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Marijuana Swap for Gas Marks Path for Aborigines

Photographer: Sergio Dionisio/Bloomberg

A liquefied natural gas tanker in Darwin, Australia. Close

A liquefied natural gas tanker in Darwin, Australia.

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Photographer: Sergio Dionisio/Bloomberg

A liquefied natural gas tanker in Darwin, Australia.

Leaning on the wheel of his patrol boat, Myti Wood points to the multibillion-dollar natural gas plant emerging on the shores of Darwin’s harbor in the far north of Australia.

“I never thought I’d have a chance to help build something like this,” says Wood, 23, an indigenous Australian whose mother’s death was related to alcohol abuse. “I used to smoke marijuana and be pretty heavy on the grog, because I didn’t have anything else to do.”

Three years ago, Wood scraped by on A$100 ($88) a week from the government. Now he’s paid A$2,000 by Workboats Northern Australia, a contractor for the $34 billion Inpex Corp (1605).-led Ichthys liquefied natural gas project, under a program managed by Aboriginal elders. More than half the company’s Darwin-based workforce of 70 is indigenous, up from 27 percent two years ago.

Past decades have been littered with efforts to improve the lot of Aboriginal people, who face an average life expectancy about 10 years shorter and a suicide rate 2.4 times higher than other Australians. Their jobless rate of 17 percent is almost triple the national average of 5.8 percent. As the government moves to reduce dependency on welfare, Prime Minister Tony Abbott’s challenge is to coax the private sector, led by resource companies in remote areas, into hiring more indigenous people at a time when investment in mining is fading.

Photographer: Darrian Traynor/Getty Images

An Aboriginal (Indigenous Australian) flag, left, and an Australian flag are displayed during the Australia Day Parade in Melbourne on Jan. 26, 2014. Close

An Aboriginal (Indigenous Australian) flag, left, and an Australian flag are displayed... Read More

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Photographer: Darrian Traynor/Getty Images

An Aboriginal (Indigenous Australian) flag, left, and an Australian flag are displayed during the Australia Day Parade in Melbourne on Jan. 26, 2014.

“They are a creative, hard-working people who have been let down,” said billionaire Andrew Forrest, chairman of Fortescue Metals Group Ltd. (FMG) “We need attitudinal changes across the board, particularly amongst those who insist through government policy on promoting welfare as a lifestyle choice. We have to pass the responsibility of employment of Aboriginal people to employers.”

Widening Gap

Forrest will report to the government in April on ways to improve existing training programs, which don’t always lead to permanent jobs. The importance of his task is underscored by Australian Bureau of Statistics figures showing the gap between indigenous and non-indigenous employment rates has widened 2.8 percentage points in the past five years, with 46 percent of the Aboriginal, working-age population in jobs.

“We have to make jobs more attractive and welfare less attractive,” said Alan Tudge, parliamentary secretary to the prime minister. While the government provides some companies with incentives such as wage subsidies to hire people under the Indigenous Employment Program, its policy regarding future programs will be molded by Forrest’s report, he said.

Indigenous Spending

Federal, state and territory governments spent a total of A$44,128 per capita on Aborigines in the year to June 30, 2011, according to a Productivity Commission report, more than double that spent on other Australians. Abbott is seeking to reduce that, with his newly created Indigenous Advisory Council expected to consider curbing payments to the long-term unemployed.

Darwin -- a city of 130,000 people in the Northern Territory where one in three people are of Aboriginal origin -- survived Japanese bombs in World War II and a devastating 1974 cyclone. Now, while it’s at the forefront of a natural gas energy expansion, the divide between most of the indigenous population and the rest remains stark.

Near an apartment block in which some units sell for A$1.5 million is One Mile Dam, one of the “town camps” where some indigenous people sleep in dilapidated sheds erected three decades ago; others have make-shift beds outside. While the camp is “dry,” the surrounding bushland is thick with empty alcohol bottles and cans.

‘War Zone’

A 10-minute walk away in Darwin’s central business district, Olga Havnen from the Danila Dilba Health Service says the mining boom has not done much to help her people.

“Sometimes we have so many amputees in here from diabetes, it looks like a war zone,” says Havnen, the service’s chief executive. Diseases like scabies, rheumatic heart disease and trachoma are common. “When you’re living in very poor, overcrowded conditions, people end up with illnesses that were common at the end of the 19th century but have now been eradicated in other parts of the country.”

Median weekly household income for Aboriginal people in 2011 was 80 percent of the average of non-indigenous households, little changed from five years before, government figures show. The percentage of those completing senior school is about half the rest of the country. While Aborigines are 3 percent of the population, they make up 40 percent of those imprisoned for assault.

