Harvard Case - De Beers Canada: The Attawapiskat Context
"De Beers Canada: The Attawapiskat Context" Harvard business case study is written by Ron Mulholland. It deals with the challenges in the field of General Management. The case study is 13 page(s) long and it was first published on : Oct 21, 2016
At Fern Fort University, we recommend that De Beers Canada adopt a comprehensive strategy for sustainable development in Attawapiskat, prioritizing community engagement, economic empowerment, and environmental stewardship. This strategy should be guided by principles of corporate social responsibility and diversity and inclusion, ensuring the long-term well-being of both the community and the diamond mining operation.
2. Background
De Beers Canada, a subsidiary of the global diamond giant De Beers, operates the Victor Mine in Attawapiskat, a remote First Nations community in Northern Ontario. The mine has been a source of economic activity and employment for the community, but it has also faced challenges related to environmental impacts, social responsibility, and community engagement. The case study highlights the complex relationship between the company and the Attawapiskat community, characterized by historical grievances, mistrust, and a lack of shared understanding.
The main protagonists are:
- De Beers Canada: A multinational corporation seeking to maintain its mining operations while fostering positive relationships with the Attawapiskat community.
- Attawapiskat First Nation: A community seeking economic opportunities, environmental protection, and a voice in decisions affecting their land and well-being.
3. Analysis of the Case Study
This case study presents a classic example of the challenges faced by multinational corporations operating in emerging markets with diverse stakeholder interests. To analyze the situation, we can apply the following frameworks:
a) Stakeholder Analysis:
- Primary Stakeholders: Attawapiskat First Nation, De Beers Canada, employees of the Victor Mine, and the Canadian government.
- Secondary Stakeholders: Environmental groups, local businesses, and the broader diamond industry.
b) SWOT Analysis:
Strengths:
- De Beers Canada's expertise in diamond mining and global market access.
- The potential for economic development and job creation in Attawapiskat.
- The community's desire for economic opportunities and improved living conditions.
Weaknesses:
- Historical mistrust and lack of communication between De Beers Canada and the Attawapiskat community.
- Environmental concerns related to mining operations.
- Limited infrastructure and skills development in the community.
Opportunities:
- Building trust and strengthening relationships through open communication and collaboration.
- Developing sustainable mining practices that minimize environmental impacts.
- Investing in community development initiatives to create long-term economic benefits.
Threats:
- Potential for environmental damage and community health concerns.
- Negative media attention and reputational damage for De Beers Canada.
- Increased regulatory scrutiny and potential legal challenges.
c) Porter's Five Forces:
- Threat of New Entrants: High, due to the abundance of natural resources in the region.
- Bargaining Power of Buyers: Moderate, as the diamond market is relatively concentrated.
- Bargaining Power of Suppliers: Low, as De Beers Canada has established relationships with key suppliers.
- Threat of Substitutes: Moderate, as alternative materials can be used in certain applications.
- Competitive Rivalry: High, as De Beers faces competition from other diamond mining companies.
d) Corporate Social Responsibility:
De Beers Canada needs to demonstrate its commitment to corporate social responsibility by addressing the following key areas:
- Environmental Sustainability: Implementing best practices to minimize environmental impacts, including water and air pollution, waste management, and habitat preservation.
- Economic Empowerment: Investing in community development initiatives, creating employment opportunities for local residents, and supporting local businesses.
- Social Responsibility: Promoting diversity and inclusion, respecting Indigenous rights and culture, and engaging in transparent and ethical business practices.
4. Recommendations
De Beers Canada should implement the following recommendations to achieve sustainable development in Attawapiskat:
a) Community Engagement:
- Establish a Joint Management Committee: Create a collaborative platform for decision-making with equal representation from De Beers Canada and the Attawapiskat First Nation.
- Invest in Education and Training: Provide training and skills development programs for community members to enhance their employment opportunities in the mining industry.
- Support Local Businesses: Partner with local businesses to create supply chain opportunities and stimulate economic growth in the community.
b) Environmental Stewardship:
- Adopt Sustainable Mining Practices: Implement best practices to minimize environmental impacts, including water and air pollution, waste management, and habitat preservation.
