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Indigenous people and the future minerals industry workforce

The questions and answers on the future workforce and economic development are the same for Indigenous and non-Indigenous people. It’s not CSR. It’s business.

Speech to the Minerals Council of Australia Workforce of the Future Forum on 12 October 2016

By Nyunggai Warren Mundine AO

Thank you for inviting me to address this forum on the minerals industry workforce of the future and the role of Indigenous Australians in it. The future workforce isn’t just something that will happen to the minerals industry. It’s something the industry can shape and direct. And it’s this I’ll focus on today.

I’ll start with my expectations about the minerals industry and its workforce in the next 10 to 15 years’ time:

  • One, the minerals industry isn’t going anywhere. It will only get bigger. The human appetite for resources shows no signs of abating. Technology and innovation, population and economic growth will only make that appetite stronger.
  • Two, Indigenous people aren’t going anywhere either. And our population is also getting bigger. Minerals extraction in Australia means engaging with Indigenous people. Indigenous Australians have ownership or other rights over 20% of the continent, including most of the areas where mining occurs. And there are still native title claims to be concluded.
  • Three, the compliance and regulatory burden for the minerals industry will increase. There’ll be greater focus on holding mining companies to account for things like site remediation. There are tens of thousands of abandoned sites across Australia. Australians and traditional owners aren’t pleased about it. There’ll be increased expectation of “cradle-to-grave” accountability for mining sites and mined products. Not to mention the rise of professional environmental campaigns and embrace of concepts like “social licence”.
  • Four, people are living longer. About half of today’s children will live past 100. Retirement ages will have to go up because 40 year retirements are unaffordable and undesirable. People will have careers spanning at least 60 years.
  • Five, technology is changing the kinds of work that require human labour. We’ve already seen massive changes in agriculture, manufacturing and mining with machines, computers and software replacing humans. Now they’re replacing office workers, process work and even “thinking jobs”. And automation is happening at a much greater pace than ever before.

A young person commencing a job today will be doing very different tasks in a decade. Their original job may disappear entirely. But they have to find 60 plus years of work. While the shelf life of jobs is decreasing, the shelf life of humans is increasing. Most people will therefore have to reinvent themselves several times in their working life. Traits like adaptability, resilience, resourcefulness and the ability to build networks and nurture relationships will matter much more in a 60 plus year career than specific qualifications.

The skills industries require will also keep changing and the talent pools for those new skills will often be small. Industries will find it increasingly hard to find the talent they need and increasingly competitive and expensive to secure it.

The Harvard Business Review recently ran a feature on AT&T. Most of AT&T’s employees are trained for jobs that are disappearing. It needs people with different skills, from fields advancing too fast for traditional training and development to keep up. The talent supply for those fields is limited and the market for it fiercely competitive. So AT&T embarked on a program to rapidly retrain its 280,000 people, rather than hire new talent wholesale. Its new buzzword is the “career lattice” instead of the career ladder.

I think companies will increasingly move away from looking for people who have particular skills to looking for people whose are skilled at learning new things.

Socio-economically, there’s a big gap between Indigenous and non-Indigenous Australians, including in income, employment, health, life expectancy and literacy and numeracy.

Demographically, Indigenous and non-Indigenous Australia are like two different countries – the demographics of Australia are typical of developed economies; the demographics of Indigenous Australia resemble developing economies.

In 10 years there’ll be nearly a million Indigenous Australians. Our population is grow at over 2% per year compared to Australia’s population overall at closer to 1.5% per year. To put that in perspective, India’s population growth over that period is expected to be 1.2% per year and Nigeria’s 2.6%.

The median age of Indigenous people is around 22 years, compared to around 37 years for the non-Indigenous population. The population pyramid for Indigenous Australians looks like those of developing countries, wide at the bottom and narrow at the top.

Population distribution is also different. Indigenous people are disproportionately represented in the sparsely populated areas where most mining occurs, and increasingly so. By 2040, Indigenous Australians will make up half the population of Northern Australia, for example.

And this country is also having two completely opposite discussions about opportunities in remote areas.

