Sustainability website / Case Studies 2006 / Xstrata nickel / Canada: Xstrata Nickel's Raglan Agreement fosters strong indigenous relations

Canada: Xstrata Nickel's Raglan Agreement fosters strong indigenous relations

In 2006, Raglan mine reached a milestone with the presentation of a profit-sharing cheque for C$9.3 million to the Makivik Corporation.

Nunavik

Xstrata Nickel's Raglan mine is the largest commercial operation in the Nunavik territory in the Arctic north of Quebec, Canada. Nunavik is sparsely populated, with approximately 10,000 residents living in 14 communities. The two closest communities to Raglan are Salluit (1,000 residents) and Kangiqsujuaq (550 residents), approximately 250km from the mine site.

The Raglan Agreement

In 1992, six years prior to production beginning at Raglan, mine representatives met with members of the Makivik Corporation and agreed to initiate a more formal consultation process. The Raglan Agreement was signed in 1995 between the Makivik Corporation, Raglan mine, Salluit and Kangiqsujuaq.

The comprehensive socio-economic agreement addresses environmental protection and mitigation, dispute resolution, procurement priority given to competitive Inuit businesses and employment. Inuit in Salluit, Kangiqsujuaq and the Nunavik region as a whole are given priority in all recruitment. An employment and training committee was formed, with representatives from the mine, the Kativik School Board and the regional government to fulfil the agreement commitments to create training programmes for Inuit workers. These include a 'stope school', apprenticeships and internships.

Profit-sharing

The profit-sharing arrangement includes a commitment to provide 4.5% of operating profit to the community partners in the agreement once the mine has recouped its initial capital investment. The 2006 payment of C$9.3 million is the second and by far the largest payment to date, following a payment of C$300,000 to the partners in 2005. The money is placed in a trust, which in turn distributes 25% of the money to the Makivik Corporation, 30% to Kangiqsujuaq, and 45% to Salluit. The Makivik Corporation and local communities distribute the funds among the 14 communities in the Nunavik region, based on an evaluation of needs.

Raglan Committee

The Raglan Agreement is governed by the six-member Raglan Committee, comprising Salluit, Kangiqsujuaq and the Makivik Corporation representatives, and three Xstrata Nickel representatives. The committee meets four or five times each year and addresses issues that may arise between the company and the local communities. The results of all environmental monitoring are reported to the committee. Should mitigation measures not be acceptable to members of the committee, a formal arbitration process is in place, although this has never been requested.

Since 1995, the committee has had a significant influence on the manner in which the mine is operated. For instance, concerns were raised that normal shipping practices were potentially disruptive to the migratory patterns of the seal population. Normal shipping – which involves ice-breakers – also interfered with traditional Inuit hunting activity during specific seasons. These issues were examined by the Raglan Committee, and it was collaboratively agreed that all shipping would cease between 15 March and 15 June. This solution does not impact mine output, nor does it disturb the seal population or interfere with traditional hunting.

Procurement

In 2006, approximately 17% of the operation's annual procurement budget was spent on Inuit businesses and services, up from 13% in 2005. The mine has a target of 20% Inuit employment (currently 18% of the workforce is Inuit). The mine continues to work towards the 20% target, despite the inherent challenges of a remote, northern operation (including high turnover), and since 1998, more than C$10 million has been invested in training initiatives by the mine and local government. New training plans are being developed for implementation by 2008 focused on skilled trades training, cross-cultural initiatives and on retention of Inuit employees.

Benchmark for First Nation Agreements

Since its development, the Raglan Agreement has been used as a benchmark and reference point for other First Nations agreements in the mining industry and in other industrial sectors. Both the Makivik Corporation and the company have shared their experiences with other companies and organisations wishing to develop their own agreements. The Raglan Agreement itself is considered a public document and is provided to third parties upon request.