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Draft Social Impact Assessment for the Aappaluttoq Ruby Project, True North Gems Inc

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Draft Social Impact Assessment for the Aappaluttoq Ruby Project, True North Gems Inc Draft Social Impact Assessment for The Aappaluttoq Ruby Project, True North Gems Inc. (In accordance with the BMP Guidelines for Social Impact Assessment of November 2009) v. 5.2 January 2014 True North Gems Inc. i TABLE OF CONTENTS PAGE 1 INTRODUCTION 3 1.1 Background 3 1.2 Objectives and Scope 3 1.3 Acknowledgements 5 2 POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK 6 2.1 The political situation in Greenland 6 2.2 Legal Framework 6 2.2.1 National legislation 6 2.2.2 National guidelines 7 2.2.3 International Unions and Conventions 8 2.3 International Labour Organization Conventions 8 2.4 Taxes and revenues 8 2.4.1 Concession fees 8 2.4.2 Tax regulation 9 3 SIA METHODOLOGY 12 3.1 Baseline study 12 3.2 Data collection and research from primary sources 12 3.2.1 Strategic Impact Analysis 13 3.3 Impact Analysis Methodologies 13 4 PROJECT DESCRIPTION 15 4.1 Ruby and pink sapphires in Aappaluttoq 15 4.2 Study area 16 4.3 The Aappaluttoq Project 19 4.3.1 Infrastructure 19 4.3.2 Processing plant 20 4.3.3 Workshop 21 4.3.4 Roads 21 4.3.5 Environmental impacts 21 4.4 Project activities in Nuuk 22 4.4.1 Hydrofluoric Acid Cleaning 22 4.4.2 Sorting 23 4.5 Expected work force and working conditions 24 True North Gems Inc. ii 4.5.1 Construction phase 24 4.5.2 Operation Phase 24 4.5.3 Camp facilities 26 4.5.4 Closure 28 4.6 Security 30 4.6.1 Sorthouse security 31 4.6.2 Security at Processing Plant 32 4.6.3 Security at the Cleaning Laboratory 32 4.6.4 Ruby Track™ System 33 4.7 TNG Gemstone Marketing 33 4.8 Certification and Branding 38 4.8.1 Certification of Greenlandic Origin 38 5 SOCIAL AND ECONOMIC BASELINE CONDITIONS 39 5.1 Overview 39 5.2 Demographic profile 39 5.2.1 Country profile 39 5.2.2 Languages spoken 40 5.2.3 Number of inhabitants 41 5.2.4 Migration 43 5.3 Social and political organisations 44 5.3.1 Political organization 44 5.3.2 Municipal administration 47 5.3.3 Civil society organisations 49 5.3.4 Labour Unions and NGO´s 50 5.3.5 Small scale mining and recreational stone collection 51 5.3.6 Employers’ organisations 51 5.3.7 Inuit Circumpolar Council 52 5.4 Values and traditions of importance in the Greenlandic society 53 5.5 Local use of natural resources 54 5.5.1 Hunting and fishing in Greenland 54 5.5.2 Hunting and fishing in the project area 55 5.5.3 Oil and mineral resources 56 5.6 Economic indicators 57 5.6.1 National economy 57 5.6.2 Cost of living 60 5.6.3 Income 61 5.6.4 Businesses 63 5.6.5 Employment 65 5.6.6 Unemployment 67 5.6.7 Income and corporate tax 69 5.6.8 Greenlandic businesses 69 5.6.9 Business development strategy 70 True North Gems Inc. iii 5.6.10 Tourism and free time activities 71 5.6.11 Challenges for the Greenland society 71 5.7 Public Infrastructure and Services 71 5.7.1 Dwelling and accommodation 71 5.7.2 Communication 72 5.7.3 Transporting facilities and infrastructure 72 5.7.4 Energy production 73 5.7.5 Health services 74 5.7.6 Health services for expatriates 74 5.7.7 Infrastructure and services in Qeqertarsuatsiaat 75 5.8 Education and training 78 5.8.1 Educational levels 78 5.8.2 Education strategy (2005-2020) 79 5.8.3 Primary and secondary Schools 79 5.8.4 Vocational Training 80 5.8.5 Higher Education 82 5.8.6 Courses for unskilled and skilled labour 83 5.8.7 Selected Education Statistics 83 5.9 Public Health 85 5.9.1 Health status 85 5.9.2 Social health and vulnerable groups 87 6 PROJECT INTERACTIONS WITH THE COMMUNITY DURING EXPLORATION PHASE 92 6.1 Exploration activities 92 6.2 Community relations between 2005-2011 94 6.3 Conflicts identified 96 7 IMPACT ASSESSMENT 98 7.1 Methodology 98 7.2 Economic environment 99 7.2.1 Employment 99 7.2.2 Taxes and Revenues 102 7.2.3 Various Taxation Scenario’s dependent upon marketing success 106 7.2.4 Business life 112 7.2.5 Closure of mine 115 7.2.6 Conflict and synergies with other economic sectors 115 7.2.7 Changes in traditional production systems 119 7.2.8 Salary boost 120 7.3 Education and training 120 7.4 Public service and development plans 122 7.4.1 Existing infrastructure and services 122 True North Gems Inc. iv 7.4.2 Pressure on development plans 125 7.4.3 Social and health services 125 7.5 Social aspects 126 7.5.1 Demography and population 126 7.5.2 Social conflicts 127 7.5.3 Vulnerable groups 129 7.6 Health 130 7.6.1 Occupational health and risk of accidents 130 7.6.2 Public health and quality of life 133 7.6.3 Environmental impact 134 7.7 Cultural and natural values 135 7.7.1 Sites of monumental or cultural importance 135 7.7.2 Access to natural areas 136 7.8 Summary impact matrix 