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As the CEO of no fewer than 15 companies, Phil Peddie is a pretty busy guy.He
is the chief executive officer of the Fort McKay First Nation, and it's a
hefty job.
Seven of the companies he leads are wholly owned by
the Fort McKay First Nation. The rest are joint ventures – 51% owned by
the band and the balance owned by non-aboriginal business partners. His
companies specialize in doing oilsands-related
work, and they couldn’t possibly be closer to their customers. Oilsands mining companies encircle the aboriginal
community.
Fort McKay is smack in the middle of the cluster of
mining projects now producing or under development – those operated by
CNRL, Imperial (Kearl), Shell, Suncor, Syncrude, and Total (Joslyn). The community’s
location and business acumen are fascinating in themselves, but to put their
success in perspective it is worth noting that over the last six years, the
Athabasca Oil Sands Project (AOSP) contracted more than $1 billion in
services and supplies with aboriginal companies– many of them at Fort
McKay. In 2008 alone, more than C$210 million local spending went towards
purchasing supplies and services from such aboriginal groups as the Athabasca
Chipewyan First Nation.
To put that number in perspective, Syncrude – which began operations in 1978 –
couldn’t boast $1 billion of total work with aboriginal contractors
until a quarter-century after start-up.
As the crow flies, the closest plant is part of
Shell-operated AOSP. Owned by Shell, Chevron and Marathon, the project
includes the Muskeg River and Jackpine mines and
the Scotford upgrader, near Edmonton. According to
the Shell consortium, more than 70 aboriginal businesses participated in the
$1 billion spend. Collectively, they provided a wide range of services and
products. These include facilities management, general maintenance works,
technical expertise, earthmoving, health and safety services, bussing, camp
construction, catering and waste management, and many others.
In terms of social and economic renewal, the rise of
aboriginal business in the oilsands areas has come
at a critical time. One reason is that there are chronic shortages of labour in the oilsands areas,
and they are unlikely to go away. Aboriginal communities can provide reliable
local labour. The oilsands
industry has become Canada’s largest employer of aboriginals by far.
The other reason is that these communities have
traditionally been important sources of untapped entrepreneurial talent. To
help develop this area, for a quarter of a century the industry has been
helping develop aboriginal entrepreneurs to meet its business needs.
Local Labour
According to Shell vice president John Rhind, this is more than a win-win. “Labour shortages are likely to be with us for a long
time, and aboriginals have traditionally been an under-represented
demographic for the industry. They can bring a lot of value to the oilsands producers. This not only applies to the Fort
McMurray area, but to all producers throughout northeastern Alberta.
There’s no question SAGD operators can benefit as well.”
According to Rhind, the
surge in First Nations businesses was partly driven by the region’s big
producers. “Some years ago the oilsands
companies around Fort McMurray made a strong commitment to engage with the
communities in the area. These included aboriginal communities –
Métis and First Nations. But it included other communities as well
– for example, non-aboriginals who were not recent hires, but had lived
in the area for many years."
These stakeholders in the Fort McMurray area –
Rhind calls them "citizens of the
environment” – have “a lot to gain from this, and we
thought it was important to make this commitment….It isn’t about
the dollars. It’s about members of the community participating in our
business.”
Until he was appointed to his present position last
March, Rhind was general manager of operations for Albian Sands, the joint venture company that operates an oilsands project for the Shell consortium. I asked him to
tell me about the project’s aboriginal partnerships. “We’re
about developing the ability of aboriginal people in Fort McKay so that when
the oilsands is done, decades or centuries in the
future, we will be leaving a sustainable culture and economy behind.”
Shell and the other operators in that area have done
this in a number of ways, Rhind says. For one,
“we look for aboriginals to become part of our workforce.”
He says Shell’s experience is that there is
“no difference at all between a First Nations employee and one from any
other background….The key is that first that you have to train your
employees. Be clear about what expectations the company has of them and give
constructive feedback. Second, if there is any systemic racism you have to be
relentless in getting it out of the system. That enables people to contribute
at the level at which they’re capable, but it also removes any barriers
that might stand in the way of their becoming successful in working in an oilsands business. Once you have a cohort of aboriginal
workers in the company which includes people in management, then you have a
sustainable system that welcomes new aboriginal employees.”
Part of that welcome arrives through Shell’s
aboriginal employee network, an internal human resources system developed to
support First Nations, Métis and other aboriginal employees. According
to a Shell statement, it “draws together aboriginal and non-aboriginal
employees and provides a diverse range of learning and social opportunities for
employees.”