On the one hand we’re talking about developing Northern Australia. A big challenge to northern development is getting more people. In 2014 the Parliamentary Committee Report on the Development of Northern Australia said:

“Australia must find ways to build its population in the tropical North—not only to attract people, but also to retain them. That is absolutely critical. There are great opportunities available in Northern Australia, but we need more people living and working in the North to be able to realise these opportunities.”

Yet, within 6 months of that Report we were embroiled in yet another debate about the future of remote Indigenous communities and whether they should be closed and Aboriginal people should move south.

How can there be a shortage of labour on the one hand and a shortage of jobs on the other?

It’s like Aboriginal people are invisible. Here we have people scratching their heads, saying: “How can we encourage people to move north?” Well Aboriginal people up there don’t need encouragement.

Earlier this year I wrote about the intellectual trap that Indigenous people and communities are somehow different from everybody else.

Small remote communities exist all over Australia with real economies, commerce and jobs, where children get schooling. But it’s as if Indigenous communities are in a different universe. Then people say there are no jobs and communities should shut down; or governments should simply accept people languishing in chronic welfare dependence, never going to school or having a job.

Sometimes people can’t see what’s right in front of them. I’ve visited remote communities with politicians and experienced businessmen who look around and say “there are no jobs”. Then they’re amazed when I point out all the jobs. Teachers. Police. Health Workers. Social workers. Doctors visiting regularly. Construction and repairs. Cleaning. Waste management. Bush taxis. There’s buildings, electrical circuits, satellite dishes, fences, generators, plumbing, septic systems, water tanks, air conditioners, cars, roads, phone towers, airstrips and other infrastructure. Supermarkets. Art centres. Also regional jobs in the mining and agriculture industries and many locations attractive to tourists.

Then there’s all the activities people would engage in if they could – like buy coffee, or get a haircut or visit a dentist or get a takeaway meal or buy clothes. The things people currently do when out of town. Once you have small businesses and people with jobs then they may need an accountant to help with their accounts and tax returns or a lawyer to help with their contracts.

And it’s not just at a community level. When we look at individual communities we may be talking a few thousand or a few hundred people. If you look at the region you find lots of communities and a larger population. People trained in a trade or skill or profession could service a wider region. East Arnhem Land has a population of close to 10,000 people for example.

The problem isn’t a lack of jobs but that the jobs which do exist are mostly done by people from outside the community or not done at all.

How has his come about?

Partly it’s a mindset problem. Indigenous people on these lands have become accustomed to look for government for everything after years of the mission management approach. Our communities need to regain the resourcefulness mindset that enabled our ancestors to live self-sufficiently for thousands of years. Governments and bureaucracies also have a mindset problem, treating these communities like dependent children; so fearful they’ll fail they give them no oxygen to succeed.

But the main reason is that Indigenous people living on Indigenous controlled land are treated differently under the law from other Australians and the structures for managing Aboriginal controlled land and the social environment in those communities work against what’s needed for commerce and a real economy.

In my speech to the Garma Festival in 2013 I identified four things that we need on Indigenous lands to have economic development. They were good governance, private land ownership, social stability and openness.

Currently people can’t buy land and build their own home or lease commercial property on these lands. Businesses aren’t free to establish and can be discouraged if they compete with ventures owned by Indigenous controlled organisations. Leadership of those organisations can act as gatekeepers, prevent competition or make decisions based on community politics and personalities. I’ve seen it. We all have. Bureaucracy and Indigenous controlled bodies are the new missionaries.

Social stability is a major issue too. Who wants to set up or invest in a business in a community or region if the rule of law isn’t enforced, if alcohol and substance abuse is out of control or if violence, abuse and property damage are rampant. The furore I triggered in recent weeks over the Indigenous domestic violence epidemic isn’t just a social issue. It’s an economic issue too.

In my Garma speech I pointed out that the First Fleet didn’t sail into Sydney Harbour and say, “There are no jobs here. Let’s go home.”. My comment shocked a few people. Good. I hope it makes people think.

