Thank you very much, Mr. Chairman.
My remarks today are further to a letter of December 11 that we sent to the standing committee on behalf of BHP Billiton Diamonds.
My name is Graham Nicholls. I'm a vice-president and director of BHP Billiton Diamonds. Joining me in making the presentation today is Maurice Zoe, aboriginal site coordinator at the Ekati Diamond Mine. Nancy Deshaw, our in-house legal counsel, is available to assist in answering any specific questions.
BHP Billiton is the world's largest diversified resources company. Its main asset in Canada is the Ekati Diamond Mine in the Northwest Territories. It's a multi-billion dollar investment and falls under federal labour law. Ekati uses the services of between 1,500 and 2,000 people, including employees and contractors. Of the total workforce, in excess of 30% are aboriginal.
We have important socio-economic obligations to the communities in the area, and we operate under stringent licences to ensure protection of the environment.
Diamond mining provides over 40% of the GDP of the Northwest Territories, as well as a significant flow of taxes and royalties to the federal government.
Our mine is located in the tundra about 300 kilometres northeast of Yellowknife. It depends on air transport and a winter ice road for access, fuel and supplies. The mine is a very complex operation, located in a sensitive environment. It can't be shut down as a result of a labour dispute without risk and negative impacts to the local economy, to the social fabric of aboriginal communities and to the environment.
There was a strike at Ekati last year. We kept operating, using our contractors and non-union employees and the 42% of bargaining unit employees who freely chose to return to work. We did not use replacement workers; no one was brought to the mine who was not already providing services there before the strike started. A first collective agreement was reached, with 97% of the workers returning to their jobs after the strike. There was minimal disruption to other stakeholders, and our safety and environmental commitments and programs were not compromised.
The strike would have lasted much longer if legislation like Bill C-257 had been in place, because the workers at Ekati had the right to return to their jobs and demonstrate that the union did not have their support for the strike. The proposed legislation would make it illegal for these workers, many of them aboriginal, to exercise this right and express their position.
The strike was imposed by the union without an independent strike vote, which is a benefit accorded to unions under the existing code when a tentative agreement is voted on and rejected. However, the code also provides a check against unions prolonging strikes that are not supported by their members, by allowing workers the option of returning to work. This is an example of the many checks that help retain balance in the current system.
The proposed bill is narrow and one-sided, and it would drive a wedge through the careful balance that is found in the existing legislation. We think the code has worked well; let's not fix what isn't broken. Mechanisms are already in place to ensure that the use of replacement workers does not undermine the role of the union. If passed, the bill would surely result in further legislation and labour disputes in an attempt to refine it further, causing even more uncertainty and instability for all stakeholders.
The proposed legislation is even more troubling because there's no evidence that it would reduce the frequency or the length of work stoppages. Rather, based on the key observations of the October 2006 HRSDC report, which you're familiar with, it is likely that the opposite would occur.
As a global investor, we must emphasize that the draft legislation would have an adverse impact on Canada's competitiveness. A decision to substantially expand our mine would be affected, for instance, if we felt that the labour situation would be difficult to manage. If our bargaining power is diminished and unions are able to exploit our dependence on the winter road or air support, or exploit our inability to shut down operations without incurring undue risk and damage to ourselves and our stakeholders and the environment, then our appetite for investment will also be diminished.
Legislation that benefits only unions and imposes risks on business continuity and an employer's ability to comply with his contractual commitments to regulatory bodies and customers alike will inevitably have negative consequences on growth and investment in Canada.
I'd now like to hand the presentation over to Maurice Zoe, to speak about the perspectives of aboriginal people, given our experience at Ekati.