Mining and Aboriginal Communities: Building Stronger Relationships – by Pierre Gratton

This speech was given by Pierre Gratton, President & CEO of the Mining Association of British Columbia (MABC), at the BC Natural Resource Forum on January 13, 2011

“Fifteen years ago, there were fewer than twenty agreements between mining companies
and Aboriginal communities in Canada. Today, there are almost 200, and many more are
being negotiated.” Pierre Gratton, President & CEO of MABC. (Jan/13/11)

New Partnerships New Markets

Thank you for that kind introduction. It’s an honour and a pleasure to be a keynote speaker at the 8th BC
Natural Resource Forum in Prince George. Opportunities in the mining and supporting industries are really
starting to pick‐up in PG, the northern supply centre for our sector. It has taken time, but with the Endako
expansion, the major growth in the northeast coal block, Mt. Milligan, Red Chris on the horizon and a
resumption in exploration activity, there is lots to be excited about.

I have been asked to speak to you today about mining and Aboriginal partnerships. As I do so, I want to turn the clock back to look at where we’ve come from, then look at where we are and where we need to go.

The New Face of Mining

Before I became President of MABC, I served as Vice President of Sustainable Development and Public Affairs for The Mining Association of Canada. While working for MAC, I witnessed and participated in a
transformation that has taken place and continues to take place across the mining sector. It is clear to me that we are on a path from which there is no turning back – the path of sustainable development.

Sustainable Development means something a little different in our industry than in some others. Of course,
mines are finite, so many scoff at the notion of “sustainable mining”. But while mines are finite, the essential
contribution of our industry to society isn’t. And our contribution to human capital through the activities of
our industry is one of the most significant demonstrations of sustainability that any sector can make. This
contribution, increasingly manifests today through our engagement with Aboriginal communities, is the stuff of community building. It is a step towards reconciling aboriginal and mining industry goals in the context of the global economy.

Another defining feature of mining and sustainable development has been the route we have taken to
embrace sustainability and First Nations in that context. It is a route that I believe distinguishes our industry from any other industry sector in this country. And it is to this that I now turn.

The very nature of mining has required the industry to move farther than any other outside its comfort zone to address criticism, find common ground with communities and stakeholders, and adapt. Whether we
jumped or were pushed, we have taken a great leap forward in several remarkable initiatives, two of which
have been led by the Canadian mining industry. It’s a journey we’re still on, and probably one that we will
never end.

The first was the Whitehorse Mining Initiative (WMI), which was launched in 1992. The second was pioneered by The Mining Association of Canada, and is called Towards Sustainable Mining.

From these initiatives, the mining industry learned matters both of process and of substance:

• From the engagement process, we have learned different models of comprehensive dialogue and
consensus building with First Nations and others.
• By listening to First Nations and others, we have learned different approaches to analyzing and
managing critical issues.

While self‐education was not the mining industry’s initial purpose in the Whitehorse Mining Initiative, it was
to be the most valuable outcome. When Towards Sustainable Mining came along, we had already learned the lessons of WMI. We knew, from the get‐go, that what we were trying to do was not just teach but also to
learn.

The Whitehorse Mining initiative (WMI) was launched at the 1992 Annual Mines Ministers Conference, held in Whitehorse. The Mining Association of Canada (MAC) stated that the industry needed “to earn the trust of Canadians and to prove that it can operate in an environmentally sensitive and sustainable fashion”.
MAC proposed a multi‐stakeholder process to work towards a “common vision and a strategic plan that will
take the metals and minerals sector into the next century.” Major organizations, such as the Assembly of First Nations and Inuit Tapiriit Kanatami, participated.

The industry’s real agenda was to educate the public about the value and importance of responsible mining.
However, as the Whitehorse Mining Initiative progressed, the industry came to realize that the engagement
went beyond educating communities and stakeholders about mining. The participants were equally intent on educating the industry.

