Article: Promoting growth and collaboration through Indigenous procurement

By every measure, the Indigenous business sector is going from strength to strength. At its inception in 2009, Supply Nation commenced with a cohort of 13 Indigenous-owned suppliers. The non-profit facilitated $4.1 billion of spend in 2022-23 and will register its 5000th business in 2024.

Indigenous businesses are active in almost every sector of the Australian economy. They operate in the industries you may expect such as agribusiness, food and beverages and the creative industries, but are also increasingly prominent in construction, engineering services, logistics and transport and emerging industries. Supply Nation has registered businesses operating in aerospace, space and satellite services as well as cybersecurity and data protection. Indigenous businesses are increasingly active in renewable energy projects and contributing to Net Zero goals across early-stage hydrogen, solar, wind and biomass projects.

Indigenous spend is growing year on year, indicating Australian corporates are placing a priority on securing products and services from Indigenous suppliers. Ahead of the ESG Procurement Conference 2024, Quest Events spoke with Kate Russell, CEO of Supply Nation, Courtney Paulsen, First Nations Procurement Lead at AGL, and Jenni Walke, Managing Director of Elephant in the Room Consulting to learn more.

What are the most common obstacles to buying from Indigenous suppliers?

“Like all businesses”, says Kate Russell, “Indigenous businesses may be challenged with obstacles within their sector and target markets. Access to capital, as well as conscious or unconscious bias, remain key challenges for our businesses, but their resilience and capability continue to prosper and grow.”

In Courtney Paulsen’s experience, obstacles are created by complex procurement practices and resistance to changing these. “To allow for the growth and innovation of their supply chain by buying from Indigenous suppliers, organisations need to look within their processes. They should assess their ability for risk adversity to allow for non-traditional ways of procurement, like breaking up work packages or changing language from value for money, to looking at the social value.”

Jenni Walke says a perception still exists that Indigenous businesses are more expensive than non-Indigenous equivalents. “This can be combated with education and awareness sessions, such as meet-the-supplier sessions, to gain an understanding of the business. In some cases, Indigenous businesses are more expensive. Often this is due to being new to industry or new to market and not having economies of scale, or their business model is about providing economic participation opportunities for local peoples – which comes at a higher cost in terms of engagement with the community. Communicating the long-term value and social impact of investing in Indigenous suppliers will alleviate this lack of knowledge, as will highlighting the potential for competitive pricing through collaboration and capacity building”, she adds. 

What can procurement leaders do to promote Indigenous engagement and beneficial relationships in their supply chains?

“The best outcomes I have seen”, says Paulsen, “is when all staff have a level of accountability for outcomes in Indigenous engagement. This applies to all levels of leadership and staff, not just procurement leaders. It is essential that procurement stakeholders within your organisation understand the business case for Indigenous engagement, and why it is important to be able to achieve outcomes and have genuine engagement. Procurement doesn’t always have the final say in the outcomes in awarding work, which is why socialisation of the “why” and accountability to this is vital for success.”

Organisations can create strategic commitments that align with the business mission under their reconciliation action plan banner or Indigenous engagement strategies. Walke recommends improving engagement by recognising and rewarding efforts that promote Indigenous inclusion, and by offering cultural competency training for procurement teams. “In addition”, Walke says, “procurement can foster long-term relationships rather than one-off transactions by collaborating with Indigenous business organisations and support networks, then aligning these collaborations with future procurement pipelines.”

Supply Nation offers training programs to upskill member organisations in the benefits of supplier diversity:

  • First Step provides businesses with an introduction to supplier diversity and Supply Nation’s core priorities, including global alliances and business goals
  • The Next Step training builds on these foundations by exploring how an organisation can embed supplier diversity into their supply chains and procurement practices

“We believe that everyone has a role to play in strengthening the Indigenous economy”, says Russell. “Those with access to a corporate budget should ensure they are including Indigenous businesses in their operations. For those that don’t have access to an organisational budget, consider how you can leverage your professional skills and capabilities to mentor or share knowledge with an Indigenous entrepreneur. In a personal capacity, why not commit to buying your Christmas presents from an Indigenous business? No matter what your role or budget, there are opportunities to support our thriving economy.”

What are some practical ways organisations can assist Indigenous suppliers in terms of capability and capacity building?

“Providing training and development opportunities and workshops on business development, marketing and financial planning will help new businesses build capability and capacity”, says Walke. For example, the Queensland Government delivers capability workshops in Southeast Queensland through their First Nation Strategy Plan. Networking events and pairing Indigenous suppliers with experienced mentors from within your organisation will help encourage partnerships and minimise both the actual and perceived risks of working with Indigenous businesses”, she says.

Supply Nation encourages organisations to consider their core capability and leverage that skill or knowledge with an Indigenous business. “Do you have existing in-house development programs that you could extend to an Indigenous business?” asks Russell. “CommBank, for example, has created an Indigenous business hotline, a set of bespoke financial solutions particularly for Indigenous businesses and an education series that supports capability development.”

Supply Nation members have access to the Members Opportunity Board: a platform to directly engage with suppliers on tangible opportunities but also knowledge sharing, skills acquisition and training, conference and trade event participation and other capability-enhancing opportunities.

“Organisations understand their future pipelines and can leverage this insight to foster relationships with Indigenous suppliers”, says Paulsen. “Engagement in capacity and capability can be as straightforward as preparing Indigenous suppliers for future opportunities or as innovative as breaking down work packages to facilitate their growth. There are many examples of this within the sector; organisations don’t need to start complex programs to support this.”

What successful programs have you seen in this space?

In support of its core mission of connecting buyers with Indigenous suppliers, Supply Nation coordinates Australia’s largest business event for First Nation’s businesses, Connect, which connects suppliers with businesses looking for procurement, collaboration, joint ventures, or other commercial cooperation. Connect2024 will be held in Meanjin (Brisbane) from 28-29 August, with over 2000 participants expected to attend the two-day event.

Awards programs are important for disseminating Indigenous success stories through the business community. “Our annual Supplier Diversity Awards celebrate successful partnerships between buyers and Indigenous suppliers as well as outstanding contributions from individuals, businesses, and organisations”, says Russell, citing the example of a partnership between Yaru Water and Qantas winning the 2023 Supplier Diversity Partnership of the Year.

Paulsen stresses that having partnerships with organisations like Supply Nation and state-based Indigenous chambers of commerce is essential for success for businesses that intend to start building their Indigenous supplier base. “There is an ecosystem of supporting bodies that run successful programs for networking and connecting buyers with Indigenous suppliers throughout the year”, she says. “A great way to start connecting is to find those organisations that support the areas in which your business operates. They know the suppliers and their capability, and are better placed to match those skills and capacity with your organisation’s buying needs.”

Noting the importance of key events including Supply Nation Connect and the Queensland Government’s Indigenous Business Connect events, Walke also points to the introduction of the Indigenous Procurement Policy (IPP) as the key program driving Indigenous engagement in Australia. “The IPP facilitated the establishment of clear targets for government departments to engage with Indigenous suppliers, providing incentives and support mechanisms to ensure successful partnerships. In states such as Victoria with its Social Procurement Policy, these targets and the policy itself are well socialised across all agencies. In other states, the IPPs are not as well known and some government departments still struggle to engage with Indigenous businesses”, she adds.

Kate Russell, Courtney Paulsen, and Jenni Walke will be speaking about Indigenous procurement at ESG Procurement Conference 2024 at the Aerial UTS Function Centre in Sydney from 6 - 8 August. Learn more.

To access the detailed conference program, download the brochure here.