Throughout Australia, there are many organisations owned and operated by Indigenous Australians that hold substantial amounts of financial capital. Laws such as Native Title & Indigenous Land Use Agreements recognise pre-existing custodial ownership for First Nations communities. Recognition of these rights allows for a process referred to in this report as a ‘conversion of interest’ where Indigenous communities are provided with financial or other assets in exchange for the use of their lands or waters.

The report notes that since the introduction of these laws, Indigenous communities and their leaders have endeavoured to optimise the financial benefits derived from these rights and interests. In 2013, the Indigenous Business Australia (IBA) hosted a forum titled ‘Pathways to Prosperity’, which sought to develop new strategies for capacity building to effectively allocate and utilise capital. A Working Group was formed to develop a set of investment principles that would provide guidance to effectively facilitate greater economic resilience for Indigenous Australians.

The principles are also supported by three core concepts that should guide a community’s thinking about the purpose, governance, and investment of financial resources. A focus on prudent decision making and higher return potential which results in more assets for communities aims to preserve culture and heritage. Gains yielded from community agreements assists in preserving heritage and culture.

The guiding objectives of a framework outline requirements including a sound risk management structure that focuses on yielding social and economic returns, such as preserving cultural heritage and capacity building through financial literacy. A key objective is economic independence through community agreements with businesses to further develop relationships in the financial markets.

The report focused on three key areas: Investment and risk management, governance structure, and community circumstances. For governance, the report recommended that a Governing Group should appoint an Investment Committee guided by an appropriate accountability structure. This would also require a mandate to enable the Investment Committee in administering the Governing Group’s funds. The mandate would also only address one purpose and required multiple mandates for various issues such as risk tolerance, reporting obligations, or decision-making rights.

The report also outlines the need for a robust Investment and Risk management framework with a clear Investment and Spending Policy Mandate. The report outlined the need for an efficient distribution of financing between social support or financial support for social enterprises. This required adoption of unique financial models that matched incoming funds and liabilities whilst factoring in financial risks and costs based on long-term community objectives of intergenerational equity.

The report also urged investments to be reflected by community circumstances where the mandate clearly outlines that the use of Indigenous land minimise any adverse impact on cultural heritage. Factors such as assessing the cultural significance of the land in question and a clear delegation of authority to the Governance Group to develop a community decision-making process are essential. This includes the provision of capacity building to enhance financial literacy for community members to be part of the consultative process.

1. This report seeks to create a bridge between the accumulated funds that Indigenous organisations receive for the use of their lands and the need for sustainable investment into Indigenous communities. This report is particularly important as it seeks to provide an investing framework that focuses on sustainable finance where the goal of an investment is more weighed towards community welfare and development rather than quarterly gains.
2. The broader financial sector could learn from this report that emphasises the importance of stakeholder relationships between companies, organisations, and the communities and societies they exist in. It underlines the need for reciprocal relationships where organisations invest in intergenerational wealth and community building.
3. Laws such as Native Title recognise pre-existing ownership between Indigenous Australians and their land. Recognition of their ownership allowed owners to gain compensation or other assets in exchange for the use of their lands or waters. As these organisations accumulated more capital it became evident funds should be used for enriching Indigenous communities.
4. The report outlines a few key guiding objectives that create a framework for any investment. It is essential that any business agreements should reflect the community’s cultural heritage where the use of Indigenous land does not adversely impact the cultural connections to that land. Respect for culture must also be followed by sound financial and risk management strategies. To attract outside investment, any program must have robust risk management policies.
5. There are key principles that aim to support the guiding objectives in the report. The framework and principles are designed to be flexible where they can be applied to various communities with differing levels of business acumen, decision-making skills, and social infrastructure. The report asks that communities be valued on a case-by-case basis. Where spending policies and risk management should be tailor-made based on a community's understanding of their opportunities.
6. The report expects any framework to account for community circumstances and purpose. Furthermore, any overseeing body must also develop appropriate mandates, governance, and legal structures alongside a strong investment and risk management framework. As the framework focuses on community development, the Investment and Risk Management framework must consider the community’s requirements for social and financial support.
7. The report emphasises respect for community purpose and circumstances as it is important that business arrangements should reflect the community’s cultural heritage where the use of Indigenous land does not adversely impact the cultural connections to that land. This comes in many forms such as investments that are consistent with cultural values.
8. The report outlines that the Governing Group should also develop mandates, governance, and legal structures to support their operations. This includes appointing an Investment Committee which has distinguishable roles and responsibilities from the governing group to establish an appropriate accountability structure. This includes developing a clear mandate with a defined purpose.
9. The report also refers to the need for a strong Investment and Risk Management Framework and a transparent spending policy where the investment committee must agree upon financial models that match incoming funds and liabilities.