Local community perspectives: Added value to communities
”Bureau of Minerals and Petroleum” - Greenland
Jørgen T. Hammeken-Holm, Head of Licence Department

 Bureau of Minerals and Petroleum
 Status of Oil Strategy and Activities
 Social Impact Assessment
 Impact Benefit Agreement
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Bureau of Minerals and Petroleum
 The Bureau of Minerals and
Petroleum (BMP) in Nuuk,
Greenland is the place of entry for all aspects of administration of minerals and hydrocarbons: “the onestop shop principle”
 Our regulatory framework is the Minerals Resources Act passed by the Greenland
Parliament in 2009
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All matters concerning exploration and exploitation of minerals, oil and gas including:
 Licensing policy and fiscal matters
 Applications for exploration and exploitation licences
 HSE matters, including environmental issues
 Approval of blasting
 Exploration drilling
 Development & initiation of production
 Termination of production, etc.
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• Licensing rounds approximately every 2. year:
2002, 2004, 2006, 2007
(2008) and 2010 have resulted in a boom in oil exploration in the last couple of years
• More than 200.000 km 2 offshore West Greenland are now covered by exploration and exploitation licences
• 20 exploration and exploitation licences in Greenland Waters
2010
2006 and
2007
2002 and
2004
2007 and
2008
Greenland
Licensing
Round 2012
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50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
2
0
0
1
0
2
2
0
0
2
3
0
0
2
4
0
0
2
5
0
År
0
2
6
0
0
2
7
0
0
2
8
0
0
2
0
9
0
2
0
1
Østgrønland
Vestgrønland
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 Before 2000: 7
 Cairn 2010: 3
 Carin 2011: 5
 Total: 15
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9

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Socio-economic issues
 The development of oil and mineral related industries will increase
Greenland’s economy and employment opportunities, but this development is also expected to have an enormous social and cultural impact on the Greenland society.
 An understanding of the interaction between a new industries and the local communities/Greenlandic society is essential in order to increase the positive effects and reduce the negative effects of the new industry activities.
 A way of managing the social effects from extracting industry projects is to conduct a Social Impact Assessment
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 The licensee shall submit a social impact assessment
(SIA) as part of the application for approval of activities that may have an significant impact (MRA 77)
 On the basis of the prepared SIA report the licensee must enter into an Impact Benefit Agreement (IBA)
 IBA defines the cooperation between the licensee, national authorities and local authorities in relation to maximizing development opportunities and mitigating impacts from the activitiy.
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Social Impact Assesment (SIA) and
Impact Benefit Agreement (IBA)
Social Impact Assessment (SIA)
 Engagement of all relevant stakeholders through consultations and public hearings;
 To provide a detailed description and analysis of the social pre-project baseline situation as basis for development planning, mitigation and future monitoring;
 To provide an assessment based on collected baseline data to identify both negative and positive social impacts at both local and national level;
 To develop a benefit and impact plan for implementation of an Impact and Benefit Agreement;
Impact Benefit Agreement (IBA)
This is a three parts agreement between the government of
Greenland, affected municipality (ies) and the licensee addressing:
 Goals for use of Greenland labour;
 Goals for use of Greenland enterprises;
 Knowledge transfer (e.g. Work placement);
 Awareness of socio-cultural values;
 Other relevant topics.
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Example of results from two IBA’s between Government of Greenland, Cairn Energy and involved municipalities
Economic Benefit
Capricorn estimated spending in Greenland through
2011 drilling project
Capricorn’s contractors’ estimated spending in
Greenland through 2011 drilling project
Income tax to Government of Greenland from foreign workers
(2011 is a preliminary estimate)
Estimated Carry of Greenlandic partner (Nunaoil)
Employment
Expected number of positions in which Greenlandic workers are involved in project through Capricorn and its contractors
Training positions for Greenlanders offered by the project
Education
Annual contribution through license agreement to
BMP for training
Annual contribution through license agreement to
Nunaoil for training
Capricorn’s contribution to an Education Fund for
Greenlandic workforce competence development
Social / Cultural
Capricorn’s contribution to a Community Development
Fund
Annual Total Benefit
Environment
Capricorn’s contribution to environmental research through license agreement
Units
DKK million
DKK million
2011
244
2010
153
DKK million
DKK million
People
Positions
DKK million
DKK million
DKK million
67
85
430
55
18.8
53
276
50
12 4
1.575
1.575
1.5 1.5
2.6 1.3
DKK million
DKK Million
DKK million
0.38
832
23.5 (since
2008)
0
505
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Copyright: Nalunaq Gold Mine A/S