CFMEU Koori construction division has warned of businesses claiming to be Aboriginal to win work, known as ‘black cladding’, are raking in millions of dollars on Victorian building projects.

The practice 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.

“It is the biggest rort, it’s happening everywhere and it’s disgusting,” CFMEU Koori organiser Joel Shackleton.

“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.”

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% Aboriginal-owned or controlled. Joel states 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.

“Victorian social procurement is supposed to help right the wrongs of the past and to lift people out of disadvantage.

“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.”

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 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.