If governance is to be enhanced in mineral rich developing
countries, then companies need to help as much as they can, says
Katherine McPhail, first presenter at a sustainability and good
governance session during the Prospectors Developers Association of
Canada's (PDAC) 2008 convention.
[ILLUSTRATION OMITTED]
McPhail is the senior program director of the International Council
for Metals in Mining.
Equally important is the sovereign responsibility on how countries
use their royalties.
"This is not a company responsibility, this is a government
responsibility," she said.
Although McPhail was speaking about developing countries, the
philosophy can be parlayed over to communities governed by First
Nations.
She said what communities want is respect.
"It is a hard question to ponder exactly how that will be
done."
Local communities bear the cost of mine operations with
environmental impacts, yet most of the economic benefits are accrued at
the provincial and federal levels with taxes, contribution and exports,
she said.
"This does not come, in the eyes of the community, as any
benefit to them."
Don Bubar, president of Avalon Ventures Ltd., has had numerous
agreements with Wabaseemoong Independent Nation and Grassy Narrows with
respect to their Separation Rapids lithium project north of Kenora. He
has also consulted with Eabamatoong Lake First Nations near Fort Hope
and more recently with the Chapleau Cree, Chapleau Ojibway and
Michipicoten First Nations regarding their Warren Township project in
the Foleyet area. Avalon reached a memorandum or understanding (MOU)
with Wabaseemoong; however, it has yet to progress to an impact benefit
agreement (IBA), since Bubar is developing markets for the
company's lithium minerals. Despite the inactivity, Bubar continues
to consult with the bands on a regular basis.
He believes it is the province's responsibility to share
revenues of natural resource extraction with First Nations. That being
said, industry has a responsibility to engage the communities directly
and ensure they benefit from the development at the economic and
environmental level. "First Nations do not benefit enough from
resource extraction in their land use areas and this is the root cause
of their current opposition to exploration and development," Bubar
said.
"At the PDAC, we agreed that First Nations should benefit
more, particularly in terms of sharing of resource revenues collected by
government. How this responsibility is shared between federal and
provincial needs to be negotiated."
He also said that juniors need to get used to the idea that they
can no longer operate in First Nations traditional land use areas
secretly without making contact and consulting with the communities.
They must make contact early and often, to inform the community of their
plans, determine local sensitivities, build relationships and most
importantly, trust that they will operate in a socially and
environmentally responsible manner.
"This is the approach we are using in the Northwest
Territories and it is starting to pay dividends for us in terms of
community support for our work."
But he prefaced this by stating that juniors should not have to
develop any MOU or IBA until the project reaches a more advanced stage,
after a resource has been defined.
This is why government is important, he said.
"They would provide some certainty to the First Nations that
any project that ultimately becomes a mine will result in benefits to
the community and obviate the need for negotiating MOUs during early
stage exploration."
Otherwise, "it is a waste of everyone's time since
grassroots exploration rarely results in a discovery of economic benefit
or environmental impact."
Kai Kaier, senior economist with the World Bank Group said there
are vertical imbalances in countries, some are more obvious than others.
"Revenue is increasing for government, but it is not making it
down to the people."
The objective now is to provide a horizontal system of extracting
the resource wealth and providing a system where benefits can be
delivered at the grassroots level.
He said there needs to be more accountability and transparency at
the government and community levels, so that there is evidence that
"governments are not taking in more revenue streams."
www.avalonventures.com
www.worldbank.org
www.icmm.com
By KELLY LOUISEIZE
Northern Ontario Business
COPYRIGHT 2008 Laurentian Business Publishing,
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