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Social Justice Report 2003

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Chapter three: Indigenous participation in decision making – Transforming the relationship between government and Indigenous peoples

The twin pillars of the government's approach
to Indigenous policy in 2003 continued to be practical reconciliation,
with its emphasis on service delivery in core areas of disadvantage, and
mutual obligation, with its emphasis on reciprocity and individual responsibility.
Through both of these policies, the government has identified moving Indigenous
people beyond welfare dependency and enabling Indigenous participation
in program delivery and design as key features of its approach.

Within this framework, there has been increased
attention over the past year to the nature of the relationship between
government and Indigenous peoples. There has been a lot of talk from governments
about the need to change the way they interact with and provide services
to Indigenous peoples and communities. This has largely occurred as a
result of the significant policy focus of Indigenous peoples and governments
on capacity building and governance reform in recent years, and progress
in 2003 in advancing the whole-of-government community trials by the Council
of Australian Governments. It has also been influenced by the conduct
of a number of significant inquiries during the year, including parliamentary
inquiries into national progress towards reconciliation and capacity building
in Indigenous communities, as well as the conduct of the Indigenous business
review, and the review of the role of the Aboriginal and Torres Strait
Islander Commission (ATSIC).^[1]

Debates during the year about the relationship
of Indigenous peoples and government have identified three key, inter-connected,
issues. First, the need to change the way government interacts with Indigenous
peoples. For governments, the emphasis here has been on the need to change
the way services are provided to Indigenous peoples, including through
improved coordination between governments and among government agencies.
Second, the need to build the capacity of Indigenous communities, coupled
with demands for improved corporate governance among Indigenous organisations.
Third, the need to review the structures and operations of ATSIC, such
as through introducing improved corporate governance mechanisms and by
making ATSIC more representative and participatory.

Indigenous peoples and governments alike
have focused on the importance of these issues during the past year. There
are, however, differences on how to best address these issues. This chapter
examines current debates about the nature of government service delivery,
building the capacity of Indigenous communities, and ATSIC reform. Ultimately,
a key focus of the chapter is on the role of ATSIC as a critical agent
in facilitating change to the relationship of Indigenous peoples and government.
It makes proposals for a changed relationship between Indigenous peoples
and governments by ensuring the effective participation of Indigenous
peoples in decision making and addressing Indigenous issues within a framework
of promoting sustainable development.

A relationship of dependence - Challenging the existing
service delivery approach

Indigenous peoples seek to challenge the
underlying basis of their relationship to governments in Australia. Indigenous
peoples have increasingly come to realise that the current system perpetuates
a cycle of dependency and is also not contributing to or promoting sustainable
improvements in Indigenous communities and individual well-being.

As ATSIC noted in 2002, 'it is now widely
recognised that Indigenous programs have perpetuated dependence, not development.
Our communities have had to face arbitrary, complex, inconsistent and
inflexible demands from program providers.' ^[2]

From the 1970s through to the present, a
particular operational environment has been established which has consisted
of governments funding Indigenous organisations to provide services to
Indigenous people. Despite criticising the failure of this community development
model (and of the self-determination principle that underpins it) there
has been virtually no change in the underlying basis of this relationship
since the current government came into power in 1996, and a continuity
in government approaches since the 1970s. ^[3]

ATSIC have described this operating environment
as a 'directed community services' model:

Current funding arrangements for Indigenous
organisations are ... directed in that it is the various Commonwealth,
State and Territory government agencies that decide the functional areas
and guidelines for expenditure. The agencies determine also whether
particular applicants' proposed projects are of high enough priority
within those guidelines to warrant funding and, if funded, they hold
the grantees accountable for the expenditure of funds according to those
guidelines. The current arrangements constitute a directed community
services model in at least two other senses. First, the arrangements
envisage that the major purpose of the funding is the provision of services
to people within the community and, second, when the arrangements direct
resources to incorporated bodies they conceive of those bodies as non-government
community service organisations ...^[4]

This approach has created 'a model of dependency
on two levels - from government to organisation, and from organisation
to clients' .^[5] The first level of dependency
in the existing approach to Indigenous service delivery is of Indigenous
organisations to government agencies:

The Royal Commission into Aboriginal Deaths
in Custody identified changing this relationship of dependence - which
disempowers Indigenous people through governmental control - as integral
to achieving the equal enjoyment of rights by Indigenous peoples.^[7]

While Indigenous organisations have become
dependent on government agencies under this approach, Governments have
also become dependent on such organisations as agents for service delivery.
This is also problematic. In its 1996 review of the Aboriginal Councils
and Associations Act 1976 (Cth), the Australian Institute of Aboriginal
and Torres Strait Islander Studies identified the following structural
problems with the present system of funding service delivery:

• being application based, the initiative for program design
  rests largely outside the authority of the funding agency;
• furthermore, the funding agency generally cannot directly
  influence in advance the nature and composition of the applicant groups;
• it follows that matters of critical importance to the
  equitable, effective and efficient delivery of publicly-funded services
  (such as representativeness, consultation and staff engagement) cannot
  be built into the planning for service provision at an early stage;
• accordingly, the planning and implementation of service
  provision is compromised by the need to accept the groups intended to
  provide the service in the form in which they have already incorporated
  themselves;
• accountability controls are then applied via the conditions
  of grant and enforcement of compliance with the incorporation law concerned;
• but this is largely ex post facto accountability (by
  grant acquittance and audited financial statements) and cannot cure
  basic defects which might exist in the group's suitability and capability
  as the service provider, stemming from its manner of incorporation;
• thus handicapped in its capacity to plan for service
  provision, the funding agency's efforts to ensure performance of funding
  objectives are frustrated;
• service provision by existing corporations is less than
  satisfactory so new corporations are established - and the whole process
  begins again. ^[8]

The second level of dependency is of Indigenous
people to Indigenous organisations. The activities of Indigenous organisations
are substantially defined and controlled by government decision making
processes over which Indigenous peoples exercise minimal, if any, control.
As a result, such organisations are based on non-Indigenous models of
governance and do not necessarily reflect the priorities and needs of
Indigenous communities. As stated by ATSIC:

This operating environment continues today.
In the words of ATSIC, it 'has in many cases replaced one form of dependence
with another. Not the welfare dependency of the Pearson theory, but the
dependence on permanent service delivery by external agencies'. ^[10]

Concerns about dependency on permanent government
service delivery are accompanied by concerns that this service delivery
model is not delivering long term and sustainable improvements in Indigenous
communities.

The current approach reduces the idea of
development 'to one of 'community development' devoid of any economic
dimension' and provides 'little encouragement to Indigenous economic development
since the resourcing of Indigenous organisations does not increase with
increases in economic activity in their local area'.^[11] Service delivery of itself brings few economic benefits.

The discussion in chapter 2 and the statistics
provided in Appendix 1 illustrate this. They show that there is no evidence
that the existing service delivery model is achieving sustained improvements
in Indigenous well-being. There is no consistent forward trend in reducing
inequalities compared to the broader Australian population and there is
a very real prospect of a worsening in the situation of Indigenous peoples
over the next decade.

As a consequence of these factors, Indigenous
people seek to move from a position of dependency on government service
delivery to being active participants in governing their own communities.
This requires a changed approach by governments and Indigenous organisations
and communities.

Overall, it requires two main but inter-related
changes. First, it requires changes to the approach of government to funding
in order to increase Indigenous participation and control.

Twelve years ago the Royal Commission into
Aboriginal Deaths in Custody made recommendations for longer term, more
flexible funding arrangements which would ensure increased Indigenous
participation and control. In particular, it recommended the introduction
of triennial block grant funding for Indigenous organisations and that
this funding be allocated through a single source with one set of audit
and financial requirements combined with maximum devolution of power to
the communities and organisations to determine the priorities for allocating
such funds. ^[12]

These and similar recommendations have been
reiterated time and again over the past decade. This includes through
the landmark report of the Commonwealth Grants Commission on Indigenous
Funding in 2001. As the discussion in chapter 2 and Appendix 2 of this
report demonstrates, addressing these issues is also a key priority of
the COAG whole-of-government trials through the concepts of shared responsibility
and of a 'joined up' approach to government activity and pooled funding.

Second, it raises challenges for Indigenous
people to develop structures that are capable of interacting with governments
while also being representative of and accountable back to Indigenous
communities and people. This requires building the capacity of Indigenous
communities to be self-determining as well as reforming the structures
of ATSIC to provide effective representation within government at the
regional, state and national levels. It is this second set of challenges
that this chapter focuses on.

In ATSIC's Annual Report for 2002-03, the
acting Chairman describes the challenge facing Indigenous communities
and ATSIC as follows:

A central issue is how to empower people
at the community and regional levels, so that policies and service delivery
are driven by the people and the communities themselves. In this vision
of the world as it should be, service delivery by governments and agencies
is driven by the needs of the community rather than by one-size-fits-all
policies and models which are imposed from above and afar. We want Indigenous
people and communities to drive change and shape their own futures.
But that means we have got to get two things right:

• the capacity of community members and the community
  as a whole to make good policy and to campaign and negotiate for the
  outcomes they want; and
• the good governance and self-management of Aboriginal
  and Torres Strait Islander people at national, regional and local
  levels.

'Capacity building' and 'good governance'
are buzz words around at the moment. But the issues that they cover
are fundamental. Basically, they mean building the skills of all Indigenous
people to improve ourselves, to shape our own lives, to run our own
affairs, and to take our rightful place as a unique part of Australian
society.

Whichever way you look at it, capacity
building and good governance lie at the heart of our [i.e., ATSIC's]
current agenda. How we deal with them will determine our future. Our
focus must be to build the framework of capacity and governance within
which we can develop relevant, well-researched policy reflecting what
Indigenous people want, and oversee the delivery of effective programs
flowing from those policies. Aboriginal and Torres Strait Islanders
need a renewed, reinvigorated, focused and high performing ATSIC. Dare
I say it: the nation needs 'a new ATSIC'. ^[13]

Facilitating Indigenous participation and moving
beyond welfare dependency - The government's approach

A key focus of the government, in implementing
its practical reconciliation and mutual obligation policies, has been
on processes for fostering Indigenous participation and moving Indigenous
people beyond welfare dependency.^[14] The
central element of the government's approach to these issues has been
a focus on the need for partnership and shared responsibility between
government and Indigenous peoples. As the Minister for Immigration, Multicultural
and Indigenous Affairs stated in August 2003:

[There is a] need to recognise that there
is a partnership of shared responsibility between governments and Indigenous
people. Governments and outsiders alone cannot effect the necessary
changes.

• Indigenous Australians have rights like all other Australians
  - rights to education, health services and the like. Governments therefore
  have obligations to provide those services in a fair, reasonable and
  appropriate way.
• But rights and responsibilities are inseparable, and
  there is a view, well founded I believe, that the responsibility of
  the individual has not been given sufficient attention.^[15]

Recent developments in the government's
position on fostering Indigenous participation and the objective of moving
Indigenous people beyond welfare dependency can be briefly summarised
as follows. ^[16]

In 2002, the Minister for Immigration, Multicultural
and Indigenous Affairs set out a five point plan for Indigenous affairs
which consists of:

• implementing a shared responsibility approach between
  Government and indigenous people that recognises that each side has
  rights and obligations;
• shifting the emphasis of policy towards the needs of
  individuals and families, with a focus on 'empowering individuals as
  members of families and communities rather than viewing the Indigenous
  world through the construct of community', and considering 'the functioning
  of Indigenous organisations to identify whether they are providing services
  that can demonstrate tangible outcomes'; ^[17]
• tackling substance abuse, particularly alcohol, as a
  major health priority and 'as a absolute necessity in terms of breaking
  the shackles of family violence, welfare dependency and the like'; ^[18]
• pursuing English literacy and numeracy as the most basic
  foundation to securing the long-term economic self-sufficiency of Indigenous
  people; and
• ensuring that mainstream funding caters to Indigenous
  needs to enable better targeting of Indigenous specific resources.^[19]

In responding to the Commonwealth Grants
Commission's report on Indigenous funding, the government also committed
to a series of guiding principles for equitable provision of services
to Indigenous people. These principles seek to identify the basic requirements
and parameters for effective and equitable approaches to service delivery
to address Indigenous disadvantage. They include:

• flexibility in the design and delivery of services, and
  the importance of developing partnerships and shared responsibilities
  with Indigenous peoples;
• developing a long term perspective in funding, design
  and implementation of programs;
• improving access to mainstream services for Indigenous
  peoples and access to services being based on need and equity;
• improving coordination of service delivery within and
  between governments;
• improving community capacity in order to achieve sustainable
  outcomes for Indigenous communities; and
• improving data collection to enable performance reporting
  of outcomes and better alignment of resources to need.^[20]

Two processes are also seen as central to
the government's 'shared responsibility' approach. First is building the
capacity of Indigenous communities and governance reform. As stated in
the government's submission to the parliamentary inquiry into capacity
building in Indigenous communities, the government's overall approach
is to 'locate capacity building firmly at the heart of policy and programme
design ... An emerging policy challenge for governments ... is to actively support
Indigenous people in their efforts to develop the individual and community
capacity necessary to achieve self-management and self-reliance'. ^[21]

Second, agreement making processes were
identified as the mechanism for implementing the government's shared responsibility
and partnership approach. In August 2002, the Minister stated that 'we
need agreements that are a two-way undertaking that change the relationship
from one of passive welfare dependency to a much more equal relationship'
based on empowerment.^[22] Such agreements,
he stated, should be guided by principles of involvement of the local
Indigenous community in decision making; shared responsibility; flexibility
to meet local circumstances; and an outcomes focus with clear benchmarks
to measure progress.

