Project Outline 2010

Poverty in the Midst of Plenty: Economic Empowerment, Wealth Creation and Institutional Reform for Sustainable Indigenous and Local Communities

Contents:

Project Outline 2010

The Poverty in the Midst of Plenty Project is a comprehensive, interdisciplinary study of the institutional, legal and policy reforms required to reduce poverty in indigenous communities. It involves comparative research that draws on anthropology, geography, demography, law and public policy to identify and analyse impediments to indigenous socio-economic empowerment, with a special focus on the impacts of large-scale resources projects located in proximity to local communities. Using policy, fiscal, procedural and legal prescriptions and models, the Project identifies solutions that will promote sustainable socio-economic development and wealth accumulation for these communities and their residents.

Background to the Project

The Project builds on the two previous ARC projects which delivered tangible benefits to indigenous communities, governments and private sector corporations through:

  • the compilation of an online database of agreements;

  • the holding of community and policy seminars on economic development, taxation and working with resource extraction industries; and

  • associated publications.

In 2002, the Agreements, Treaties and Negotiated Settlements (ATNS) Project began examining agreement-making with indigenous Australians. In 2006, its focus expanded to agreement implementation. Around this time, research confirmed that agreements - particularly those with a focus on good practice, benefit maximisation and diversity of opportunity - were critical in fostering the socio-economic development of indigenous and local communities (Langton et al 2006, 2004).

In addition, extensive fieldwork by Chief Investigators and Partner Organisations revealed the need for further research into the systemic bases for indigenous disadvantage, the structural hurdles in overcoming poverty and the expansion of models for sustaining economic empowerment. Key areas for research included:

  • institutional and inter-governmental arrangements in indigenous affairs, tax and agreement structures; and

  • the social context for the implementation of these agreements (Corbett & O'Faircheallaigh 2006, O'Faircheallaigh 2007, Strelein 2008).

In response to a perceived need for longitudinal studies to evaluate these matters, this Project integrates research on corporate, trust, land titling and tax law and policy with research on the following topics: 

  • economic capabilities;

  • governance;

  • the social, demographic and policy environment;

  • the role of tax in building economies;

  • the 'resource curse' problem (Langton & Mazel 2008) and

  • the formalisation and securitisation of land titles (Wallace 2009).

Significance and Innovation

The Project's significance lies in its potential to enhance socio-economic opportunities for indigenous and regional communities in Australia and in comparative international contexts. This potential can be realised through an improved understanding of the institutional, structural and legal reforms required to promote indigenous economic participation, entrepreneurship and sustainable wealth creation.

Many past policies and institutional and legal models have failed indigenous peoples. The current research seeks to overcome this history by highlighting the relationships between indigenous economic empowerment and government policy, indigenous institutions and land, corporate, trust and tax law. Research that illuminates the relationship between practice, policy and conceptual studies is innovative in itself, especially given its proposed adoption of evidence-based analyses of the effectiveness of vital policies. The key elements of this research include:

i. Policy, Institutional Relationships, Economic Empowerment and the Resources Industry

Indigenous economic development is a federal policy priority (Macklin 2008), centering on the clearly important yet immense task of finding innovative ways to increase indigenous wealth accumulation (Altman, Biddle & Hunter 2008). Following suggestions by Westbury and Dillon (2006) that the reasons for indigenous disadvantage lie in Australia's complex array of institutions, policies and programs, the Project examines issues such as the need for clear institutional arrangements, the fostering of local and regional capacity, the effective management of financial benefits from agreements and transparency in agreement-making.

ii. Mining

In Australia, mining offers many indigenous populations an alternative source of employment and contracting opportunities. Yet high levels of disadvantage continue among indigenous populations located near resource projects, in a phenomenon described as 'poverty in the midst of plenty' (Langton & Mazel 2008, Auty 1993).

Given the unprecedented number of opportunities offered by the mining industry, it is vital to understand the constraints on indigenous economic participation. Moreover, it is also necessary to develop strategies for increasing economic diversity, as high levels of dependency on mining can be detrimental for communities (DITR 2007).