In 1788 Sydney was one of the most isolated and remote places on the planet. The colony had little support from Britain and limited supplies. Arthur Phillip set up a system to emancipate convicts so that they could learn trades and set up enterprises. This was supported by the laws of England, a civil administration and courts of law. By the time Phillip returned to Britain whaling and sheep industries had been established, emancipated convicts had set up farms and ships had reason to take port in Sydney for trading. The early shoots of an economy were starting to sprout. That early colony in Sydney had those four pillars I talked about.

All cities in Australia started out as remote communities with “no jobs”, far more remote and with far fewer jobs than in any Indigenous community today. Resource-rich regions in remote Australia the size of some countries can be self-sustaining economies with jobs and commerce too.

So what does all this mean for the minerals industry and Indigenous Australians in 10 to 15 years’ time.

Go back to those expectations about the future I started with. The future minerals industry workforce won’t be all about scaling up and scaling down to meet a cyclical industry. It will be about relationships and having access to a pool of human capital who are educated and adaptable, whom you can draw on for whatever is needed – at whatever stage of the business cycle, the compliance cycle or the innovation cycle you happen to be in.

The minerals industry will want job-ready and educated local populations – which means job-ready and educated Indigenous people.

For Indigenous communities the future presents a different challenge. Here we are taking about people needing to re-skill many times to maintain a 60 plus year career and we still have people who’ve never had even one job. Here we are talking about technology and innovation and many of our kids can’t even read or write.

Today’s children are tomorrow’s workforce. Many children in the areas the industry will be doing business in are not getting educated in the way it needs for a future workforce. Many aren’t going to school at all.

Indigenous Australians don’t have the luxury of time that other cultures had to get where they are today. Like developing economies, we have to find a way to leapfrog ahead.

Indigenous people and the minerals industry actually want the same thing. We can sharpen our engagement model to achieve it.

The minerals industry was the first industry that had to engage with Indigenous Australians to operate. It’s learnt a lot about what to do, and what not to do. Sometimes the engagement has been positive and sometimes negative.

The early model was royalty agreements for access to land. We all know how messed up some of those arrangements became. Aboriginal people talk cynically about “royalty day” when large sums of money are doled to people one day each year and they go and blow it. Today the preferred model is payments into trusts for the benefit of communities at large and with a focus on preservation of funds. But mining companies often retain control or veto of how funds are used, heralding a new form of paternalism.

The solution to both these challenges here is governance and accessing the right skills and advice. Asset management and investing is a specialist skill. Most community based groups – whether it’s an Aboriginal group or your local football club – don’t have the capabilities. dA model we could look at adapting is the one family businesses use when their businesses grow and they come into wealth. They adopt a combination of family members gaining skills and experience and finding advisers and confidants from outside who are trustworthy and capable and can supplement the skills they need.

Traditional owners have the right to build sovereign wealth and use their asset base and it must be effectively managed. But it isn’t a panacea for delivering economic development. If Indigenous people remain asset rich and skills poor, the status quo won’t change.

What we need is individuals gaining skills, getting educated, finding employment, getting independence and being able to generate their own quid.

In joint ventures between mining companies and traditional owner groups the biggest opportunities aren’t from the contributions to community assets but actually from locals getting jobs where they learn skills and gain experience working in a business and can use these in their own community – taking a job or starting a small business to do the things that outsiders have been brought in to do.

Here are two questions the minerals industry should think about to ready itself for the future.

  • First, what are you doing about securing an educated local talent pool in 10, 15 or 20 years? The people you’ll need in your future workforce and supply chains aren’t going to school or getting the education you need them to have. What are doing about that? Some of these communities want to establish private schools. Have you talked to them about partnering with them for that purpose?
  • Second, what are you doing to help identify jobs, set up small businesses and generate commerce in communities in the areas you need to operate? The minerals industry is one of the most influential and well connected industries in the country. It’s an industry built on entrepreneurship. There’s a lot it can do to help Indigenous people gain these skills. In helping create real economies in these areas you also help secure your future workforce.

The questions and answers on the future workforce and economic development are the same for Indigenous people as for non-Indigenous people. This isn’t corporate social responsibility. It’s a business imperative.

If you find the right solutions to these challenges, then the outlook for Indigenous Australians and the future minerals industry workforce is bright.

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Posted by admin on November 15, 2016

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