For industrial developers, collaboration is the price of admission

By Jen Wojtaszek | August 11, 2017

It takes more than engineering know-how to bring large-scale development projects to fruition. Today, companies that want to build mines or processing plants must take proactive steps to ensure that local communities reap their fair share of the benefits of these enterprises.

In Canada, our dealings with Aboriginal peoples haven’t always been an area of focus, especially historically. The way these relationships were managed had the potential to lead to less-than-positive outcomes for all stakeholders.

Today, developers recognize and accept that indigenous communities must be full partners in any of their plans. They agree that when a project wraps up or a mine closes down, the only remnants should be positive and able to last for at least for a generation or two. The goal: leave a lasting influence and a positive legacy.

To make sure there’s full understanding and open communication surrounding these industry-community collaborations, participation agreements (also known as impact and benefit agreements [IBAs] or opportunity agreements [OAs]) are developed, committed to, and implemented. Participation agreements are privately negotiated but legally enforceable contracts between the developing organization and the affected Aboriginal group(s). Beyond traditional corporate social responsibility, they are fundamental to obtaining and sustaining access to the land that development companies need, and the approvals and consents required to operate there.

The goals of the agreements are essentially twofold. First, they set out the terms and conditions for a company’s presence in the host community and its accountability for its actions. Second, they form the basis for mutual trust, setting the terms by which resource-development benefits will be shared with the communities that will remain connected to the land long after the project closes. These participation agreements are separate and distinct from resource revenue-sharing arrangements between governments and Aboriginal groups. The latter specify how public revenue from resource developments, such as royalties and taxes, will be shared.

Managing relationships and agreements with Aboriginal groups is an area of expertise that we at Hatch have been developing for some time. We’re often asked to design and implement programs, initiatives, and strategies that bring economic advantages—such as upskilling, training, and local business involvement—to host communities where our clients develop their industrial sites. We also monitor the implementation of a company’s participation agreements to ensure the commitments made are honored.

Jobs and skills development—things that stand to make communities more sustainable and stronger economically—are usually the most sought-after and desirable benefits in remote areas. It’s not surprising. The Mining Association of Canada has estimated that there are 1,200 Aboriginal communities located within a 200-kilometre radius of 180 producing mines and better than 2,500 active exploration sites. Consider, too, that Aboriginal people are one of the fastest-growing and youngest segments of Canada’s population, and it’s easy to see why engaging the labor force in development work is a win-win.

There’s another topic directly related to jobs and skills that always generates interest: how to win work with the development company. We’ve provided information sessions and helped to identify and retain government organizations to come and teach community members about starting businesses, bidding on contracts, and even how to obtain funding from Canada’s federal government for skills development and training. Additionally, we have developed implementable incentive-penalty strategies geared toward encouraging local content through agreements with service contractors.

Still, it’s a balancing act. The business walks a fine line, trying to give the community what it wants and meeting the demands and expectations of its shareholders, too. Most important is that the company be transparent in its dealings and transactions, careful not to overpromise and raise expectations it may not be able to meet.

Here are some lessons we’ve learned that can pave the path for smoother industry-community partnerships.

  • Manage expectations from the start. Hold public meetings that invite and engage the entire community as early as possible. Honestly identify any impacts the development may have and the opportunities it can provide.
  • Have the resources you’re going to need to support the strategies you put in place. Do your homework so you won’t have to postpone, suspend, or trim back programs you’ve promised to implement.
  • Invest in cultural awareness. Invite representatives of local community associations to make presentations about their customs, heritage, philosophies, and traditional lands. Make sure everyone working on the project attends.
  • Take a top-down approach. Get the most senior levels of management to set the direction and the example. If employees see that support for strategies and programs originates with the CEO, they’ll buy-in sooner, giving it their full cooperation and commitment.

It’s a simple strategy, but one that can’t be underscored too strongly or too often. Operate openly, in good faith, and with complete transparency. It’s the only way to be sure you’ll win the invitation to work in—and with—that community again.