Best practices with resource companies:

Transcription

1 Best practices with resource companies: White River Forest Products & other adventures from a small but mighty First Nation. Norman Jaehrling, CEO Pic Mobert First Nation

2 Who is this guy? Norm Jaehrling 29 years in community economic development & management in Northern Ontario CEO Pic Mobert First Nation & White Lake Limited Partnership Managing Director Gitchi Animki Energy Limited Partnership/Giizis Power (Solar) LP Chairman & President Magwayyawk Forestry Services LP Secretary & Director, White River Forest Products

3 What s this guy going to talk about? A little bit about our Community & what we have been up to Why & how we pursue business opportunities in the resource sector Our experiences and insights on working with resource companies by using White River Forest Products as an example Best practices & lessons learned

4 Good things are happening now, but we came from very little As recent as 10 years ago, and mostly 5 years ago, none of what I will present on existed other than in the visions of our leaders. Ours was a community struggling with adversity, poverty a have not.

5 About our First Nation Ojibway Nation Total Band Membership of app. 1,000 about 350 live in community Traditional territory and reserve lands on/around White Lake app. 350 km from Sault Ste. Marie & Thunder Bay We are governed by a progressive, visionary elected Council led by Chief Wayne Sabourin. Forward thinking, effective leaders who are pushing forward on a mandate that balances nationhood, economic development, education, health and healing.

6 About our economy We are coming out of a long period of economic struggles. And this is the most exciting and active period of economic development in our modern history!

7 Building business assets & capabilities. Renewable energy: Gitchi Animki Energy LP 19 MW (hydroelectric) 50% Giizis Power (Solar) LP App. 2 MW in roof & ground mount (S. Ont) 51% Forestry White River Forest Products LP Magwayyawk Forestry Services LP 51%

8 Local & Regional Focus Bamkashwada LP - East West Tie Transmission Project 100% FN owned with 6 FN s Supercom Industries LP Construction of Large Scale Public Infrastructure Project & Related

9 There s a job if you want it. We have moved from high unemployment to being unable to fill jobs locally. We directly employ over 100 people, and through our partnerships & joint ventures, some 200 or more Add in the construction workforce for our hydro developments, 400+ Business income direct and & through jv s over $10 million, in the 10 s of millions including entities which we hold equity

10 We are building a Nation In addition to our economic & business activities, we are: Developing our Chi-Naaknigewin (Constitution) Participating in a Restoration of Jurisdiction on Education process with the Union of Ontario Indians Implementing election reform including 4 year terms Advancing an Aboriginal Title & Comprehensive Claim process In the interim, concluding a major (16 sq. km) addition to our reserve land base outside the claim process

11 So why all the fuss about resource companies? Basically, we were tired of being on the outside looking in. Of struggling with poverty, underfunding and dependence while surrounded by immense wealth creation in the forests and minerals. The story of the forest industry in our traditional territory (White River SFL) will help you to understand how things have changed for us.

12 In May 2007, Domtar Inc. announced the indefinite closure of its sawmill in White River. At the time, the mill employed over 230 people in the mill and woodlands operations & was the core of White River s economy. The Pic Mobert Community is located 35 km west of White River. And how do you think it impacted the Pic Mobert First Nation?

13 It didn t! When Domtar closed its doors: There were essentially no Band members and no community members working in the mill; There were no owner operators or employees in the woodlands. In fact, we essentially had virtually no forest based economy (despite diligent efforts to get in the door )

14 Although Domtar tried to sell the mill, no one was interested. The mill was destined for the wrecking ball. If it came down, the forestry license would be lost and wood allocated to other mills. It would have been the end of wood manufacturing in our local area. And so

15 We believe there is opportunity in adversity, and We were confident that the forestry sector would recover in the future, and Decided that that if/when the mill ever reopened, that THIS TIME we would be on the inside. But.

16 And so (the idea that led to) White River Forest Community representatives were brought together through a community adjustment committee/process supported by Ontario, Which created an opportunity to work collaboratively and for mutual benefit To brainstorm ideas and options, and We decided the buy the place. And (with the Township of White River) created a community venture, White River Forest Products, to do the deal. Products was born!

17 Domtar accepted our offer and we had a deal! We offered a tune, got the place for a song, and in 2009, White River Forest Products became the owner of the White River sawmill. First priority was to transfer the Sustainable Forest License (SFL) to the new company this was completed in And then what happened?