Eventually, the Whitehorse Mining Initiative reached an Accord, a consensus document signed by all
participants. It specified principles and goals related to the priority issues, and it expressed commitments for follow‐up action.

The Whitehorse Mining Initiative did not eliminate the mining industry’s hurdles or its challenges. But it did
achieve a higher level of mutual understanding between the industry and key constituencies.

The strengths of the Whitehorse Mining Initiative were:

• All stakeholders supported the process and endorsed the Accord.
• A platform was created for on‐going multi‐stakeholder consultations on priority issues, such as aquatic
impacts and acid rock drainage.
• Key relationships were strengthened, which facilitated the development of new mines in Canada, such
as our great diamond mines, Ekati and Diavik and more closer to home, the famous gold‐silver mine at
Eskay Creek.
• New attention was given to aboriginal priorities, which led to a more constructive pattern of
relationships.

The weaknesses of the Whitehorse Mining Initiative (not uncommon in many of today’s agreements, including treaties):

• Monitoring and reporting on implementation of the commitments made in the Accord were weak
• No comprehensive strategy was established to broaden the base of support for the commitments in
the various constituencies.

The outcome of the Whitehorse Mining Initiative was not what the mining industry initially imagined or
expected. Its most remarkable achievement was how it fundamentally changed the way the industry approach issues and the people it works with.

By the late‐1990s, however, many in the industry were growing concerned that the momentum of the WMI
was waning.

In 1999, the MAC Board held a seminal meeting in which it decried the industry’s declining social license. The bar was rising, our critics were getting more vocal and more global. We felt increasingly out of sync with
society again and, through major international accidents, we had partly ourselves to blame. Just five years
since the success of WMI, we had dropped the ball.

We needed to respond, again.

This time, the MAC embarked on what has been recently recognized by both Five Winds/Strandberg
Consulting and Canadian Business for Social Responsibility, as the leading sustainability initiative in the
country: Towards Sustainable Mining or TSM.

TSM, at its heart, is about improving the industry’s reputation through improved performance. And we go
about this by aligning what we do with the priorities and values of our communities of interest or
stakeholders. A key element of TSM is an Aboriginal Relations policy framework that includes the following
commitments:

• Respect Aboriginal and Treaty rights and seek to understand local perspectives on those rights;
• Acknowledge and respect the social, economic, environmental and cultural interests of Aboriginal Peoples;

TSM also has some key components:

• A National Advisory Panel that includes representatives from First Nations, Metis and Inuit, organized
labour, NGOs, mining communities and the financial sector.
• Performance metrics against which mine sites evaluate and report their performance.
• Third party verification and annual public reporting of industry performance.

In the process of building TSM, the industry has again honed its ability to sit down with its communities and
stakeholders, to listen, to learn and to earn their respect. Last month, MABC became the first provincial
mining association to adopt TSM. We will be rolling out a range of training initiatives for our members this
year.

MAC members – and soon all MABC members – measure and publicly report their performance in a range of performance indicators, notably in community and Aboriginal community engagement.

The directional shift represented by the Whitehorse Mining Initiative and TSM has not been a single‐minded march forward by mining companies. The industry still includes many skeptics. Some might say that the gap between leaders and laggards in the industry has grown. Lapses in environmental or social performance continue to damage our image. But, as I said before, we are all now on a path to which we are committed.

With Aboriginal people, the journey has been both challenging and rewarding. Fifteen years ago, there were
fewer than twenty agreements between mining companies and Aboriginal communities in Canada. Today,
there are almost 200, and many more are being negotiated. These agreements, most commonly called IBAs,
are based on our industry’s recognition of a few things:

1) That we must respect the fact that we are operating on traditional territory
2) That First Nations have rights that must be respected.
3) That Aboriginal peoples can and should be our most important local resource, as employees, as
business suppliers, as partners.

