An Indigenous Procurement Policy (IPP) aims to significantly increase the rate of purchasing from First Nations businesses.
IPPs may include annual targets for the number and value of contracts to be awarded to First Nations businesses, employment targets, mandatory set asides, first refusal, and financing assistance, and will likely preference First Nations businesses before a general approach to market.
There are private sector IPPs and Government IPPs.
- Private sector IPPs may be part of a negotiated land access agreement with the existing cost of a proponent’s business simply redirected to the First Nations business partner(s).
- Government IPPs operate to improve First Nations socio-economic outcomes, and may impose obligations on companies contracting with the Government.
What should proponents do?
Even if an IPP is not included in a land access agreement, setting up a private IPP with policies and targets is good practice for proponents.
Proponents designing IPPs can review government IPPs for guidance. Possible design features (targets by volume and/or value) can include employment targets, mandatory set asides, first refusal, financing assistance, role of Joint Ventures, and so on.
A project-based IPP should be designed in conjunction with relevant Traditional Owners as part of enabling Free, Prior and Informed Consent (FPIC) to maximise outcomes.
There are a lot of relevant First Nations businesses across Australia. Proponents should consider elevating and supporting First Nations businesses by being proactive in the following ways:
- Early engagement and communication of opportunities
- Doing a local and First Nations businesses assessment
- Having an accessible EOI (Expression of Interest) process
- Assisting Traditional Owners with additional support to create businesses
- Setting up partnerships with established First Nations businesses to assist with skills transfer
- Working closely with lead contractors to ensure subcontractor opportunities are made available.