The Benefits and Risks of Impact Benefit Agreements

By negotiating Impact Benefit Agreements (IBA), private agreements between Indigenous governments and corporations, Indigenous governments and organizations have been able to mandate employment practices such as hiring, promotion and workplace culture to ensure that employment benefits that flow to their members. While these changes are positive, however, Indigenous influence over employment is hindered by global labour practices, lack of enforcement of IBA provisions and by limited worker control in the workplace.

McMaster Researcher


Mills, S.E. & Sweeney, B. 2013. Employment Relations in the Neo-Staples Resource Economy: IBAs and Aboriginal Governance in Canada's Nickel Mining Industry. Studies in Political Economy, Spring 91: 7-33.

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What is this research about?

Economies focused on the export of natural resources rather than manufacturing (a neostaples economy), tend to have particular characteristics. These include being vulnerable to boom bust dynamics of commodity prices, being controlled by large companies external to the region and not developing a diversified economy. Governments and institutions, however, can intervene to capture a greater share of resource rents locally. The authors suggest that in Canada, resource economies have moved from a staples to a neo-staples economy whereby provincial and federal governments have less influence over increasingly large international corporations and Indigenous groups have greater agency over the direction of resource development.
In effect, IBAs are mechanism that allows local Indigenous communities to capture a greater share of resource rents resulting from resource development. IBAs are private agreements whereby Indigenous governments exchange access to resources for employment opportunities for their members, financial transfers, business opportunities and environmental protections. Therefore, Indigenous communities often rely on IBAs to assume some control over industries in their own communities.
The purpose of this research is to analyze a case study of employment during the construction and operations phases of Voisey's Bay nickel mine and concentrator in Labrador to gain a better understanding of employment relations in a neostaples economy. Vale is a company that owns the nickel mine, the Nunatsiavut Government is the Inuit government in Labrador , and the United Steel Workers (USW) is the union that represents employees at the mine.  The authors hope to understand how the governance of employment has changed in a neostaples environment and what that means for northern resource workers in Labrador.

What did the researchers do?

The researchers from McMaster University interviewed 36 workers and 27 people from different sectors involved in the operations phase of Voisey's Bay during the spring and summer months of 2009, 2010, and 2011 and reviewed numerous documents. Interviews with the 27 key informants were wide-ranging while the interviews with workers included questions regarding employment relations and workplace governance as they related to the IBA, the USW, and their employers. 

What did the researchers find?

The researchers found that:

  • In general, Inuit workers felt that the IBA helped ensure that people from their communities were hired and many think that their own employment resulted from the IBA.
  • The northern communities play an increasingly important role in regulating employment in a neostaple economy due to the IBA. The increasing participation of Indigenous peoples in resources governance is a key feature of a neostaples political economy.

However, the interests of the people from those communities in employment benefits are also hindered by the IBA:

  • The Indigenous leaders' ability to represent the interest of their members who worked at the mine was limited by the IBA.
  • The IBA created conditions that allowed Vale to increase their power vis a vis the union and thereby push down worker conditions and wages.
  • Due to the fly-in, fly-out organization of labour at the mine, Indigenous workers were not able to stop Vale from using replacement workers from out of province.

How can you use this research?

This research can also help other Indigenous communities to consider whether the benefits of signing an IBA are worth the costs to their community.

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