Andrew Lee Smith, CEO of True North Gems: An Exclusive Fairjewelry.org Interview
Introduction:
Andrew Lee Smith, Founder and CEO of True North Gems(TNG), described his companies’ fine track record of beneficiation both in Greenland and in other First Nation Communities. He states that the accusations of collusion between TNG and BMP against the Inuit’s rights to small scale mining and selling of rubies are absolutely false.
In sum, his position has been entirely consistent: to work lawfully in Greenland, to provide benefit to local community and also, to provide a new source of highly ethical gemstones to the jewelry sector.
“The Union’s issue is with the Greenland government, less so than True North,” he said. “The days of colonialist approach to mining are an anachronism in today’s industry. Not only is an exploitative approach to rights of local peoples an abdication of a moral obligation, it is fundamentally good business to make sure you have the support of local people… we want to bring benefit with whatever we do.”
Twice in the interview, Mr. Smith reiterated his complete support of small scale mining and selling of rubies by Native Greenlanders, so long as it is lawful.
I am most grateful for Mr. Smith taking a considerable amount of time to answer to have this discussion. This interview was conducted by phone. The transcript was then then emailed to Mr. Smith for his final approval.
Below is our conversation with limited editing. ~ Marc Choyt, Publisher
Marc Choyt: First, what is your background, and how did you come to be CEO of True North Gems?
Andrew Lee Smith: I founded true north gems in 2000. I am a geologist by training and have been in the minerals and exploration business for twenty-five years.
Working on this story about the relationship between the Inuit and True North was in many ways very discouraging. What have you learned from what has taken place?
Who are your sources?
Marc Choyt: Among several people, I have been writing about Niels Madsen.
Andrew Lee Smith: I encourage you to check your sources. It is my understanding that Neils and his group refer to themselves as Greenlandic, but I may be may be mistaken.
We have been operating for 8 years in 3 major aboriginal communities including Greenland and our track record with working with Native people is very good. In particular, our dealings with the Kaska First Nation in Canada’s Yukon Territory has demonstrated the company’s approach to dealing with the rights of First Nations. True North Gems was the first Canadian company to sign a landmark agreement with a local First Nation that recognized their rights to their traditional territory. An act of which the company and I personally are very proud.
The MOU with the Ross River Band and the Kaska First Nation was the first of its kind and has since been used as a precedent for other agreements between individual companies and local first nations. It was based on the Babine Protocol which I helped to negotiate with a group of First Nations leaders and a group of resource industry representatives convened by the Premier of British Columbia in 1998. The Babine Protocol was never ratified.
Marc Choyt: What about the claims of the August 16 Union?
Andrew Lee Smith: I am not aware of the specific claims of the August 16th Union so it is hard for me to comment. My understanding is that the incident of August 16 is somehow being portrayed as an attempt by True North and the Greenland government violate the rights of indigenous people. This is a misrepresentation and I am of the opinion that there is a lot of disinformation being generated about the incident. We work closely with the local people of Fiskenaesset and our relationship with this local community has been mutually respectful. Niels is not part of the local community of Fiskenaesset.
Our relationship with the local government, the Kommun of Fiskenaesset, is excellent. I really believe that the perspectives of the people of Fiskenaesset, the BMP and local law enforcement officials need to be included if a true evaluation of the events of August the 16th is to be understood. We continue to develop programs to work with the local community, skill training, generation of jobs, are all part of True North’s intention to have a positive impact on local and regional economies with anything that we do.
We are firm supporters of the concept of ethical sourcing, certification and order to move our business plan forward. Working with local communities is key.
I encourage you to speak to the people we are working with instead of only radical groups engaged in illegal activities.
Marc Choyt: What happened at the site on August 16th?
Andrew Lee Smith: I was not a witness so I cannot provide any personal observations, but, as I understand it, the police were summoned by government because of illegal activities.
Marc Choyt: It was not your company that made the call? Who told them?
Andrew Lee Smith: No, it was the Greenland authorities as far as I know. Once the Greenlandic authorities became aware of what is going on the police were summoned to deal with an illegal act. True North’s participation in the incident was a result of our concern for the safety of our personnel in a confrontational situation and the fact that the incident was occurring on a property that we had the legal rights to explore.
Marc Choyt: Do you favor Inuit mining rights under Article 32 or Article 7?
Andrew Lee Smith: As I understand the spirit of Article 32, it is not designed to allow large groups of people to use mechanized equipment to extract gemstones. Its intent is to preserve the rights of local people to collect and use material that they find. I believe the Article allows for the extraction of to semiprecious gemstones by groups of no more than two.
Marc Choyt: But the notion of semi-precious gemstones has no credibility in the trade.
Andrew Lee Smith: It is my understanding that the Greenland government based the intervention on their interpretation of 32 which identified the activities of the August 16th Union as illegal. Again, I would urge you to speak with those involved if you intend to provide a true assessment of the events of August 16.
Marc Choyt: Right now, you feel you have a solid relationship with the Greenlanders?