As noted in Chapter 2, the government has
also made a series of commitments through the communiques of the Council
of Australian Governments. These include investing in community leadership
initiatives and promoting links between Indigenous people and the private
sector to increase economic independence. The whole-of-government community
trial initiative has also been discussed at length in Chapter 2 and Appendix
2 of this report.

The government has also initiated a number
of inquiries and reviews in 2002 and 2003 on matters that are related
to these priorities and this approach. These include:

• Inquiry into capacity building in Indigenous communities,
  commenced by the House of Representatives Standing Committee on Aboriginal
  and Torres Strait Islander Affairs in July 2002 and still underway;
• Review of the Aboriginal and Torres Strait Islander Commission,
  which delivered its final report in November 2003 and which will form
  the basis of legislative proposals for reforming ATSIC in 2004;
• The Indigenous Business Review, which is due to report
  shortly; and
• Review of the Aboriginal Corporations and Associations
  Act 1976 (Cth) in 2002, with the government recently announcing
  that it would introduce legislative amendments to the Act in 2004 to
  improve the effective of Indigenous organisations; ^[23]

In the Social Justice Report 2002, I examined the approach of the government in some detail. I sought to
establish whether government activity and programs backed up the weighty
commitments that they make or whether the broader approach of the government
to Indigenous issues, particularly through the confines of practical reconciliation,
constrained the enabling environment in which such directions were to
be implemented.

Overall, I have noted the significance of
the government's commitments to improved coordination and efficiency in
service delivery, on focusing on building the capacity of Indigenous communities
and in seeking to enter into partnerships of shared responsibility with
Indigenous peoples to promote economic development. The commitments of
the government offer significant potential for making real advances in
the situation of Indigenous peoples.

I have also expressed concern, however,
that the government appears reluctant to relinquish any control over decision
making or resource allocation and accordingly, that they have set a narrow
basis for the relationship with Indigenous peoples.^[24] As noted in the previous chapter, the absence of any benchmarking and
agreement of targets in the short, medium and longer terms also means
that the government's approach lacks a longer term perspective to issues
of funding, program design and implementation.

There are a number of implications that
flow from the government's approach that are relevant in considering developments
in fostering Indigenous participation in decision making processes and
seeking to move Indigenous peoples beyond welfare dependency.

First, the government's approach is a narrow
one in that it is primarily directed to improving the existing service
delivery framework. While the government seeks to engage Indigenous people
in making this system more responsive to their needs, the primary focus
of the government is not on transforming the current approach. The focus
is on addressing the needs of Indigenous people (at the individual, family
and community level) as disadvantaged citizens and on improving their
access to citizenship entitlements. Distinct cultural attributes of Indigenous
peoples are secondary concerns in this framework.

Second, as a consequence, the process of
re-drawing the boundaries of the relationship between Indigenous peoples
and government through partnerships and agreements does not contemplate
a change in the relationship based on acknowledgement of distinct Indigenous
identity and cultures or recognition of the distinct status and inherent
rights of Indigenous peoples. It is not based on recognising Indigenous
jurisdictions or on sharing power. This distinguishes the government's
approach from a treaty process and from the broader comprehensive agreement
making approach proposed by ATSIC in the mid-1990s in negotiations on
a social justice package.^[25]

Third, the government's focus in on achieving
greater efficiency and outcomes for Indigenous peoples from within the
existing service delivery framework. The government is not, for example,
contemplating radical change to existing financial commitments and approaches
to addressing Indigenous disadvantage. Instead it is focused on improving
the performance and accessibility of existing mainstream programs and
services; freeing up Indigenous specific services to address issues that
cannot be addressed through these mainstream services; improving the allocation
of existing funding on the basis of need; and addressing fragmentation
of service delivery that exists across government departments and between
governments. These are important issues to focus on, but without a broader
frame of reference they confine the scope of the relationship between
government and Indigenous peoples.

Ultimately, these factors suggest that the
government's approach, and their efforts to date to engage Indigenous
peoples, do not seek to transform the existing model of service
delivery to Indigenous peoples. Instead, they focus on improving the effectiveness of the existing approach and consequently, the outcomes
achieved by it in relation to Indigenous disadvantage.

The government's approach is not, however,
completely closed. Their commitment to capacity building in Indigenous
communities and governance reform of Indigenous organizations offers much
potential to unshackle the constraints that exist through the current
service delivery approach and has the potential to lead to more radical
transformation in the relationship into the future.

Capacity building in Indigenous communities and
governance reform

In setting out a human rights framework
for reconciliation, the Social Justice Report 2000 noted the
pivotal importance of building the capacity of Indigenous peoples and
supporting Indigenous governance structures. Such a focus, the report
suggested, provides 'the potential for a successful meeting place to integrate
the various strands of reconciliation' by tying together 'the aims of
promoting recognition of Indigenous rights with the related aims of overcoming
Indigenous disadvantage and achieving economic independence'.^[26]

The Social Justice Report 2001 then provided an overview of developments in relation to community capacity
building and governance reform, and provided some detailed case studies
of current developments.^[27] That report
referred to capacity building and governance as follows:

Capacity building relates
to the abilities, skills, understandings, values, relationships, behaviours,
motivations, resources and conditions that enable individuals, organisations,
sectors and social systems to carry out functions and achieve their
development objectives over time.^[28]

Governance concerns the
structures and processes for decision making, and is generally understood
to encompass stewardship, leadership, direction, control, authority
and accountability.^[29]

There is currently an emerging consensus
among governments and Indigenous peoples in Australia about the importance
of supporting governance reform and capacity building of Indigenous communities.
These terms are now reflected in the policy approaches of all Australian
governments and commonly appear in debates about Indigenous policy.

There are four main features of developments
over the past few years relating to capacity building and governance reform
that I highlight in this chapter.

a) The existence of significant capacity in Indigenous
communities

The first is that the significant attention
paid over the past three years to issues of governance and capacity building
in Indigenous communities has demonstrated that there already exists much
capacity at the community level.

There are numerous examples of the ingenuity
and initiative of Indigenous peoples in developing solutions to meet their
local needs. These range across all areas of life for Indigenous people
as well as all areas of government activity. They include justice related
issues, health, education, employment and training, through to business
development, dealing with substance abuse, healing, processes for applying
customary law and improved community coordination. As an example, Figure
1 over the page provides a case study of the approach of the Murri School
in Queensland in addressing Indigenous educational achievement in a culturally
appropriate and community controlled environment.

Examples of community initiatives such as
this have predominately been brought to the attention of governments,
policy makers and Indigenous communities through the following events
and processes over the past two years : ^[33]

• The first national Indigenous governance conference convened
  by Reconciliation Australia, ATSIC and the Australian Institute of Aboriginal
  and Torres Strait Islander Studies in 2002; ^[34]
• The Northern Territory's Indigenous economic forum of
  May 2003;^[35]
• The Northern Territory's Indigenous governance conference
  ('Building effective governance') of November 2003;^[36] and
• The House of Representatives Standing Committee on Aboriginal
  and Torres Strait Islander Affairs inquiry into capacity building in
  Indigenous communities, which commenced in July 2002 and is due to report
  in the first half of 2004.^[37]

These conferences, forums and inquiries
have revealed that activities currently taking place in Indigenous communities
all across Australia encompass a startling variety of processes and cover
an enormous range of activities. While these activities achieve varying
levels of success and generally operate under difficult conditions, their
mere existence provides an antidote to the regular public image of Indigenous
people which almost entirely defines our people as victims and according
to the disadvantage that many of us suffer, and which presents our communities
as dysfunctional and riddled with problems.

As Reconciliation Australia notes, 'the Building Effective Governance conference in the Northern Territory
in November (2003) for example, uncovered multiple positive initiatives
unknown even to other Territorians'.^[38] The identification of positive stories about Indigenous peoples 'having
a go' and seeking to change the circumstances that exist in communities,
has two main benefits. It suggests that problems that exist in Indigenous
communities are not insurmountable and can be challenged; and it chips
away at the negative portrayal of and misconceptions about Indigenous
peoples.

The realisation that there is already a
significant accumulation of capacity and skills in communities also provides
a platform for reform. As the Centre for Aboriginal Economic Policy Research
note:

The capacities of individual Indigenous community members
can certainly be increased, through education, training, and experience
... However, it should also be noted that in our experience it is often
the case that many Indigenous community members have enormous capacities,
acquired from past experience and training, but they are somewhat
reluctant to use those capacities in difficult organisational environments.
Community members get burnt out in such environments and end up withdrawing
from them, either as employees or active members of governing bodies.^[39]

A key challenge is therefore to identify
existing capacity in Indigenous communities and to understand and deal
with the circumstances that prevent this capacity from being fully utilised.

b) The importance of capacity building in building
a more effective service delivery framework

The second feature of the attention to capacity
building and governance reform in Indigenous communities in recent years
is the growing realisation of the integral role that these issues play
in addressing the deficiencies of the existing service delivery approach.

Building community capacity and promoting
good governance in Indigenous communities is increasingly being seen as
necessary to developing a more effective service delivery framework that
can contribute to sustainable development in Indigenous communities.

In a discussion paper released in 2003,
Mick Dodson and Diane Smith explore the linkage between capacity building
and sustainable development. They sought to consider in the Australian
context one of the main findings of the Harvard Project on American Indian
Economic Development, namely, that there is a vital link between governance
and sustainable development.^[40]

They approached the issue by identifying
the key ingredients for sustainable development and examining these according
to the level of local control that Indigenous communities presently have
over them. They state:

On the evidence available, many Indigenous communities
and their organisations have been going about development backwards,
getting caught up in issues over which they have little or no control.
The most common way communities and organisations proceed is to focus
all their energy on:

• starting up a never-ending variety of new business
  projects that are uninformed by wider 'whole of community' needs and
  realities;
• responding to externally driven development proposals
  and other people's economic agendas;
• chasing transitory opportunities, usually single major
  development projects;
• chasing transitory grant funding, and tying their scarce
  local expertise into whatever repackaged programs are on offer from
  government and the private sector; and
• focusing on short-term outcomes where success is usually
  measured by immediate economic impacts such as money and jobs (neither
  of which seem to last).

Given local conditions of socioeconomic disadvantage
and great need, this approach is both tempting and understandable. But
the result is that the overall direction of development in communities
is usually haphazard.^[41]

They describe this approach as a 'tatslotto
approach' to economic development which 'produces the inevitable outcome
- the odds are against winning and most of the time communities lose their
money'.^[42] They argue that international
best practice and research suggests that instead of this focus, Indigenous
communities should focus on issues over which they exert a high level
of control:

[T]he key ingredients over which Indigenous
communities can currently exercise the greatest degree of control are
their own local processes and structures for governing themselves, and
their local development policies and strategies. Communities and their
representative organisations can create the local conditions for more
legitimate and broadly representative rule, more effective decision-making,
capable delivery of services and collective action.

