NAIF Communities Session Nov 2015 doc
Published on: Mar 3, 2016
Transcripts - NAIF Communities Session Nov 2015 doc
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Northern Australia Investment Forum
Working with Communities: Investors and the local communities – a long term perspective
Monday 9th November 2015
1:00 – 2:30pm
Speaking notes – Phil Edmands
Venue: Darwin Convention Centre
Good afternoon distinguished guests, ladies and gentlemen.
Before commencing I wish to respectfully acknowledge the Traditional
Owners of the land on which we gather, the Larrakia people,and pay my
respects to their Elders both past and present.
We will discuss communities more broadly in the panel sessionthat is to
follow, but in this sessionI propose focussing on Indigenous
Unlike the rest of Australia, Northern Australia is in many respects still
frontier country, with massive potential yet to be realised. A key to this
happening is Indigenous communities being fully enrolled in the process.
Governments need to establish the settings that enable this, and
investors and Indigenous communities need to understand each other
and work together to achieve it.
Northern Australia covers more than 40% of Australia’s landmass,
contains up to 17 million hectares of arable soil, receives over 60% of
Australia’s rainfall, and holds around 90% of Australia’s gas reserves.
The vast majority of Rio Tinto’s global iron ore productioncomes from
Northern Australia. Our Pilbara iron ore operations comprise 15 mines,
four port facilities and 1700 km of private railway - the largest private rail
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network in the world. We also have salt, diamonds, coal, bauxite and
uranium interests in Northern Australia.
And one of the two large potential mining developments Rio Tinto has
globally – the South of Embleybauxite project – is in Northern Australia.
(The other is the Oyu Tolgoiunderground projectin Mongolia.)
All of these Rio Tinto operations in Northern Australia require close
collaboration with Indigenous communities.
And it’s likely to be no differentforother investors in Northern Australia.
Very large areas of Northern Australia are held under some form of
Indigenous title – approximately 50% of the land in the Northern Territory
Indigenous Australians are also a very important poolof potential
employees. On presentprojections Indigenous Territorians are
expected to grow from 30% to 50% of the Northern Territory’s population
over the next 30 years.
And whilst there have been, and remain, some difficult issues in
overcoming economic exclusionof indigenous Australians, there is real
Respecting culture and addressing mistakes of the past are first steps to
realising that opportunity.
Early Australian policy towards Indigenous Australians was to seekto
assimilate them. They were forciblyseparated from their families, their
culture was suppressed, their title to their lands was denied, and their
ability to make decisions forthemselves about their lives and how they
would live them was taken away and delegated to non-Indigenous
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administrators. Not surprisingly these policies contributed to
catastrophic disadvantage and suffering forIndigenous peoples.
Over time these policies have changed, and I believe there is now a
determination by current Governments to get Indigenous policy right.
Part of doing this, I suggest, is by removing unintended bias in the
approach to Indigenous policy making. Historical policy sometimes
didn’t seem to recognise that differenceand diversity between peoples
does not derogate from their equality.
Whilst everyone is from differentcultural backgrounds – in the case of
Indigenous people one of the most ancient and long lived on earth –
peoples are fundamentally equal. They have equal innate potential, and
are equally affectedby disadvantage.
Too often well-meaning Indigenous policies - and investor approaches -
have beenpatronising because they assume a lesserpotential on the
part of Indigenous Australians, rather than recognising that Indigenous
Australians simply have far more deprived and disadvantaged
circumstances which affecttheir ability – as they would anyone’s – to
function well and realise innate potential.
This has led to policies which seek to look after Indigenous Australians
and protect them from themselves,rather than policies which provide
Indigenous Australians with what they need to overcome their
disadvantage and competeindependentlyand on equal terms.
A number of things have weighed on the innate potential of Indigenous
Australians. It is hard for people to take responsibilityfor their lives if all
decisionmaking power over their lives has been given to someone else.
It is hard for people realise their potential if the system has required
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them to deny their identity as a conditionof offering them opportunity.
And it is hard for people to have self-confidence if they are in an
environment that treats them as inferior.
But this is why working with Indigenous communities,in addition to being
appropriate, offers suchtremendous potential. Not only is there vast
potential in natural assets – vast tracts of underdeveloped land that have
agricultural and resources wealth - and very substantial capital held in
Indigenous charitable trusts which could potentially be released forco-
investment, but there is vast untapped human potential which has been
historically suppressed or ignored.