Andrew Lee Smith: Yes, except for a vocal minority, that is portraying True North in a negative light. Our plans are to move forward cooperatively with local people and see them benefit along with our shareholders.
If you speak with a broader base of sources, you will find that there is not only support among key areas for what True North is attempting to do, but, you will find people who have serious issues with what the Union, engaging in illegal activity.
If you look at our company’s record in the Yukon and Baffin Island, you will see we are innovative in our relationships with local communities and local economies.
True North’s management and staff have become frustrated with being confronted by the one sided version of the “facts” as presented by the union and its representatives.
Marc Choyt: That’s why I wanted to hear from you.
Andrew Lee Smith: The Union is doing everything they can to cast in us in a negative way. I believe their issue is not with us, but with the laws of Greenland.
I would urge you to speak with representatives from BMP and police officials, in respect to what is taking place in respect to the ruby project in Greenland.
If you have not included the opinions of law enforcement, the local community and BMP you will be getting a biased version of the facts. We are quite happy to have you investigate.
The laws of Greenland are in the interest of Greenlanders and the context in which reasonable people operate and the context in which we operate. If the Union can be successful in having the laws changed, we will respect the laws.
At this point, there was some discussion between us about what constituted “facts.” Mr. Smith suggested that in order to get the full story, I need to hear the government. I also needed to diversify my sources. I explained that I was a part time blogger and the president of a jewelry manufacturing company, not a full time journalist. I was interested in hearing True North’s perspective. From my view, since True North was working within the laws over the government, it would be reasonable to expect that the officials would support Mr. Smith’s view. I had come to him so he could state TNG’s position clearly and for the record.
Then we continued our conversation.
Andrew Lee Smith: The support of the Aug 16th in Greenland is a small minority. More importantly, they do not have support at the local level in the community that we are dealing with.
Marc Choyt: Do you know about the petition that is circulating, asking for the rights to have small scale mine and selling of rubies?
Andrew Lee Smith: No.
Marc Choyt: In two weeks, I believe they already have 2000 signatures.
Andrew Lee Smith: We have no problem with Greenlanders mining and selling their rubies under article 32, under the interpretation of Greenlandic law.
The interpretation is not something that True North has something to do. We want to conduct ourselves within the laws of Greenland and exercise our rights.
Marc Choyt: I have heard that one of your plant managers quit—because of hostilities from your local community.
Andrew Lee Smith: My understanding is that his reasons had to do with a change in jobs. But I have not had a chance to speak to anyone. There is nothing specific there. It is just rumor and gossip.
In my opinion, the Union has an agenda that has more to do with the self interest of a few and less with the collective interests of the people of Greenland. Their communication, ideas and description of events is not necessarily an accurate portrayal of the facts.
The broader context here is that there is tremendous opportunity that could have benefits to a great number of people. True North is excited and happy about participating in that.
I take offense to any implication that there is a conspiracy to align our self interest against the Greenland people. If you have a look at the Company’s track record, we are held in high regard amongst First Nation communities in Canada.
Marc Choyt: What specific beneficiation programs have you implemented?
Andrew Lee Smith: Our efforts to date have been focused around the small gem polishing facility in Fiskensesset. Over the past three years we have purchased equipment, supplied rough stones and provided two sessions of professional instruction on polishing and jewelry design free of charge to local artisans. We have also helicoptered two large boulders of ruby ore to the village and placed them near a playground where children have access. These are two modest ways that we are attempting to connect with the local community and foster the development of a local gemstone artisans. If we are successful in developing a mining operation at Fiskensesset, we have a broader and more comprehensive plan to impact the local and regional communities in this regard. These plans will be detailed as part of a feasibility study.
Marc Choyt: Would you support the rights of the Greenlanders to the small scale mining and selling of rubies?
Andrew Lee Smith: We are not opposed to that small scale mining if it is lawful. However, rights that we have established to explore and potentially mine rubies in compliance with the laws of Greenland, must also be respected.
The issues they have are with the Greenlandic government. The Union goes out of their way to make this an issue for True North and I think that this is mis-directed.
Marc Choyt: Why is it misdirected?
Andrew Lee Smith: There exists in Greenland is a tremendous opportunity to develop a new source of ruby for the global trade. That is part of what True North sees as their role here. To offer alternative to the current suppliers of ruby to the global market – we see the opportunity to have a positive impact on the gemstone industry and generate tremendous benefits as well.
We are trying to develop a broader initiative —we see this as part and parcel of what we are doing.
Marc Choyt: What happens to your rough after it is mined?
Andrew Lee Smith: Transportation and auditing is done under BMP and is kept in our vaults in Vancouver. Some is sent in our manufacturing experiments, to determine the economic viability of project. It is done under strict codes of conduct, independent auditing and review by representatives from Greenland government. We are a public company and as such all our activities are highly regulated and audited, which includes the stone traffic.
Our stance is that we support the laws of the Greenland government and respect the local communities and it is the company’s obligation to conduct ourselves in a fashion that will have a positive impact on the local community. Our actions have benefits that will support local aboriginal people.