Arguably then, the best approach for communities
to follow in trying to achieve sustainable economic development would
be to focus initially on those key ingredients over which they have
the greatest degree of local control: that is, their governance arrangements ...^[43] [T]hey should concentrate on building up stable, capable and legitimate
governing institutions, structures and processes.^[44]

Dodson and Smith suggest that based on international
evidence, 'it is only when effective governance and holistic development
strategies are in place that economic and other development projects have
the chance of becoming sustainable'. Or put differently, 'sustainable
development is - fundamentally - a governance issue'.^[45]

This creates a challenge for Indigenous
communities and organisations:

Communities do not have to suspend all development
initiatives until they get their governance in order, but neither should
they embark on new development initiatives without also commencing the
harder work of building effective governance. For many communities and
their organisations this may mean having to create a whole new mindset;
and it will be hard not to fall back into reactive mode.^[46]

It also creates challenges for government
in supporting the building of such capacity and appropriate governance.
These include not locking Indigenous communities into a service delivery
model that is not responsive to their needs and which distracts or dilutes
the focus of Indigenous peoples from establishing and pursuing their own
priorities, as well as providing appropriate recognition of the role of
Indigenous people in setting priorities and developing processes for allocating
funds on this basis.

c) The importance of corporate governance standards

The third, related, feature to emerge from
the focus on capacity building and governance reform in recent years is
an identified need to improve corporate governance in Indigenous communities
and of Indigenous organisations.

This issue has received extensive public
coverage during the past year in relation to the operations of ATSIC and
prompted the introduction of a 'separation of powers' within ATSIC by
the Minister for Indigenous Affairs in early 2003. As ATSIC's Chief Executive
Officer notes, there was also a significant level of 'negative reports
on ATSIC published in the media that intensified from February 2003, and
which drew strength from a widespread public acceptance that ATSIC had
not been vigorous in pursuing problems of accountability'.^[47] The issue of improved corporate governance for ATSIC is discussed in the
next section of this chapter.

Corporate governance is an issue that has
also been prominently reflected in the media following allegations of
fraud and mismanagement among some Indigenous organisations. In Western
Australia, for example, a parliamentary committee inquiry was established
during the year into the handling by the WA Health Minister of allegations
of financial impropriety relating to a peak Indigenous representative
body.

The most recent review of the Aboriginal
Councils and Associations Act 1976 (Cth), conducted in 2002, highlights
a range of challenges for Indigenous communities and government relating
to corporate governance standards.^[48]

It is estimated that there are nearly 3000
associations incorporated under the Aboriginal Councils and Associations
Act, fulfilling a range of diverse functions in relation to Indigenous
communities. Associations incorporated under the act play an integral
role in delivering services to Indigenous communities at the federal,
state and territory level. A vast majority of these associations are non-profit
organisations delivering services to Indigenous communities, such as health,
housing, employment and legal services. There is great fragmentation of
service delivery through the vast range of corporations that exist in
communities, with a loss of economies of scale and lack of focus on the
holistic needs of communities.

As the Review notes, 'the formation and
regulation of corporations is a very prominent feature of Indigenous social
and economic life'.^[49] While this is very
much a reflection of the level of dependency of Indigenous people on government
services, the prominence of regulatory systems in Indigenous communities
comprises a level of intrusiveness into Indigenous lives that is experienced
by no other group of people in Australian society.

The reliance of governments on Indigenous
organisations to deliver government services creates a high level of dependency
for Indigenous peoples on these organisations. The consequence of this
is that 'whole Indigenous communities may be dependent on the services
provided by a corporation. When such corporations fail, there may be no
alternative service providers'.^[50] The standard
of corporate governance thus has a major impact on service delivery and
accessibility of programs for Indigenous peoples.

As the Review notes, the Aboriginal
Councils and Associations Act has been in operation for more than
25 years and has not been amended in the past decade. Since the act was
introduced, however, there have been 'significant changes in the circumstances
of Indigenous peoples and in the uses which Indigenous people make of
corporations' as well as in corporate governance standards.^[51] These changes range from broader Indigenous involvement in program delivery,
legal recognition of Indigenous rights (such as native title), and significant
changes to the approach to corporate regulation.

As a consequence of this, the Review concludes
that the Act is now out of date, suffers from a series of technical shortcomings
and that successive amendments to the act prior to 1992 have meant that
it has drifted from its original legislative purpose. This legislative
purpose, the provision of a statute of general application to provide
Indigenous people with a simple and flexible mean of incorporation, also
reflects an outmoded conception of corporate governance and does not reflect
changes that have taken place in the relationship of Indigenous peoples
and governments.^[52] As a consequence, 'the
incorporation statute has now itself become a source of disadvantage for
Indigenous people'.^[53]

Despite this, incorporation of Indigenous
organisations under the act is often 'involuntary' in the sense that Indigenous
organisations are required to incorporate to comply with legislative provisions
and government policy. Under certain circumstances, for example, Indigenous
organisations are required to incorporate under the Aboriginal Land
Rights (Northern Territory) Act 1976 (Cth) and Native Title Act
1993 (Cth). Similarly, governments have 'adopted policies of 'self-management'
which give the responsibility for the delivery of a wide range of essential
services ... to Indigenous communities themselves. Government funding bodies
often require the communities to form corporations before they are eligible
to receive the funding to perform these services'.^[54]

There are consequences to such 'involuntary'
incorporation, including:

• People who would not have otherwise formed a corporation,
  and who may not understand the consequences or technical requirements
  of incorporation are required to do so.
• The requirement for incorporation can force together
  Indigenous groups which would not otherwise have joined together, and
  which might not share the same views or goals, making the corporation
  vulnerable to destabilising competition between groups.
• The requirement for the establishment of community-based
  organisations to perform community services can result in confusion
  between the membership of the community or group and the membership
  of the corporation itself.^[55]

ATSIC have similarly noted concerns about
the incorporation of community-based organisations that has occurred over
the last thirty years which has occurred through a 'reactionary' process
with 'no real strategy underpinning the proliferation of incorporated
bodies'. They note that the culturally inappropriate structures of these
organisations have led to organisations being 'dominated by larger families'.
Ultimately, this process 'commonly did not contribute to social capital
and, in fact, often undermined existing capacities' with the consequence
that 'the effects of this history now have to be 'undone'.' ^[56]

In essence, government policy and legislative
requirements have foisted on Indigenous peoples regulatory frameworks
that contribute to an absence in Indigenous organisations of what the
Harvard Project on American Indian Economic Development refers to as a
'cultural match'. As Dodson and Smith explain:

Underlying ... principles of good governance is the
issue of legitimacy and mandate. Each community and region will have
to find some degree of match or 'common ground' between the types of
governing structures and procedures it wants to develop, and the culturally
based standards, values and systems of authority of community members.
For example, common ground must be found about issues such as who should
hold power, how power should properly be exercised, how decision making
and disputes should be handled, and about the respective rights and
responsibilities of different members and leaders. The more a governing
body finds some cultural 'fit' or 'match' in these matters, the more
it will secure the ongoing mandate of its members ...

Cultural match is not simply a matter of importing
romanticised views of traditional Indigenous structures or authority,
and expecting them to handle economic development decisions, financial
accounts and daily business management. Creating a cultural match is
more about developing strategic and realistic connections between extant
cultural values and standards, and those required by the world of business
and administration ... [W]hile Indigenous governance arrangements need
to be informed by local cultural standards if they are to be regarded
as legitimate by community members, the governing arrangements also
have to work - governing bodies have to be practically capable of responding
and taking action in the contemporary environment.^[57]

The Review of the Aboriginal Councils
and Associations Act concluded that, on the basis of the concerns
expressed about the Act, there is a pressing need for reform to the corporate
governance regulatory framework for Indigenous organisations. The Review
recommended two main aspects to this reform: the provision of 'special
regulatory assistance' for Indigenous peoples, through the provision of
measures for the corporate regulator (currently the Registrar of Aboriginal
Corporations) to assist and encourage directors of corporations to develop
the skills and good governance practices necessary for long term viability
of corporations; and significant reform to the Aboriginal Councils
and Associations Act, but maintenance of an Indigenous specific incorporation
approach.^[58] Accordingly, the Review proposes
the introduction of a new Indigenous Corporations Act. ^[59]

On 15 January 2004, the Minister for Immigration
and Multicultural and Indigenous Affairs announced that the government
was shortly to introduce proposed legislative reforms to the Aboriginal
Councils and Associations Act. These proposed amendments are intended
to:

• rationalise the number of corporations through a focus
  on pre-incorporation scrutiny and support for alternatives to incorporation;
• provide conferencing opportunities to encourage agencies
  to resolve co-ordination issues;
• provide accredited training for Directors and members
  of corporations;
• expand assistance for dispute resolution; and
• establish a 'rolling program of 'healthy corporation'
  checks tailored to Indigenous corporations, coupled with more streamlined
  responses to critical problems'.^[60]

The provision of greater support for addressing
corporate governance issues in Indigenous organisations and amending the Aboriginal Councils and Associations Act are vital components
in seeking to build the capacity of Indigenous communities. The government's
proposed legislation should be treated as of the highest priority. This
should be reflected in the treatment of the draft legislation in the legislative
programme in Parliament. The draft legislation must also be subject to
broad consultation, given the necessity that any legislative reform should
facilitate rather than obstruct the development of Indigenous organisations
that achieve an appropriate 'cultural match' between cultural legitimacy
and corporate governance requirements.

d) Definitions of capacity building and a reform agenda

The fourth main feature to emerge from the
focus on capacity building and governance in Indigenous communities over
recent years is that, despite the convergence of views on the need for
capacity building and governance reform, there is no commonly agreed definition
of what capacity building is, nor an agenda for progressing capacity building
and governance reform in a whole of government and holistic manner.

Submissions to the House of Representatives
Standing Committee on Aboriginal and Torres Strait Islander Affairs inquiry
into capacity building in Indigenous communities (herein referred to as
the parliamentary inquiry into capacity building) reveal that there are
significant differences in the understanding of what the terms capacity
building and governance reform mean to different governments, service
delivery agencies and Indigenous peoples and organisations.^[61] The Australian Institute of Aboriginal and Torres Strait Islander Studies
comment in their submission to the Inquiry on the widespread and uninformed
use of the term capacity building and it's permeation across all levels
of public policy and research.^[62]

Submissions reveal that different organisations
apply the term capacity-building to refer to anything from political processes,
self-determination, Indigenous rights, citizenship rights, corporate governance,
self-governing community structures, regional autonomy, government service
delivery reform, education and training, partnerships, economic development
to sustainable development. Some of these descriptions equate potential
outcomes of capacity building with the process of capacity building.

The lack of a common understanding of what
capacity building and governance reform entail promotes policy confusion.
It is a significant problem that has the potential to render commitments
by governments to support such processes meaningless. As ATSIC have stated:

In this country the rhetoric of capacity building has
been adopted by state governments and by Commonwealth agencies ... What
is missing is an agreed setting for the programs and activities which,
these agencies claim, incorporate capacity building or capacity development
processes. Each agency derives its own view of capacity building and
development, and there is a danger that this reinforces the stovepipe
program environment. ^[63]

A potential consequence of this policy confusion
is the adoption of an extremely limited approach to capacity building
that equates developing the capacity of Indigenous organisations and communities
with improving the delivery of government services. This has the potential
to co-opt the process of capacity building so that it reinforces the characteristics
of the existing system, with all the structural problems noted earlier
in this chapter. As I discuss in Chapter four in relation to developments
on the Anangu Pitjantjatjara Lands, this raises the concern that the emphasis
of governments on capacity-building could amount to nothing more than
a bureaucratisation of what was formerly called community development.

This limitation is implied in the terms
of reference of the parliamentary inquiry into capacity building which
requires the Committee to examine 'strategies to assist Aboriginals and
Torres Strait Islanders better manage the delivery of services within
their communities'.^[64] The Committee has,
however, been presented with arguments from many witnesses and in many
submissions urging that it not make the mistake of confining discussions
about capacity development to the realm of service delivery.