Investors in committing investment to Australia often benchmark against
metropolitan Australia. Northern Australia is a frontier that is not like
metropolitan Australia. It has its own cultural settings and a unique land
title and regulatory system derived, not just from a WesternEuropean
tradition, but from the system developedover thousands of years by one
of the oldestsurviving cultures on earth.
Unleashing Northern Australia’s potential will require commoneffortby
Governments,investors and Indigenous communities.
Governments’role is to enable developmentthrough the right policy
settings and incentives.
The first enabler is title to land. As mentioned Indigenous title in
Australia was developed overthousands of years by Indigenous
peoples. Only relatively recently was it again recognisedin Australia by
our High Court.
There have beencomplementaryattempts to recognise and protect that
title through legislation. However the fit between legislation based on a
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Westernlegal system, and title which arises from customary law, has not
always been an easy one.
The legislation has imposed inefficientregulation in pursuit of its
protective purpose. And whilst itself the product of a living system it has
assumed a customary law system that doesn’tdevelop but is frozen in
pre-settlementtimes. The legislation has also tended not to recognise
the ability to exercise Indigenous title rights for commercialpurposes.
Many Indigenous Australians have questioned whether recognitionof
native title has delivered the broad Indigenous community uplift that was
And whilst investors would not want the uncertainty of opening up
existing arrangements and title to land, there is reason I suggest to look
again at what has and hasn’t worked, and refine the system in
consultation with Indigenous communities so that it gets closerto the
essence of their title rights and culture.
That review also needs to answer the questionof how that title should sit
within the fabric of a modern Australia and a global world.
Relevant work is underway. The Council of Australian Governments
(COAG), assisted by an Expert Indigenous Working Group, is
investigating how Indigenous land administration and use can be
improved to supportIndigenous economic development. And the
Australian Law Reform Commissionhas recently investigated aspects of
native title legislation, including connectionto land.
Ongoing review needs to considerhow economic development can be
supported through titles that are secure,tradeable and provide collateral
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for financing, but also how regulation of heritage and access (as an
example for exploration) can be streamlined.
Indigenous communities have made it clear that they don’t want to
eschew economic developmentand live in a time warp as a means of
preserving their culture. They want to retain and strengthen their identity
and culture but be supported in doing so through engagementwith the
modern economic developmentof Australia.
As was said by Wayne Bergman, then Directorof the KimberleyLand
Council and now CEO of KimberleyRegional Economic Development
“AboriginalCulture cannotsurvivewithoutan economy to support
it. And to build a viableIndigenous economy,we mustbe allowed
to control ourland and sea country and to use the leverageit gives
us to buildan economicfoundation for our future.”
Title to land in Northern Australia is highly complex,ofteninvolving
Indigenous and other co-extensive titles.
Sometimes it’s possibleforcommercialdevelopments to work within the
title framework that exists, but in some cases this will require
development of forms of tenure that preserve Indigenous title but permit
commercialways of exploiting land, resources and Indigenous title
The White Paper sets out a range of measures that are being
undertaken to achieve this, and successfully solving for these issues will
be a key enabler.
As averted to in the White Paper, Governments can also be responsive
to attempts to unlock funds held in Indigenous charitable trusts. This will
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need to proceed carefully and in ways that don’t damage existing
contractual arrangements and rights. However billions of dollars have
been paid into these trusts.
Restricting use of these funds to charitable purposes means they are not
available for investment in economic projects. I suggest this restriction
goes beyond taxation considerations and the fact that the funds are
communal – it is consistentwith a view that Indigenous beneficiaries
need to be looked after and their money kept safe.
In fact, whilst there are governance issues because of lack of experience
and training, people learn from their mistakes. Indigenous Australians
need to be able to control their economic resources just as other
Australians do. If their funds are invested in commercialprojects those
funds will indeed be at risk, money will be made but also lost, and tax
will be paid on profits. But this will be because there will be profits to
Governments can also affirm in the strongestterms, and in absolute
contrast to the assimilation policies of the past, that policy now is to
honour Aboriginal and Torres Strait Islanderculture and identity, and
empowerIndigenous communities to protect, preserve and indeed
strengthen that culture and identity whilst taking their rightful place in the
economic and social fabric of modern Australia.
