Based on findings from participatory action research, we describe a process for the development of a Strategic Indigenous Reserve (SIR) in water for Indigenous groups in the Northern Territory, Australia. In the first case study at Mataranka, we show how a ‘top-down’ process initiated by the Northern Territory Government (NTG) was characterised by inadequate engagement and a failure to deliver water justice or an outcome accepted by the traditional owner groups. In a second case study at Oolloo, the traditional owner groups were engaged by the NTG in a consultation process, but it commenced with a unilateral offer of a water allocation to the SIR that was not formulated in a collaborative way. As a result, traditional owners considered the process unfair, and in turn, the allocation offer was perceived as ‘unfair’. Using insights from these two cases we outline an alternative and collaborative process to support engagement by decision-makers with Indigenous groups that promotes water allocations and outcomes that are just, sustainable and have broad-based community support.

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