Project investment has created skills shortages in areas with relatively large indigenous populations such as Western Australia, where the jobless rate of 4.7 percent is 1.1 percentage points lower than the national average.

Fading Boom

Even so, direct employment of indigenous people in the resource sector increased from 2.3 percent of the workforce in 2006 to just 3 percent in 2011, a period when the mining boom was at its height. Now there are signs that the surge in investment, which sparked soaring wages at some remote projects, is fading. Mining and energy projects worth a total A$1.7 billion moved to the committed stage in the six months to last October, the lowest value in more than a decade.

Relying on the mining industry to help solve the problems of indigenous people is fraught with danger, said Jon Altman, a professor of Aboriginal economic policy at the Australian National University in Canberra and editor of “People on Country: Vital Landscapes, Indigenous Futures.”

“The mining industry is driven by shareholders who want to see cost cutting through workforce shedding,” he said. “The risk is that in trying to create mainstream employment for some and making the welfare net smaller for the rest, you will put more poorly educated indigenous people deeper into poverty.”

‘Normal Behavior’

It’s in the mining industry’s interest to hire more Aborigines, said the Minerals Council of Australia’s director of health, safety, environment and community policy, Melanie Stutsel. More than 60 percent of members of the lobby group -- which wants additional government funding for companies to set up job-training programs -- operate on indigenous owned or controlled land.

Still, “there are a lot of challenges toward employing and then retaining indigenous people in the resources industry,” Stutsel said. “It’s time-consuming and expensive. If a worker doesn’t have any history of a family member being employed and they live in a remote community, those are additional barriers to them engaging in normal economic behavior, so you need to adjust your expectations.”

Welfare Trap

The push to enlist companies is part of Abbott’s bid to reduce welfare dependency. Speaking to a Sydney business audience in March 2013 he called the indigenous jobless rate a “scandal.” “People with nothing much to do will have high rates of substance abuse, domestic violence and avoidable illness,” he said.

Bradley Rosewood, a 33-year-old man taking a break from clearing land for the Ord-East Kimberly irrigation expansion project in Western Australia, said government handouts ultimately are detrimental to his people.

“Welfare gave women some income to look after their kids, but it was a bad thing for men because they didn’t need to work anymore,” he said. “The government gave us millions of dollars for programs that don’t work and never benefited us. My people have to start helping themselves, looking to get skills.”

In Kununurra, a town of about 6,000 people in Western Australia’s tropical northwest, Ian Trust looks out his office window toward a park where indigenous people sit on the grass, drinking alcohol from mid-morning in the 40-degree Celsius (104 degree Fahrenheit) heat. Young children sit with them, missing school.

Cars, Planes

“Welfare is killing our people,” said Trust, 62. “It’s fueled diabetes, suicide, high imprisonment rates and alcohol fetal syndrome.” Trust, who spent his early years living in a dirt-floor tent, formed Wunan Foundation, a non-government organization that rewards families meeting goals such as sending their children to school.

“We can’t go back to purely traditional ways,” Trust said. “We’re not going to live in caves and eat raw meat. We want to drive around in cars and fly planes.”

Aborigines spent at least 40,000 years living as nomadic hunters before settlers from the U.K. arrived in 1788 to build a penal colony. The arrivals, bringing alcohol, tobacco and diseases such as measles and smallpox, labeled Australia “terra nullius,” or “land belonging to no one.”

“Indigenous peoples throughout the world have seen a history of being treated as second-class citizens,” Valerie Alia, a professor emerita who previously taught at Leeds Metropolitan University in the U.K. and author of “New Media Nation: Indigenous Peoples and Global Communication,” said by phone from Toronto. “Work in resource projects may sometimes help, as long as the companies commit to looking after the land which is often owned by the indigenous themselves.”

Role Model

Abbott faces challenges. A lack of cooperation between the major parties, plus divisions at various levels of government, means some efficient programs are sacrificed, according to Warren Mundine, appointed by Abbott to lead the IAC.

“This issue has got to be bigger than party politics,” said Mundine, a former president of the opposition Labor party. “It’s not just in the interests of my people to raise our lot,” he said. “Every Australian taxpayer should be concerned because so much money has been wasted.”

On his boat in Darwin, Wood is adamant indigenous people can contribute as long as it’s recognized they may need extra support. A network of workplace mentors has helped, he said.

“When I see my old friends, I gloat a bit about the money I earn and they want to work here, but I tell them they have to give up their lifestyles first,” Wood said. “I like being a role model for my nephew and nieces. I can show them there’s hope.”

To contact the reporter on this story: Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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