This won't wash: The First Nations counterfeit

Author:

Australia | Publication | août 2023

In this article we consider the recent rise of the so-called practice of black cladding or black washing (which we suggest might be better termed culture washing) and how to mitigate against it.

Content

Many colours, same concept
What is black cladding/ black washing?
Culture washing and procurement contracts
Suggested steps to mitigate culture washing risk

Many colours, same concept

Many will be aware of recent criticism of corporate entities alleged to be engaging in (or having engaged in) actual or perceived “greenwashing”. In its broadest sense, this includes the (direct or indirect) communication that a company, product or process enjoys particular environmental, social or ethical attributes in circumstances where that is not the case.

Greenwashing is one particular strain of “colour washing”, an umbrella term which also includes:

“blue washing” (which has been taken to relate either to communication of unsubstantiated compliance with one or more United Nations standards and/ or an unsubstantiated claim that a product has positive ethical/ social credentials);
“rainbow washing” (communication of unsubstantiated pro-LGBTQI+ attributes); and
“pink washing” (communication of an unsubstantiated association with breast cancer initiatives and/ or women).

What is black cladding/ black washing?

A perhaps lesser known practice in the same vein is the category of conduct whereby there is a communication to the effect that:

an entity is a First Nations entity (i.e. owned and/ or led by First Nations individuals); or
a product or process has been produced or delivered by a First Nations entity or individual,

in circumstances where that is not the case.

This practice has variously been labelled “black cladding”, “black washing” and “brown washing”. A suggested alternative label for this conduct is “culture washing”.

The second proposed category of behaviour listed above has perhaps been – until now – the more commonly encountered. In the past conduct of this nature has typically been cast as generally false, misleading or deceptive in nature, without any particular focus on the First Nations element. Nomenclature aside, this broad category of conduct appears to be increasingly common and particularly insidious.

Washing of all descriptions has the potential to erode consumer confidence and allow corporate entities to gain considerable unfair advantage, thereby threatening competition. It also undermines the very principles sought to be promoted. As an example, where entities engage in greenwashing, there is a risk that they attract or retain a social licence to engage in conduct which is environmentally harmful, reduce the incentive to minimise that harm and potentially evade legal sanctions otherwise applicable to the conduct sought to be “washed” out. Similarly, where entities or individuals engage in culture washing, other entities which are legitimately First Nations owned and/ or led, or First Nations individuals who sell, produce or deliver products or services, must work harder to attract or retain their share of an unfair market. It also impairs consumers’ ability to make informed decisions about all manner of transactions – from government departments seeking to procure First Nations entities to deliver services, to individual consumers wishing to purchase goods from a legitimate First Nations producer.

Culture washing can occur in a variety of ways. Supply Nation, a not-for-profit organisation which aims to promote supplier diversity by operating a database of verified First Nations businesses, defines culture washing (they use the term “black cladding”) as:

…the practice of a non-Indigenous business entity or individual taking unfair advantage of an Indigenous business entity or individual for the purpose of gaining access to otherwise inaccessible Indigenous procurement policies or contracts. Unfair advantage involves practices and arrangements that result in the disadvantage or detriment to an Indigenous business, or that do not represent a genuine demonstrated level of equitable partnership and benefit.¹

A broader interpretation of culture washing may also include:

misrepresenting the level of involvement of First Nations individuals in the ownership of a business;
a corporate entity misrepresenting the level of involvement in its management or operations by First Nations individuals, particularly in order to attract lucrative private or government contracts, joint venture agreements and/ or funding;
corporate restructuring to ensure the relevant shareholding and/ or directorship satisfies any requisite criteria to be designated as a First Nations entity, particularly where there is little or no commensurate pecuniary benefit or allocation of responsibility and autonomy to First Nations individuals;
creating shadow First Nations businesses, or “arms” or “branches” responsible for obtaining a relevant contract and/ or funding, particularly where there is little or no commensurate benefit to the First Nations business, arm or branch;
academic culture washing, where non-First Nations academics partner with First Nations academics (thereby meeting research grant criteria and imbuing their work with credibility), in circumstances where the First Nations academic does not have meaningful participation in the relevant project; and/ or
directly misrepresenting that a product or service being advertised or sold has a particular association with First Nations individuals or culture, when that is not meaningfully the case.

Culture washing and procurement contracts

Culture washing can become particularly relevant where Federal or State government funding is earmarked exclusively for the promotion of economic participation by, and advancement of, First Nations individuals and businesses. Initiatives aimed at greater economic participation by First Nations individuals and businesses include grants allocated by the National Indigenous Australians Agency (NIAA), such as the Local Investments Funding Grant Opportunity, which provides one-off funding up to $100,000 for businesses invited to apply by the NIAA,² and the NIAA Prescribed Bodies Corporate Capacity Building Grant Opportunity³. Indigenous Business Australia (IBA) also offers business finance schemes to eligible First Nations businesses (including start-up finance packages), allowing First Nations businesses to apply for grants and/ or loans from IBA.⁴

Notably, in July 2015, the Federal Government introduced an Indigenous Procurement Policy (IPP) in order to boost First Nations economic activity in Australia. The intention of the IPP was to better facilitate the winning by First Nations businesses of valuable government contracts.⁵ Throughout FY2022, over 1,200 First Nations businesses secured 11,500 new contracts through the IPP, worth $1.6 billion.⁶

Culture washing in its broader sense has attracted some adverse regulatory attention in the past, primarily focussed on conduct which involves the sale of products or services advertised as being First Nations in character, when they are in fact not. For example, the Australian Competition and Consumer Commission has previously prosecuted a seller of art in relation to false representations made to consumers that various items, including boomerangs and didgeridoos, were painted by Australian First Nations people, in circumstances where that was not the case.⁷ In another recent matter, the Australian Securities and Investments Commission commenced proceedings against Youpla Group Pty Ltd, alleging (inter alia) that Youpla Group Pty Ltd made false representations that their funeral plans were owned and/ or managed by First Nations person(s), had First Nations community approval and were more beneficial to First Nations communities than other funeral plans.⁸

Suggested steps to mitigate culture washing risk

There are measures which can be taken to reduce your or your organisation’s risk of becoming involved in possible culture washing, including:

Undertake appropriate due diligence prior to entering into negotiations with entities seeking to contract with a First Nations owned and/ or led business or individual, or with entities holding themselves out to be First Nations owned and/ or led, and document that due diligence.
Ensure any statements (written and oral) or other representations made in any context are accurate and honest. If required, undertake appropriate investigations to ensure this is the case, and document any such investigations.
Consider that the use of non-verbal communication (for example illustrations, colours and other imagery) may create or contribute to an impression that an entity, product or service has a First Nations association.
Remember that the omission of certain information, or selective representation of information, may of itself be misleading.
Seek legal advice where appropriate, including during any negotiation phase, prior to entering into any commercial arrangement, and/ or if you suspect that you have encountered culture washing.

With thanks to Siena Monterosso and Liam Mackay for their assistance in the preparation of this article