This is all part of empowering Indigenous communities spiritually,
culturally and economically. And a very tangible way of marking that
change is for there to be appropriate Constitutional Recognitionof
Aboriginal and Torres Strait Islandercommunities.
Investors should support that recognition. Rio Tinto would not presume
to decide any modelfor Indigenous Constitutional recognition.
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Indigenous communities need to decide that for themselves. But we
have formally and strongly thrown our support behind the Recognise
And then there is how investors work with Indigenous communities in the
context of specific projects.
My first point is don’t reach for the law books to deeply understand the
viscerally interconnected concepts of indigenous title and Indigenous
Whilst native title may be referred to and described inlegislation it is not
a creature of that legislation. It is a time immemorial system sought to
be recognised – incompletelyand imperfectly – by that legislation. The
detail and essence of that system is part of an oral tradition held safe by
That means investors need to deal directly with the appropriate
representatives of each relevant Indigenous community.
And it is increasingly the case that business is being asked to be
involved in Indigenous communities hosting any developmentin ways
that go beyond the developmentitself.
This is something that can be done collaboratively with other
businesses. Like safety, this is an area where businesses should be
transparent with each other and share learnings for the greater good.
At Rio Tinto we emphasise a partnership modelwith Indigenous
communities,and take a life cycle approach.
A primary objective we have is to drive Indigenous workforce
participation across the whole spectrum of employmentopportunities.
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We share that objective with many other employers,and it is in all our
interests to share what works and what doesn’t.
For instance we are presently considering why some of our sites like
Weipaat 22% Indigenous employmentand Argyle at 27% Indigenous
employmenthave much higher rates of participation that some other
sites. Any insights we gain, or others have, would be useful to all
businesses operating in these areas.
Separately capital projects drive participation because of the greater
workforce needs,but of course when a particular capital project
concludes employmentdrops again. If we were able to collaborate with
other businessesor Governments that had capital projects
countercyclical to ours that would help in smoothing employment
We also emphasise training so that Indigenous applicants for jobs are
work ready and Indigenous business counterparties are business ready.
This extends to early learning, school retention, vocational training,
tertiary study, business mentoring and cadetship support.
As an example in Cape York we have entered into a partnership with the
WesternCape College.This program is focused on school-to-work
pathways, providing school-based traineeships,apprenticeships and
scholarships to ensure local students have strong career prospects,both
within and beyond our business.
In 2001,the schoolhad no Indigenous year 12 graduates. In 2013,there
were 28 Indigenous students that graduated year 12. During this time
the WesternCape College has beenresponsible fora 17 per cent
attendance improvementto 75 per cent across its Indigenous junior
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students, and 20 per cent attendance improvementto 68 per cent across
its Indigenous seniorstudents.
In Arnhem Land we have contributed to the Knowledge Centre that is a
meeting place for local Yolngu clans, a teaching space,an
administrative centre for adult education and training, and a showcase
for Yolngu culture and art. We are also contributing to the mine training
centre in Arnhem Land.
Language is culture, and we supported a major digitisation of language
program by the State Library of New South Wales of Indigenous
languages across Australia.
Many of our community support activities are contained within
comprehensive agreements with Indigenous communities. We have, for
instance, engaged in agreementmaking with Traditional Owner groups
in the Pilbara for more than 16 years. This has led to "claim wide" or
"country wide" agreements which provide monetary and non-monetary
intergenerational benefits for local Indigenous communities,whilst also
facilitating our operations.
Other community engagementextends to building up local economies.
Over the past five years Rio Tinto has spent more than $3 billion with
Pilbara Aboriginal businessesand their joint venture partners. We have
also recently sub-let the Karratha Station pastoral lease to the Ngarlama
Aboriginal Corporation. This is the first time that an Indigenous company
has operated one of Rio Tinto Iron Ore’s six pastoral businesses.
Finally, as an example of co-investing, we have ceded asignificant
bauxite lease to an Indigenous corporationat Gove, and are working
with the Gumatj to assist in its developmentin tandem with our own
bauxite operations in the area.
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These are just a few of the very many programs we have with
Indigenous communities in Northern Australia.
They are simply a natural incident of the truism that all investors must
act locally wherever they operate. They are also examples of a broader
win-win partnership model – one we are convinced leads to better
commercialoutcomes whilst supporting preservation of culture and
identity, and the wellbeing of Indigenous communities.
Ends (2467 words).