Groote Eylandt residents were killing each other 15 years ago in acts of drunken violence, but since local women demanded an alcohol permit system there has been a drastic turnaround, community leaders say.
The federal standing committee on indigenous affairs is travelling around Australia to investigate alcohol abuse in Aboriginal communities and to find ways to combat it.
On Wednesday in Groot Eylandt the committee heard that in the early 2000s a group of strong elder women threatened to leave the island if the men continued to drink, ultimately winning the fight to move the community to a permit system.
On the island, off the east coast of the Northern Territory, the communities of Umbakumba, Angurugu and Anindilyakwa have been dry for about a decade.
Permit holders can drink in licensed venues, which have stopped selling takeaway alcohol entirely.
The corresponding rates of violence dropped by 70 to 80 per cent, said Keith Hansen, CEO of Aminjarrinja Enterprises Aboriginal Corporation.
He said the system was successful because it was initiated by the community: "If you get the indigenous people owning it, it will work, and it is working."
The island began selling low aromatic Opal fuel at the same time and fuel sniffing has also stopped, Mr Hansen said.
"It's the best thing I've seen in this community. ... It was a massive change to this island. People started to come out, people started to work, the community started to get better and better, family life changed."
He acknowledged Groot Eylandt as an island had more control over supply than mainland communities.
There have been very few instances of indigenous residents abusing the system, he said.
"It's mainly whitefellas... selling grog to indigenous people."
Indigenous permit holders understand the rules, "whereas whitefella's looking for the quick quid."
Mr Hansen said contractors flying in and out of the island on charter flights several times a week from Darwin and Cairns were not being searched by police sniffer dogs, and have been bringing in alcohol and drugs to make more money selling them at a higher price to captive customers.
He said he asked authorities why the homes and bags of white workers were not being searched and he was told to mind his own business.
The hearings will continue in Ceduna in SA next month.