This Project documents and evaluates several communities' approaches to the management and utilisation of resource revenues to identify factors that explain variable economic and social outcomes. On this basis, it will make recommendations for practice and policy reform to maximise the contribution of these revenues to indigenous development.

iii. Economic Distribution and Diversification

The Project examines institutional reforms intended to achieve the effective management and distribution of financial benefits from mining agreements, as well as the economic diversification of indigenous economies.

With regard to these objectives, Altman & Taylor (1989) advocate the selective use of community and region-based 'import substitution' and 'export promotion' strategies to generate products and services. Aboriginal organisations established primarily for land or natural resource management are already contributing to regional economies by securing goods and services contracts from governments and companies (Pritchard & Gibson 1996).

Local diversification may also be enhanced through the design of tax, investment, joint venture and other instruments that are intended to share resource wealth with local and indigenous communities while enabling capacity-building for economic empowerment (Boadway & Keen 2008, Neilor 1995).

iv. Regional Infrastructure and Services

Relationships between all levels of government, industry and local and regional indigenous organisations are crucial to the provision of adequate infrastructure and services, especially in under-developed remote regions. Building indigenous perspectives and social constructs into the operation and design of all infrastructure and service policies and programs is essential to their success (Calma 2005).

This Project will examine the operation of indigenous institutions and the impacts of government policy and private sector activities in this area, and will also propose reforms facilitating collaborative program delivery.

v. Acquiring Data for Informed Policy and Planning

A major problem in achieving optimal indigenous participation in regional economies has been the lack of attention paid to the implementation of agreements (O'Faircheallaigh 2002a). Instead of ensuring accountability through the achievement of identified goals within defined timeframes, implementation has been neglected, giving rise to a failure of 'progressive realisation' (Calma 2005).

To enable the more effective progression of agreements and their desired outcomes, the development of accurate, region-specific and culturally sensitive social, cultural and economic data is essential. 

vi. Culturally Sensitive Empirical Data

Interest in the statistical profiling of regional socio-economic conditions in mining regions has arisen among some stakeholders (Harvey & Brereton 2005). Drawing on developments in applied demography (Siegel 2002), recent studies have begun to establish methodological tools and data sources relevant to this task, as well as formulate basic statistics on the size, distribution, composition and dynamics of regional indigenous populations (Taylor 1999, 2004a, 2004b, 2006, 2008, Taylor & Scambary 2005).

These studies are intended to address deficiencies in the following areas:

  • the foundation for measuring the impact of mining agreements on regional populations;

  • the capture of facts on indigenous demographics (following the substantial undercount of indigenous populations in the 2006 Census);

  • the reflection of indigenous socio-demographic categories in available data (with profiling to date providing an inadequate example of 'the demography of disadvantage' (Jones 2004), hampered by its lack of fit with local values, structures and institutions (Morphy 2007)); and

  • the modeling of indigenous population changes in mineral regions of Australia (as without more work in this area, issues of scale and composition relating to future labour supply and the potential impact of mining employment on labour markets remains unknown (Biddle & Taylor 2008)).

This Project will address these shortcomings by:

  • evaluating and adjusting available demographic data as a preliminary to developing the optimal projections of indigenous populations in regions that are the focus of mining agreements;

  • applying these adjusted population levels to indicators of social and economic status derived from existing census, survey and administrative data;

  • applying ethnographic methods to produce more nuanced profiles of indigenous populations in two selected regions;

  • identifying local indigenous social and economic organisation categories, with a view to recasting conventional demographic facts to better reflect indigenous values; and

  • paying particular attention to family structures, life cycles and kin-based connections to country.

