Article – Rio Tinto’s win-win model for northern and indigenous prosperity

by 12 November 2015

9 November 2015
Phil Edmands
The Australian

Northern Australia is the underdeveloped frontier of the “lucky country”.

The pathway to further economic prosperity for the Top End hinges on two factors: governments must establish the right ­settings, and investors and local communities must take a partnership approach.

The vast majority of Rio Tinto’s global iron ore production comes from Northern Australia. Our Pilbara iron ore operations comprise 15 mines, four port facilities and 1700km of private railway. We also have salt, diamonds, coal, bauxite and uranium interests in Northern Australia. And all of these operations require close ­collaboration with indigenous communities.

It’s likely to be no different for other investors in the “top-end”.

Large areas of Northern Australia are held under some form of indigenous title. Indigenous Australians are also an important pool of potential employees — and Rio Tinto is proud to be one of the biggest employers of indigenous men and woman in Australia, employing about 1600 indigenous Australians.

Some difficult issues in overcoming economic exclusion of ­indigenous Australians remain, but real opportunities exist if mistakes of the past can be addressed.

Early policy was to seek to ­assimilate indigenous Australians. They were separated from their families, their culture was suppressed, their right to country was denied, and their ability to make decisions about their lives was ­delegated to non-indigenous administrators.

Subsequent policies didn’t seem to recognise that cultural ­diversity does not derogate from the fact that peoples are fundamentally equal — they have equal innate potential, which is equally limited by disadvantage.

Instead these more well-meaning policies assumed a lesser ­potential on the part of indigenous Australians. This led to policies to look after indigenous Australians and protect them from themselves, rather than policies that provided indigenous Australians with what they need to overcome their disadvantage and compete independently and on equal terms.

It is hard for people to take ­responsibility for their lives if all decision-making power over their lives has been given to someone else, to realise their potential if ­opportunity is only available if they deny their identity, and to have self-confidence if they are treated as inferior.

The Northern Australia White Paper, however, evidences the real determination by the government to correct for these past failings and get indigenous policy right.

It recognises that realising the potential of Northern Australia requires governments, investors and indigenous communities to leverage not only its vast natural assets, but its tremendous untapped human potential.

A primary enabler is title to land. Indigenous title in Australia was developed over thousands of years. Only relatively recently was it again recognised in Australia by our High Court.

There have been complementary attempts to recognise and protect that title through legislation. However, the fit between legislation based on a Western legal system, and title that arises from customary law, has not always been an easy one. Legislation has imposed complex and inefficient processes. And, while itself the product of a living system, that legislation has assumed a customary law system that doesn’t ­develop, but is frozen in pre-settlement times. It has also tended not to recognise the ability to exercise indigenous title rights for commercial purposes.

Title issues are now being ­reviewed by the Council of Australian Governments, assisted by an Expert Indigenous Working Group.

Ongoing review must address overregulation, and how economic development can be supported through titles that are secure and tradeable, and provide collateral for financing.

Governments can also be responsive to attempts to unlock funds held in indigenous charitable trusts. This will need to proceed carefully to safeguard existing contractual arrangements and rights.

Restricting use of these funds to charitable purposes, however, means they are not available for investment in economic projects. It is also consistent with a view that indigenous beneficiaries need to be looked after and their money kept safe.

In fact, while there are governance issues given lack of experience and training, people learn from their mistakes. Indigenous Australians must be able to control their economic resources just as other Australians do. And, yes, if those funds are invested in commercial projects they will be at risk, but the alternative is locking the money away at bond rates of interest.

The broader action for governments is to confirm that current policy is to honour Aboriginal and Torres Strait Islander culture and identity, and empower indigenous communities to protect, preserve and indeed strengthen that culture and identity while taking their rightful place in the economic and social fabric of modern Australia.

A tangible way of marking that change is for there to be appropriate Constitutional Recognition of Aboriginal and Torres Strait ­Islander communities.

Rio Tinto is not advocating any model for indigenous constitutional recognition. Indigenous communities must decide that for themselves. But we have shown our strong support for the Recognise campaign.

At a more individual level, Rio Tinto adopts a partnership model with indigenous communities. A primary objective we have is to drive indigenous workforce ­participation across the whole spectrum of employment opportunities.

We are involved in early learning, school retention, vocational training, tertiary study, business mentoring and cadetship support.

Our partnerships with schools and school programs have helped improve attendance, retention and graduation outcomes for indigenous students. And in Arnhem Land we have contributed to the Knowledge Centre as a teaching centre and showcase for Yolngu culture and art. We are also ­contributing to the mine training centre in Arnhem Land.

We additionally seek to ­improve local economies. In the Pilbara we have issued contracts to indigenous contracting ­companies worth more than $3 billion. And we have ceded a ­significant bauxite lease to an indigenous corporation at Gove, and are assisting them to develop it.

Finally, we recognise that ­language is culture and supported a major digitisation of indigenous languages by the State Library of NSW.

These few examples are part of a broader win-win partnership model — one we are convinced leads to better commercial outcomes while supporting preservation of culture and identity, and the wellbeing of indigenous communities.

Phil Edmands is managing director for Rio Tinto Australia and a Business Council of Australia director.

Courtesy of the Australian

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