The EKATI Diamond Mine is situated in the Lac de Gras region of Canada’s Northwest Territories, 300 kilometres north-east of Yellowknife and 200 kilometres south of the Arctic Circle. It is in one of the harshest climates in the world, ranging from 30° Celsius in summer with 24 hours of sunlight to minus 60° Celsius in winter and almost total darkness. To operate effectively and efficiently in this environment, and to ensure a sustainable future for the business, we need to work in collaboration with the indigenous Aboriginal people, various government departments, our suppliers and our workforce.
In establishing the EKATI operation, one of our first steps was to conclude our Socio-Economic Agreement (SEA) with the government of the Northwest Territories (NWT). The SEA outlines responsibilities for both the Government of the NWT and BHP Billiton Diamonds Inc. These include targets for hiring (both Northern and Northern Aboriginal people) and business spend (Northern businesses). Then we concluded mutual Impact and Benefit Agreements (IBAs) with four different indigenous First Nations, utilising the SEA as a basis to conclude those Agreements. Each of the IBAs is voluntary and confidential and establishes a mechanism for priority hiring, employee training and preferential business opportunities. In addition, cash payments and scholarships are provided to the impacted Aboriginal groups.
Akaitcho Treaty 8
In November 1996, BHP Billiton Diamonds Inc and the leadership of the local Akaitcho people signed an IBA known as Akaitcho Treaty 8. The IBA is a partnership agreement that covers employment, training, business and social programs that would benefit the Akaitcho Treaty 8 IBA benefactors through the life of the mine.
We were mindful that when people are involved in a new and different work environment, such as setting up a business to supply a major diamond mine in a remote area, there is a process of learning that can present significant challenges. These include ensuring the business will survive in the longer term, setting times for starting and stopping work, utilising proper safety equipment, living away from home in a remote camp, leaving the family and coping with the social impact.
In the business world, the smallest change can have a big impact on indigenous people’s personal lives and their way of life at home and in the community. It is our commitment to respect and help protect their cultural heritage while offering opportunities to enrich their lives.
Meeting the challenge
When we started discussing business opportunities under the IBA, there was neither infrastructure nor existing goods or services businesses within the Akaitcho Treaty 8 group to support the potentially vast business opportunities associated with diamond mining. They wanted to know how they could help us become successful in order for them to become successful through training, employment and business opportunities. Collectively, we rose to the challenge to make our commitments become a reality.
In line with the IBA, we established a local procurement office and conducted seminars and workshops about our procurement guidelines. Our purchasing strategy was based on assisting Aboriginal suppliers to attain joint ventures and business partnerships, to tender IBA suppliers first where practical, and to provide opportunities for local suppliers to deliver goods and services that have only been available from the south.
Wherever practicable, contracts were unbundled into smaller work packages. Our training programs focused on helping emerging IBA enterprises to become skilled and competitive. We also encouraged our contractor companies to identify opportunities for IBA suppliers and to provide training. This was facilitated through the compilation of a directory of local businesses specifying the types of goods and services they can provide to EKATI.
The range of projects identified for IBA suppliers included air support, ore haulage, construction, mining support services, maintenance of the winter road, catering and accommodation services.
We commenced slowly with small service contracts such as supplying labour to fish out lakes and conducting traditional knowledge study programs in order to initiate some business volume, earn the trust and respect of each other and to set up companies for the future. This led to other opportunities, such as making stakes for use in our surveying activities. First Nations people from an outlying community now supply these stakes. The contract provides jobs and training for those people who do not want to leave their communities to work, while allowing them to maintain their cultural activities day to day.
Charlie DeLuca, Asset Supply Manager at EKATI says, ‘It generally took three years to slowly build capacity among local suppliers and set the successful direction for the future. Infrastructure, trained personnel, equipment, computer operating systems, cultural barriers, communicating, and understanding what we wanted, are all challenges we’ve faced to various degrees with our suppliers’.
Focusing on sustainability
Through 1999 and 2000, EKATI promoted the idea of having all four IBA groups form a single company to supply services to the operation. This would mean that all business and employment opportunities could be directed through one company rather than to each the four IBA partners separately, ensuring the interests of all parties were considered. It was also thought that a single company would have a greater possibility of being sustainable into the future. Such a ground-breaking arrangement presented a major challenge, not only for the four First Nations but for us as well; however, it had the potential to provide benefits for all involved.
The vision of a single company has already been partly realised. Understanding the concept offered numerous advantages, representatives of the two largest First Nations – Yellowknives Dene and Lutsel K’e Dogrib Treaty 11 – met, concluded business and formed a company, Kete Whii Ltd (KWL).
An ongoing on-site project at EKATI is the haulage of ore from one of the surface mines to the processing plant. This was identified as an appropriate contract of work for KWL, which would provide for numerous jobs, equipment and infrastructure. Associated training would lead to employees gaining certification for operating Class 1 highway equipment. This would allow them to also operate on-highway semi-trailers during their two weeks off. While the company was responsible for hauling ore for us, it made sense that KWL also maintained the haul road on which their trucks were operating. This expanded their role on our site to operating graders and water trucks.
Training for KWL employees commenced, both off site and on site. We also assisted the company in meeting with their financial institutions to fast-track the project, as equipment had to be brought in via the ice road, which is mainly built on top of frozen lakes and ponds and is open for just 78 days each year.
KWL has since been presented with other opportunities – through the introduction of our underground mining operations – and has risen to the challenge. To gain the required expertise, they arranged a joint venture with an experienced Canadian underground mining company. The joint venture has set targets to hire Aboriginal people, conduct training programs and ensure their cultural heritage is maintained. The company mines with state-of-the-art underground equipment, utilising remote control devices, and maintains the equipment. Many training opportunities exist through this joint venture arrangement.
The business corporation of the Yellowknives Dene First Nation, Deton’Cho Corporation (DCC), is charged with managing Kete Whii Ltd on behalf of the Aboriginal partners. The Chief Executive Officer of DCC, Neil McFadden, states, ‘Our relationship with BHP Billiton concerning KWL has been both progressive and rewarding. Working together, we have overcome the trials and tribulations of bringing a concept to reality. KWL is all about building ... human resources, assets, capacity’.
Meeting spending commitments
As the chart below shows, in 2003 BHP Billiton Diamonds spent US$318 million to support operations at EKATI. Of this, 85.4 per cent went to Northern businesses and 29.7 per cent to Northern Aboriginal businesses. The total cumulative spending through Northern and Northern Aboriginal businesses, from the beginning of construction, exceeds US$1.37 billion.
| Total business history spend 1999 to 2003 – US$ | |||||
|---|---|---|---|---|---|
| Category | 1999 | 2000 | 2001 | 2002 | 2003 |
| Northern Aboriginal | $39m | $51m | $81m | $93m | $94m |
| Overall Northern | $213m | $198m | $250m | $271m | $272m |
| Other | $58m | $42m | $44m | $45m | $46m |
| Total | $271m | $240m | $294m | $316m | $318m |
Charlie DeLuca says, ‘These are win-win relationships that manage risk, develop people, assist communities and respect traditional rights. Are we valued in the communities? Yes we are, we’ve been named one of the 100 best employers in Canada in each of the last three years (Mediacorp Canada Inc survey). Can we do better? Of course, that is what continuous improvement is all about’.
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