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"...when I was a young fella, there were no Aboriginal managers. If you were lucky you might get to be head stockman. You didn't even think about being manager.”
Since 1991, the Central Land Council has been developing systems to help Aboriginal traditional land owners control the management of commercially viable cattle stations. There are only three Aboriginal cattle stations in Central Australia that have sufficient grazing capacity to be commercially viable. All of the others are either too small or were severely degraded prior to Aboriginal control (Department of Lands, 1970, 1974, 1975, 1976, 1984; Lands & Housing 1992). Mistake Creek, Alcoota, and Loves Creek are now all being successfully operated by their traditional owners. Their current success is due not only to their economic viability, but also to management support and training provided by CLC. [1]
The CLC provides executive training, secretariat support, planning support, and technical and financial information in culturally appropriate ways. These systems integrate traditional Aboriginal with non-Aboriginal decision-making structures, and Aboriginal control with financial accountability.
These support services are provided on request, and the Aboriginal pastoral companies are free at any time to discontinue the relationship and seek alternative support. This assistance is designed to help Aboriginal traditional owners take control. In taking control, people are often faced with difficult challenges that cause tension and frustration. Sometimes people make wrong decisions, and this can cost money. Support services also cost money, time, and effort. We should not consider this a cost, but an investment, just as we do the benefits of 15 or more years of education to which most business managers in Australia have access.
Ultimately, we have no alternative but to adopt these systems if rural Aboriginal people are to be treated as anything more than suppliers of labour and land to externally controlled pastoral ventures.
To understand why we have taken this approach it is important to look at the disjunction between the historical position of Aboriginal people, and the demands now placed upon them as pastoral directors. The cultural perspectives and spheres of knowledge of traditional Aboriginal people are vastly different from those of non-Aboriginal business leaders. Very few Aboriginal pastoral company directors have had access to secondary education. Only about half of them can read and write. Up until recently, there have been no systems available which have integrated Aboriginal and non-Aboriginal modes of economic knowledge. It is therefore extremely unreasonable to expect unsupported traditional Aboriginal people to direct the operations of a companywhich may gross over $1 million annually.
In the past, one of two solutions was adopted. Neither of them worked. The first solution was to hide behind the concept of Aboriginal self-determination, offering money and nothing else. This placed Aboriginal people in a decision-making role where they understood few of the structural parameters of the enterprise. Questions such as ‘Who owns the company? Who does the Board represent? How is wealth created?, Why doesn't the government make more money? Why are we taxed?’, are only a few of the questions which all disappeared in a mystical maze.
The second solution that was, and unfortunately still is, adopted, is just as unstable. This is to vest control in the hands of external advisers who have a responsibility to seek Board approval but sometimes consider this as an irrelevant rubber-stamping exercise. Often they have no genuine interest in keeping the Board informed. Aboriginal people may consent to such arrangements in the hope of achieving some economic trickle-down. Sometimes traditional owners are placed on the Board in token and transparent roles such as nominee directors.
Under this kind of arrangement, traditional owners soon lose interest. They become frustrated by a lack of control, a lack of information, and a deep suspicion of the management regime. They ask, "Why have those outsiders got a cattle station on my land? Why don't they pay me to use my land?" When asked, the outside experts say "ah, but this is your cattle station. When we make a profit, you'll get paid. You just have to wait until we make a profit". So the manager continues to buy a new motor car for the manager, and to build new infrastructure, all the while building his empire, and the profit never comes, and traditional owners don't get paid. So the traditional owners start eating the cattle. And they cut the fence for a shortcut. And they humbug the manager for diesel, and batteries. And when he doesn't give it to them they sack him and sack the consultant. And if they can't sack him they just eat more cattle.
We have adopted a midway approach in which Aboriginal people make the executive decisions, but we also provide, to the extent we are able, systems of accountability and timely, appropriate and balanced information.
No activity on Aboriginal land will be sustainable in the long term if it does not have the support of traditional owners. This is recognised in s23 of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth), which requires the Land Council to consult with traditional Aboriginal owners or other Aboriginal people with an interest in the land, in respect to any proposal relating to the use of that land. The Land Council must ensure that they understand the nature and purpose of the proposed land use, and as a group consent to it. This process must be undertaken even when the operating company represents traditional owners.
The management structure of a commercial Aboriginal enterprise must be consistent with both corporate law and Aboriginal law if it is to survive. The commercial cattle companies all have a Board of Directors made up of traditional landowners. Sometimes a funding agency has insisted on having a Board representative. In a joint venture situation there are various options for Board membership, depending on the equity relationships within the company. In any case, careful attention must be paid to the structure to ensure that Aboriginal people are not marginalised from a process that they often approach with trepidation.
