Businesses claiming to be Aboriginal to win work are raking in millions of dollars on Victorian building projects, the CFMEU Koori construction division warns.
The practice – known as 'black cladding' – is rampant in the state's construction industry. It involves businesses passing themselves off as majority Indigenous owned or controlled by using the names and faces of Aboriginal people to create a black front. This then unlocks access to contracts under government procurement policies that are designed to increase opportunities for Indigenous businesses and workers.
The CFMEU's Koori organiser, Joel Shackleton, says Aboriginal people are being exploited into being the front for 'black cladding' businesses which are actually owned and operated by non-Indigenous bosses and rarely employ Aboriginal workers or subcontractors.
"It is the biggest rort, it's happening everywhere and it's disgusting," Mr Shackleton says.
The Union is calling for the establishment of a government-funded Victorian Aboriginal Construction Board of Integrity to check the authenticity of Aboriginal businesses in the construction sector.
The Board would include elected Indigenous, construction and union representatives and be the ultimate authority for verifying and certifying Aboriginal businesses.
Currently, Kinaway Chamber of Commerce oversees the verification and registration of Aboriginal businesses in Victoria, while Supply Nation is the peak organisation for registering Indigenous businesses nationally. Both organisations operate business registries that are used when government contracts are awarded in line with Indigenous and social procurement targets.
The state government awarded $21.2 million in contracts to 129 Victorian Aboriginal businesses and organisations in the 2020-2021 financial year, according to the social procurement annual report. The figures are expected to have grown substantially since then thanks to the government's Big Build infrastructure push.
To qualify as an Aboriginal business, an organisation needs to be at least 50 per cent Aboriginal owned or controlled.
But Mr Shackleton says it is currently too easy to game the system by using Indigenous figureheads with no real power or even faking the Aboriginal heritage of those connected to the business. Sub-contracting out work to non-Indigenous workers is also common and not in the spirit of the rules.
The CFMEU has raised concerns about 'black cladding' businesses operating on a number of government infrastructure projects, including the Suburban Rail Loop, only to be unfairly accused of coercion by Kinaway chief executive Scott McCartney.
"We have simply been calling out the practice of 'black cladding', which is a disgraceful abuse of a system that's supposed to help Aboriginal people," Mr Shackleton says.
He says many builders are also distressed to discover so-called Aboriginal business they have hired in good faith are not Aboriginal businesses at all.
"Victorian social procurement is supposed to help right the wrongs of the past and to lift people out of disadvantage," Mr Shackleton says.
"It's not for non-Indigenous people to start dodgy labour hiring companies and dodgy cleaning companies and funnel non-Indigenous labour through them. It has to stop."