These advances require the application of techniques developed in the field of anthropological demography (Morphy 2007, Kertzer and Fricke 1997, Szreter, Sholkamy & Dharmalingam 2004). This innovative area incorporates alternative methods of development evaluation (O'Faircheallaigh 2002b), and builds on well-established participatory appraisal approaches (Birckhead 1999, Chambers 1994, Walsh & Mitchell 2002, ESMAP et al 2005). The incorporation of these techniques will demonstrate for the first time the practicality of injecting ethnographically-informed data that reflects the diversity of indigenous 'life projects' (Peterson 2005, Trigger 2005) into deliberations around mining agreements and their assessment. This is intended to facilitate evidence-based policy making for regional and remote communities.

vii. Legal and Taxation Options to Create Incentives for Economic Empowerment

Taxation is inextricably linked with participation on equal terms in Australia's market economy, and also touches on accountability in governance (Stewart 2006, Stewart 2003, Steinmo 1993; OECD, 2008). Current tax and legal regimes, however, tend to embed poverty and limit indigenous entrepreneurship and investment. Furthermore, indigenous resource-related agreements that establish charitable trusts to manage negotiated financial benefits have proven inappropriate for the long-term sustainability of fund management (Strelein & Tran 2007). 

This Project responds to these issues by:

  • conducting an analysis of the full range of commercial and financial models that are available and appropriate for indigenous organisations;

  • educating and empowering stakeholders to establish models best suited to their circumstances;

  • investigating the role of tax in a 'diverse economy' that acknowledges local and cultural economic practices (Gibson-Graham 2006: 58, Langton et al 2006).

  • drawing on a comparative analysis of indigenous tax exemption regimes in Canada, the United States and New Zealand, as well as other tax and subsidy regimes for regional communities (see Holland & Vann 1998, Wells et al 2001, US CDFI 2001, 2008).

  • examining options for new tax vehicles (Levin 2007) and incentives for economic engagement (Gunya Australia 2007, Stewart 2008).

Overall, the Project will critically examine policies such as the Australian Treasury's wellbeing framework and the principles of tax policy design, so as to contribute to the development of tax regimes that foster indigenous enterprises, joint ventures and other commercial and social models (Strelein 2008: 52, Henry 2007). It will seek to empower indigenous people to become active participants in the economy, rather than recipients of welfare.

viii. Land Titling and Securitisation Options for Economic Empowerment

The creative and flexible use of land titles can create economic opportunities - a fact that has been realised by the Australian governments, which are incorporating their potential for wealth creation into new policy approaches to welfare reform and 'meaningful' economic participation. Their focus has, however, largely been limited to the creation of legal frameworks that allow for the conversion of communal titles into individual titles (see, eg, Aboriginal Land Rights (NT) Amendment Act 2006 (Cth); Aboriginal and Torres Strait Islander Land Amendment Act 2008 (Qld)).

De Soto (2000) has criticised informal title systems as 'dead capital', with his analysis becoming loosely incorporated into criticisms of communal titles in Australia (Pearson et al 2006). More recently, however, international critiques of de Soto argue that the complex set of normative rules governing communal land titles requires a more nuanced approach than that which was originally articulated (UNDP 2006, Trebilcock & Veel 2008). In Australia, where native title is the main land-based asset, formalisation and individuation also raise particular difficulties (Godden & Tehan 2007).

This Project will analyse and propose creative ways in which indigenous land titles in Australia might be used for wealth creation. It will evaluate:

  • land titling reforms in other jurisdictions;

  • applicability to Australia; and

  • Australian reforms.

The ATNS database, which was developed as part of an earlier project, will be crucial to these undertakings as a rich storehouse of empirical research data and a means of communicating with partners, indigenous communities and the public.

Conceptual Framework

This Project is centred on a comparative analysis of the institutional, legal, social and economic arrangements required to promote sustainable economic empowerment and wealth creation for indigenous peoples in Australia and elsewhere. It includes the investigation of mining, oil and gas project case studies in Australia, Canada, New Zealand and Southern Africa (Ballard & Banks 2003). It also includes land titling research with a focus on Peru, the Pacific and Southern and Central Africa.