138 8 DRAFT IMPACT AND BENEFIT PLAN 140 9 DRAFT MONITORING PLAN AND DRAFT EVALUATION PLAN 144 9.1 Draft monitoring plan 145 10 ANALYSIS OF ALTERNATIVES 150 10.1 Mine camp on site vs. housing of workers in Qeqertarsuatsiaat 150 10.2 Sorting house in Nuuk vs. sorting house in Qeqertarsuatsiaat 151 10.3 Polishing of rubies in Greenland vs. polishing in Asia 151 10.4 Project Vs No project 152 11 ACTIVITIES INVOLVING STAKEHOLDERS 154 11.1 Activities involving stakeholders 154 12 REFERENCES 157 True North Gems Inc. - 1 - DEFINITIONS AND ABBREVIATIONS Wording or abbreviation Explanation ANFO AN/FO – Ammonium Nitrate / Fuel Oil APP Local fishermen and hunters’ association BMP Bureau of Minerals and Petroleum in Greenland Concentrate Is the result of processing to separate rough ruby and pink sapphire from the matrix. Concentrate may be “dirty” (including approximately 35% matrix still firmly attached to the crystals) or “clean”, having very little matrix attached DKK Danish Crowns DCP Decommissioning and Closure Plan EBA EBA Engineering Consultants EIA Environmental Impact Assessment FIFO Fly-In-Fly-Out basis FSA The Primary Schools Final Examination FSUA The Primary Schools Extended Final Examination GA Employer’s Association of Greenland GM Grontmij A/S GMS Greenland Mining Services A/S HIV/AIDS Human Immunodeficiency Virus/ Acquired Immune Deficiency Syndrome HS Health and Safety HR Human Resources ICC Inuit Circumpolar Council ICMM International Council on Mining & Metals ILO International Labour Organization Inuit Aboriginal/Local people of Greenland IUCN International Union for Convention of Nature Matrix Refers to the rock in which the rough ruby and pink sapphire crystals are found MoB Man over Board True North Gems Inc. - 2 - MSDS Material Safety Data Sheet OHS Occupational Health and Safety PPE Personnel Protective Equipment PWC PriceWaterhouse Coopers QAPP Quality Assurance Project Plan Rough ruby and pink Are crystals in their natural state that look like red sapphire pebbles RAL Royal Arctic Line A/S SIA Social Impact Assessment SIK Sulinermik Inuussutissarsiutteqartut Kattuffiat – Employee’s Union of Greenland SLiCA Survey of Living Conditions in the Arctic International Convention for the Safety of Life at SOLAS Sea STD Sexual Transmitted Disease TB Tuberculosis TNG True North Gems Inc. TNGG True North Gems Greenland S/A Ton Metric tonnes ToR Terms of Reference UNESCO United Nations Educational, Scientific and Cultural Organization WPA Work Place Assessment True North Gems Inc. - 3 - 1 INTRODUCTION 1.1 Background This report is the Draft Social Impact Assessment (SIA) for the Aappaluttoq ruby mining project in Qeqertarsuatsiaat in Kommuneqarfik Sermersooq, West Greenland. This Draft SIA has been produced by Grontmij A/S on behalf of True North Gems (TNG), according to the Guidelines for Social Impact Assessment for mining projects in Greenland, Bureau of Minerals and Petroleum, November 2009 (the Guidelines). Figure 1-1 shows the SIA Process as required according to the Guidelines, indicating where in the overall process this report is located. Figure 1-1 Location of the Draft SIA in the overall SIA Process Scoping & ToR BMP review and comments Relevant material for submission, e.g.: Stakeholder Participation Strategy It is strongly recommended to Scoping report keep BMP updated and Background material consulted throughout the Minimum 1-2 hearing year(s) process DRAFT SIA submitted Formal BMP review and hearing IBA negotiations Revised FINAL SIA submitted between BMP, This report participation municipality and licensee BMP review and approval Impact Benefit Agreement (IBA) signed Implementation, monitoring and evaluation of Impact Benefit Agreement through: Stakeholder Benefit and Impact Plan Monitoring Plan Evaluation Plan * Background material includes relevant studies, reports, memos etc. Source: Guidelines for Social Impact Assessments for mining projects in Greenland, Bureau of Minerals and Petroleum, November 2009 The SIA process started in July 2009 with the elaboration of a Scoping document. Scoping consultations with stakeholders and field work in Nuuk and Qeqertarsuatsiaat were performed in February 2011, followed by additional consultations by phone and mail during March 2011. The feedback received during the public hearing, expected to take place in the spring of 2013, will be incorporated into the final version of this document. 1.2 Objectives and Scope According to the Guidelines, the objectives of the SIA process are: To engage all relevant stakeholders in consultations and public hearings To provide a detailed description and analysis of the social pre-project baseline situation as a basis for development planning, mitigation and future monitoring True North Gems Inc.
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