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Question: Public Sector Procurement

The Hon. T.A. FRANKS: I seek leave to make a brief explanation before addressing a question to the Minister for Aboriginal Affairs, the Public Sector and Industrial Relations and Attorney-General on the topic of the ICAC's 'Buying trust: corruption risks in public sector procurement' report tabled this week.

Leave granted.

The Hon. T.A. FRANKS: The ICAC commissioner this week identified, in her report, a concern around what she has termed, and others have termed, 'black cladding', noting that the government's Aboriginal Economic Participation Strategy is intended to increase Aboriginal participation in the South Australian economy and that, for large projects, industry participation waiting is increased for contracts that will involve Aboriginal participation.

Black cladding is of course defined to be practice of non-Indigenous business entities or individuals taking unfair advantage of an Indigenous business entity or individual for the purpose of gaining access to otherwise inaccessible Indigenous procurement policies or contracts. Unfair advantage involves practices and arrangements that result in disadvantage or detriment to an Indigenous business or that do not represent a genuine, demonstrated level of equitable partnership and benefit.

The ICAC commissioner identified the inclusion of an Aboriginal supplier to increase the chances of winning a tender and, in that situation, once the tender was successful the work was not allocated to that Aboriginal supplier and, indeed, also misrepresented labour hours performed by Aboriginal workers.

My question to the minister is: what will the government do to respond to this?

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector): I thank the honourable member for her question. The report that was tabled this week identifies that certainly that is a potential issue. I haven't had a particular instance brought to my attention, and I don't remember being written to by ICAC about actual instances of this occurring, but it certainly raises this. I think, from memory, the ICAC report talks about this being a concern in other jurisdictions as well.

I did read that with interest. We do have targets, that I am very proud of, for participation for Aboriginal-owned and controlled businesses, in terms of government supply, and also targets in terms of employment on government projects for groups of people, such as Aboriginal people, who often have difficulty in accessing the workforce.

I know the Office of the Industry Advocate does a lot of work, and I have been very pleased over many years to work closely with the South Australian Office of the Industry Advocate in terms of helping Aboriginal-owned and controlled companies getting more involved in government work. I know that there is a yearly function that is run that connects Aboriginal businesses with government agencies directly that I have had the privilege of being involved in.

Also, Supply Nation is an organisation that is a federal government initiative and on its list a company has to be majority Aboriginal-owned to be a Supply Nation registered business. I certainly will raise the issues that the ICAC commissioner has raised with my ministerial colleagues. A lot of government procurement is done through Treasury but the transport department in particular is a major procurer of services in South Australia, and it is a particularly important issue.

A statistic that I can remember reading, I think from a Supply Nation report, is that an Aboriginal-owned business is a hundred times more likely to employ Aboriginal people within their business so, for very good reasons, we want to encourage Aboriginal businesses to partake in government supply chains. 

The Hon. T.A. FRANKS: Supplementary: will the government investigate acquittal reporting coming direct from Indigenous businesses that are included in tenders, and will the government also consider refusing the opportunity to tender to those businesses found to be engaged in black cladding?

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector): I thank the honourable member. That was the other part of the ICAC report that referred to Aboriginal businesses, and I certainly am intending to and can inform the member that I will be raising them with the Treasurer in particular.

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