Martin, David F. --- "Deal of the Century? a Case Study from the Pasminco Century Project" [1998] IndigLawB 34; (1998) 4(11) Indigenous Law Bulletin 4

Deal of the Century? A Case Study from the Pasminco Century Project

By David F. Martin

The Gulf Communities Agreement (‘the Agreement’)` was signed between representatives of three registered native title claimant groups, Century Zinc and the State of Queensland on 7 May 1997. Its formal signing followed protracted regional negotiations, initially outside the ambit of the Native Title Act 1993 (Cth) (‘the Act’) and involving the broader Gulf Aboriginal community. With the issuing of Section 29 Notices under the Act however, there was a necessary change of focus to negotiations taking place under the Right to Negotiate provisions of the Act. Final agreement from all claimants was arguably precipitated by the imposition in February 1997 of arbitration procedures with strict time frames under the Act.

This brief paper examines the economic development regime established under the Agreement for Aboriginal people of the Gulf region. Although not considered here, it is important to note that convoluted and fraught political relations among different Aboriginal groupings in the region characterised the negotiations and will continue to have an impact on the implementation of strategies to realise these benefits.

The claims of the three native title groups covered the mining lease itself, the slurry pipeline corridor between the mine and the port, and the port area. While there are some direct benefits to members of these groups, the employment and economic development regime under the Agreement recognises the socioeconomic disadvantage of all Aboriginal residents of the Gulf region, and is specifically directed towards what are termed 'local Aboriginal people'. These are defined as both members of the native title groups, wherever they may live, and residents of the Gulf communities, even if they are not members of registered native title groups. This means, for example, that any preferential Aboriginal enterprise development or employment strategies cannot be fulfilled by utilising skilled Aboriginal people from elsewhere. Thus, non–local Aborigines who are employed through the project will not be included in statistics to be used in monitoring the agreement.

The economic goals set out in the Agreement include the movement away from welfare dependency, the promotion of economic self–sufficiency to the greatest extent possible, and the enablement of local Aboriginal people to participate as fully as possible in the project. In the light of these goals, I want to raise some questions about a set of interrelated issues. The first issue relates to existing Aboriginal socioeconomic disadvantage in the Gulf region, and the challenges that this poses for realising the goals of the Agreement. The second issue relates to the processes and structures through which the Agreement is to be resourced, implemented and monitored. The third issue I want to touch on concerns the kinds of Aboriginal corporate structures and strategies which could take advantage of the opportunities offered by the Pasminco Century mine project.

Addressing Aboriginal disadvantage

The Aboriginal population of the Aboriginal and Torres Strait Islander Commission (ATSIC) North West Queensland region, which stretches from the Gulf down to Birdsville and the South Australian border, is around 6000, some 17 percent of the total population. Nearly half of this Aboriginal population lives in Mt Isa itself. Roughly 2300 Aboriginal people live in the Gulf region, primarily in the townships of Doomadgee, Mornington Island, Burketown and Normanton. It is this population, together with members of the three Native Title Groups who live outside the region in centres such as Mt Isa, who stand to benefit from the Gulf Communities Agreement.

Statistics paint a rather grim picture. Aboriginal people of this region suffer from extremely poor health, with a life expectancy among the lowest in Australia. Particularly in the communities of Mornington Island and Doomadgee, there is a great need for improvement in environmental health infrastructure, such as adequate housing and water supplies. Most Aboriginal employment in the Gulf region is through Community Development Employment Projects (‘CDEP’) schemes. For those who are employed outside CDEP, by far the greatest number are in 'community services' and 'public administration'. Aboriginal people here have the lowest educational qualifications of any Queensland ATSIC region—in 1991 for example, only 177 Aboriginal people had a post–secondary school qualification. A recent audit has demonstrated a major lack of work skills and experience among the Aboriginal people of the Gulf.

Such statistics reflect in large part the complex and fraught post–colonial history of the region. The violent frontier period of the last half of the 19th century, and the subsequent state–instituted policies of institutionalisation and removal of Aboriginal people, have resulted in culturally heterogeneous communities and polyglot populations in terms of traditional land and language affiliations. Regional Aboriginal politics is characterised by complex, ongoing disputation over issues such as land and identity, often conducted through Aboriginal organisations. There has been a major absence in the region of cohesive, well–resourced and sophisticated organisations to articulate Aboriginal land and economic interests.

