NTI clarifies its resource royalties trust regime
We would like to clarify a few points in your article “New trust will manage resource revenues for Nunavut Inuit” (retrieved on November 24, 2011 at 7:09 A.M.)
We appreciate your coverage on this important issue.
The article mentions that 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 or $12 on every $100 on royalty on their net profits.
We would like to clarify that 12 per cent is the minimum standard, not a cap or ceiling. The Policy states (at s. 4.1) that “NTI or an RIA shall only enter agreements granting mineral rights on IOL that provide for payment of 12% or greater Net Profits Interest Royalty” (emphasis added.)
The article further mentions that seven trustees of the trust will include “three appointees from their senior financial management teams.”
Just to be clear, these “three appointees” will be independent professionals with relevant experience, knowledge and expertise. They will be appointed from a list nominated by the senior-financial management teams of NTI and the Regional Inuit Associations.
The article also states 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 trust will be managed by seven trustees, three of whom will be independent professionals. The trust will also be assisted by a professional advisor or advisory committee.
In other words, the trust will not be managed directly by NTI, although it is conceivable that in its formative stage before the trust retains its own staff, NTI may contribute some staff time. But the trustees, not the NTI board, will be the decision-making body of the trust at all times.
We hope the above will clarify any possible misunderstanding on NTI’s new Resource Revenue Policy.
Chief Executive Officer
Nunavut Tunngavik Inc.
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