Corporate Knights' inaugural Aboriginal Relations Ranking: Extractive Industry. Art by Jason Baerg.

Natural resources are the basis of the Canadian economy. The economic shockwaves generated by the recent tumble in commodities prices are a prime example of the depth of this country’s dependence on natural capital. Our long-term prosperity as a country depends on proper management of these resources and of the environmental and social effects of their extraction.

Given the concentration of these resources in Canada’s remote areas, responsible extraction is inextricably linked to responsible Aboriginal relations. Living close to resources, Aboriginal communities often become stewards of impacted lands. As local residents, Aboriginal peoples have a vested interest in maintaining ecosystem services and pursuing a sustainable approach to extraction.

As economic partners, communities and industry can find mutual benefits in a healthy partnership. At best, extractive activities act as catalysts for economic development and diversification of Aboriginal communities. At worst, they destroy landscapes, poison water sources, and harm local residents.

In our inaugural Corporate Knights Aboriginal Relations ranking of extractive industries, we have found that many companies have policies in place to ensure constructive relations, while others maintain a dated frontier mentality. There are a growing number of positive stories, but all companies have room for improvement.

We examined companies in the forestry, mining, oil and gas, and utilities sectors. Companies were chosen based on revenues in fiscal 2007. The ranking uses a best-in-class approach, so all rankings are relative. Therefore, sectors should not be compared. Short-term impacts of companies’ operations on Aboriginal communities were gauged using Employment and Community Relations indicators, while long-term effects were reflected by Business Development, Environmental Impact and Governance measures. Employment indicators examine commitment to and success in Aboriginal recruitment, hiring, retention and advancement. The Community Relations category evaluates company consultation processes and support of local indigenous culture. Business Development examines how well a company lays the foundation for a post-extraction economy, while Governance judges how well a company integrates Aboriginal communities into its management process. Environmental Impact gauges whether or not a company has a long-term environmental strategy to safeguard the health and landscape of local communities. This category specifically looks at environmental impacts on Aboriginal communities and is not meant as an in-depth environmental assessment of the entire operation.
 
Overall, companies did well if they had a defined long-term vision for Aboriginal relations with explicit, ambitious targets. Responsible companies consult Aboriginal communities early and often throughout the extractive process, and include Aboriginal representatives on Boards of Directors and management teams. Progressive companies pass on the benefits accrued from extraction through profit sharing and the gradual transfer of long-term assets.

Forestry
Eighty per cent of Aboriginal communities are in forested areas, creating plenty of opportunities for effective partnership. Top company Domtar had a long-term, successful sawmill partnership with the Waswanipi First Nation. In operation since 1997, the joint venture has facilitated knowledge transfer and local capacity building for future forestry initiatives. Developed in 1995, it included specific objectives and metrics in the areas of employment, community involvement, and training. In 2007, the Waswanipi First Nation opted to take full ownership of the sawmill and purchased Domtar’s 50% share. Second-place finisher Catalyst worked with the Tla’Amin First Nation and the Powell River, BC municipal government to develop co-operation protocols and provide long-term economic possibilities through the sale of surplus land and assets back to the Tla’Amin and the city. Third-ranked Weyerhaeuser has the most comprehensive Aboriginal policy of its sector peers.

No company revealed the proportion of Aboriginal people in management, and only AbitibiBowater provided Aboriginal employment figures. Despite its commitment to transparency, AbitibiBowater was the target of one of the longest running Aboriginal land protests in Canadian history. The people of Grassy Narrows First Nation called for a moratorium on clear-cut logging in their traditional territory in 2002 that was ignored until June 2008. Canfor has also been implicated in protests, including a 12-day blockade in February 2008 by the Maiyoo Keyoh Society (a subgroup of the Carrier Sekani tribe in BC), instigated when a contractor began cutting a road right-of-way on traditional land.

Mining
Leaders Cameco, Xstrata, and Rio Tinto all came within 0.5 points of each other, but performance dropped with the remaining companies. Cameco is Canada's largest industrial employer of Aboriginal people and has an Aboriginal representative on its Board of Directors. Fifty per cent of its workforce is of Aboriginal descent, with a goal to have this proportion increase to two-thirds. Xstrata has an agreement with local communities in the Nunavik Region to share 4.5 per cent of its Raglan mine's operating profit. The Raglan Committee, consisting of three Aboriginal and three company representatives, succeeded in changing shipping operations to accommodate traditional hunting patterns. Rio Tinto Alcan’s Diavik mine is committed to purchasing 70 per cent of its annual requirements for goods and services from northern companies, and has surpassed $1 billion in transactions with Aboriginal businesses.

Goldcorp and Teck Cominco both have poor environmental records in areas with high Aboriginal populations—in 2005, Goldcorp was fined $225,000 for violating the Ontario Water Resources Act at Red Lake, and Teck Cominco has released mercury, selenium, and slag near Aboriginal communities in BC. Teck Cominco has strong Aboriginal initiatives in Alaska, but their Canadian operations lack an obvious commitment to Aboriginal relations.

Oil and Gas
Companies performed in a relatively close range in this sector. Suncor led the pack with several joint ventures and buy local policies. It was the only oil and gas company with an Aboriginal representative on its Board of Directors; however, the company’s percentage of Aboriginal employees decreased from 7.5 to 5 per cent between 2002 and 2006 (which is still industry-leading). Second-place Imperial Oil has an Aboriginal Skills and Employment Partnership Program that has had over 2,600 participants since it started in 2004, while Shell has incorporated traditional environmental knowledge into its land reclamation process.

EnCana is currently operating on disputed First Nations land in BC and has a poor environmental compliance record. Both Canadian Natural Resources Limited and Husky Energy have no Aboriginal relations policy, but do provide scholarships and community investment.

Utilities
First-place BC Hydro and Power has had an Aboriginal Relations department since 1992, and was the first utility to seek Progressive Aboriginal Relations (PAR) status (see Methodology). Despite lack of a stated Aboriginal policy, Hydro-Quebec has a 59 per cent Cree workforce at its Chute-Allard and Rapides-des-Coeurs developments. TransCanada has an Aboriginal Contracting Strategy, which led to a substantial increase, from $4.2 to $29.1 million, in contracts awarded to Aboriginal companies from 2003 to 2007.

There was little difference in post-extraction programs within the sector, with most companies concentrating on community investment and scholarships. No company reported Aboriginal representation in management. Ontario Power Generation has had a poor historic track record with Aboriginal relations but issued a formal apology in 2007 for failure to recognize past land claims.

We encourage companies to view strong Aboriginal relations as a key to future success. Not only do Aboriginal and industry expertise make excellent complements but Aboriginal business is gaining ground. Aboriginal enterprises are growing at a rate nine times faster than those of other Canadians, so local procurement and partnerships should be flourishing. What’s more, Aboriginal people own or control forty percent of the Canadian landmass, with another 800 land claims outstanding. Consultation and a genuine commitment to addressing Aboriginal concerns are crucial, because their concerns are Canadian concerns: claims to the resource-rich Arctic, environmental integrity, social justice and economic development can all be furthered through sincere engagement with Canada’s Aboriginal communities. Future management of Canada’s resources requires an approach that venerates cultural and natural heritage. Navigating these challenges in an integrative and respectful manner should be on everybody’s priority list.