Obstacles blocking mining from offering pathways out of poverty for Indigenous people in remote communities must be removed, writes accountant Marion Murphy.
An accident of birth has bestowed Australians with a continent rich in mineral resources. Mining these resources is how we maintain our high standard of living. For people in remote parts of Australia, many of whom are Indigenous, mining is the only pathway out of poverty. But unfortunately, the opportunity that mining brings is frequently squandered by the poor practices of intermediary organisations.
Let me take you on a journey to north-west Queensland, to see how a world-class mining development panned out for the local Indigenous people when the windfall from mining was managed by such intermediaries. It was the early 1990s, and I had just finished a six-hour, dusty, bone-jarring drive north from Mount Isa to the cool shady banks of the Nicholson River, near the Doomadgee Aboriginal Community. My visit coincided with a community meeting with Conzinc Riotinto of Australia Ltd (CRA), in which the development of a zinc deposit was being negotiated. This was no ordinary ore body. Just south of Doomadgee, CRA had stumbled across what was to be the largest zinc mine in the world. The zinc discovery offered a once-in-a-century opportunity for economic development for the region. Aptly, CRA called the project Century Zinc.
Native title was still a nascent phenomenon at the time. The 1992 High Court Mabo decision had found that Indigenous people with ancestral connections to certain crown land could claim traditional Indigenous title over the land. Significantly, the Century Zinc ore was located on the traditional country of the Waanyi people. Many of the native title claimants lived at Doomadgee, while others were based in Mount Isa or afar.
I joined a group of locals, hugging the shade, to hear what CRA had to offer: more than $20 million in cash, ownership of the nearby Lawn Hill and Riversleigh pastoral leases, infrastructure, and training and employment opportunities. All up, the offer to the Indigenous locals was worth $60 million. Northwest Queensland is rich in minerals and low in population. The largest urban centre, Mount Isa, is home to 18,000 hardy individuals. The town is a hub for the surrounding mining, grazing, and Indigenous support industries and communities. In the 1990s, Indigenous people in nearby Mount Isa had well-paid jobs in mining and related industries. But Doomadgee residents were poor. Employment was largely limited to the euphemistically named Community Development Employment Program: part-time, unskilled, work for the dole. The only free enterprise was sly grog, illicit drug sales, and illegal bush-killed meat. The village landscape was dominated by wrecked houses, with family groups gathering around campfires in yards. The town, isolated enough at the best of times, was cut off from the rest of the country throughout the wet season, which bogged inbound and outbound roads.
The intent was to get Indigenous people off welfare.
“If you don’t want the mine to go ahead, we will accept your decision, and leave,” said the CRA representative. This was not a bluff. A previous proposal to move infrastructure through Burketown had been rejected by Indigenous locals, and the company rerouted. The Doomadgee locals were divided. Disagreements degenerated into violence. As negotiations stalled, the Queensland Government offered a sweetener of another $30 million for infrastructure and training.
After six years of testy negotiations, the Gulf Communities Agreement (GCA) was finally signed in 1997. This was one of the first post-Mabo agreements of its kind. The GCA encompassed Waanyi land to the south and the land beneath the infrastructure route to the port of Karumba on the Gulf of Carpentaria. The intent was for local Indigenous people to get off welfare and achieve economic parity with other Australians. The lawyers got to work creating a tangle of interconnected incorporated bodies to represent different interests. Internal disagreements kept these groups in a holding pattern, running up overhead costs and making it difficult for the locals to achieve their aims. Experts called this a ‘governance problem’. I call it human nature.
Try running a business with your extended family and see how long you last. Add in the challenges of poverty, the tyranny of distance without transport or the internet, and limited commercial education or experience, and you begin to realise the low odds of something like this ever going smoothly, let alone achieving any success.
Nauru’s history is a lesson in human nature.
By 2015, Century Mine was done and dusted. Its greatest success was training and employment. For a third of the Aboriginal employees, it was their first taste of work and, importantly, they liked it. The mine employed 1,000 Indigenous people on a fly-in fly-out basis over its 20-year lifespan. Only a few had formal qualifications or had held supervisory roles. Most worked as machinery operators. One outstanding employee, Rachel Cameron, went on to win the national mining award. Many left Doomadgee and settled on the east coast and other population centres because home ownership, the cornerstone of wealth generation and community development, is virtually impossible at Doomadgee, or any Indigenous jurisdiction, due to legal constraints. Australia’s urban centres offer better services and more opportunities.
