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Wednesday, February 20, 2013

LEADING ABORIGINAL CORPORATION IN ADMINISTRATION

Updated Fri Nov 2, 2012 3:02pm AEDT
The Bawinanga Aboriginal Corporation is in administration, leaving hundreds of employees fearing for their future and community pride shattered. In the past, the BAC won national recognition for services to outstations, employment for indigenous rangers and support for highly successful indigenous artists. But in less than three years the BAC has gone from a strong financial position to what's believed to be millions of dollars in debt.
ASHLEY HALL: It was once considered one of Australia's greatest success stories in Indigenous development.
But now the Bawinanga Aboriginal Corporation (BAC) is in administration, leaving hundreds of employees fearing for their future and community pride shattered.
The corporation was created more than three decades ago in the heart of Arnhem Land in the Northern Territory. It's won national recognition for services to outstations, employment for Indigenous rangers and support for highly successful indigenous artists.
But in less than three years the BAC has gone from a strong financial position to what's believed to be millions of dollars in debt.
It's claimed the outgoing CEO, an ex-Federal Police officer, outlaid funds to start an air service and to employ fly-in fly-out workers.
Those close to the BAC say they're devastated that a once proud Aboriginal corporation has been so quickly run into the ground.
Sarah Dingle reports.
SARAH DINGLE: Bawinanga was a byword for success. Founded in 1979 to service communities in north Arnhem Land - it provided residents with modern employment, while allowing them to live on country.
Professor Jon Altman has been involved with the Bawinanga Aboriginal Corporation from the beginning, developing business and strategy plans.
JON ALTMAN: The BAC expanded to the point where it was the largest Indigenous development corporation in north Australia and it was the envy of very many remote and Indigenous communities who saw the BAC as just the outstanding model for community development and service deliveries.
SARAH DINGLE: The BAC has been a profitable and well-regarded Indigenous corporation - currently the third largest in Australia, employing more than 500 staff.
For the 2010/2011 financial year, the BAC had a total revenue of more than $38 million dollars, and a healthy profit of $2.7 million.
JON ALTMAN: This is a pivotal organisation in the region that has got a population of about 3,500 Indigenous people but covers 10,000 square kilometres. I mean this is a huge area, this is the size of a small European country.
It grew and really became to be seen as the standout organisation and it provided employment for literally hundreds of Indigenous people and also provided livelihood opportunity to, up to 700 Indigenous artists.
SARAH DINGLE: But that's all changing. On Wednesday the BAC was placed under special administration by the Federal Government's Registrar of Indigenous Corporations, Anthony Bevan.
ANTHONY BEVAN: I did that after receiving a request for assistance from all of the directors of the corporation. The directors were unsure of what the financial position was and the extent of any financial difficulties. It is far too early to put a number on it but the corporation has been through a difficult patch.
SARAH DINGLE: The World Today has heard the debt could run to as much as six or seven million dollars.
But the BAC is not your average company - a lot of its funding comes from state and federal money, much of that tied to specific programs such as the well-regarded ranger program.
ANTHONY BEVAN: There can never be any guarantees in relation to the employment of anyone in a corporation that is under special administration.
SARAH DINGLE: Professor Jon Altman says that's devastating.
JON ALTMAN: Over the last couple of years it seems to me that BAC has expanded rapidly, that much of its core business hasn't been profitable and so basically it has gone into debt and an organisation like BAC cannot operate with a deficit. That's just impossible for this style of organisation. It hasn't got the capacity, if you like, to get a line of credit.
You know, the CEO of Bawinanga lacked business acumen and so what we saw, if you like, was a lack of fiscal rectitude or discipline in relation to BAC.
SARAH DINGLE: The outgoing CEO Luke Morrish is an ex-AFP (Australian Federal Police) officer from Canberra. He first arrived in Maningrida in 2007 as the government business manager, the regional head of the Federal Intervention, before joining the BAC as its CEO.
Professor Jon Altman says Luke Morrish left under a cloud.
JON ALTMAN: While some of its core businesses are like the supermarket and Maningrida Arts and Culture were struggling, it actually expanded its regional coverage to provide services to other communities and it also started again, high risk businesses like BAC Air Services and new tourism enterprises.
A number of the corporation staff were actually living in Darwin 500 km away and part of what BAC Air Services used to do was fly-in fly-out staff. The number of non-Indigenous people working for the corporation has expanded rapidly
SARAH DINGLE: The World Today attempted to contact Luke Morrish without success.
ASHLEY HALL: Sarah Dingle reporting.
http://www.abc.net.au/news/2012-11-02/leading-aboriginal-corporation-in-administration/4349896
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