These factors clearly pose major impediments to the capacity of many Aboriginal people to take advantage of work and business opportunities arising from the project. From the point of view of business more generally, they could simply be seen as disincentives to the development of Aboriginal employment strategies, contracting opportunities, or joint ventures in the region. In the Gulf Communities Agreement, the Native Title Groups negotiated specific measures in order to help overcome the structural disadvantages for local Aboriginal people. I will turn to these shortly.

It is clearly unrealistic to expect a single development such as Century to address the accumulated socioeconomic disadvantages of the whole region, although many Aboriginal people in the Gulf region continue to hold this view. On the other hand, such factors must be seen as an inherent part of the wider social, political and commercial environment within which business operates, just as much as are the vagaries of international commodity markets for example. Nonetheless, the successful implementation of the Agreement has the potential to place local Aboriginal people in a strategic position to take advantage of other commercial opportunities in the region, and creatively managed by all parties, provide a point of strategic leverage for Aboriginal people into the regional economy which has so far been denied them.

There is also an important policy question raised; socioeconomic disadvantage is generally seen as an attribute of the group as an aggregate, but is it to be addressed solely at the group level? Should development funds from the project be used, for example, for broader–based and reasonably large scale enterprises which arguably increase the wealth of the regional Aboriginal 'community' as a whole, should they fund small–scale family or individual enterprises which have the potential to increase the wealth of individuals or sub–groups, or should there be a mix? I will pose some questions in relation to these matters in my final section.

Implementing and resourcing the Agreement

As international best–practice experience demonstrates (see eg Banks 1996; Ivanitz 1998: 13–16; O'Faircheallaigh 1995:17–18), one of the key issues in the negotiation of both development–specific and regional agreements with indigenous peoples is the provision of ongoing resources for implementation and monitoring. In the Gulf Communities Agreement, a set of structures and resourcing arrangements were negotiated which while certainly open to critical appraisal, provide a framework within which core concerns of the native title groups can be addressed over the expected 20 year life of the project.

These concerns include protection of environmental and Aboriginal heritage and cultural values, but here I will briefly mention only the key structures concerned with employment, training, and business development. These are shown diagrammatically in Figure 1 below.

The key bodies are:

(a) Century Employment and Training Committee (CE&TC)

This Committee is an advisory body, with representation from the Native Title Groups, the Aboriginal communities of the Gulf, Pasminco, ATSIC, and the Queensland and Commonwealth governments. The Gulf Communities Agreement recognises the major structural disadvantages from which most local Aboriginal people suffer and establishes the outline of an employment and training program which provides 'pathways' for individuals to move along manageable routes of structured employment, training, education and on–the–job experience and promotion. At the core of the Agreement will be the Century Employment and Training Plan, which will provide agreed mechanisms and resources for these programs, and set specific targets to maximise the employment of local Aboriginal people.

The CE&T Committee has a key role in providing advice and recommendations to the Pasminco Century Project on developing and implementing the Century Employment and Training Plan, and in monitoring and evaluating the implementation of training and employment programs by Pasminco, Aboriginal organisations, and government agencies. It will be resourced by Pasminco.

(b) Aboriginal Development Benefits Trust (ADBT)

The purpose of the ADBT is to provide loans or grants for business skills training, start up finance for small businesses and finance for equity in joint ventures and land purchases. Its principal funds derive from Pasminco under a formula set out in the Agreement, and total around $20m over the expected life of the mine. There are also smaller funds to be provided for sporting programs by Pasminco and Queensland.

The Board of Trustees has 11 Directors, of whom 8 are local Aboriginal people. The Trust provides the primary mechanism in the Agreement for Aboriginal enterprise development. The Board will have a number of challenging policy decisions to make once it is formally established, including what proportion of funds to invest to ensure long–term viability of the Trust, whether to allow grants as well as loans, the establishment of priority

areas for targeting its funds, and procedures for

assessing applications.

Another challenge will be posed by the necessity to strategically link the operations of the Trust with programs operated by ATSIC's commercial branch, the Commercial Development Corporation and other agencies, as well as the commercial sector in order to maximise the economic leverage of Trust funds.