By 2021 the curse of unemployment had returned to Doomadgee, with a quarter of the town’s adult population unemployed. Many moved to Mount Isa or Townsville, which provide more health and other services. There are women in Mount Isa that have scarcely worked a day in their lives. Teenage girls who hold no hope for their lives have turned to drugs, alcohol and fighting. Men I spoke to are faring better: they spoke proudly of working in mining or on cattle stations.
Over the life of the mine, Century paid out $13 million in cash to fewer than 2,000 native title holders. This money flowed slowly through the channels of incorporated bodies, haemorrhaging large amounts to lawyers, accountants, and directors. Some of these native title holders are now wondering where their money went and are calling for an audit.
The Lawn Hill and Riversleigh Pastoral leases are owned by the native title holders, and the business is run by a board. This is a lucrative and valuable asset, estimated to be worth roughly $100 million today. It should be capable of paying millions of dollars in dividends to the native title holders, but there has been a revolving door of managers—which suggests trouble at a board level.
The Gulf Regional Economic Aboriginal Trust (GREAT) is the custodian of GCA funds for economic development. It held $30 million in assets in 2022 and aspires to retain and build its wealth. In the financial year ending June 2022, more than $5 million was paid to traditional owner groups under the GCA. This exceeds the amount paid to local governments, which have more rigorous and established governance departments, and provide services to the entire community regardless of ethnicity. Despite the millions of dollars of assets held in Lawn Hill and Riversleigh, as well as GREAT, even in the regional hub of Mount Isa, poverty abounds and persists to this day. Many Waanyi people are homeless, and squat with relatives in dangerously overcrowded homes.
Cape York Aboriginal leader Noel Pearson once said that communities do not raise themselves out of poverty, families do. He was right. It need not have turned out this way. There were lessons to be learnt, and from our own neighbourhood.
Decaying infrastructure on Nauru, November 2022.Photo: Graham Moody
A century ago, the small Pacific Island of Nauru was being mined for its phosphate. A succession of European colonists controlled the trade, and the Nauruans, who numbered only a few thousand, were as poor as church mice. By the late 1960s, Nauru was independent and Nauruans were among the wealthiest people in the world on a per capita basis. Some of the spoils from phosphate mining were distributed to individuals, but some were retained by the government for investment in businesses for the future. By the turn of the century, the Nauruan government had lost the lot. Business investments had failed, and charlatans took the rest. However, there were a few Nauruans who had invested their royalties with great success and are today well off and comfortable.
Nauru’s history is a lesson in human nature and the vagaries of community and government-run businesses, boards, and trust funds. It should have been a warning sign for the GCA. Every review of the GCA identified governance as a problem. Delve deeper and one would uncover that the expectations of the incorporated bodies were unrealistic. Entrepreneurship cannot flourish beneath the regulatory and political burden of community-based commissariats.
The ambition of GREAT is to take an equity position in small local business investments. This slows down decision making and reduces the incentive to grow the businesses, without providing any competitive advantage. This is exactly what is wrong with community-based attempts at economic development.
It is time to wind up this naive experiment in ‘socialism with Indigenous characteristics’ and distribute the remaining assets held by GREAT to the native title holders. As individuals or families, they can choose whether to spend their money on a home, car, education, business investment, big party, or all of the above. The directors of the Lawn Hill and Riversleigh board need to be held to account by its members, the Waanyi people, and distribute a competitive return by way of dividends. Otherwise, alternative governance and management arrangements should be adopted. One option would be a medium-term lease of the pastoral business, which would provide a substantial and guaranteed income to the native title holders. The administrators of Lawn Hill, Riversleigh, and GREAT were approached for comment, but did not reply. Back in 1997, before the ink had even dried, CRA offloaded Century and its Gulf Community Agreement. The mine has since changed hands another five times. The Indigenous development commitment was too heavy a handicap for CRA and its successors. It is in the local community’s interest that agreements do not jeopardise the profitability of a mine. Despite an abundance of mineral resources near Doomadgee, too few have followed in Century’s path to provide high-paying employment opportunities.
The Minerals Council of Australia says Australia misses out on $68 billion in potential mining investment every year, thanks to obstructive Aboriginal land councils, and green and red tape, which deter investment in this vital industry. The people who suffer most from the lack of mining investment are those in remote communities. Employment, infrastructure, and services are only possible with a continuous pipeline of investment through mining.
This is a problem for the regions; but its consequences are not limited to the regions. It diminishes the wealth and security of our nation as a whole.
Marion Murphy CPA has worked in north-west Queensland periodically since 1985.
This article from the Winter 2024 edition of the IPA Review is written by accountant Marion Murphy.