18 We stayed in compliance with the SFL. Did a bit of road work Cut a bit of wood, until the rest of the customers closed up Looked for investors and/or partners Waited, and waited, and waited some more for the forest sector to recover.. And the years passed. Actually, not much!

19 And then came the recovery, and Frank. The forest economy began to recover in The pulp mill in Terrace Bay was sold and re-opened. There was once again a market for wood, and wood chips in the region. Sawmills need a chip customer And we met Frank Dottori, who shared our vision.

20 Frank Dottori is the founder and retired CEO of Tembec - a true entrepreneur Believed in community ownership and participation, building local economies and people, and had the credibility, track record and resources to make it happen. The communities sold 49% of the company to Dottori in May, 2013 and he become Chairman and CEO. The right partner.

21 What s happened since then? Start-up of the mill commenced in June, 2013 Financing through a combination of equity, private and public debt Mill is now fully operational Just completed a $10+ million capital program with modern, efficient saw line more capital investments planned Employ app. 150 people

22 Equity ownership interest Representation on the Board of Directors As shareholders, we benefit financially when the company achieves profitability, and even more so if the company does very well e.g. preferred shares. Through the board and other direct relationships with shareholders & senior management, contribute to major decisions on the operations & represent/advocate for the interests of our Community & members. So what s in it for us?

23 So what s in it for us, from an economic development perspective? We created an opportunity to build a forest (industry)-based economy for our First Nation. Four major opportunities: Employment, direct and through a labour contract with our development corporation (mill, security/watch services) An agreement to supply 50% of the wood required by the mill app. 200,000 m3/year Options to provide other services, including yard operations, road construction & maintenance, others Training and business development supported by a development trust funded by the company ($1/m3) Principle is benefits are based on building capabilities people and businesses no royalties its up to us to execute on the opportunities that are available to as founders and shareholders.

24 Results to date. Over 30 full time jobs for Band and community members (and growing). Many started through our labour contract Labour, production, yard equipment operations. Labour contract is continuing has provided a mutually beneficial testing/preparatory step for individuals wanting to work for the sawmill Harvest/road contracting company, Magwayyawk Forestry Services LP supported by multi-year, evergreen MOA with sawmill

25 And now for the moral of the story Lessons learned Best practices

26 This is our time. In the context of resource developments & operations, we literally hold the golden ticket. Duty to consult, accommodation and a growing number of favourable court decisions mean that resource development & operations cannot proceed without First Nation consent & participation/benefit sharing.

27 Benefit sharing is more than cutting a cheque. Rather, we must focus on creating sustainable: Knowledge Experience Capabilities Assets People Enterprises.that can provide the ability to generate our own cheques over the long term (through business revenues & profits).

28 Those who hold the gold, rule. We are no longer satisfied with being a stakeholder that has to be managed. Instead we have moved to be being partners, & co-proponents & coowners equity & a place at the table. And moving forward we will move on to becoming proponents & sole owners

29 Its not easy to be an owner. As a small community, we faced a few challenges when engaging in business: Limited expertise Limited capital Low/no risk tolerance. Demands creative strategies to convert political capital into hard capital and capabilities - so that over a period of time, we can participate more equally in terms of capital & risk.

30 Don t go it alone. Partnerships have been our most effective tool for: Accessing Executing.economic & business opportunities. In our case, we have developed over 10 joint ventures/co-ventures that span forestry, mining, civil & commercial construction, among others. Actively pursuing others in environmental services, trucking, equipment leasing, among others.

31 Squeeze out as much as you can. In our case study, our goal was not to get shares in a sawmill, but rather to build a forest based economy: Manufacturing Harvesting Hauling & Roads And in the future: Management Worker accommodations Value added manufacturing Repair & maintenance services

32 Don t put all your eggs in one basket. Diversification is key: Business lines & capabilities need to transcend specific operations, sectors Knowledge, skills & expertise. Geographic beyond our doorstep, traditional territory.

33 Believe. In less than a decade, and mostly in the last 5 years we have come from economic obscurity & despair to a major participant & contributor to the local & regional economy. It took vision, purpose, people, resources, determination, tenacity and most of all. A belief that we will be a strong & independent Nation!

34 Miigwetch! Norman R. Jaehrling (807)