ATSIC Commissioner Kim Hill referred to
the need for capacity development to be applied outside a formal service
delivery framework by the Committee as follows:

The terms of reference are limited to service delivery
only. If the aim of the inquiry is to overcome disadvantage and failing
policies then we have to look beyond just service delivery. I believe
the inquiry should be based on the human element of the problems which
we face and not on service delivery. It should be about how our people
can become full and active partners with agencies as part of our participation
in the economic, political and social environment of Australia. So
capacity building should concentrate on the participation of people,
with human and citizenship rights, rather than on organisations, which
are only deliverers of such services to the communities. In terms
of access and equality, I think governments have a responsibility
to provide services. The inquiry should not just be looking at ways
to hand over this responsibility to communities; it has to take a
broader view of capacity building-or capacity development, which is
the term I prefer to use.^[65]

In their submission to the inquiry, the
Fred Hollows Foundation emphasises the importance of acknowledging the
broader structural environment within which capacity building strategies
take place:

[C]apacity building and service delivery must take
place in a broader context of policy and funding arrangements which
are likely to constitute significant barriers to these approaches.^[66]

They note the following seven structural
issues relating to the approach of governments that impacts on the successful
implementation of capacity development initiatives:

• The current socio-economic and health status of remote
  communities and their members;
• Lack of basic infrastructure in which 'capacity-building'
  can occur;
• The lack of availability of services and lack of funding
  equity;
• The complexity of Government funding arrangements and
  lack of coordination of services at various levels of Government;
• Lack of sustainability in Government programs - the impact
  of electoral and funding cycles;
• The lack of accountability of Government departments
  to achieve measurable outcomes in the delivery of services; and
• The lack of Indigenous control of decision-making.^[67]

Failure to acknowledge and address these
features of the existing service delivery model will result in any benefits
from capacity building only ever being marginal or short-term. This is
also illustrated by the case study of infrastructure provision in remote
communities provided in Figure 2 below.

It is essential that capacity building be
properly understood as complementary to reforming government approaches
to service delivery and not as a substitute for such reform. As ATSIC
state:

ATSIC believes that appropriate service delivery and
a developmental approach [that incorporates capacity building] are
different and that these differences need to be understood by everyone
involved in service delivery in Indigenous communities. Both are required,
and the best outcomes are obtained when there is a synergy between
the two.^[75]

To address the lack of an agreed framework
for advancing capacity building, ATSIC has developed an integrated framework
for progressing capacity building and promoting sustainable development
in Indigenous communities. ATSIC have recommended to the parliamentary
committee into capacity building that this framework be adopted through
the Council of Australian Governments and form the platform from which
all governments would work with Indigenous communities. ATSIC have also
entered into a partnership with OXFAM International to provide technical
assistance within ATSIC to pilot this approach. This framework is an important
initiative and is considered in more detail in the next section.

ATSIC's framework for capacity building and sustainable
development

ATSIC's framework for capacity building
and sustainable development has its origins in a number of reports and
discussion papers that have been prepared by or for ATSIC over the past
six years. These include the discussion paper and report on greater regional
autonomy;^[76] scoping paper on resourcing
self-determination;^[77] the Dillon report
on service delivery in Doomadgee and Palm Island;^[78] discussion papers on capacity building;^[79] and other documents.^[80]

Each of these documents reveals a continual
engagement by ATSIC, and one that has generally not been acknowledged,
on finding new and improved ways to exert its leverage and utilise its
functions to achieve lasting improvements in Indigenous communities. As
the 2001 discussion paper Changing perspectives in ATSIC states:

More than ten years after the establishment of ATSIC,
more than twenty five years after the establishment of the Department
of Aboriginal Affairs, socio-economic indicators for many of the Indigenous
peoples of this country are still a source of shame. The question
being asked both internally and externally is whether there are some
aspects of the way ATSIC does business which do not have a positive
impact on these indicators ... ^[81]

The history of our structure (ie, ATSIC), and the history
of our programs and program priorities, tend to enshrine the 'service
delivery' approach to community development. Service delivery is of
course an agreed function of government. But, in the words of Paul
Streeton, 'we know very little about how to transform social services,
adequate food and certain institutional arrangements into long, healthy,
productive, creative, enjoyable lives'. The continued adherence to
a service delivery model - at the expense of seeking additional approaches
to dealing with endemic social and economic issues confronting some
Indigenous communities - means that this transformation is still some
way in the future.^[82]

As ATSIC notes in its submission to the
parliamentary inquiry into capacity building, they have made 'a concerted
effort' over the past three years to understand the limitations of the
current service delivery model ^[83] and to
identify ways of overcoming them. They emphasise international trends
in development practice, which has moved from 'the needs-based approach
(needs determined by external experts) of the 1970s to activities based
on theories of participation, capacity building and capacity development'.^[84] Their integrated framework for capacity building and sustainable development
is the product of this consideration.

The focus of ATSIC's integrated framework
is on capacity development, involving the active participation
of Indigenous peoples in decision-making processes. Capacity is defined
as 'the abilities, skills, understandings, values, relationships, behaviours,
motivations, resources and conditions that enable individuals, organisations,
sectors and social systems to carry out functions and achieve their development
objectives over time'.^[85] The focus on capacity development rather than capacity building emphasises
two things - that considerable capacity already exists at the community
level; and that the emphasis is on a continual process rather than on
completing an activity.

This approach is characterised by broad
based participation and a locally driven agenda; building on local capacities;
ongoing learning and adaptation; long term investment by government agencies;
integration of activities at various levels to address complex problems;
and a systems approach to problem solving. It aims to enhance skills,
abilities and resources; strengthen understandings and relationships;
and address issues of values, attitudes, motivations and conditions in
order to support sustainable development.^[86]

In accordance with this, there are three
defining features of ATSIC's approach. The first is that it is a people-centred developmental approach focused on building the human and social capital
necessary for Indigenous participation in planning, organising and administering
programs. As stated in the Dillon Report:

[C]ommunity development ^[87] is about people development, not service delivery. It is participatory
in nature, specific and not focused on compliance. It is about process.
It is about engagement of people of their well being. No amount of ...
programs will bring about development in people unless (the programs) ...
are linked to a community development process ... (Such a process) ... is
supplementary to the service delivery function of governments. ^[88]

Second, it emphasises process elements such
as access to choice, participation in planning, and access to decision
making. ATSIC states:

What distinguishes capacity development from service
delivery is its holistic nature, and its suggestion that individuals,
families, and organisations have a definite and active part to play
in the process - rather than as passive recipients of services ... if
the program is simply delivered to passive recipients, dependency
is reinforced and capacity is not strengthened ... [C]apacity development
recognises the importance of thinking about individuals, organisations,
programs, policies, etc, as part of a broader whole rather than as
discrete, or loosely connected concerns. It requires change in the
way 'problems' are addressed. The traditional service delivery mode,
which breaks a large issue into separate chunks ... does not necessarily
deal with the 'whole' - or the space between the inter-related elements.^[89]

The third is that a capacity development
approach incorporates a focus on sustainability, continually re-assessing
whether a program or project can become self-sustaining or how to maintain
the impact of a program intervention in a community over time. ATSIC see
this as involving a subtle change form the current service delivery approach,
which focuses on the following key stages:

• Where are we now? (current situation);
• Where do we want to be? (vision, goals);
• How do we get there? (planning, strategies);
• Did we get there? (monitoring, evaluation);
• Where are we now? (Current situation);
• and so forth.^[90]

By contrast, the capacity development approach introduces
a new element to this cycle as follows:

• Where are we now? (current situation);
• Where do we want to be? (vision, goals);
• How do we get there? (planning, strategies);
• Did we get there? (monitoring, evaluation);
• How do we stay there? (sustainability);
• Where are we now? (Current situation);
• and so forth.^[91]

ATSIC's integrated framework for capacity
building and sustainable development is reproduced in figure 3 below.

Figure 3: ATSIC’s integrated
capacity building framework for sustainable development ^[92]

This framework highlights that there are
three levels of interventions for capacity development - the community
level; Indigenous organisations; and government level (including ATSIC).
There are different approaches needed for each level. The focus of capacity
building strategies for individuals and community members is on empowerment,
with interventions to be essentially participative. For Indigenous organisations
the focus is on governance and aligning organisational structures to community-based
Indigenous decision-making processes. At the government level, the focus
is on integration and whole-of-government coordination and cooperation.

As ATSIC Commissioner Kim Hill noted at
a public hearing for the capacity building inquiry:

all three (levels or tiers of activity) have to embark
on a new relationship with capacity building as a key focus. Concentrating
on communities will not make any significant changes. Agencies have
to change the way they deal with and interact with communities and
community people. For communities, I believe, the aim is empowerment.
For organisations, the aim is appropriate government systems. For
agencies, the aim is to have a whole of government approach with community
aims in mind. ^[93]

ATSIC's framework suggests that by reforming
and improving the way Indigenous organisations and government undertake
their obligations and responsibilities to individuals, families and small
groups, the resulting space will reinvigorate the strengths and creativity
of Indigenous people and communities. Indigenous community capacity will
be given the opportunity to emerge and be supported if the surrounding
structures reform (and develop) their existing practices. Community-based
organisations can do this by seeking to align their organisations structures
to Indigenous decision-making processes and government can integrate and
coordinate their policies and programs to facilitate strategic planning
(at the regional and community level) rather than submission based interventions.

ATSIC describes the different focus and emphasis at each
level as follows:

Community level: A focus
on empowerment using participative community asset development techniques.
'Family/clan panning could also include participation in situational
analyses, demographic projection and feasibility assessment of economic
development aspirations. These approaches mean local responses to
local issues and active involvement in identifying problems and contributing
to solutions'.^[94]

Community organisations: A focus on good governance. 'ATSIC recognises and endorses the broader
role of Indigenous community-based organisations, and believes that
(this) integrated framework ... will reinvigorate community-based organisations
in a way that will build human and social capital, as well as capacity.'^[95] 'The potential of community -based organisations as vehicles
for community capacity building depends on good governance, including
how representative they are of individuals, families and small groups
(with their private interest) that make up 'community'. Negotiation
of roles and responsibilities between organisations, and between organisations
and kinship based groupings, is a critical aspect of organisational
reform. Changes to legislative and regulatory frameworks are required
to enable culturally appropriate forms of governance'.^[96]

Government: A focus on
whole-of-government approaches. 'The diversity and complexity of contemporary
Indigenous societies and cultures point to the need for location
specific responses by service delivery agencies in all jurisdictions.
Such location specific responses should be driven by local and regional
perspectives, through community and regional plans, and by formalising
a shared partnership arrangement through agreement making, based on
those plans'.^[97] 'Whole of government
engagement with whole-of-community would build on the emerging capacities
within communities and constituent groups, as well as government agency
representatives, and allow flexible service delivery across coordinated
agencies in all jurisdictions. Agencies would deal with communities
in structured planning environments (Sec. 13 and Sec 94 of the ATSIC
Act, 1989 are critical in the application of this strategy)'.^[98]

In their submission to the parliamentary
inquiry into capacity building, ATSIC highlight two crucial issues to
drive change across each of these levels.

The first is concentrating on local level
planning processes that 'can better match 'vertical' sectoral resource
supply systems with local development planning so as to build integrated
'horizontal' environmental, economic, social and governance systems'.^[99] ATSIC intends to develop a model of local level planning that has the
following features:

• is participative, raises awareness and empowers;
• incorporates or is consistent with principles of mutual
  obligation and sustainable development;
• supports the development of greater economic self-reliance
  which working to reduce passivity and dependency;
• can be part of the process of program and service delivery
  reform by better matching planning and coordination to local level need;
  and
• integrates community planning with ATSIC Regional Council
  planning processes. ^[100]

The second is building the internal capacity
of ATSIC (and in its present form, ATSIS) as well as the wider bureaucracy
to support and manage a developmental approach with communities. To this
end, ATSIC/ATSIS signed a Memorandum of Understanding (MOU) with OXFAM
International in early 2003 to undertake joint development activities
aimed at building the capacity of ATSIC/ATSIS officers.