The comparative focus of this Project will extend the researchers' previous work, which includes:

  • an audit of agreements and their implementation;

  • the development of the ATNS database; and

  • significant analytical work on the incidence, nature, scope, and content of agreements (Langton, Tehan, Palmer & Shain 2004, 2006, Tehan 2003, Llewellyn & Tehan 2006, Langton & Palmer 2003, Langton, Mazel & Palmer 2006, Langton & Mazel 2008).

Our research team is distinguished by its wide range of expertise, which is intended to ensure an effective intermeshing of methodologies and an interdisciplinary approach to complex problem solving (Klein 1999).

Research Design

This Project takes a 'ground up' approach that relies on the analysis of empirically-based case studies to give an understanding of the scope and context of indigenous engagement in the economy and the impediments to further engagement and wealth accumulation. Its main methodological stages are:

  • Primary social, anthropological, demographic and legal research and an initial researchers/partners workshop in year one to refine the common questions for economic empowerment and participation in diverse locations.

  • An in-depth empirical research program of qualitative interviews, focus groups and surveys of documents and institutional and regulatory instruments in relevant selected Australian and international locations for each discipline in the research team.

  • Critical assessment of the effectiveness of various agreement implementation strategies, public and private sector arrangements, indigenous corporate structures, tax, business and land titling arrangements for economic empowerment and participation of indigenous peoples. This includes the conduct of a final workshop, the completion of an integrated research publication and the dissemination of results.

  • Innovative technological and content development of the ATNS database in all stages.

Each methodological stage will have a series of research questions which engage the institutional, cultural and legal indicators of economic empowerment and participation including impediments, incentives and benefits.

Research Methods

The diversity of research issues involved in this Project requires empirical work, investigation and analysis at many levels including further work on the ATNS database, as well as primary social, demographic and legal research. Other key aspects include:

  • finalising case studies with Partner Organisations (projects, regions, jurisdictions and agreements will be identified using a sampling technique);

  • undertaking case studies in Australia and overseas;

  • finalising research questions for focused inquiry; and

  • developing and disseminating interim and final results.

i. Primary Legal and Social Research

This phase will develop the basis for substantive analysis and the case study targets, beyond those already identified by Partner Organisations. It will involve the general social, demographic and legal analysis of research questions, to inform the conceptual and theoretical bases of proposed frameworks for economic development and conclusions about best practice, impediments and reform. This substantive research will assist in the redesigning of the ATNS database.

ii. Domestic Case Studies

Representative sample case studies will be developed in conjunction with Partner Organisations and indigenous communities. Potential sites for these case studies (being the Kimberley and the Pilbara) have already been identified. The number of studies depends upon the targets identified and the capacity for participation by indigenous communities, with Marnda Mia already indicating its willingness to take part. Expressions of interest from industry and indigenous organisations often bring the benefit of ready access to key information and sites.

The empirical investigation phase will involve interviews with indigenous organisations, businesses, households, mining operations, government agencies and advisors. Research by expert associates will supplement this phase. Analyses of change in the socio-economic status of select regional populations impacted by mining agreements will be undertaken using a mix of census and administrative time series data, with qualitative input from mineworkers and associated households. Two case studies on land titling reform in  the Northern Territory will also take place.

iii. International Case Studies

International case studies will be based on their usefulness for comparative studies within Australia. Sites that have already been identified for such case studies include the Diavik Diamond Mine and the Voisey's Bay nickel mine in Canada, and the Richards Bay Diamond Mine in South Africa. Initial research for international case studies on customary land claims and mining in Africa and Peru, and joint ventures and benefit agreements in Canada and Aotearoa/New Zealand, will occur prior to extensive field research. Chief Investigators and Partner Organisations with substantial research experience in targeted international sites will manage this work together with eminent associate investigators from those sites.

iv. Analysis and Writing

In-depth analysis of diverse arrangements and frameworks will give rise to unique perspectives on the institutional, structural and legal imperatives that impede or promote indigenous economic empowerment. These perspectives will be incorporated into:

  • analysis and report writing, including the integration of research findings into a series of public forums for research dissemination and publication;

  • the conduct of seminars and workshops within phases (i) and (iv), addressing issues raised in the comparative disciplinary perspectives; and

  • a final workshop that will include presentations for a monograph.

v. Database Upgrade and Research Capacity

Innovation on the ATNS database will continue, with both the database and the case studies for this Project requiring the collection of wide-ranging data. Quantitative statistical methods will be used to produce initial descriptive data on agreements and correlations for later intensive qualitative analysis. The review and upgrade of the database infrastructure will incorporate the functionality necessary for collecting and assessing information on agreement implementation and related activities in varied Australian and international contexts. The bibliographic resources and searchable functions of the database will be extended.

