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Working with Aboriginal and Torres Strait Islander peoples

Joint Ventures under the Indigenous Procurement Policy

Indigenous AffairsEconomic DevelopmentIndigenous Procurement Policy
Wednesday, 15 April 2020
Publication author(s):
National Indigenous Australians Agency
Publication abstract:

For the purposes of the Indigenous Procurement Policy (IPP) an incorporated joint venture is a company formed through the incorporation of an Indigenous business and a non-Indigenous business

What is a Joint Venture?

For the purposes of the Indigenous Procurement Policy (IPP) an incorporated joint venture is a company formed through the incorporation of an Indigenous business and a non-Indigenous business

In 2019 changes were made to registration requirements for Indigenous Joint Ventures.  The changes were implemented in response to stakeholders’ concern that disingenuous arrangements could be formed in order for non-Indigenous businesses to access IPP contract opportunities.

From 1 January 2019, to be eligible to bid for Commonwealth contracts under the IPP, incorporated Indigenous joint ventures must:

  • Be an incorporated company (registered with ASIC or ORIC as an Aboriginal Corporation) formed through the incorporation of an Indigenous business and a non-Indigenous business.
  • Be at least cumulatively 50% owned by an Aboriginal and/or Torres Strait Islander person(s).
  • Be able to demonstrate at least 50% Indigenous control (involvement) of the joint venture and Indigenous involvement in the management of the joint venture.
  • Be for-profit in that the joint venture is able to distribute its equity to its shareholders and not be a registered charity in its own right.
  • Be able to trade as a business in its own right.
  • Be registered in Australia.
  • Demonstrate commercial independence.

Additionally, as part of this registration they must have in place:

  • a strategy to build the capability of the Indigenous business partner; and
  • an Indigenous workforce strategy.

Details of the registration process can be found at www.supplynation.org.au/joint-venture-changes

Is there support for Indigenous businesses considering joint ventures?

There are advisory services available to eligible Indigenous businesses who are considering entering, negotiating or exiting a joint venture arrangement. This includes Indigenous Business Australia.

For further information on support available go to www.iba.gov.au or www.supplynation.org.au/joint-venture-changes).

What constitutes commercial independence of a joint venture?

To be commercially independent, a joint venture must “reflect a collaboration of the joint venture parties’ resources, skills and assets and not totally or fundamentally depend on non-commercial relationships and use of resources (e.g. equipment, personnel, facilities, financial or bonding support) with another non Indigenous enterprise or enterprises to deliver its core service offering(s).”

The joint venture must demonstrate that it has its own commercially incorporated identity with Indigenous management and control (involvement) at the highest level with Indigenous interest being responsible for the provision of clearly defined portions of the work conducted by the JV.

There are also other specific requirements. Contact Supply Nation for further details.

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