What is Black Cladding?

Black cladding is a rort running rampant in the Victorian construction industry.

It is when a business passes itself off as an Aboriginal enterprise to win contracts under government procurement policies.

Illusion vs. Reality: The Facade of Aboriginal Ownership

On the face of it, a ‘black cladding’ business looks to be majority Aboriginal owned and operated, but this is just a front. The faces and names of Indigenous people are often used to create the illusion of an Aboriginal business, while the power and profits sit with others.

In some cases, people are connected to a company with fake Aboriginal heritage, and often work is sub-contracted out to non-Indigenous workers.

Many 'black cladding' businesses underpay and exploit Aboriginal workers

Both the federal and Victorian governments have procurement policies that aim to boost employment opportunities for Aboriginal people and businesses that are at least 50 per cent Aboriginal owned or controlled.

Annual reports show the Victorian government awarded $21.2 million in contracts to 129 Aboriginal businesses and organisations in the 2020-2021 financial year, while the federal government awarded 11,500 new contracts – worth more than $1.6 billion – to 1200 Indigenous businesses in 2021-2022.

Concerns from Koori Construction:

But Koori Construction, the Indigenous arm of the CFMEU, believes it is too easy to cheat the system, undermining legitimate Aboriginal businesses and exploiting Aboriginal workers, particularly in the construction sector.

Profile picture of Joel Shackleton
CFMEU Indigenous Organiser, Joel Shackleton​

“Many ‘black cladding’ businesses underpay and exploit Aboriginal workers,” says the Union’s Indigenous organiser, Joel Shackleton.

“It is also not uncommon for companies that have won contracts under the auspices of being an ‘Aboriginal company’ to employ mostly non-Aboriginal workers.

“While we recognise that many businesses must employ some non-Aboriginal workers, our experience is that ‘black cladding’ companies make no effort to attract, support or provide meaningful opportunities to Aboriginal workers.”

What makes an Aboriginal Business?

To qualify as an Aboriginal business, an organisation needs to be at least 50 per cent Aboriginal owned or controlled.

The 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 registries that are consulted when government contracts are awarded in line with Indigenous business procurement targets.

What Checks Are in Place?

Kinaway and Supply Nation require Confirmation of Aboriginality documents for verification and registration, and say they check these against business records.

Supply Nation describes its verification process as “rigorous” and “world-leading”. It says its checks of ownership and Confirmation of Aboriginality documents, plus annual and spot check audits on businesses, guard against ‘black cladding’.

But Mr Shackleton says faking Aboriginal heritage is as easy as “coming up with a good story” and getting a Statutory Declaration signed to support it.

“The checks that are in place are completely inadequate and it is far too easy for a business to masquerade as an Aboriginal business,” he says.

What Needs to Change?

The CFMEU Koori construction members are calling for the establishment of an Aboriginal Construction Board of Integrity to check the authenticity of Aboriginal businesses in the construction sector.

The Board would include elected Indigenous elders and community members, and construction representatives and be the ultimate authority for verifying and certifying Aboriginal businesses.

It would operate independently of Kinaway Chamber of Commerce and Supply Nation, providing a final stamp of authenticity for Aboriginal businesses claiming to be an aboriginal company.

Koori Construction CFMEU logo

What Impact Does Black Cladding Have on Indigenous Workers?​

The Victorian state governments social procurement framework is designed to increase opportunities for Indigenous businesses and workers, lifting them out of a long history of disadvantage, trauma and marginalisation.

The construction sector has a really important role to play in this, because it is one of the few industries where people from disadvantaged backgrounds can find meaningful and well-paid employment without the need for tertiary qualifications or even basic literacy skills.

Businesses that engage in ‘black cladding’ are not only dishonest but also robbing Indigenous people of their dignity and opportunities, especially in construction.

“Accessible and dignified employment is our community’s best opportunity to achieve autonomy and equality,” Mr Shackleton says. “Losing this opportunity only continues the devastating cycle of trauma and disadvantage experienced by too many Koori people.”