- Invest in Environmental Monitoring: Establish a comprehensive environmental monitoring program to track the impacts of mining operations and ensure compliance with regulations.
- Support Environmental Conservation: Partner with local organizations to protect and restore natural ecosystems in the region.
c) Economic Empowerment:
- Create Employment Opportunities: Prioritize hiring local residents for jobs at the Victor Mine and related industries.
- Invest in Infrastructure: Support the development of community infrastructure, including housing, transportation, and healthcare facilities.
- Promote Entrepreneurship: Provide resources and support to local entrepreneurs to establish businesses and create new economic opportunities.
d) Transparency and Accountability:
- Communicate Openly and Honestly: Establish clear communication channels to share information about mining operations and environmental impacts with the community.
- Conduct Regular Community Consultations: Engage in regular consultations with the Attawapiskat First Nation to address concerns and build trust.
- Implement a Grievance Mechanism: Establish a transparent and accessible process for resolving disputes and addressing community concerns.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: De Beers Canada's core competency lies in diamond mining, and these recommendations align with the company's mission to operate responsibly and sustainably.
- External Customers and Internal Clients: These recommendations address the needs of both external stakeholders, such as the Attawapiskat community, and internal clients, such as employees.
- Competitors: By demonstrating leadership in sustainable development, De Beers Canada can gain a competitive advantage in the diamond industry.
- Attractiveness - Quantitative Measures: While it is difficult to quantify the benefits of sustainable development in the short term, the long-term economic and social benefits of these recommendations are significant.
6. Conclusion
De Beers Canada has a unique opportunity to create a model for sustainable development in Attawapiskat. By adopting a comprehensive strategy that prioritizes community engagement, economic empowerment, and environmental stewardship, the company can create a win-win scenario for both the community and the business. This approach will require a commitment to long-term investment, open communication, and collaborative decision-making.
7. Discussion
Other alternatives not selected include:
- Continuing current operations with minimal engagement: This approach would likely lead to continued mistrust and conflict, potentially resulting in legal challenges and reputational damage.
- Exiting the Victor Mine: This option would result in job losses and economic hardship for the community, but it would also avoid the risks associated with continued mining operations.
Risks and Key Assumptions:
- Community acceptance: The success of these recommendations depends on the willingness of the Attawapiskat First Nation to engage in a collaborative process and build trust with De Beers Canada.
- Financial investment: Implementing these recommendations will require significant financial investment from De Beers Canada.
- Regulatory environment: The regulatory environment for mining in Canada may change, potentially impacting the feasibility of these recommendations.
8. Next Steps
De Beers Canada should take the following steps to implement these recommendations:
- Develop a detailed implementation plan: Outline specific actions, timelines, and resources required for each recommendation.
- Establish a dedicated team: Assemble a team with expertise in community engagement, environmental sustainability, and economic development.
- Engage with key stakeholders: Begin a process of open communication and consultation with the Attawapiskat First Nation, other stakeholders, and government agencies.
- Monitor progress and adapt as needed: Regularly evaluate the effectiveness of the recommendations and make adjustments based on feedback and changing circumstances.
By taking these steps, De Beers Canada can demonstrate its commitment to sustainable development and create a positive legacy in Attawapiskat.
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Case Description
De Beers, a sophisticated, international mining company, operated the Victor Mine, an open pit diamond mine in Canada, located within traditional territory claimed by the Attawapiskat First Nation. To develop the mine, De Beers had to follow provincial and federal legislation, meet environmental standards, and most importantly, negotiate use of the land with the First Nation. Although the mine was successful, the First Nation community was suffering with health, education, and housing issues; rampant unemployment; and a remarkably high rate of suicide among its youth. Benefits negotiated in the mining agreement were not resolving the problems, despite the provision of employment opportunities and payment of millions of dollars to the First Nation. In frustration, the First Nation set up road blockades to stop work at the mine. De Beers now wanted to extend their mining operation by using a mine extension, but to do that, they had to seek further agreement from the Attawapiskat. Did the history of First Nations in Canada affect their relationship with De Beers? Were the stakeholders meeting their responsibilities? What lessons could be applied to negotiations for future developments?
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