Reaching these agreements takes time and is not always easy. And it often feels like it’s getting harder. We
are all trying to navigate the changing landscape of Aboriginal law, including the recent adoption by the
federal government of the UN Declaration on Indigenous Peoples. The question about veto power on land use decisions creates a difficult situation, if not an impasse, for some negotiations, as companies navigate the grey area of pursuing greater levels of certainty for their land interest with the need, in a market economy, to provide a reasonable return to shareholders.

It’s challenging because there are no clear rules or standards to apply to negotiations, only precedent, and
often precedent is not clear, because agreements are private and confidential. So every agreement is unique,
each varying community to community, project by project, company to company, and influenced by the
plethora and rapidly expanding cadre of lawyers and consultants hired to “assist” in the negotiations.

Add to these challenges the BC reality of overlapping, unsettled claims, and there emerges the reason why the Fraser Institute continues to rank BC near the bottom on the indicator of First Nations issues.
Nevertheless, there is much that we – industry, Aboriginal communities and governments – can do to make it easier, which is in all of our interests to do.

• Industry can continue to improve the way it works with First Nations and other communities of
interest, enhanced and measured through initiatives like Towards Sustainable Mining.
• The Province can accelerate the implementation of resource revenue sharing. Two agreements were
signed last August, but nothing since. Yet many more new mines and mine expansions are eligible.
• We can build on and expand initiatives like the Aboriginal Mine Training Association, a federally‐funded
program that offers training and job experience for First Nations mine workers.
• We can continue to support and expand the award‐winning education programs of the North West
Community College in Smithers, which offers practical, hands‐on training for First Nations in mining
and exploration, and other schools, like TRU, BCIT and Northern Lights.

Today, mining is the largest private sector employer of First Nations in Canada. We have helped to stimulate new Aboriginal businesses, improve literacy and training on and off reserves, create wealth, opportunity and hope. Today, the northeast coal sector has 40 percent Aboriginal employment. The McLeod Lake Indian Band is playing a key role in building the Mt. Milligan mine through their business units. McLeod Lake and the Nak’azdli people will doubtless be employed in significant numbers by the mine.

The Mt. Milligan is one of the two new mines for which the province has concluded resource revenue sharing
agreements with the local First Nations.

The second is in the south. New Gold’s New Afton mine also has a Participation Agreement with the
Secwepemc Nation and high levels of First Nations employment and business contracting.

Also in the south, Copper Mountain has concluded an Impact Benefit Agreement with the Upper Similkameen Indian Band. Negotiations on revenue sharing with the Province are underway.

What this confirms is the trend – new mines come with agreements between First Nations the companies and First Nations and the Province. These agreements are not required, but they are beneficial to all parties and are becoming commonplace in BC.

When mining projects hit the newspapers, it’s often because something has gone wrong. We don’t hear often
about the many success stories that continue to function, day in and day out. These new mines, the most
recent examples in BC, are the good news stories.

Kelly Lindsay, Executive Director of the national Aboriginal Human Resources Council, has put it best. He says the mining sector is the vanguard in its work with First Nations. We are on the front lines, pioneering new relationships and doing what for generations governments have failed to do.

Even when relationships are frayed, it still means there is opportunity.

Indeed, while First Nations are demanding change, what they are looking for is investment, jobs, education,
training and opportunities for their children. National Chief Shawn Atleo’s has rightly made education a focus of his mandate.

And we need First Nations.

We are all in this together and we must share this land as a single community built on mutual respect.

The future of mining in British Columbia will, in my opinion, be shaped by no issue greater than how we
respond to the First Nations challenge. There is no other sector better prepared to meet this challenge than
ours. We are natural risk takers. We are builders. We are solution‐oriented and deeply practical and
pragmatic. We have experience.

If we do this right, which we will, we will achieve a goal I lay out for you today. I want the BC mining industry to be recognized not just in Canada but around the world for its collaborative work with First Nations. Ours will be a sector with the best safety record supported by governments, welcomed by First Nations and respected by environmental organizations.

Thank you.

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