The Indigenous Procurement Policy Is Failing — And It’s Costing First Nations Communities Their Future

By SCOTT FRANKS

For more than a decade, the Indigenous Procurement Policy (IPP) has been held up as one of Australia’s flagship mechanisms for supporting First Nations economic participation. The intention was simple and honourable: create meaningful opportunities for Aboriginal-owned businesses, strengthen local economies, and ensure government spending benefits the communities it impacts.

But today, the policy is drifting far from its purpose. Instead of empowering First Nations communities, the IPP is increasingly being manipulated, commercialised and, in some cases, openly exploited. The result is a system that looks good in annual reports but fails those it was supposedly designed to uplift.

Having worked in this space for more than 15 years — and even tested black-cladding arguments in the NSW Supreme Court — I have seen the pattern too many times to ignore: the IPP is no longer functioning as intended.

Black-Cladding Has Become an Industry

Black-cladding — where non-Indigenous companies use Aboriginal identity as a façade to secure contracts — is no longer a fringe issue. It is spreading, and it is lucrative.

Non-Indigenous companies hire a single First Nations employee and reinvent themselves as “engaged in Aboriginal business”. Others form superficial partnerships or buy their way into Aboriginal business networks. In some cases, people falsely claiming to be First Nations are used to give companies an Indigenous face.

The purpose?

To chase IPP spend targets.

To appear compliant.

To win contracts intended for genuine Aboriginal-owned businesses.

This behaviour is not accidental. It is enabled by weak oversight, commercially-driven membership models and auditing bodies that often lack cultural or industry expertise.

When auditing organisations rely on memberships for revenue, cultural integrity becomes secondary. And while these bodies struggle to police black-cladding, many large contractors now ignore them entirely and run their own internal cultural verification processes — a damning indictment of a system meant to provide assurance, not confusion.

The Quiet Displacement of Local Mob

One of the most damaging and least discussed failures of the IPP is the way Aboriginal businesses from other states are entering local Country and displacing local Traditional Owners.

Under the banner of “meeting Aboriginal participation targets”, contracts are being awarded to firms with no cultural connection to the land they operate on. Local mobs — those whose heritage, identity and history are tied to that Country — are overlooked in favour of companies with slick branding, established networks or interstate visibility. This is not what the IPP was designed for.

Local procurement is supposed to:

• strengthen local employment pathways,
• support community-owned enterprise,
• uphold cultural authority, and
• deliver local benefit from local projects.

Instead, the system now rewards companies whose only connection to the community is the contract they’ve come to claim.

RAPs and Memberships Are Being Used as Cultural Cover

Corporate Australia has become adept at using Reconciliation Action Plans (RAPs) and Aboriginal business memberships as cultural shields. These documents and programs were created to encourage engagement, not serve as a substitute for it.

A company can purchase a membership, recruit one Aboriginal staff member, and instantly appear legitimate. They become “eligible partners” under the IPP without demonstrating any genuine commitment to local mob, economic development or cultural responsibility.

• A RAP on the wall does not equal cultural authority.
• A membership fee does not equal legitimacy.
• And Aboriginal procurement cannot be treated as a box-ticking exercise.

Accountability Is Missing — And Communities Are Paying the Price

The central flaw in the IPP is not the policy itself; it is the absence of enforcement, cultural oversight and genuine accountability.

• If governments are serious about protecting First Nations economic opportunity, then the path forward is clear:
• Local Traditional Owner authority must be mandatory, not optional.
• Auditing and certification must be culturally led and independent of commercial influence.
• Non-local Aboriginal businesses should not operate on Country without Traditional Owner endorsement.
• Membership-driven legitimacy must be replaced with evidence-based cultural verification.

These changes are not radical. They are basic principles of cultural respect and economic justice.

The IPP Can Be Saved — But Only With Courage and Integrity

The Indigenous Procurement Policy was built on the right foundations. It was one of the few government programs that recognised economic empowerment as a pathway to community strength.

But good policy without proper protection becomes a loophole.

And a loophole becomes a business model.

Unless governments confront the exploitation occurring within the IPP — and unless First Nations Ministers and leaders are empowered to intervene — we will continue to see Aboriginal businesses undermined, local communities sidelined, and cultural authority diminished.

This is a turning point.

If the IPP continues on its current trajectory, it will not simply fail to close the economic gap — it will deepen it.

Australia must choose: a procurement system that serves the people it was designed for, or one that continues to reward those who have learned how to game it.

The future of First Nations economic independence depends on that choice.

• Scott Franks is an Indigenous leader and entrepreneur whose career spans heritage consultancy,
  Indigenous business development, environmental & cultural heritage advocacy, and corporate
  governance.
• A Proud Wonnarua man from the Hunter Valley, Scott is known for cultural heritage protection and Indigenous business leadership.
• He is the founder and director of yarrawalk Pty Ltd and owner of Tocomwall Pty Ltd.