The first activity under the MOU is a capacity
building training program being trialled with ATSIC/ATSIS staff in three
regional offices (Cairns (Qld), Kalgoorlie (WA) and Bourke (NSW)). There
are two stages to the training - the first stage and level is staff in
regional offices to understand and implement a developmental approach;
and the second stage and level for regional managers and more senior staff
to manage staff and programs in undertaking a developmental approach. ^[101] The purpose of the training is not
to turn ATSIC/ATSIS staff into development workers but instead to institute
within the agency an understanding of capacity development principles
to apply within a service delivery environment. The trial is managed by
the Community Development and Education branch of ATSIS, working in conjunction
with the ATSIC Board. An advisory committee is oversighting the initiative
and will evaluate its progress.

Capacity building and governance reform - an agenda
for change

Overall, it can be seen that there have
been significant advances in the past three years in relation to capacity
building initiatives. There is a broader acceptance of the need for capacity
building and governance reform within Indigenous communities and to changing
the way that governments go about delivering services. There is also a
broader acknowledgement of the breadth of initiatives currently underway
to address the overall circumstances of Indigenous peoples. This is let
down, however, by the lack of a consistent understanding of what capacity
building entails which promotes a more limited focus purely on the operations
of existing service delivery mechanisms.

The proposal of an integrated capacity development
approach by ATSIC demonstrates the potential for transforming
the relationship of Indigenous peoples and government through a focus
on governance reform and capacity building. It provides a holistic, whole-of-government
approach that serves as an agenda for change. The adoption of this framework
would not only provide a long term framework and vision for improving
Indigenous well-being, it would also ensure that all governments proceed
in addressing capacity development issues with a consistent understanding
of the goals and objectives of such a process. Many current initiatives
of governments - such as the COAG whole-of-government trials, proposals
to reform corporate governance standards relating to Indigenous corporations,
and agreement making with ATSIC - fit within or is consistent with this
integrated framework.

On the basis of the issues discussed in
this section, I have chosen to make the following recommendations to advance
progress on capacity building in Indigenous communities.

Strengthening the role of the Aboriginal and Torres
Strait Islander Commission

This chapter and the previous chapter have
highlighted a number of positive developments as well as deficiencies
in the current approach of the government to Indigenous policy. Both the
positive initiatives currently underway and outstanding concerns point
to the need to strengthen the role of ATSIC as a way of facilitating increased
and improved Indigenous participation in decision making processes. On
this basis, I have chosen to conclude this chapter by presenting an agenda
for reforming the role and functions of ATSIC. Such reform is needed to
extend ATSIC's influence and to support ATSIC in adopting an expanded
leadership role within government, as well as to facilitate greater Indigenous
participation in the processes of government.

I particularly focus on the challenges of
greater regionalisation and strengthening the influence and leadership
role of ATSIC at the national level.^[102] These are crucial issues for advancing capacity building in Indigenous
communities, improving accountability of governments to Indigenous peoples
and ultimately, in creating a new relationship between Indigenous peoples
and governments. They are also issues which will in all likelihood dominate
debates about Indigenous issues in 2004, with proposals for legislative
reform to ATSIC likely to be debated in Parliament in the first half of
the year.

a) Developments in 2003 - Corporate governance
issues and the ATSIC Review

Much of the focus on Indigenous issues in
2003 centred on the performance of ATSIC and proposals for reforming its
structure and functions.

These concerns about conflicts of interest
led the Minister to announce on 17 April 2003 that the government had
decided to strip ATSIC of over $1 billion in funding by creating a new
executive agency to manage ATSIC's programs in accordance with the policy
directions of the ATSIC Board.^[105] The
basis of this decision was to promote good governance and accountability;
address the 'current breakdown in community confidence in ATSIC'; allow
ATSIC to refocus its attention on 'more significant policy issues' rather
than be distracted by 'the micro-management focus on ATSIC's own spending';
and to enable the Board and Regional Councils to take 'a more strategic
approach in future so that their influence is extended - not only with
regard to the programs for which they are directly responsible, but also
by enabling them to engage with mainstream agencies with greater credibility
and authority'.^[106]

The newly created Aboriginal and Torres
Strait Islander Services (ATSIS) commenced operations on 1 July 2003.
The Minister issued directions to ATSIS on 1 July 2003 requiring it to:

• take all reasonable steps to ensure that ATSIS conforms
  to the policies and strategic priorities established by ATSIC, and reflects
  the priorities set by ATSIC Regional Councils in their regional plans;
• facilitate linked approaches with other government agencies
  and coordinate its activities to achieve 'effective synergies with overall
  Government policies and priorities' as well as have 'appropriate regard
  to overall Government policies and priorities';
• take all reasonable steps to allocate resources on the
  basis of relative need, taking account of the availability of alternative
  services, as well as the supplementary nature of ATSIS funding and the
  priorities for addressing relative need spelt out by the ATSIC board;
• ensure best practice in its relationship with service
  providers, for example through adopting outcome-based funding and performance-based
  contracts;
• ensure compliance with the conflict of interest directions
  described above; and
• work in partnership with the ATSIC Board and Regional
  Councils, including by providing support for regional planning and policy
  development. ^[107]

The Minister declared that the creation
of ATSIS was to be an 'interim' measure pending the outcomes of the review
of ATSIC announced in 2002.

This review of ATSIC produced a discussion
paper in June 2003 expressing significant concerns about the way ATSIC
currently operates.^[108] In November 2003
it released its final report, titled In the hands of the regions -
a new ATSIC, with recommendations for reform. The final report of
the Review Team acknowledges the importance of ATSIC:

ATSIC should be the primary vehicle to represent Aboriginal
and Torres Strait Islander peoples' views to all levels of government
and to be an agent for positive change in the development of policy
and programs to advance the interests of Aboriginal and Torres Strait
Islander Australians.^[109]

Ultimately, however, they conclude that
ATSIC:

The report of the Review Team particularly
emphasises the need to improve the connection between ATSIC's regional
representative structures and national policy formulation processes. The
Review Team state that:

In terms of capacity building, this identifies
a challenge to develop a 'cultural match' between the structures of ATSIC
and Indigenous peoples at the local level to ensure that ATSIC is representative
and participative.

Significantly, the Review Team note that
public perceptions of how ATSIC have performed have been burdened by unrealistic
expectations, with the organisation blamed for failures which lie outside
its control. They have noted that:

Similarly, they note that ATSIC has also
not lived up to unrealistic expectations of what it can achieve:

They state that these unrealistic expectations
have also operated to shield governments from being accountable:

Accordingly, they approach the issue of
reform of the role of ATSIC pragmatically, stating that:

b) The ATSIC Review's proposal for a 'new ATSIC'

The report of the Review Team outlines the
Review Team's vision of what a reformed ATSIC should look like. They consider
that ATSIC reform should result in an organisation that:

• Enables Aboriginal and Torres Strait Islander people
  to build a future grounded in their own histories and cultures within
  the broader Australian framework;
• Represents and promotes the views of Aboriginal and Torres
  Strait Islander people, including their diversity of opinion;
• Vigorously pursues the interests of Aboriginal and Torres
  Strait Islander people through partnerships with Aboriginal and Torres
  Strait Islander communities, governments and other sectors of Australian
  society;
• Influences priorities, strategies and programs at the
  national, State/Territory and regional level;
• Minimises and streamlines the government interface with
  Indigenous communities;
• Promotes good Indigenous governance;
• Recognises the complexity of relationships between Aboriginal
  and Torres Strait Islander individuals, communities, organisations and
  governments and the values and limitations created by this;
• Is an equal partner in all negotiations, resourced adequately
  to achieve this equality, and commands goodwill and respect;
• Increases women's participation and expression of views;
• Ensures that there is transparent accountability of all
  organisations that are funded to provide services for Aboriginal and
  Torres Strait Islander people;
• Maintains its unique status;
• Recognises that ATSIC is a key player, but not the only
  player, that seeks to advance the interests of Aboriginal and Torres
  Strait Islander Australians with government and others.^[115]

To achieve this vision, the Review Team
recommends a revised structure for ATSIC that includes the following features:

• The retention of ATSIC's 35 Regional Councils;
• The replacement of the ATSIC Board, which is currently
  constituted of 18 zone commissioners, with two new structures - a national
  body and a national executive;
• The new 'national body' would be the governing body of
  ATSIC and determine ATSIC policy, primarily through the development
  of a national plan which would be drawn from ATSIC Regional Council
  plans and ultimately form the basis of the policies and programs of
  all governments;
• The 'national body' would meet at least twice every four
  years;
• The new 'national body' would have 38 members and be
  comprised of the 35 elected Regional Council chairs, the chair of the
  Torres Strait Islander Advisory Body and the chair and deputy chair
  of the new 'national executive';
• The new 'national executive' would be delegated by the
  'national body' the role of leading ATSIC and advocating on behalf of
  ATSIC on a day to day basis;
• The new 'national executive' would have up to10 members,
  comprised of 8 people elected by the 'national body' including a chair
  and deputy chair, as well as up to 2 people appointed by the Minister
  from elected regional councillors;
• A series of national committees would be established
  to provide policy input to the 'national body' to ensure the incorporation
  of regional priorities into national planning, with membership drawn
  from the 'national body' and 'national executive';
• The Regional Council planning process would be accorded
  higher status in establishing ATSIC's priorities; and
• The elected and administrative arms of ATSIC (and presently
  ATSIS) would be reunified in one organisation with a clear delineation
  of roles incorporated into the ATSIC Act.^[116]

The ATSIC Review Team observes that this
proposed 'new ATSIC' is underpinned by a number of principles. These include
that:

• ATSIC should be the peak State/Territory and national
  body, which advocates for the development of Aboriginal and Torres Strait
  Islander communities;
• The regional councils (and relevant members of the national
  body) should provide the State/Territory policy interface with the governments
  co-coordinating regional activities;
• Representatives from each State/Territory should then
  constitute the national body, achieving a direct relationship between
  the regional, state and national levels;
• The national body should provide the policy interface
  for the Australian Government setting and advocating a national strategic
  direction and monitoring progress against ATSIC's national plan to reinforce
  the accountability of program and service providers;
• ATSIC's primary focus should be on building strong local
  communities through development and implementation of a needs-based
  regional plan;
• State/Territory and national programs should be informed
  by, and undertake activities consistent with, regional plans;
• All government funded programs should be subject to an
  independent assessment of outcomes; and
• The role of elected officials should be clearly delineated
  from that of the administration.^[117]

Overall, the ATSIC Review Team made 67 recommendations
which broadly address issues of the relationship between ATSIC and Indigenous
peoples, the federal government, the states and territories, and between
its elected and administrative arms.^[118]

c) Responding to the ATSIC Review's proposals and
the conflict of interest directions

In supporting the reunification of ATSIC
and ATSIS, I support the retention of the conflict of interest directions
within ATSIC by which ATSIC's elected representatives would continue to
set policy priorities and to decide the broad program allocation of funding
but not have any involvement in making individual funding decisions. The
reunification of ATSIC's structure would overcome a potential tension
that has been created through the creation of ATSIS whereby it is required
to 'take all reasonable steps to ensure that ATSIS conforms to the policies
and strategic priorities established by ATSIC' on the one hand, and 'coordinate
its activities to achieve effective synergies with overall Government
policies and priorities as well as have appropriate regard to overall
Government policies and priorities' on the other hand.

Despite supporting these recommendations,
however, I also have reservations about the Review Team's proposals for
the creation of a national body and national executive in the format that
they propose. I also consider that the Review Team's model does not provide
adequate support to ATSIC's national structure and consequently would
not provide ATSIC with sufficient leverage or powers to undertake a broader
role of monitoring performance by other government agencies (at all levels)
and in setting priorities to apply across government.

I am also concerned that there are also
significant gaps in the Review Team's analysis which overlook issues relating
to the broader service delivery environment in which ATSIC operates, as
well as deficiencies in the model that it proposes.

In August 2003, I made a submission to the
ATSIC Review Team following the release of its discussion paper. In that
submission it was noted that the Review Team 'does not appropriately contextualise
ATSIC's role within the broader framework of government policy making
and delivery of services relating to Indigenous peoples'.^[119] There are two aspects to the concern that I had initially expressed to
the Review Team in this regard that have not been addressed in their final
report.