Industry Partner Commitment and Collaboration

This Project provides a clear advantage to all Partner Organisations, informing and enhancing government, private sector and community engagement. All partners will be actively engaged in formulating the research agenda and identifying key issues for investigation and case studies.

The Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) has made a significant commitment to this Project. FaHCSIA is the primary source of advice on indigenous issues to the Federal Minister, and is also the coordination point for whole-of-government arrangements in the delivery of programs and services for Australia's indigenous people. Its continued engagement in successive projects indicates its dedication to our research agenda on economic empowerment, consistent with the government's Closing the Gap strategy.

Rio Tinto is a long-term partner organisation for the Project, providing it with substantial financial assistance. Rio Tinto supports international accords encompassing principles of social responsibility, sustainable development, concern for indigenous and tribal peoples and fundamental rights at work and human rights (Rio Tinto 2008). Rio Tinto is committed to working in partnership to enhance its policies and procedures to the ultimate advantage of indigenous people in those countries in which it operates.

Woodside has also offered financial assistance for the Project, with Woodside staff taking an active part in ARC Linkage symposia. Woodside's on-shore activities and its operations off north-western Australia allow it to directly engage with indigenous communities. Its participation represents a commitment to 'establishing and maintaining sustainable and mutually advantageous relationships with indigenous communities wherever it operates' (Woodside 2005).

Santos is offering financial and in-kind contributions for the Project. It is committed to working with the researchers to develop effective bases for practical outcomes for indigenous communities involved in its resource extraction activities.

Marnda Mia is offering a significant in-kind commitment. The Marnda Mia Central Negotiating Committee comprises traditional indigenous landowners from the Pilbara region at the heart of negotiating and managing the benefits and impacts of the resources industry. Marnda Mia's collaboration will provide significant indigenous guidance for the research agenda.

National Benefit

The Poverty in the Midst of Plenty Project will make a major contribution to two of Australia's national research priorities: strengthening the nation's socio-economic fabric, and promoting good health. The Project directly addresses these issues through its analysis of key social determinants including 'economic participation, financial incentives and community and private sources of support' for indigenous people. Its investigation of policy options such as welfare reform and participation, as well as fiscal and legal forms for creating economic incentives, will have flow-on effects in creating better health outcomes for indigenous communities. The projected 'end-users' of the Project's research include indigenous and local communities, governments, policy makers, regulators and corporations.

As government and private sector initiatives provide renewed prospects for economic development, agreement-making with indigenous peoples remains central. Research on achieving more effective outcomes in this context will produce significant benefits for indigenous communities by:

  • analysing ways to maximise the flow of benefits from the resources sector;

  • researching links between government behaviour and service for indigenous well-being;

  • investigating legal forms and taxation incentives to encourage indigenous capacity and entrepreneurialism; and

  • making publicly accessible information on the alternatives available for maximising wealth creation.

Partners will use the research from this Project to solve identified problems and contribute to ongoing policy development. This research will also enhance the capacity of Partner Organisations to meet their social responsibility obligations and to ensure that engagement with indigenous communities produces the intended benefits of socio-economic development and wealth accumulation. Furthermore, investigation of public sector frameworks and recommendations for better policy integration will assist government policy-makers. In addition to the general application of its benefits, the Project will provide a valuable source of information on policy options for indigenous economic development. Together with the ATNS database, its research findings will have a significant role in improving socio-economic outcomes for indigenous communities across Australia.

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