Road to success – Downer and Bama Services join forces in Cape York

Background

The growth of Indigenous businesses, which are up to 100 times more likely to employ Indigenous people[1], is a bright spot among ‘Closing the Gap’ results. Supporting opportunities for Indigenous businesses is a priority for Jawun and its partners, and one which has gained traction due to the Indigenous Procurement Policy (IPP). The IPP requires 3% of federal government procurement contracts to be awarded to Indigenous businesses, and its introduction in 2015 drove a rapid increase in the value of contracts for Indigenous businesses. These exceeded $1 billion in the first two years post-IPP, compared to just $6 million in 2012-13[2].

Many of the contracts involve big business partnering with Indigenous businesses to help them gain the skills and meet the preconditions and standards necessary for approval. According to the Business Council of Australia, its member companies spent or contracted over $2 billion with Indigenous owned businesses and joint ventures between 2014 and 2018[3].

A collaboration between services giant Downer EDI Limited (Downer) and Indigenous-owned civil construction and landscaping organisation Bama Services (Bama) in Cape York is a great example of these joint ventures. In 2017, Bama was supported by Downer to win two road construction contracts with a combined value in excess of $10m contract for sealing and paving a section of the Peninsula Development Road, in Cape York.

Bama (formerly Djarragun Enterprises and a member of Cape York Partnership) was set up in 2010 to provide transition to work pathways for young Indigenous school leavers. Its Support and Wellbeing program provides its employees, 75% of whom are Indigenous, with health, wellbeing, legal and professional training support. This is crucial for the many employees from remote community contexts, whose exposure to full-time employment is limited.

Bama has been a partner of Jawun since 2010, with around 20 secondees supporting it as it gained more and larger contracts in civil construction, building and landscaping, and employed more Indigenous staff. They worked on WHS, policies and procedures, employee support and business strategy and development. Through that support Bama achieved pre-qualification status with a number of tier 1 contractors and Top 100 companies, including Rio Tinto and Lend Lease.  Through this and Jawun Executive Visits (14 of which have visited Cape York) Bama grew its corporate network, and its confidence in leveraging it.

Downer has been a secondment partner of Jawun since 2013, with 50 of its employees seconded to Indigenous organisations in Inner Sydney, West Kimberley and Cape York.

Approach

Downer and Bama Services formed a joint venture in 2017 to deliver major infrastructure for the Peninsula Development Road in Cape York.  The Joint Venture was based on a commercial relationship and in equal proportion.  In that arrangement, Downer supported Bama by way of financial support, including of provision of guarantees required under the contract and working capital support.  Downer also provided systems support in the form of Health, Safety and Quality management and key personnel support through secondment of engineers. 

Downer sees this Joint Venture as a commitment to engage Bama workers in a number of initiatives: a defence project, maintenance and bridge and traffic management contracts. Further, Downer is committed to skills transfer and capacity building for those Indigenous employees, while recognising that its own employees will also benefit from new learning and new skills as well as a sense of enhanced corporate culture.

Bama Services see the commercial value of the venture and are proud of what this represents. As General Manager Ranjan Rajagopal puts it, “The significance of what Bama and Downer have agree to it that it’s commercial, not a gift or charity”.

For both, this venture represents a directly collaborative contracting approach to the opportunity presented by the Indigenous Procurement Policy. Rather than involving middle layers of councils or consultants, with spending at each transaction point, both sought an approach where funds could go straight to Indigenous contractors, with the added advantage of skills transfer and wraparound support. It took time to set up: Downer invested in due diligence to answer questions about Bama’s structure, governance, management and capacity to take on the additional work of this JV; while Bama considered carefully what they would need to bring to the venture and what it would meant to them in terms of their future direction and aspirations in Cape York and beyond.

Outcomes

The Downer-Bama partnership will improve the accessibility, safety and reliability of transport infrastructure for the local community. It will also develop the skills, capability and experience of local Aboriginal and Torres Strait Islander peoples, leading to a greater sense of empowerment as well as employment opportunities.

General Manager of Infrastructure Projects at Downer, Jeff Bowser, is proud that working closely with Bama has created real jobs and upskilling opportunities for Aboriginal and Torres Strait Islander peoples:

“Our partnership with Bama is a tangible demonstration of the sustainable positive outcomes achieved through strong relationships. We are proud to be taking an active role in creating long-term sustainable value, benefits and choice for Aboriginal and Torres Strait Islander peoples through a practical approach.”

General Manager of Bama Services, Ranjan Rajagopal, sees the partnership with Downer enabling the development of local Indigenous skills, capability and employment opportunities in the civil construction industry. He also sees it as a milestone for Indigenous-corporate engagement more generally:

“The delivery of these major packages of work in close partnership with Downer has enabled Bama to take huge leaps forward. The commitment Downer has made is unprecedented, and sets a high watermark for what the private sector can do to help ‘close the gap’.

The experience, professionalism and know-how Downer has nurtured and developed in Bama has enabled us to realise our potential and achieve our aspirations. Our staff have the opportunity to improve their skills through Downer’s in-house training, secondments, coaching and mentoring from experienced leaders.”

Next Steps

The Downer-Bama Joint Venture completed the two projects successfully, on time, well ahead of budget and exceeded the contractual targets set for Indigenous procurement, training and employment levels.

The Downer-Bama relationship is not limited to the delivery of those two projects.  Management at both companies continue to work collaboratively to identify more opportunities for joint delivery and exclusive arrangements.  The joint approach to business development is an integral part of the nature of the relationship as it has mutual (commercial and social) benefit to both organisations.

Outside the partnership, other Indigenous and corporate organisations are watching with interest. While Cape York is arguably exceptional in the depth and breadth of its corporate-Indigenous engagements, other regions are watching the Downer-Bama partnership in the hope it reflects a ‘new normal’ when it comes to Indigenous empowerment through sustainable enterprise. As Ranjan puts it,

“The Downer-Bama partnership should not entirely be viewed through the lens of corporate social responsibility or a RAP.  It is based on sound business logic and commercial principles.  Bama offers Downer an avenue into new markets and Downer offers Bama a platform to leverage and build capacity, capability and sustainability.  Together, both parties have an opportunity to make financial gains, while simultaneously creating social impact.”


[1] Supply Nation 2018, accessible at https://supplynation.org.au/wp-content/uploads/2018/10/Building-Indigenous-Growth-Report.pdf

[2] Australian Financial Review Feb 2018, accessible at www.afr.com/news/economy/closing-the-gap-in-indigenous-politics-20180212-h0vyx1

[3] ibid