First, is that the Review Team had on the
one hand acknowledged that ATSIC has wrongly been used as a scapegoat
for failures by governments in addressing key areas of Indigenous disadvantage
yet on the other hand replicated this scape-goating itself. In their final
report, the Review Team acknowledge that ATSIC is not primarily responsible
for service delivery to Indigenous people and that its funding is of a
supplementary nature. Despite this, they also set out the following test
for determining the accountability of ATSIC:

The Review Panel believes that the real test of accountability
within ATSIC is whether, at the community level, Aboriginal and Torres
Strait Islander Australians are actually getting the outcomes that
the investment by agencies at all levels of government is designed
to achieve.^[120]

As quoted above, the expectations on which
such a test of accountability is based were described by the Review Team
itself as 'not realistic'. Such a test also does not provide the 'more
positive, focused and clearly defined' role for ATSIC that is needed,
based on a 'more realistic recognition that ATSIC cannot be the vehicle
to serve all Indigenous needs for government services'.^[121] This test of accountability wrongly conflates ATSIC's accountability (as
demonstrated through normal auditing requirements which apply to all government
agencies and through which ATSIC has demonstrated a high level of accountability)
with effectiveness in improving Indigenous peoples' lives.

It is one thing to suggest that ATSIC should
strive to improve Indigenous peoples' lives - something that they undoubtedly
do. But it is entirely a different thing to hold them accountable for
the failure of successive governments to address the consequences of history and to do so within a system in which ATSIC exercises a marginal
role.

The second related concern is that the Review
Team's report does not acknowledge the broader framework of government
policy making and service delivery in which ATSIC operates. This includes
recognition of the significant under-funding in key areas of Indigenous
marginalisation, which is a key factor in preventing needs-based funding
from being implemented (as the Commonwealth Grants Commission's inquiry
into Indigenous funding clearly demonstrated).

This is also reflected in the failure of
the ATSIC Review Team to acknowledge a number of recent initiatives undertaken
by ATSIC to reform the way that it operates and to advocate for changes
to the way the existing service delivery environment operates. A number
of these processes have been referred to earlier in this chapter (culminating
in ATSIC's Integrated framework for capacity building and sustainable
development). Ironically perhaps, one of its criticisms of ATSIC's
current approach is that it is a 'top down body' where its regional operations
'are very much focused on program management' - the very criticism that
ATSIC has made about the constrained environment in which it operates.

Perhaps the most disappointing feature of
the Review Team's final report, however, is the lack of detailed discussion
and recommendations relating to supporting more flexible structures at
the Regional Council level. The Review Team's discussion paper devoted
significant attention to proposed reforms to strengthen ATSIC's Regional
Council structure. It identified three models for strengthening Regional
Councils which they termed the regional authority, regional council and
devolution models. In the final report, the Review Team note that:

On this basis, the Review Team's final report
contains no recommendations relating to including provisions in the ATSIC
Act to allow regional council structures to evolve over the longer-term
in accordance with the aspirations of Indigenous peoples within the various
council regions. Such proposals have now been under discussion since the
conduct of ATSIC's Section 26 review in 1998 and the regional
autonomy consultations of 1999 and 2000 without result.

ATSIC have also responded to the Review
Team's final report by stating that the proposal for a new 'national executive'
and 'national body' is flawed and unacceptable on the basis that it extinguishes
the right of Regional Councillors to vote directly for their full-time
national representatives and drastically reduces the full-time Indigenous
representation at the national level.^[123] They state:

• extinguish the right of Regional Councillors to have
  a direct vote for their full-time national representatives;
• have a two-tiered structure of national-level Indigenous
  decision-making, with one tier comprising 41 members;
• establish an executive structure that is likely to
  disadvantage small States and rural and remote communities;
• reduce the level of full-time Indigenous representation
  at the national and regional level from the current 53 positions to
  39 and increase the current levels of responsibilities of Regional
  Council Chairs with no apparent additional support; and
• reduce the level of full-time national Indigenous representation
  from 18 to 2.

This ... is about the capacity of Indigenous
Australians to be properly represented at the national, State and regional
levels. This (proposed structure) would impose an intolerable burden
on the proposed new executive, particularly as it and the new national
body over time would be increasingly held responsible for the ongoing
crisis in Indigenous communities by the Indigenous community as well
as by mainstream Governments seeking to identify a convenient scapegoat
for their own shortcomings. It would be impossible for two full-time
representatives - a Chair and Deputy Chair - to carry out all the many
national tasks and responsibilities which are required to represent
effectively the interests of Aboriginal people and Torres Strait Islanders,
nationally and internationally.

ATSIC have also noted that the Review Team's
proposed model for a 'national body':

In the alternative, ATSIC have proposed
that ATSIC Elections be extended so that ATSIC Commissioners are directly
elected at the same time as ATSIC Regional Councillors, and that subsequently,
all Regional Councillors then elect the Chair of the Commission (rather
than the current approach where the Regional Councillors elect the Zone
Commissioner, and the Zone Commissioners elect the Chairperson).^[126]

I join with ATSIC in its concerns about
the proposals for a 'national body' and 'national executive'. I note however
that in general, there is much potential in the Review Team's proposal
that there be a new mechanism such as the proposed 'national body' to
involve Regional Council Chairs in establishing national priorities and
policies. It is desirable that such a 'national body' determine ATSIC
policy, primarily through the development of a national plan which would
be drawn from ATSIC Regional Council plans.

It is fanciful, however, to suggest that
a national body comprised of such a membership and charged with such responsibilities
could effectively acquit their responsibilities to Indigenous peoples
through the national body, particularly when the national body would only
be meeting once every two years.

The infrequency of meetings of the proposed
'national body' combined with the reduced size of the national board (or
new 'national executive') could significantly impact on the ability of
ATSIC to advocate for reform at the national level, and on its ability
to develop national policies. This would consequently affect its ability
to influence the approach of other government departments and different
governments. As I noted in my submission to the ATSIC Review's discussion
paper:

Consideration could, however, be given to
an intermediate position whereby the ATSIC Board of Commissioners or equivalent
'national executive' is retained and charged with the day to day responsibilities
of advocating ATSIC's position at a national level. Such a body would
need to address issues of representativeness. Such a body could then be
supported by a national congress or 'national body' made up of all Regional
Council Chairs which meets with the Board of Commissioners on a regular
basis (perhaps 3 to 4 times per year) to determine ATSIC's national policies
and priorities.

d) Proposed features of a 'new ATSIC'

Having identified a number of concerns with
the ATSIC Review Team's proposed reforms to ATSIC, it is important to
identify ways in which ATSIC could be reformed to meet the key objectives
identified by the ATSIC Review.

ATSIC has appropriately identified the starting
point for any discussion of program design and service delivery for Indigenous
peoples in its 2001 budget advocacy document titled Directions for
change. ATSIC stated that for all programs and policy proposals
'the values and aspirations that are meaningful to, and express priorities
of, Australia's Indigenous peoples must be the basis for the policy approaches
being taken.' Accordingly, the question that they saw as being the central
one was:

Will this activity enhance Indigenous people's
capacity to achieve what is important to them and, in its development
and implementation, contribute to the empowerment of Indigenous peoples
and the achievement of their objectives and priorities? ^[128]

Proposals for reform of ATSIC should be
considered in light of this overall objective for all government service
delivery to Indigenous peoples. This requires that ATSIC be representative
at the regional level and must be able to reflect the objectives and priorities
identified at this level up to the state/territory and national levels.
It also requires that ATSIC must have the capacity to set the agenda and
subsequently evaluate the performance of other government agencies at
both the federal and state/territory level in achieving this objective.

To achieve this, ATSIC's current powers
must be enhanced at the each of the national, state/territory, and regional
levels. As noted above, what is required to make ATSIC more effective
is not a redistribution of ATSIC's current powers from the national
to the regional level but instead an enhancement of the existing
powers at both levels. It should also be noted that at present, ATSIC
does not fully utilise its existing powers at either the national or regional
level. There remains much potential for ATSIC to achieve many of the objectives
identified in the ATSIC Review within its existing structures and powers.

In my submission to the ATSIC Review Team,
I identified the following proposals for strengthening ATSIC at the national,
state/territory and regional level.

• Reform to ATSIC at the national level

There must be sufficient attention paid
to the importance of ATSIC maintaining a strong voice at the national
level. Any diminution of ATSIC's role at the national level will ultimately
affect its ability to influence the national policy agenda and will lead
to less effective advocacy for Indigenous peoples. This will be the case
even where a diminution of the national focus is accompanied by an enhanced
role for regional councils.

In my submission to the ATSIC Review, I
proposed a number of mechanisms to enhance ATSIC's powers at the national
level to provide increased ability to set national objectives and to monitor
and evaluate the performance of other government departments in addressing
the service delivery needs of Indigenous peoples. It is noted that ATSIC
has extensive powers which could be used for this purpose under Section
7 of the ATSIC Act but that these powers are not fully utilised at present.

In particular, I have suggested that ATSIC's
existing powers should be enhanced by strengthening the scrutiny role
of ATSIC over service delivery and program design by other government
departments. This could be achieved through amendments to the ATSIC Act
which:

• empower ATSIC to set the objectives and guiding principles
  for service delivery to Indigenous peoples across all issues (which
  they can do under the present legislation), but also to empower them
  to be able to develop legally binding directions for service delivery
  agencies that accord with these principles;
• require the Minister to table in Parliament all such
  directions set by the ATSIC Board;
• provide that all directions issued by the ATSIC National
  Board and subsequently tabled in Parliament have the status of legislative
  instruments (or delegated legislation) ; ^[129]
• require all government departments to include in their
  annual reports to Parliament information as to how they implement the
  directions of the ATSIC Board in delivering relevant services and programs;
• empower ATSIC to evaluate how government departments
  and agencies (at all levels) comply with these directions in delivering
  services. Consequent to this would be providing powers to ATSIC to request
  documents from government agencies at all levels (the Social Justice
  Commissioner has such a power under the Human Rights and Equal Opportunity
  Commission Act 1986) and to require government officials (including
  secretaries of departments) to appear before the ATSIC Board to inform
  the Board of the department or agency's approach and any action that
  they are taking to address deficiencies in their department's performance
  or compliance;
• provide for regular scrutiny of compliance with these
  directions by the Australian National Audit Office or through an enhanced
  Office of Evaluation and Audit within ATSIC; and
• provide for scrutiny processes by the Parliament,
  including through ATSIC reporting to Parliament about deficiencies in
  department's complying with directions and for parliamentary committees
  to scrutinise the actions of departments through specific inquiries
  or senate estimate processes.

Legislative instruments remain subject to
the scrutiny of the Parliament and may be disallowed on the passage of
a motion by one of the houses of parliament. Providing ATSIC with the
power to issue legally binding directions would create a direct relationship
between the ATSIC Board, the elected representatives of Indigenous peoples,
and the federal Parliament, the elected representatives of the whole Australian
community. Such recognition of ATSIC would be appropriate.

ATSIC should also have an enhanced monitoring
role at the inter-governmental level. Current processes at this level,
such as through COAG commitments and Ministerial Councils including the
Ministerial Council on Aboriginal and Torres Strait Islander Affairs,
have provided an ineffective monitoring framework. For example,
I have previously expressed concerns in relation to the monitoring of Bringing them home by MCATSIA on behalf of COAG due to the insufficient
information that is publicly reported which limits the accountability
of governments, as well as the lack of consultation with Indigenous peoples
and lack of independence in the evaluation of governmental progress. ^[130] ATSIC's national role should be enhanced by ensuring that it has a permanent
role in the COAG and MCATSIA processes.

• Reform to ATSIC at the state / territory level

I also support enhancing the structure of
ATSIC for interface with state and territory government through improved
support for ATSIC's State Advisory Committees (SACs). There are two key
issues that must be addressed to achieve this goal.

First, ATSIC's governing legislation should
provide for the organic growth of the relationship between ATSIC and state
and territory governments. The ATSIC legislation should provide the minimum
features of the State Advisory Committee structure by being extended to
authorise SACs to enter into agreements with state and territory governments.
The ATSIC Act should provide that the SACs are empowered to undertake
any activity that falls within the terms of any such agreements between
ATSIC and the relevant state or territory. This should extend to agreeing
on funding arrangements whereby the SAC may pool state or territory funds
with Commonwealth funds, and run state or territory programs. This may
require that a mechanism is included in the ATSIC Act for agreements struck
with state or territory governments to be scheduled to the Act, in order
that it is clear what ATSIC's powers extend to in this regard.

