The Australian government has introduced stricter ownership and registration requirements for businesses seeking contracts through its Indigenous Procurement Policy (IPP). Under the new rules, companies must be at least 51% owned and controlled by First Nations people or be formally registered as a First Nations operation with the Office of the Registrar of Indigenous Corporations in order to qualify for Commonwealth contracts.

This change is intended to address the issue of "black cladding," a practice where non-indigenous companies present themselves as indigenous-owned to gain access to government contracts designated for First Nations businesses. Previously, eligibility for the IPP required only 50% indigenous ownership and control.

By raising the ownership threshold and emphasizing formal registration, the government aims to ensure that economic opportunities and benefits directly support First Nations entrepreneurs and contribute to their economic self-determination. The updated measures seek to strengthen the authenticity and integrity of the procurement process under the federal Indigenous Procurement Policy.