(c) Gulf Aboriginal Development Company Ltd (GADC)

GADC has the primary role of administering the Agreement on behalf of the Native Title Groups, each of whom have representation on its Board. GADC is obligated to act only on the instructions of the Groups in carrying out certain of its functions. For instance, GADC distributes certain moneys directly to Aboriginal Corporations representing the Native Title Groups under a formula established in the Agreement, and in consultation with the Groups. GADC will employ an environmental Liaison Officer selected by the Century Environment Committee, who has an important role in assisting the Committee and the Native Title Groups in monitoring the environmental management regime for the project.

GADC also has an important coordinating role in employment and training and business development, for example in receiving from Pasminco lists of available positions, and providing them with names of local Aboriginal people ready for employment, seeking support from governments to maximise resources to implement the Century Employment and Training Plan, and proving advice to Pasminco on contracting and joint venturing possibilities for local Aboriginal people.

(d) Various pastoral holding companies

In order to secure its exploration and other interests, the mining company purchased a number of pastoral leases in the region. Under the Gulf Communities Agreement, management companies with varying proportions of shareholdings by Aboriginal groups are being established. The Waanyi Native Title Group in particular will shortly hold 100% of the shares in one large pastoral station, and major shares in two other stations in the mine region, initially 49% rising to a majority share holding by 2002. A major issue will be providing adequate capitalisation and effective, commercially–orientated management for these properties, as the experience with Aboriginal–owned pastoral enterprises in many other regions has demonstrated (Dale 1991, Young 1988). There is a real risk that these pastoral enterprises will have major difficulties in securing adequate funding. The Commercial Development Corporation (CDC) does not provide finance for pastoral enterprises, and while the Indigenous Land Corporation has funds for land management, and ATSIC has some funds which could be sought for capital improvements, the national demands on their relatively limited resources are severe. Nonetheless, joint venture and other possible arrangements are currently being investigated, and provision has been made in the Agreement for ongoing management and pastoral work training programs, in part funded by Queensland.

Appropriate Aboriginal corporate structures and strategies

The Gulf Communities Agreement has established a number of organisations and processes which are designed to safeguard the interests of the native title groups, provide employment and training for local Aboriginal people to become a significant component of the overall workforce on the project, and provide resources for the development of Aboriginal enterprises in the region. However, it can only set the enabling framework for such programs. There will be an ongoing need for strategically directed support from such agencies as the Department of Employment Education Training and Youth Affairs (DEETYA), ATSIC and the CDC. A major challenge will be to ensure that there is a ‘whole of project’ approach to implementing the Agreement involving Pasminco and the various responsible agencies at both Federal and State level. With respect to the development of Aboriginal business enterprises and joint ventures in particular, there will be major challenges to be faced.

There are a range of Aboriginal business enterprises which could develop from the project itself, or find niches in the regional economy. Amongst those that have been mooted thus far are the transport of foodstuffs to the mine site, mine village maintenance, road maintenance around the mine site, the transport of workers around the mine site, air charter joint ventures in the region, ecotourism, barge operations at the port, catering, mine and pipeline rehabilitation, light vehicle maintenance, and recruitment agencies. Some of these may be more suited to small–scale enterprises, others clearly require more sophisticated management and significant capital.

There is thus a continuum of possible organisational structures and sizes which could be involved in business developments, from larger, broadly 'representative' and incorporative organisations, to family or even individual enterprises. A number of issues are raised here.

Firstly, the principles on which business operates are in many ways antithetical to crucial Aboriginal principles, evident in this region as elsewhere. For instance, Aboriginal people typically emphasise the primacy of managing 'social' capital—such as investing in the maintenance of links to kin and family—over accumulating material capital. There is also characteristically intense pressure within Aboriginal groups to distribute material resources, and a pervasive social monitoring of the status which flows from them which people frequently term 'jealousy' (see e.g. Martin 1995).

Furthermore, in the modern, increasingly globalised business environment, there is an ever–increasing need to be flexible and innovative in taking advantage of market opportunities. This arguably requires skilled management with the power to take the necessary decisions quickly. However, in this region, as elsewhere, Aboriginal people typically place considerable emphasis on process in decision–making, for instance through extended consultations and negotiations, balancing of various competing interests, and gaining some kind of broader consensus behind a planned action. This can place Aboriginal businesses at a considerable commercial disadvantage.

