Partners in Industry – Increasing Aboriginal business engagement in Canadian mining

In July 2015, the Red Chris Development Company Ltd. and the Tahltan Nation signed an Impact, Benefit and Co-Management Agreement (IBCA), creating a unique partnership between the Tahltan people and parent company, Imperial Metals, for the life of the Red Chris mine in northern British Columbia. It outlined provisions for communication and interaction on social and environmental issues, and covers education, training, employment, capacity support, and contracting opportunities.

The Tahltan First Nation stands out as an Aboriginal procurement success story, having grown from a small construction company in 1985 into the Tahltan Nation Development Corporation (TNDC), providing goods and services to all of the companies operating in the resource-rich Stikine River catchment. After the tailings dam breach at Imperial Metals’ Mount Polley mine in 2014, signing the IBCA with the Tahltan, and, in particular, creating the Red Chris Monitoring Committee to monitor tailings storage, ensured not only regulatory compliance for Imperial Metals, but an ongoing social licence to operate (SLO).

Aboriginal entrepreneurs and businesses like the TNDC have become an integral part of mining supply chains across Canada. For mining companies, maximizing procurement from Aboriginal businesses not only contributes to their SLO, but establishes a reliable source for goods and services and a local workforce for the life of the mine and beyond.

Through strategic partnerships, Aboriginal businesses in mining have evolved from mostly small, labour-intensive service providers, such as janitorial staff and cooks, to contractors responsible for managing multi-million-dollar projects, partners in joint ventures, and suppliers of professional drilling, construction, transport and environmental services.

However, a number of barriers specific to Aboriginal businesses in mining exist. Entrepreneurs and small to medium-sized enterprises (SME), in particular, need a hand to overcome these barriers and fully realizing the economic development opportunities that resource projects in their territories present. These barriers are currently being explored by a collaborative research project between the Canadian Council for Aboriginal Business (CCAB) and the Mining Shared Value (MSV) venture of Engineers Without Borders (EWB).

10-img_2895“The two most important barriers are difficulty accessing capital loans and equipment, and education,” says Dr. Karen Travers, research analyst at the CCAB, explaining it can be difficult to establish and expand, particularly for those living on reserve land which cannot be used as collateral on a loan.

“Banks can be reluctant to lend money to Aboriginal businesses,” says Travers. “The business owners we spoke to believe there is a false perception of risk with an Aboriginal business and that they are subjected to stricter criteria.”

Access to post-secondary education, skills development, and reliable business forecasting information are also barriers, explains Travers, together with a lack of infrastructure, especially in remote areas. The absence of all-season roads for transporting goods and unreliable internet for online banking compound this disadvantage.

The MSV-CCAB project is investigating the economic and social impacts of procurement from Aboriginal suppliers and developing a business case for mining companies to procure goods and services from Aboriginal businesses.

“One of our main roles is collaborating and coordinating corporate, community, and government players,” explains Anthea Darychuk, research manager with EWB Canada. “We do on-the-ground research to inform policy-making at higher levels of government and intergovernmental organizations, but we also identify and share the best practices so people are not replicating or recreating resources.”

This coordination role is especially important in 2016 as the mining industry emerges from several economically-challenging years. Even in a highly regulated industry, Darychuk explains, “everybody works in their own bubble” and mining companies and Aboriginal-run businesses often keep their heads down and try to find their own way through a changing legal landscape. Aboriginal communities expect to be considered in the development of new mining projects and to benefit from the mining activity in their territory.

“The overall political feeling in Canada right now with the Truth and Reconciliation Commission and the adoption of the United Nations Declaration on the Rights of Indigenous Peoples has created an environment where it’s not so much if you are going to engage, but how,” says Travers.

10-img_3034The government has handed a substantial amount of the consultation process onto businesses, and those conversations largely cover employment, training and economic development. A concerted effort from all stakeholders, rather than a patchwork of programs, is needed to bridge the gap that currently exists between the technical and labour needs of the mining industry and the business and workforce capacity of local Aboriginal communities.

Communication is key, according to the highly successful Secretariat to the Cree Nation Abitibi-Témiscamingue Economic Alliance (SAENCAT). Established in Quebec in 2002, the SAENCAT connects Cree entrepreneurs, large and small businesses with the non-Aboriginal businesses working in the James Bay territory and the Abitibi-Témiscamingue region. Two important initiatives of the SAENCAT include an online Cree Business Directory and organizing regular meetings and conferences to bring everyone together.

Mining company budgets are tighter than they used to be, explains Darychuk, and several companies that the MSV-CCAE researchers interviewed didn’t have the funds for staff to go into the community and seek businesses out.

“If communities can create registries of their own local assets and capacity, it makes the whole process a lot smoother, and opens up more possibilities for Aboriginal businesses to be recognized and contracted earlier,” says Darychuk.

Increased transparency and early engagement are crucial to bring together government, industry and Aboriginal businesses, and increase Aboriginal procurement in the mining supply chain. In practical terms, this involves lowering the barriers for Aboriginal entrepreneurs and SMEs, advertising the full breadth of local businesses who service the mining industry, and mining companies opening their doors and welcoming Aboriginal businesses of all sizes into their supply chains.


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January 2, 2017

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