The Right Footing: Rio Tinto Alcan and the Haisla First Nation – by David Hicks (The Global Commodities Report – October 2011)

Published by New Vanguard Media, The Global Commodities Report is a digital magazine about the benefits of resource business.

The Kitimat aluminum smelter was built smack in the middle of the claimed traditional territory of the Haisla First Nation back in the oblivious 1950s. With a $2.5 billion upgrade in the works, it was time to re-engineer the social relationship as well.

A long overdue formal agreement, called the “Haisla Nation – Rio Tinto Alcan Legacy Agreement”, has been achieved between Rio Tinto Alcan, the owner and operator of the aluminum smelter at Kitimat, British Columbia, and the Haisla First Nation, both of whom reside at the headwaters of the Douglas Channel in northwestern BC.

While the first relationship protocol and series of meetings between the parties began just over a decade ago, the current relationship took work, but both parties ratified the 30-year renewable agreement in support of the aluminum operations at Kitimat. This smoothes the way for Rio Tinto Alcan to move ahead with its three-year, $2.5 billion modernization project and facilities upgrade, establishes a Legacy Trust Fund for Haisla community development, and opens up opportunities for Haisla members to participate and benefit via training, employment and procurements.

The resulting Legacy Trust Fund will receive annual payments and be managed by the Haisla Nation Council and their Trust Fund management company. The funds will be applied to social, economic and community development in the Haisla community.

Colleen Nyce, Manager, Corporate Affairs and Community Relations at Rio Tinto Alcan (and also Manager Communications and External Relations for the Kitimat Modernization Project), says that the new technology being installed in Kitimat will be the first application of the company’s proprietary AP40 aluminum production technology, which proffers to boost aluminum production capacity by almost half (from 282,000 tpy to 420,000 tpy capacity) while reducing overall emission intensity by close to 50%. “And that includes a GHG reduction of half a million tonnes a year,” she says. “It’s a significant investment for the company but it is certainly a win for all the other players as well – the environment; the region; the Haisla Nation; and the province of British Columbia.”

AN AWKWARD START

You could say it’s about time. When the Alcan operations at Kitimat were originally built in the 1950s, in the heart of the Haisla traditional territory, it was in an era when indigenous peoples’ interests weren’t on the radar for corporations and governments, and there was little thought given to the impact on the Haisla. When Alcan opened the smelter in 1954, it attracted a surge of about 10,000 workers, primarily non-aboriginal workers and residents to the sparsely populated area. Both sides admit that the relationship has been strained at times.

When the facilities upgrade was first announced in 2006, the Haisla approached the company about using this as an occasion for both parties to put relations on a better footing. The agreement took three and a half years to negotiate and was ratified by the band membership by just over two-thirds in 2010.

The agreement accomplishes three things. “First, it settled the past,” Nyce says. “The parties coexisted all these years primarily without paying much attention to the other. Yes, there was friction along the way, but that has now been put behind us. Second, it establishes our current intention to work together, including employment, training and business opportunities. And third, the establishing of a cooperative relationship keeps our eyes on moving forward to the future – this is a 30-year commitment with 10-year renewal options.”

Nyce says that most of the short-term opportunities will be during the construction phase where Haisla members will gain opportunities for industrial work experience and procurement contracts. When asked how represented the Haisla are in the current Rio Tinto Alcan workforce, she admits, “I would say the number of Haisla workers in our current operation is rather low in comparison to the general population. There are many reasons for this, one of which is lack of education and training capacity which is being addressed by our joint ownership of a local training school, Kitimat Valley Institute.

“There are a lot of efforts and initiatives taking place as a result of our new relationship with the Haisla Nation and we feel quite confident that the new opportunities being made available to the Haisla will generate a lifetime of sustainable work and business opportunities.”

The downside of increased technological efficiency through the Kitimat Modernization Project admittedly will be that the permanent operating personnel needs will actually shrink from 1,400 to 1,000. But Rio Tinto Alcan notes that no layoffs are involved. “While the next three years of construction will see an on site temporary workforce peaking at about 2000, the permanent operation will gradually reduce by natural attrition [e.g. retirements],” Nyce says.

“What’s great about all of this is not only will we have a bright new shiny world class smelter that is productive, efficient and environmentally friendly, but we will have secured the aluminium industry in British Columbia for many more decades to come”.

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