A second set of issues is raised by the advantages of scale in enterprise development. There may well be considerable potential scope for joint venture and other business opportunities flowing from this project, as well as other mines in the region. However, to take advantage of many of them in a highly competitive environment, Aboriginal businesses will arguably need to be large enough to raise the necessary venture capital (eg through CDC or the ADBT), attract skilled staff whether Aboriginal or non–Aboriginal, put in place appropriate and cost–effective employment and training, and develop flexible and reasonably sophisticated management strategies.

In establishing the structures for such businesses, Aboriginal people will characteristically stress the need for broad representation based on indigenous social and political groupings. Yet, as I've suggested above, there are real questions as to whether such 'representative' structures are appropriate in the commercial realm. They are likely to be severely disadvantaged in terms of their capacity to be flexible, innovative, and commercially orientated. In establishing 'community wide' enterprises in this region then, there will need to be considerable creativity in developing structures which encompass Aboriginal diversity and which can facilitate particularly Aboriginal priorities and goals, but which are still commercially viable. Furthermore, there are real issues as to how such broadly–based enterprises actually address the socioeconomic disadvantage of their nominal Aboriginal owners.

At the other end of scale, there are small enterprises, for example individual or family based. There is considerable interest amongst local Aboriginal people in getting involved in joint ventures, and such interest is frequently based on small aggregates of kin or family members. I would argue that such entrepreneurship should be encouraged and facilitated as a means of making real changes to the circumstances of particular sets of people. Yet, there are dilemmas here; for instance, advantaging particular sets of people who are judged to be likely to succeed commercially is likely to cause antagonism amongst others in the region.

Furthermore, entrepreneurial Aboriginal individuals may not be supported in their applications by the agencies who provide their venture capital, in particular ATSIC and CDC which have policies requiring them to fund 'community' based enterprises. As an aside here, it is not a common requirement in the wider business world to demonstrate community support for a business venture in order to attract capital investment in it.

Moreover, in terms of addressing socioeconomic disadvantage in the region, it has to be said that those Aboriginal people who could realistically take advantage of such commercial opportunities are not likely to be the most severely disadvantaged, while at the same time, the claims of 'trickle down' economic theories in improving overall economic standards of populations are yet to be substantiated. Also, small Aboriginal businesses, like small Aboriginal organisations in the service sector, are not likely to have the aggregate of skills to be viable. An important aspect of an overall strategy then will be to provide appropriate, and highly skilled, mentoring and support services to Aboriginal businesses in the region.

Concluding remarks

The Aboriginal signatories to the Gulf Communities Agreement had a number of key objectives which they wanted the Agreement to help achieve. Among them was an improvement in the socioeconomic conditions of the regional Aboriginal population, focussing on employment and training and enterprise development. For its part, Pasminco's stated objectives are to institute a best practice employment regime with clearly articulated goals and measurable outcomes. The challenge for the company, and for the Aboriginal organisations and people of the Gulf region, is to work within the practical realities of the situation while taking into account the very high expectations of Aboriginal people.

David F Martin is a consultant anthropologist. He also works as a part–time Research fellow or the Centre for Aboriginal Economic Policy Research at Australian National University. A version of this paper was delivered at the 'Doing Business with Aboriginal Communities' conference, Alice Springs, 24—27 February 1998.

References:

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Dale, Allan 1991. ‘Aboriginal access to land management funding and services. Case studies: Kowanyama, Aurukun, Woorabinda and Trelawney’, Division of Environmental Studies, Griffith University.

Ivanitz, M. 1998. 'The emperor has no clothes: Canadian comprehensive claims and their relevance to Australia', Land, Rights, Laws: Issues of Native Title, Regional Agreements paper No. 4, Native Titles Research Unit, Australian Institute of Aboriginal and Torres Strait Islander Studies, Canberra.

O'Faircheallaigh, C. 1995. 'Negotiations between mining companies and Aboriginal communities: process and structure', CAEPR Discussion Paper No. 86, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra.

Martin, D.F. 1995. 'Money, business and culture: issues for Aboriginal economic policy', CAEPR discussion paper No. 101, Centre for Aboriginal Economic Policy Research, Australian National University, Canberra.

Young, E. 1988. ‘Aboriginal cattle stations in the East Kimberley: communities