Dissolving government imbalances with industry royalties.

• Author: Louiseize, Kelly
• Position: NEWS

If governance is to be enhanced in mineral rich developing countries, then companies need to help as much as they can, says Katherine McPhail, first presenter at a sustainability and good governance session during the Prospectors Developers Association of Canada's (PDAC) 2008 convention.

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McPhail is the senior program director of the International Council for Metals in Mining.

Equally important is the sovereign responsibility on how countries use their royalties.

"This is not a company responsibility, this is a government responsibility," she said.

Although McPhail was speaking about developing countries, the philosophy can be parlayed over to communities governed by First Nations.

She said what communities want is respect.

"It is a hard question to ponder exactly how that will be done."

Local communities bear the cost of mine operations with environmental impacts, yet most of the economic benefits are accrued at the provincial and federal levels with taxes, contribution and exports, she said.

"This does not come, in the eyes of the community, as any benefit to them."

Don Bubar, president of Avalon Ventures Ltd., has had numerous agreements with Wabaseemoong Independent Nation and Grassy Narrows with respect to their Separation Rapids lithium project north of Kenora. He has also consulted with Eabamatoong Lake First Nations near Fort Hope and more recently with the Chapleau Cree, Chapleau Ojibway and Michipicoten First Nations regarding their Warren Township project in the Foleyet area. Avalon reached a memorandum or understanding (MOU) with Wabaseemoong; however, it has yet to progress to an impact benefit agreement (IBA), since Bubar is developing markets for the company's lithium minerals. Despite the inactivity, Bubar continues to consult with the bands on a regular basis.

He believes it is the province's responsibility to share revenues of natural resource extraction with First Nations. That being said, industry has a responsibility to engage the communities directly and ensure they benefit from the development at the economic and environmental level. "First Nations do not benefit enough from resource extraction in their land use areas and this is the root cause of their current opposition to exploration and development," Bubar said.

"At the PDAC, we agreed that First Nations should benefit more, particularly in terms of sharing of resource revenues collected by government. How this responsibility is shared...