Aboriginal Board members are elected by the shareholders, who are also the traditional owners. The Aboriginal clans are not formally divided up into separate business groups, each of which is able to elect a Board member. However, traditional owners usually try to ensure company stability by carefully choosing the composition of the Board in a way which will fairly represent the custodial clans. Custodial responsibilities for land are not always strictly based on direct descent through family lineages, but are often based on the kirda and kurtungurlu system which is a striking feature of the land tenure systems of several Central Australian groups. [2]
Equitable decision-making structures are usually only distorted when English-proficient individuals manipulate their role as information brokers to the community to enhance their own status. Unfortunately, external agencies often unwittingly support this distortion, by channelling information through the English-proficient individuals. One of our major purposes in supporting decision-making processes, and providing information in appropriate ways, is to ensure that all the decision-makers understand the issues at hand, thus reducing reliance on English-proficient individuals.
As well as representing the landowning groups, the Board members must be actively interested in the responsible management of the company. The Boards of most Aboriginal cattle companies in the CLC region are made up of a mixture of age groups, from elders to people in their early thirties. Gender balance is not seen as an issue by the Aboriginal traditional owners, with some Boards having a majority of women and some having a majority of men.
Both Mistake Creek and Loves Creek have Aboriginal managers. One of these managers is a traditional owner. There are substantial social benefits in appointing a traditional owner as manager, but it does create some difficulties. On one side, it can be difficult for a Board to take disciplinary action against a non-performing manager who is a relation. On the other side, a traditional owner/manager will often come under great pressure from relatives to share the resources that he controls. Aboriginal and non-Aboriginal societies both have complex systems for the allocation and control of resources, and rules and responsibilities for those in controlling positions. However, most rural Aboriginal people are not aware of the structure and complexity of non-Aboriginal systems. So money is considered at face value, as something to share for the benefit of all. Training providers have sometimes failed to educate Aboriginal people adequately about company structures and processes, and in particular, about the important principle that the manager must operate as the guardian of their property, and cannot distribute any property without the collective consent of the owners.
There are three major ways we have found for easing this pressure. Firstly, it is important that the Board selects a manager with the personal strength and integrity to be able to withstand the pressure. Secondly, we have an accountability system that gives the manager enough flexibility to manage, but allows regular monitoring by the Board and ensures that the Board decides on major expenditure items. This is done by giving the manager an order book with a purchase limit agreed on by the Board. Any purchases over this limit must be ratified by the Board. Thirdly, we have introduced a directors' training program, with regular follow-up of the lessons at later meetings.
The Aboriginal Board of Directors makes the decisions. CLC staff are advisers only. Board meetings for each company occur about every six to twelve weeks, depending on need. For example, in the three years to June 1997, the Board of Mistake Creek Station met seventeen times, with an average attendance of eleven traditional owners.
In all our support activities, we aim to transfer knowledge and responsibility to the Aboriginal directors as soon as is practicable, but change cannot be forced onto people. To fully complete this process will take many years, probably generations. The generational nature of social change must be recognised and accepted. However, gains are being made. A recent example is the decision by the Board of Mistake Creek to hold every second meeting without our support, and to take responsibility themselves for the secretarial processes associated with the meeting.
We use a number of methods to ensure Aboriginal control of decision-making. They rely on the following key features:
The information provided includes financial and technical planning and management; corporate law; contracts; and roles and responsibilities of directors, shareholders and managers. This information is provided through a range of mechanisms, including technical consultants, directors' training, financial information in the "money story" format (see diagram), and participatory approaches to business planning.
We engage pastoral consultants to provide management and marketing information when needed. For example, the consultant engaged for Mistake Creek has assisted with management planning and by negotiating excellent prices for Mistake Creek export cattle. The Aboriginal manager of Mistake Creek has enhanced his own property management skills by listening to the consultant, so that the consultant now rarely needs to visit. The system has proved to be very cost effective.
We recognised that the Aboriginal directors were being expected to operate in an economic and political system that they did not comprehend. Mainstream rural training providers operate on the basis that training must begin with simple skills training, and trainees showing promise can then slowly be trained up in conventional Western ways until a management class emerges. We know that this practice has not produced a class of Aboriginal pastoral managers or company directors, nor have we seen signs of such a class emerging after twenty years of land rights. Why would young Aboriginal people be keen to undertake a ten-year training program, when they have no role models, and cannot reasonably aspire to be managers or directors? In the words of Stephen Ellis, the first Aboriginal manager of Mistake Creek, "when I was a young fella, there were no Aboriginal managers. If you were lucky you might get to be head stockman. You didn't even think about being manager".
We concluded that teaching manual skills was just an excuse for those trainers who had no effective means to teach complex theoretical ideas about economics or corporate law. So we engaged Jim Downing and Stuart Phillpot to develop and present directors' training modules to the Boards of the Aboriginal cattle stations. The training, delivered between 1993 and 1995, consisted of three one week modules, presented over three months.