Local Business
According to the Athabasca Tribal Council, which
represents the interests of five Treaty Eight First Nations in northeastern
Alberta, there are approximately 5,000 Cree and Dene people in the region.
Besides employing aboriginal workers from these communities directly, Rhind notes that his company and others in the area have
“appointed people to work with aboriginal individuals to help them
develop successful businesses. We want to work with local aboriginal
businesses successfully and in a mutually beneficial way.”
That’s the view through the corporate window.
Multiple-CEO Phil Peddie picks up the story. He
operates in the world of aboriginal entrepreneurialism.
Peddie oversees a large group
of companies which collectively employ nearly 1000 men and women. A Shell
news release quoted him as saying that “working with Shell and the
Athabasca Oil Sands Project over a number of years has enabled the Fort McKay
group of companies, joint ventures and entrepreneurs to grow, and has brought
significant opportunity to develop skills, establish businesses and further
our community.” This reporter phoned to find out more.
The Fort McKay First Nation has seven wholly-owned
companies which, collectively, provide a large number of services mostly
targeted at oilsands-sector project maintenance and
development. These include, for example, light earthmoving, fuel
distribution, fleet maintenance and a variety of environmental services: According
to the band’s business website, “Our land reclamation services
encompass the entire process from start to finish.”
The Fort McKay Group also has a number of joint
venture companies in which the aboriginal community forms partnerships with
established non-native companies to provide specialized services. For
example, Fort McKay Landing Services, which specializes in camp construction,
is a partnership with modular facilities giant ATCO Structures and Logistics.
From the First Nation’s point of view, there
are many reasons to like these joint ventures. For one, the community has
control of a business that is adequately financed. In addition, the venture
transfers managerial and technical skills to the local community and
contributes to local employment. Also, of course, for their businesses the
status Indian shareholders receive their earnings tax-free.
According to Peddie, each
of these companies is operated by a management committee with equal
representation from both sides. “It brings together the technical and
management expertise of our partners plus the labour
we can supply. Our unwritten goal for each of these enterprises is 30%
aboriginal content. In every business we own, our goal is 30%.”
Achieving that percentage of aboriginal employees isn’t easy.
“It’s difficult to achieve because the unemployment rate in Fort
McKay is quite low. A lot of people are employed by Shell, Syncrude, Suncor, and so on, so for some of our companies
we are below that mark and for others we are above it.”
Oilsands employment has
transformed the local economy, he says. “Only 30 years ago, the people
of this community were primarily trappers. A European boycott of Canadian
furs destroyed the trade,” and very tough times followed.
Now a hamlet of some 700 souls, Fort McKay is mainly
composed of status Indians from the Fort McKay First Nation. The social
fabric also includes a Métis community of perhaps 200, non-treaty
aboriginals, and small numbers of individuals of other origin. The Fort McKay
Group of Companies can’t strictly draw from the local community to
reach its “aboriginal content” goals because most working
residents hold fulltime jobs with Syncrude, Shell,
Suncor or another big local producer.
According to Peddie, 13%
of local people work for the Treaty Eight band’s wholly-owned
companies. A similar number work for its JV partnerships. “So to try to
reach our content quotas, we employ aboriginal people from all over the
region.”
Being Canadian
Like representatives of other companies in the Fort
McMurray area, John Rhind says that “working
with aboriginal contractors is one way Shell benefits the communities where
we operate. We announced our billion-dollar milestone to thank the businesses
and partners we worked with during those six years.”
Shell’s achievement is impressive, and
certainly something to brag about. However, it is worth remembering that Syncrude began developing business partnerships with
aboriginal communities in the 1970s: During the construction of the plant,
chairman and CEO Frank Spragins visited aboriginal
communities, and let contracts before the plant produced its first barrel of
oil. This policy was spurred by Spragins’
successors, Brent Scott and Eric Newell. The company’s ground-breaking
efforts were both visionary and transformational.
As the company’s initiatives were coming to
fruition, Newell addressed the triumph of Syncrude’s
pioneering efforts in a speech given15 years ago. “We’ve brought
two decisively different belief systems…those being business and
spiritual… together in understanding and cooperation,” he said.
“We’ve drawn strength from each other to leap the hurdles and
head down the road side by side – on a journey not only to secure
Canada’s energy future, but also to explore what it really means to be
Canadian.”
One outcome of Syncrude’s
initiatives is that today, Phil Peddie is a pretty
busy guy.
Peter McKenzie-Brown
Language Instinct
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