The notion of community participation in sustainable environmental management is well documented, but applications between environmental scientists and indigenous Australians are less known. Many indigenous Australians are socially and culturally marginalized, and agencies debate over appropriate designs for collaborative, cross-cultural environmental programmes that will alleviate marginalization. This paper presents two case studies from northern Australia, where indigenous people participated in an environmental project exploring the commercial potential of the local sea cucumber resource. A framework with principles of participation and knowledge exchange guided project implementation at both localities. Participant observation data that related to these principles suggests that abuse of power imbalances and exploitation (institutional racism) may be more easily disguised within formalized governance structures than in the informal networks and structures that can be supported through less formalized representation. Linking informal and formal governance structures and canvassing a range of governance modalities will ultimately connect the human behaviours and governance structures needed to progress indigenous environmental management in Australia.