The Indigenous Opportunities Policy (IOP)
The Indigenous Opportunities Policy states:
For the purpose of promoting employment and training opportunities for Indigenous Australians, where projects involve expenditure over $5 million ($6 million for construction) in regions where there are significant Indigenous populations, officials must:
- Consult with the Department of Education, Employment and Workplace Relations, the Commonwealth Indigenous Coordination Centres or equivalent Commonwealth Office, and community council or group, as appropriate, in the planning stages of those projects.
- In each procurement process under those projects, require each tenderer to submit as part of their tender a plan for providing training and employment opportunities to local Indigenous communities and for the use of Indigenous suppliers that are small and medium enterprises.
Overview
In July 2011, the Australian Government introduced changes to its procurement processes to maximise Indigenous employment opportunities and the engagement of Indigenous businesses. This occurred through the Indigenous Opportunities Policy (IOP).
It is now a requirement for major suppliers to the Australian Government to demonstrate commitment to Indigenous employment (including the use of Indigenous suppliers) under a process being managed by the Department of Education, Employment and Workplace Relations (DEEWR).
When does the IOP Apply?
The IOP applies to Australian Government procurement processes worth more than $5 million (or $6 million for construction), where the main activity occurs in regions with a significant Indigenous population - i.e. where the proportion of Indigenous people in an Indigenous area is higher than the (2006) national average of 2.5 per cent.
This not only affects those suppliers wishing to do business with the Australian Government, but also the Australian Government agencies contracting the work.
When doesn’t the IOP apply?
The IOP does not apply to:
- Australian Government grants
- procurement undertaken by agencies who are not subject to the Financial Management and Accountability Act 1997
What do I need to do?
Australian Government agencies will need to ensure that their procurement policies, processes and procedures reflect the requirements of the IOP.
Suppliers tendering for projects above the threshold may need to have a DEEWR approved Indigenous Training, Employment and Supplier Plan (IOP Plan).
- This Plan must outline their commitment in all of the following areas:
- Training Indigenous Australians
- Employing Indigenous Australians
- Working with small to medium Indigenous businesses
- Incorporating IOP objectives into the running of the organisation as a whole
For Indigenous Australian businesses, the IOP provides opportunities for them to become part of the supply chain of major suppliers to the Australian Government. The IOP encourages supplier diversity and forms a key part of the Australian Government’s strategy to halve the gap in employment outcomes between Indigenous and non-Indigenous Australians. While the IOP is focused on the creation of training and employment opportunities in the area the project is being delivered. Indigenous businesses from across the country can be subcontracted if Indigenous suppliers are not available locally.