Second, there remains a significant problem
of accountability for service delivery to Indigenous peoples at the state
and territory level. Very few parliaments in the states and territories
have extensive audit and parliamentary committee structures to hold state
departments and agencies accountable for their service delivery. The distribution
of state and territory funds for Indigenous service delivery is also the
area where there exists the least transparency and greatest cost shifting.
It is crucial that ATSIC's role in monitoring state and territory performance
is addressed as a preliminary issue in expanding the role of ATSIC at
the state/territory level.

It would be appropriate for ATSIC's Office
of Evaluation and Audit (OEA) to have its role expanded to focus on state
and territory level service delivery, with a particular view to developing
recommendations for improving the relationship and interaction of ATSIC
with the relevant government. ATSIC should seek to negotiate a funding
contribution from the states and territories for such audits to be undertaken
on a regular basis within their agreement making function. The additional
benefit of this audit process being undertaken by ATSIC's OEA would be
the capacity to tie this work into both the regional level and into the
national policy framework. It would also facilitate comparative analysis
on progress between different states and territories. This would facilitate
the identification of best practice and of transferable models which could
then be applied in other states and territories.

• Reform to ATSIC at the regional level

The ATSIC Review report rightly emphasises
the need for enhanced powers at the regional level and for input from
the regional and local levels to inform policy development and decision-making
processes at the state / territory and national levels. The need for more
effective regional structures for ATSIC that prioritise local needs and
build greater community-capacity has long been recognised. This has in
part been motivated by a desire for better representation of community
interests, but also in response to the need to develop structures and
arrangements to facilitate improved service delivery to Indigenous peoples.
In regard to service delivery to Indigenous people, the following issues
have been noted:

• Lack of planning and poor coordination or duplication
  of services;
• Lack of clear delineation of responsibility for service
  delivery at federal, state, territory and local government levels;
• Fragmented and inconsistent policies and programs across
  governments; and
• Failure to integrate Indigenous involvement into the
  planning and delivery of services.

Problems have also been identified in relation
to the inflexibility and short-term nature of funding arrangements to
Indigenous community organisations. The need for greater powers for regional
councils in terms of setting funding priorities, determining outcomes,
entering purchaser/provider agreements, developing more representative
and effective regional governance arrangements that have the capacity
to facilitate greater Indigenous participation and sustainable economic
development are fundamental and significant issues that deserve serious
consideration.

It is necessary for all levels of ATSIC
to be enhanced in order to address policy and service delivery issues
effectively at a regional level. The profile of ATSIC representatives,
such as ATSIC Commissioners and Regional Chairpersons, has ramifications
for their capacity to represent regional concerns adequately and to exert
sufficient leverage at state and national levels. However, an outstanding
issue that needs to be addressed is that of the level of state and territory
governments' accountability to their Indigenous constituents, and the
need to have greater transparency in monitoring the funds and services
directed to Indigenous people. Without effective external evaluation of
the states and territories' performance, and the capacity for regional
planning to identify and to target services towards specific outcomes
at a state level, the potential to address community needs adequately
at the regional level will be greatly limited.

In addition, longer-term commitments at
the level of planning and funding are fundamental to addressing the outstanding
deficits in Indigenous service delivery and the entrenched nature of Indigenous
disadvantage.

Accordingly, in my submission to the ATSIC
Review I supported the transition to what the Review Team described as
a devolution model, with some qualifications. Implementation of the devolution
model must address the following issues effectively:

• The provision of the ability for regional councils
  to enter into agreements. This includes:
  • the capacity to seek more flexible funding arrangements,
    including purchaser/provider agreements; and
  • enhanced regional planning processes that target
    funds more effectively – for example, through an outcomes-based
    funding approach and longer-term funding frameworks.
• The need to enhance the profile of ATSIC representatives
  at the state level to ensure that regional needs are prioritised. This
  should include consideration of:
  • Capacity to monitor funds directed to Indigenous
    needs at the state / territory level, for example, through review
    of specific purpose payment arrangements;
  • Empowerment of State Advisory Committees to enter
    agreements with state / territory governments; and
  • Strengthening of the profile and support for State
    Advisory Committees at state / territory level, including potential
    parliamentary representation.
• The creation of flexibility for regional councils
  to adapt to their local needs through developing alternative governance
  arrangements. This would include:
  • The capacity to represent a range of local interests,
    including those of traditional owners;
  • The ability to address service delivery needs more
    efficiently and appropriately within a designated region; and
  • The time-frame and capacity to develop an appropriate
    regional model from the ground up.

Consideration of alternative governance
arrangements must not be restricted to one model, such as the regional
authority structure adopted in the Torres Strait. The need for flexibility
in developing new forms of governance and the unworkability of a ‘one-size-fits-all’
model should be recognised. In addition, the limited applicability of
the regional authority model in meeting the needs of Indigenous people
in certain areas, particularly metropolitan and urban centres, must be
taken into account.

e) The challenge of ATSIC reform

Overall, the acting Chairman of ATSIC identifies
the challenges that currently face ATSIC as follows:

The challenge for ATSIC is to become the core organisation
which:

• develops the policies and programs to deliver what
  Aboriginal people and Torres Strait Islanders need and want;
• play a key role to ensure that they are implemented
  across government; and
• holds governments, agencies and service providers -
  including ATSIC itself - accountable for achieving outcomes. ^[131]

The ATSIC Review goes part of the way to
identifying an agenda for change to ATSIC to meet these objectives. There
is, however, a need to go beyond what the Review Team have proposed and
ensure that there is no relative weakening in ATSIC's national structure
while also increasing the focus on supporting innovation at the regional
level.

Reform of ATSIC is a critical aspect in
achieving the effective participation of Indigenous peoples in decision
making processes and supporting sustainable development. The extent to
which the government supports ATSIC over the coming year to more effectively
drive an agenda for change, including by providing it with sharper legislative
powers, will be the litmus test of their commitment to achieving sustainable
improvements in Indigenous communities.

Conclusion

This chapter has highlighted the increased
attention over the past year to the nature of the relationship between
government and Indigenous peoples. There is clear dissatisfaction with
the way that the current service delivery model operates to reinforce
Indigenous dependency on government services rather than promote sustainable
development. Capacity building in Indigenous communities and governance
reform of Indigenous organisations is increasingly being seen as a panacea
for overcoming the limitations of this approach.

Despite this, capacity building initiatives
are progressing within the existing service delivery model and with little
reform to this system. There is also a lack of agreement on an agenda
for change into the future, which again operates to restrain reform to
within the strictures of the existing approach of governments. This needs
to change. As ATSIC have outlined in their Integrated framework for
capacity building and sustainable development, there needs to be
reform at the governmental, organisational and community levels simultaneously
if there is to be any transformation in the relationship of Indigenous
peoples to government. The focus needs to be broader than improved efficiency
of Indigenous organisations. No amount of change at one level of the system
will result in sustainable improvements for Indigenous peoples if it is
not accompanied by reform at the other levels.

A key challenge in this is reforming the
role of ATSIC so that there is an appropriate cultural match between ATSIC's
organisational structure and its constituents, Indigenous peoples at the
local level. ATSIC also needs to be strengthened so that it is equipped
to exercise a more pivotal role in policy making at all levels of government
- particularly through strengthening its ability to monitor the performance
of government.

In committing to an approach defined by
partnerships and agreements, capacity building and a more targeted role
for ATSIC in the broader policy framework, the government has opened up
the potential for significant and lasting reform in the relationship
of government with Indigenous peoples. There are clear limits in these
commitments - it is not, for example, underpinned by any recognition of
Indigenous rights or distinct cultural attributes of Indigenous peoples;
and it is not clear that these commitments envisage much change to existing
forms of service delivery.

Whether this potential is realised will
depend on the legislative reform program that the government embarks on
in 2004; their willingness to be increasingly innovative and flexible
with service delivery arrangements; and the commitments that they are
prepared to make at the inter-governmental level. Realising this potential
will also, of course, depend on the efforts of Indigenous peoples and
ATSIC as they seek to define a new relationship with government.

1. Of these inquiries and reviews,
only the ATSIC Review and the inquiry into national progress towards reconciliation
released final reports in 2003.

2. Aboriginal and Torres Strait Islander
Commission, Annual Report 2001-02, ATSIC Canberra 2002, p33.
NB: The Commission is herein referred to as ATSIC.

3. For an analysis of this approach
and the government's position on self-determination see: Aboriginal and
Torres Strait Islander Social Justice Commissioner, Social Justice
Report 2002, HREOC Sydney 2002, Chapter 2, especially pp8-11. (Herein: Social Justice Report 2002).

4. ATSIC, Resourcing Indigenous
development and self-determination - A scoping paper, Australia
Institute, Canberra 2000, p4.

5. ATSIC, Changing perspectives
in ATSIC - from service delivery to capacity development, ATSIC
Canberra 2001, p4.

6. ATSIC, Resourcing Indigenous
development and self-determination - A scoping paper, op.cit, p21.

7. Royal Commission into Aboriginal
Deaths in Custody, National Report - Volume 1, AGPS Canberra
1991, pp 9-10.

8. Australian Institute of Aboriginal
and Torres Strait Islander Studies, Final Report of the Review of
the Aboriginal Councils and Associations Act 1976, AIATSIS, Canberra
1996, Volume 1, pp145-146 as cited in ibid, pp27-28.

9. ATSIC, Resourcing Indigenous
development and self-determination - A scoping paper, op.cit, p22.

10. ATSIC, Changing perspectives
in ATSIC - from service delivery to capacity development, op.cit, p4.

11. ATSIC, Resourcing Indigenous
development and self-determination - A scoping paper, op.cit, p5.

12. Royal Commission into Aboriginal
Deaths in Custody, National Report - Volume IV, AGPS Canberra
1991, p21.

13. Acting Chairperson's review in:
ATSIC, Annual Report 2002-2003, ATSIC Canberra 2003, p9.

14. Note: The government's approach
places considerable emphasis on achieving outcomes in employment in order
to address Indigenous welfare dependency. The Social Justice Report
2001 provided a detailed analysis of the government's mutual obligation
approach to welfare reform and employment issues. See: Aboriginal and
Torres Strait Islander Social Justice Commissioner, Social Justice
Report 2001, HREOC Sydney 2001, Chapter 2 and Chapter 3 (Herein: Social Justice Report 2001). It set out and analysed the key
role of the Indigenous Employment Policy and Community Development Employment
Projects Scheme and the then newly commenced trial of Community Participation
Agreements. While it is acknowledged that mutual obligation and employment
form a key part of the government's overall approach to Indigenous issues,
this chapter is not focussed specifically on these issues.

15. Ruddock, P, 'ATSIC and its future',
Speech, Bennelong Society Conference - An Indigenous Future? Challenges
and Opportunities, 29 August 2003, online at /,
<20 October 2003>, p2.

16. See further: Ruddock, P, 'ATSIC
and its future', ibid. ; Ruddock, P, 'Agreement making and sharing
common ground', Speech, ATSIC National Treaty Conference, 29 August 2002;
Ruddock, P, 'Changing direction', Speech, ATSIC National Policy Conference
- Setting the agenda, 26 March 2002; Department of Immigration, Multicultural
and Indigenous Affairs, Government response to the Commonwealth Grants
Commission Report on Indigenous Funding, DIMIA Canberra 2002; and
Department of Immigration, Multicultural and Indigenous Affairs, Submission
- House of Representatives Standing Committee on Aboriginal and Torres
Strait Islander Affairs' inquiry into capacity building in Indigenous communities, DIMIA Canberra 2002. These documents (except the Bennelong
society speech) were considered in detail in: Social Justice Report
2002, Chapters 2 and 3.

17. Ruddock, P, 'ATSIC and its future', op.cit, p2.

18. ibid.

19. Ruddock, P, 'Changing direction', op.cit, pp7-8.

20. Department of Immigration, Multicultural
and Indigenous Affairs, Government response to the Commonwealth Grants
Commission Report on Indigenous Funding, op.cit, p3.

21. Department of Immigration, Multicultural
and Indigenous Affairs, Submission - House of Representatives Standing
Committee on Aboriginal and Torres Strait Islander Affairs' inquiry into
capacity building in Indigenous communities, op.cit, p20.