The training focused on:
Future training needs were identified. The two main needs identified were:
The training format emphasised participatory techniques such as simulation modelling, and comparison of contracts in the non-Aboriginal world with equivalent binding arrangements in the Aboriginal world. It used examples from everyday experience to explain theoretical concepts. The training has since been accredited under the Australian National Training Authority.
The effectiveness of the directors' training program is evident from the positive way in which directors have taken charge in subsequent meetings. Issues which previously required extensive discussion (eg. the process of checking the accounting by an auditor and the Australian Securities Commission) are now easily understood by brief reference to the directors' training. The lessons of the training continue to be reinforced through regular directors' meetings. We have had repeated requests from directors to conduct a refresher course to investigate new issues, reinforce old lessons, and introduce further information.
We assist the Board in making financial decisions by presenting and explaining a visual "money story" at each Board meeting (see diagram). The money story is a generic term to describe the graphical representation of a range of financial information, including detailed income and expenditure, accumulated profit and loss, and balance sheet. It can also be used to prepare and revise budgets.
The money story dissipates the suspicion that previously surrounded financial advisers who could not make themselves understood. It enables people to gradually understand the logic of financial management. These revelations are not immediate. People still find accounts and financial management hard to grasp. But instead of sitting there, eyes glazed or closed as we read out typed accounts, they now concentrate on the graphs and ask questions about depreciation or where the money was spent, or suggest where we might save money in the next budget period.
We need to improve the money stories, so we can better explain such things as depreciation and livestock trading accounts. We must also continue to use money stories in the long term. The time will come when we no longer need to explain them, and people will use them to make critical management decisions without our help.
We have developed a new participatory enterprise planning process to assist Aboriginal people to understand financial management and other important elements of planning (cf. Rural Enterprise Unit and Land Assessment & Planning Unit, 1997). This process parallels the standard Property Management Planning process which is generally recognised throughout Australia.[3] Traditional owners take part in setting goals, ground mapping, land use mapping, herd modelling, cash flow modelling, and action planning to ensure that:
Participatory enterprise planning has been used in a range of pastoral and tourism planning processes, notably in the preparation of a property management plan for Loves Creek Station, involving 6,000 head of cattle (Jayrook and Rural Enterprise Unit, 1997)
The pastoral businesses we have supported have earned $4.88 million in the 3 years to June 1997. We now face the same constraints as all pastoralists. With the continuing decline in industry profitability, these companies may yet become bankrupt. However, the understandings gained by Aboriginal people will be of benefit to themselves and their communities in the future. Whatever the fate of the pastoral industry, our processes of management support are appropriate for any industry. The lessons must be heeded if rural Aboriginal people are to enter the management class, and not just be suppliers of labour and land to someone else's venture. But more than this, the lessons must be heeded if joint ventures with Aboriginal people are to enjoy stability and harmony in the long term.
We have drawn on the ideas of many people, include Jim Downing, Simon Kearney, Stuart Phillpot, Julia Mitchell, Richard Trudgen and Fiona Walsh. We are indebted to them all.
Department of Lands, (1970), Developmental Report, Willowra.
Department of Lands, (1974), Development Report, Ti-Tree Station.
Department of Lands, (1975), Developmental Report, Utopia Station.
Department of Lands, (1976), Development Report, Chilla Well.
Department of Lands, (1984), Inspection Report, McLaren Creek
Department of Lands and Housing, (1992), Development Report, Tempe Downs.
Downing, J. and Phillpot, S. (1995) Pastoral company directors' courses: Alcoota, Loves Creek, Mistake Creek, Yuelamu. Remote Rural Resources. Canberra.
Jayrook and Rural Enterprise Unit, (1997) Loves Creek Station: Property Management Plan.
Rural Enterprise Unit and Land Assessment & Planning Unit (1997) Participatory Enterprise Planning: planning land based activities with rural Aboriginal people. Central Land Council.
Tracker Tilmouth is the Director of the Central Land Council in Alice Springs. Paul Mitchell is coordinator of the Central Land Council’s Rural Enterprise Unit.
[1] This article refers specifically to the three commercially viable cattle stations mentioned here, although the comments also apply to some extent to other cattle stations which are not commercial, but are subsidised due to the social benefits they provide to the community.
[2] These two terms are sometimes translated as owner and caretaker/policeman respectively, and imply differing responsibilities for the dreaming stories of the country over which the cattle graze. These roles are known under different names in other Central Australian languages.
[3] Cf Land Management Task Force (1995) Managing for the Future., Commonwealth Department of Primary Industries and Energy, Canberra.
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URL: http://www.austlii.edu.au/au/journals/IndigLawB/1998/60.html