In this episode Matthew Karakoulakis and Kerri Lee Harding explore “black cladding”, a process or business structure designed to take a business advantage to the detriment of an Indigenous business or business person.
Supply Nation considers 'black cladding' as the practice of a non-Indigenous business entity or individual taking unfair advantage of an Indigenous business entity or individual for the purpose of gaining access to otherwise inaccessible Indigenous procurement policies or contracts.
Matthew Karakoulakis explains that 'black cladding' mostly arises from joint-ventures. In a typical scenario a larger entity (usually the non-Indigenous business) and an Indigenous business come to together as an entity.
'Black cladding' occurs when the setup of the joint venture allows the non-Indigenous company to qualify as an Aboriginal business, or attempt to misrepresent themselves as an Aboriginal business in a bid to win contracts.
'Black cladding' is further compounded when the Indigenous business in the partnership is denied any benefits be it in terms of capacity building or even having a say in the joint venture.
Matthew Karakolakis says, luckily there is more awareness about black cladding and if cases are detected they should be reported to Supply Nation or other Indigenous or government bodies.
He adds that the NSW Indigenous Chamber of Commerce is also involved in clamping down on bogus joint ventures.
Joint venture entities are also being more closely monitored and audited and held accountable in their reporting requirements.
The federal government has strengthened its monitoring and oversight arrangements of Indigenous businesses winning Indigenous Procurement Policy contracts, in an effort to crack down on wrongdoing.