22. Ruddock, P, 'Agreement making
and sharing common ground', op.cit, p3.

23. Minister Vanstone, 'Indigenous
organisations to benefit from reforms', Press Release, 15 January 2004.

24. For details, see: Social Justice
Report 2002, Chapters 2 and 3.

25. For the relevance of this approach
see: Aboriginal and Torres Strait Islander Social Justice Commissioner, Social Justice Report 2000, HREOC Sydney 2000, Chapter 4 (Herein: Social Justice Report 2000).

26. Social Justice Report 2000, p107. See also Social Justice Report 2001, Chapter 3.

27. Social Justice Report 2001, Chapter 3. The focus of that chapter was on the necessary requirements
for capacity building to be effective and contribute to sustainable improvements
in the well-being of Indigenous peoples, as well as case studies of recent
governance and capacity building initiatives.

28. Social Justice Report 2001, p67, citing: ATSIC, Discussion paper on ATSIC's approach to
community capacity building, Unpublished paper, ATSIC Canberra 2001,
p1.

29. ibid, citing: ATSIC, Regional autonomy for Aboriginal and Torres Strait Islander communities
- Discussion paper, ATSIC, Canberra 1999, p22.

30. Aboriginal and Islander Independent
Community School, Handbook, p2.

31. Examples of Aboriginal community
controlled schools and colleges in other states and territories include
Papunya School (Northern Territory), Institute for Aboriginal Development
(Alice Springs, Northern Territory); Tranby College (Glebe, New South
Wales); Tauondi College (Port Adelaide, South Australia); and Batchelor
College (Batchelor, Northern Territory).

32. Further information on the Murri
School can be obtained by emailing info@murrischool.bigpond. I would also
like to express my gratitude to the Murri School for the assistance they
provided HREOC staff in compiling this case study.

33. For an overview of research on
capacity building and governance in Indigenous communities in Australia,
see Dodson, M and Smith, D, 'Governance and sustainable development: Strategic
issues and principles for Indigenous Australian communities' Discussion
Paper 250 / 2003, Centre for Aboriginal Economic Policy Research, Canberra
2003, pp3-4. Available online at: .

34. See: .

35. See:

36. See:

37. See: www.aph.gov.au/house/committee/atsia/indigenouscommunities/inqinde.htm

38. Reconciliation Australia, 2003
Reconciliation Report, Reconciliation Australia, Canberra 2003,
p11.

39. Centre for Aboriginal Economic
Policy Research, Submission to the House of Representatives Standing
Committee on Aboriginal and Torres Strait Islander Affairs - Inquiry into
Capacity Building in Indigenous Communities, CAEPR,Canberra 2002,
p4.

40. Dodson, M and Smith, D, op.cit, p1.

41. ibid, p11.

42. ibid, p12.

43. ibid., p11.

44. ibid, p12.

45. ibid.

46. ibid.

47. ATSIC, Annual Report 2002-03, ATSIC Canberra 2003, p10.

48. Corrs Chambers Westgarth Lawyers,
Anthropos Consulting, Dodson, M, Mantziaris, C, and Rashid, S, A Modern
Statute for Indigenous Corporations: Reforming the Aboriginal Councils
and Associations Act, Office of the Registrar of Aboriginal Corporations,
Sydney, 2002.

49. ibid, p7.

50. ibid.

51. ibid, p1.

52. ibid, p2.

53. ibid.

54. ibid, p6.

55. ibid.

56. ATSIC, Submission to the House
of Representatives Standing Committee on Aboriginal and Torres Strait
Islander Affairs - Inquiry into Capacity Building in Indigenous Communities, ATSIC, Canberra 2003, p5.

57. Dodson, M and Smith, D, op.cit, pp18-19.

58. Corrs Chambers Westgarth Lawyers,
Anthropos Consulting, Dodson, M, Mantziaris, C, and Rashid, S, op.cit, pp8-13.

59. See: ibid, pp16-30.

60. Minister for Immigration, Multicultural
and Indigenous Affairs, Indigenous organisations to benefit from reforms, Media Release, 15 January 2004.

61. The submission of the Western
Australian government to the House of Representatives inquiry into capacity
building is a good illustration of this. It is a collection of statements
and policies from different agencies and departments of the government
and reveals different understandings and approaches between these agencies.

62. Australian Institute of Aboriginal
and Torres Strait Islander Studies, Submission to the House of Representatives
Standing Committee on Aboriginal and Torres Strait Islander Affairs -
Inquiry into Capacity Building in Indigenous Communities, 28 August
2002, pg 4 & 5.

63. ATSIC, Changing perspectives
in ATSIC - from service delivery to capacity development, op.cit, p6.

64. House of Representatives Standing
Committee on Aboriginal and Torres Strait Islander Affairs, Terms
of reference - Inquiry into capacity building in Indigenous communities, online at: www.aph.gov.au/house/committee/atsia/indigenouscommunities/inqinde.htm,
11 November 2003.

65. Hill, K, Hansard - House of
Representatives Standing Committee on Aboriginal and Torres Strait Islander
Affairs inquiry into capacity building in Indigenous communities, 27 November 2002, p209.

66. Fred Hollows Foundation, Submission
to the House of Representatives Standing Committee on Aboriginal and Torres
Strait Islander Affairs - Inquiry into Capacity Building in Indigenous
Communities, Fred Hollows Foundation, Sydney 2002, p1.

67. ibid, p4.

68. Race Discrimination Commissioner, Water report, HREOC Sydney 1994.

69. Race Discrimination Commissioner, Review of the Water report, HREOC Sydney 2001. See also: Grey-Gardner,
R and Walker, B, 'What lies beneath: Sustainable groundwater management
for communities of Indigenous people', Speech, International Association
of Hydrogeologists, International Groundwater conference - Balancing the
groundwater budget, Darwin 2002; Centre for Appropriate Technology, Submission
to the House of Representatives Standing Committee on Aboriginal and Torres
Strait Islander Affairs - Inquiry into Capacity Building in Indigenous
Communities, CAT, Alice Springs 2003.

70. Race Discrimination Commissioner, Review of the Water report, op.cit, p61.

71. ibid, pp71-72.

72. Centre for Appropriate Technology, Submission to the House of Representatives Standing Committee on Aboriginal
and Torres Strait Islander Affairs Inquiry into Capacity Building, CAT, Alice Springs 2003, p10.

73. ibid, p11.

74. ibid, p14.

75. ATSIC, Submission to the House
of Representatives Standing Committee on Aboriginal and Torres Strait
Islander Affairs - Inquiry into Capacity Building in Indigenous Communities,
op.cit, p5.

76. ATSIC, Report on greater regional
autonomy, ATSIC Canberra 2000; and ATSIC, Regional autonomy
for Aboriginal and Torres Strait Islander communities - Discussion paper,
op.cit.

77. ATSIC, Resourcing Indigenous
development and self-determination - A scoping paper, op.cit.

78. ATSIC, Review of Indigenous
communities of Doomadgee and Palm Island, ATSIC Canberra 2000 (Herein Dillon report).

79. ATSIC, Changing perspectives
in ATSIC - from service delivery to capacity development, op.cit., and Gerritson, R, Community capacity building: An ATSIC Discussion
paper, Unpublished, ATSIC 2001.

80. For example: ATSIC, Directions
for change - ATSIC 2001/02 Budget outlook, op.cit..

81. ATSIC, Changing perspectives
in ATSIC - from service delivery to capacity development, op.cit., p3.

82. ibid, p13.

83. ATSIC, Submission to the House
of Representatives Standing Committee on Aboriginal and Torres Strait
Islander Affairs - Inquiry into Capacity Building in Indigenous Communities,
op.cit, p5.

84. ATSIC, Changing perspectives
in ATSIC - from service delivery to capacity development, op.cit., p5. Note: developments in theories relating to development and sustainability
since the 1970's are discussed in detail in the Native Title Report
2003, Chapters 1 and 2.

85. ibid, p7. This was the
definition adopted by the Social Justice Report 2001 and discussed
earlier in this chapter.

86. ibid, p9.

87. Note: There are slight variations
in the terminology used by ATSIC over the past three years as their approach
has evolved.

88. ATSIC, Dillon Report, op.cit, p2.

89. ATSIC, Changing perspectives
in ATSIC - from service delivery to capacity development, op.cit., .pp7-8.

90. ibid, p10.

91. ibid, p11.

92. ATSIC, Submission to the House
of Representatives Standing Committee on Aboriginal and Torres Strait
Islander Affairs - Inquiry into Capacity Building in Indigenous Communities,
op.cit, p8.

93. Hill, K, Hansard - House of
Representatives Standing Committee on Aboriginal and Torres Strait Islander
Affairs inquiry into capacity building in Indigenous communities, 27 November 2002, p210.

94. ATSIC, Submission to the House
of Representatives Standing Committee on Aboriginal and Torres Strait
Islander Affairs - Inquiry into Capacity Building in Indigenous Communities,
op.cit, p9.

95. ibid, p3.

96. ibid., p9.

97. ibid, p4.

98. ibid., p9.

99. ibid, p7.

100. ibid.

101. For details of OXFAM's approach
see: OXFAM Community Aid Abroad, Submission to the House of Representatives
Standing Committee on Aboriginal and Torres Strait Islander Affairs -
Inquiry into Capacity Building in Indigenous Communities, OXFAM,
Melbourne 2003.

102. The discussion in this section
is based on: Aboriginal and Torres Strait Islander Social Justice Commissioner, Submission to the ATSIC Review, HREOC Sydney 2003 (Herein: Aboriginal
and Torres Strait Islander Social Justice Commissioner, Submission
to ATSIC Review). Available online at:

103. The Directions were issued on
24 December 2002 and amended on 3 February 2003.

104. Ruddock, P, 'Directions to ATSIC
concerning conflicts of interest', Press Release, 24 December 2002, ,
12 December 2003.

105. For an overview of the directions
see: ATSIC, Annual Report 2002-03, op.cit, pp10-11, 17-18.

106. Ruddock, P, 'Good governance
and conflicts of interest in ATSIC', Press Release, 17 April 2003, ,
12 December 2003.

107. ATSIC, Annual Report 2002-03,
op.cit ¸ p11.

108. Hannaford, J, Huggins, J and
Collins, B, Review of the Aboriginal and Torres Strait Islander Commission, Public Discussion Paper - June 2003, Commonwealth of Australia,
Canberra 2003, online at: .

109. Hannaford, J, Huggins, J and
Collins, B, In the hands of the regions - Report of the Review of
the Aboriginal and Torres Strait Islander Commission, Commonwealth
of Australia, Canberra 2003 (Herein ATSIC Review Report), p24 and Recommendation
2.

110. ibid, p5.

111. ibid, p32.

112. ibid, p30.

113. ibid.

114. ibid, p30.

115. ibid, p25.

116. ibid, pp7-8, 14-15.

117. ibid, p26.

118. See: ibid, pp8-13.

119. Aboriginal and Torres Strait
Islander Social Justice Commissioner, Submission to ATSIC Review, p3.

120. ATSIC Review Report, op.cit, p69.

121. ibid, p30.

122. ibid, p36.

123. ATSIC, 'A stronger ATSIC regionally
and nationally', Press Release, 5 December 2003, p1.

124. ibid.

125. ATSIC, 'A new ATSIC - in the
hands of the people', Press Release, 8 December 2003, p1.

126. ibid.

127. Aboriginal and Torres Strait
Islander Social Justice Commissioner, Submission to ATSIC Review, op.cit,
p1.

128. ATSIC, Directions for change,
op.cit, p1.

129. Legislative instruments are
governed by the Acts Interpretation Act 1901 (Cth), see section
46A. For an overview of delegated legislation and the scrutiny role that
is exercised over it by the Parliament see Odgers' Australian Senate
Practice, 9th Edition, Department of the Senate Canberra 1999, Chapter
15. An example of a similar legislative instruments process is Public
Service Commissioner Directions. There are many other variations of such
instruments, see for example disability standards issues under section
31 of the Disability Discrimination Act 1992 (Cth).

130. See further: Aboriginal and
Torres Strait Islander Social Justice Commissioner, Submission to
the Senate Legal and Constitutional References Committee inquiry into
the stolen generation, HREOC Sydney 2000, .

131. ATSIC, Annual Report
2002-2003, ATSIC Canberra 2003, p2.