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Thursday, January 05, 2012

How Indigenous Peoples are changing the economics of the energy and resource sectors...

An interesting debate taking place regarding Canadian First Nations engaging in direct negotiations with large corporations over transmission logistics which provide some insight into how Maori may benefit. Two examples given by Suzanne LeClair are:


Enbridge’s Northern Gateway, where Aboriginal land leverage is now worth 10% of the $5.5 billion project with $1 billion worth of economic benefits to native communities along the route.
 
Source: Native leaders vow to block Northern Gateway pipeline, The Globe and Mail.

 

Nunavut Land Claim and royalties on Arctic resources

The powerful mining sector has spent $2.2 billion in Nunavut since 1999. Nunavut Tunngavik Inc (NTI) will begin collecting 12% royalty on all resources located in its jurisdiction. Estimates are that NTI will collect about:
  • $219m between 2013 and 2019 from Agnico-Eagle’s mine
  • $400 m by 2023 for Areva’s Kiggavik uranium mine (if approved...)
  • $256m by 2031 from Newmont Mining
  • $1.8 billion in royalties from Arcelor Mittal’ Mary River iron project by 2021.
 
Source: Welcome to Nunavut


Staggering sums, although it is often employment that is dangled as the carrot for Indigenous Peoples. Rio Tinto, Australia, has increased its Indigenous workforce to six per cent, up from 0.5 per cent in 1996. What is the Canadian data?
Canadian First Nations Employment in Mining
A 1998 survey of 53 operating mines indicated that: 18 mining operations had hired Aboriginal employees in 1997; the total number of Aboriginal employees was 422; the most frequent types of jobs filled by Aboriginal people included labourers, miners, truck drivers/equipment operators, trades and maintenance operators. These figures had increased somewhat from an earlier survey administered in 1991/1992 (IGWG 1998). A 1996 report (IGWG 1996) noted that Aboriginal employment in Canada averages 4.2%, with higher rates in Saskatchewan (5.7%), Manitoba (9.7%) NWT (28.3%) and Yukon (12.5%). (Source: Hipwell et al. 2002).

Found this nice historical piece on Maori and the goldrushes on 'The Prow' dot org, korero from Te Tau Ihu, top of the South Island). Maori employment in agriculture and mining has recovered from a previous decline recorded from 2004-2009:

 Māori and non-Māori employment by industry, 2004–2009
.

Māori employment growth has recently been relatively strong in mining and agriculture, although I've yet to find this data decomposed into just mining employment.

Percentage change in employment by ethnicity and industry, June 2008 to June 2010

 Source: Dept. of Labour.


Mining is yet to feature in the Maori economy data (see the BERL analysis...currently 0% exposure). However, the Iwi Chairs forum recommended discussion on "the strategic relevance of the exploration of mining within the conservation estate as a direct issue as well as more broadly reflecting a change in policy toward reconciling economic and environmental interests." There are plenty of caveats for Indigenous engagement in mining of course. Two Maori commentators have chipped in with their perspectives. 

For Buddy Mikaere "...there are many good reasons for Indigenous People to have equity positions or ownership (whether sole or in partnership) in vital infrastructure such as pipelines or transmission lines." He rightly points out the needed investment diversification outside the normal iwi interests of farming, fishing and forestry and the opportunities for employment and gaining management experience and partnering with utilities in future projects.


Mikaere paints a rather tidier picture than actually exists in Aotearoa. The Maori Party is twisting itself into a characteristic knot where it opposes asset sales but if/when they take place (and the senior coalition party is committed to the sale of these assets despite the economics of such a deal being very shonky), they argue iwi corporations should be front of the queue.

Te Taru White argues "...it is ultimately about relationship and respect and to ignore this, will be very costly in time, energy and money." For Te Taru, "consultation must move from the ground level up and that quasi-tribal organisations and those established and often fed by the Government's hand, cannot be construed as representing communities. They are in conflict and are prone to being attracted by perverse incentives." He further notes the 'convenient short cuts' available to Government and corporates "to get a decision through without having to deal with the 'riff raff' otherwise referred to as communities. Amazing what a swanky environment, rubbing shoulders with the hoi poloi, a nice glass of chardonnay and of course a promise of continued Government handouts ..."


Australian initiatives show dedicated resources and a comprehensive strategy of improving Aboriginal employment in what is a very strong sector, albeit one whose history is written in blood with ongoing issues for those communities in which it is embedded. The issues at this point in Aotearoa are primarily environmental and are resonating throughout many Maori communities, particularly along the East Coast, and look set to be a key environmental issue over the next generation for all Aotearoans. Look for a continuation of the classic development (jobs, economic growth, import substitution) versus the environment dichotomy battle lines. Surely this is precisely the context in which an Indigenous philosophy should be able to both broaden and deepen the debate?


Readings:
Aboriginal Peoples and Mining in Canada: Consultation, Participation and Prospects for Change by William Hipwell, Katy Mamen, Viviane Weitzner and Gail Whiteman, (2002).

IMPACT BENEFIT AGREEMENTS BETWEEN ABORIGINAL COMMUNITIES AND MININGCOMPANIES: THEIR USE IN CANADA by Irene Sosa and Karyn Keenan (2001)

Moving mountains: Communities confront mining and globalizatio by GR Evans, J Goodman (2002).

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