that are winning jobs at the minute — they’re all just companies that have been set up for a long time and they’re just creating an Aboriginal branch.”

Shadow Assistant Minister for Indigenous Australians Warren Snowdon said it was “valid” to ask how the business impacts on employment and training and skill development of First Nations people “especially given the high levels of disadvantage and unemployment in the community”.

Supply Nation have welcomed the report, with CEO Laura Berry saying they have “noted” the recommendations of the Committee about the Indigenous business sector.

“We will work through the report and the recommendations in consultation with our partners,” she said.

“As always, we remain committed to our vision of building a strong, prosperous and viable Indigenous business sector well into the future and look forward to continuing to play an integral role in the process.”

Shadow Minister for Indigenous Australians Linda Burney said Labor would consider the detail of the report “very carefully” in consultation with First Nations communities.

“Ultimately, Labor wants to see and remains committed to realising genuine job opportunities and economic development that empowers First Nations communities,” she said.

By Sarah Smit