New trust will manage resource revenues for Nunavut Inuit
NTI and three regional Inuit orgs will bank and distribute half of the royalties collected
With at least 10 huge mines poised to move into production in Nunavut within the next 10 years, billions of dollars from gold, iron, silver and other minerals will start to flow out of the territory.
But Nunavut Tunngavik Inc. and Nunavut’s regional Inuit associations will be ready: now there’s a plan to back them up as they negotiate revenue-sharing deals with mineral and mining companies that want to operate on Inuit-owned lands.
These companies must pay a minimum of $12 in every $100 as a royalty on their profits, says the policy adopted at NTI’s Annual General Meeting this week in Cambridge Bay.
And that money will go into a new trust fund, whose operations are spelled out in the policy.
NTI’s resource revenue policy, which came into effect on April 1, 2011 , seeks “to establish clear, efficient and consensus-based arrangements to govern the shared and sustainable use of a portion of the economic benefits derived from mineral resource development in the Nunavut Settlement Area.”
Under the policy, NTI and the regional Inuit associations will only grant companies mineral rights on Inuit-owned lands if these companies agree to pay a 12 per cent royalty on their net profits.
That royalty, and fees from future oil and gas development, will flow into a new trust, that NTI will manage, for an amount to be fixed every year, the policy states.
But Inuit associations in the Baffin, Kivalliq and Kitikmeot regions will retain control over any money they receive over and beyond that 12-per-cent royalty.
Any money exceeding that 12-per-cent royalty — for example, money earned from a surface or mineral exploration agreements, Inuit impact and benefit agreements, water compensation agreements, partnership agreements, or equity participation agreements — will stay with NTI or the regional Inuit associations, depending on which group makes the deal.
Seven trustees will independently oversee the new trust — the NTI president and presidents of the regional Inuit associations along with three appointees from their senior financial management teams.
Half the money put into the trust will be distributed every year to NTI and the three regional associations.
After deducting management costs, money from the so-called “operating fund” will go out in three chunks: 30 per cent to NTI, 10 per cent to each regional Inuit association, and 40 per cent to those same regional associations on a per capita basis.
NTI and the regional Inuit associations are supposed to spend the cash on “providing both near-term and long-term sustainable benefits.”
These may be “for economic, social, cultural, environmental or other purposes.”
But the money isn’t supposed to be spent on things that “duplicate or replace” things governments are supposed to pay for.
Beneficiaries will only see cash dividends if three-quarters of NTI’s membership votes for this — and if that vote passes, only NTI will be able to give out the money.
The rest of the money received will remain in an “endowment fund.”
Interest from its capital won’t be handed out unless it contains more than $100 million, the resource revenue policy says.
You can read the full text of the policy here.