The importance of Indigenous Economic Self-Determination within Investment Strategies
In recognition of Aboriginal and Torres Strait Islander peoples’ rights to self-determination, First Australians capital (FAC) is empowering Indigenous entrepreneurs to create a new economy driven by First Australians for First Australians.
We recognise the significant opportunity to build the Indigenous business sector and – by extension – the Australian economy.
What is economic self-determination?
The United Nations Declaration of the Rights of Indigenous People (UNDRIP) should be considered the ‘North Star’ for all programs and strategies related to self-determination and system change where Indigenous people are concerned. Economic self-determination is the practice by which Indigenous people have free, prior, and informed consent, but also, ongoing choice to the decisions that impact their economic futures.
“Indigenous peoples have the right to self-determination. They can freely determine their political status and pursue their economic, social, and cultural development by that right. They have the right to maintain and strengthen their distinct political, legal, economic, social and cultural institutions while retaining their rights to participate fully, if they choose to, in the state’s political, economic, social and cultural life.” (UNDRIP)
These rights are recommended in the Australian Sustainable Finance Roadmap, in recognition of Aboriginal and Torres Strait Islander peoples’ rights to self-determination, financial institutions work to codify the principle of free, prior and informed consent in decisions made by financial institutions.
Truth-telling and economic exclusion
Historical practices have excluded Indigenous people from participating in the economy and weakened self-determination. Indigenous communities have had (and some still have) limited ability to redress the gap and participate in the benefits of economic growth and vitality enjoyed by other Australians.
Indigenous entrepreneurs can experience barriers that inhibit innovation and self-determination and hold them back from reaching their full potential.
- Indigenous entrepreneurs can lack access to networks that could provide support and expertise in areas to assist business establishment and growth;
- Traditional blindness from finance professionals and investors who look for deals that reflect their own lived experience, or don’t have expertise in Indigenous land tenure or community governance arrangements;
- A lack of understanding, or interest in, the value of Indigenous worldviews and knowledge from financial institutions;
- Indigenous businesses face perceptions that they are less capable and of “trustworthiness’ that manifest from a legacy of systemic racism;
- Exaggerated perception of risk – investors’ risk appetite and the risk levels they perceive with Indigenous businesses and;
- A lack of transparency on investment and partnership motivations from investors to Indigenous businesses.
To assist the redress of these barriers, First Australians Capital will soon be releasing the Indigenous First Impact Framework. A guiding framework to assist financial institutions on the best practices and foundational pillars needed to guide investment strategies in Indigenous businesses whilst empowering economic self-determination.
The Indigenous economy is an emerging and underserved market. Within this economy, there lies untapped potential of Indigenous entrepreneurism, ecological knowledge, and world views to build a thriving economy.
The Indigenous business sector comprises more than 12,500 businesses, and revenue is growing faster (estimated 12.5% p.a) than the SME sector. Material opportunities exist to grow the number of Indigenous businesses and the scale of these businesses across all regions and sectors.
Close to 50% of Australia’s land mass has some form of Indigenous property rights, rising to an estimated 80% of Northern Australia (2020 OECD Report).
Although Indigenous peoples may have interests in land under Native Title or other Indigenous Titles, due to limitations in legislation and the barriers listed above, communities cannot leverage that Title or pursue economic/enterprise activity. This means that natural capital and assets are largely underutilized, and communities cannot pursue their ambitions for development and economic sustainability.
From a market perspective, this provides enormous potential for Indigenous knowledge, practice and innovation to regenerate the land and address climate change. Empowering Indigenous entrepreneurs in industries where they have a natural competitive advantage unlocks opportunities in water, land and resource management (including regenerative agriculture and renewable energy).
The Future of Economic Self-Determination
The FAC Impact Investment Platform is a vehicle to empower Indigenous economic self-determination. As a non-government Indigenous governed and led organisation, we are uniquely positioned to empower Indigenous entrepreneurs to create an economic future on their self-determined terms.