We have established a group of people around the company who have experience with issues of ethical sourcing. There is a tremendous opportunity here to develop a venture to meet market trends toward ethical sourcing and certification. In order to maintain that standard and maintain that mantle you have to practice what you preach.
We are a little defensive when we get falsely accused as stomping on people rights.
Marc Choyt: You have strict control of the material?
Andrew Lee Smith: Yes, chain of custody and assurance of source are critical to the certification process which a key aspect of True North’s business plan. A lack of stringent controls on stone traffic could allow for Greenland rubies to be diluted with ruby from other sources, such as Burmese material. A situation similar to what happened initially with Canadian diamonds.
If you are truly going to provide certification and confidence, you really have to be able to justify your operations all the way down the line.
As a public company, we are highly regulated, highly scrutinized and have a great deal of responsibility. We would never risk doing “off balance sheet transactions” or “stone diversion” as the practice is illegal for public companies and the penalties and liabilities are severe. The public domain which includes liability and full independent auditing is a much better business environment in which to advance issues of ethical sourcing in the gemstone industry.
Marc Choyt: You are not yet selling finished material?
Andrew Lee Smith: No. The rough that is currently in our possession and any material that we recover from our exploration activities is, and will be, the property of the Greenland government. We have no right to sell any of the material without the expressed consent of the Greenland government. Once we receive our mining license, we will have rights to produce and sell ruby material from a commercial operation.
If we can successfully establish a commercial ruby operation in Greenland, we see a real benefit to developing a partnership with the Greenlandic people with the Greenlandic government to move the stones out of the country as branded material.
We are also developing strategies for co-operation in the vale added component on a vertical integrated business plan.
These are all processes we are engaging with the Greenlandic government. To go into production the mine must be owned by Greenlandic company which we now have formed. If we are successful, it will be through that company that we will flow all the rough and participation in value added process. That is a requirement under Greenlanic law and it will be subject to all the auditing regulatory compliance required under the laws of Greenland.
These were follow up questions asked after the initial interview:
Marc Choyt: How long have you been collecting and exporting ruby rough from Greenland?
Andrew Lee Smith: We have been exploring for rubies in Greenland since acquiring our exploration license in 2004. Part of the exploration process requires us to extract bulk samples to establish the value of the deposit in order to determine whether a commercially viable ruby deposit exists. Under the terms of our exploration license, we have no rights to sell or, in any other way, distribute rubies, or ruby specimens recovered as part of the exploration process. Any and all material extracted is the property of the Greenland government, in our possession for the purpose of the evaluation only. The chain of custody, inventory and tracking controls for all of this material is in place and is subject to review by the BMP, and independent auditing by consulting firms representing the Greenland government.
Marc Choyt: How did you meet Eric Braunwart (of Columbia Gemhouse)? Who introduced you two initially?
Andrew Lee Smith: I have not met Eric personally, but he has been well known to True North management for the past three years. We have met with him on a few occasions to discuss the ideas of ethical sourcing, fair trade, the requirements for certification and the practices that Columbia Gem House employs in this regard. Two associates of Mr. Braunwart’s consult and advise True North Gems on these and other issues, John Emmet and Dr. David Hargreaves. Dr. Hargreaves has been named as the keynote speaker at GIA Annual Convention in San Diego next August. I understand that the thrust of his talk will be on fair trade and ethical practices
Marc Choyt: My understanding is that August 16th Union was formed to assure small scale mining and selling rights for local Greenlanders. You stated that TNG would not oppose this initiative if it were legal under Greenlandic law. Would it be correct to say that TNG does in fact support the core objective of the August 16th Union? I am not talking about their methods, which the BMP has determined are illegal—but specifically, their objective to secure mining rights.
Andrew Lee Smith: True North Gems supports the rights of indigenous people to benefit from the resources that exist within their traditional territories. These rights are currently defined by articles in the laws of Greenland and are respected by True North Gems.
We believe there are ways that current regulations could be modified to allow greater access for Greenlanders to mineral resources and we have made our opinions known to the Greenland government. True North Gems has no place in the political process of Greenland, but is committed to, and will continue to be committed to, conducting the Company’s business in a lawful and respectful manner. The Company’s expectations are that any rights that True North has established under the laws of Greenland are, and will be, recognized and respected equally.
Marc Choyt: Would TNG provide any assistance of work cooperatively with small scale mining by Inuit if it were permitted? If so, what would that look like?
Andrew Lee Smith: It is the belief of True North’s management that the rights of indigenous people make them stakeholders in any venture that takes place in territories traditionally occupied by them. Further, it is in the best interests of the company and its shareholders to see that these rights are recognized and that any benefit that stems from resource development is fully realized.
In the past, the company has supported local skills training programs through investment in equipment and education. We will continue to do so. If we are successful in establishing a commercial ruby mining operation in Greenland, it will be contingent on the Company demonstrating the benefit of the operation to the people of Greenland through socio-economic benefits studies and environmental impact assessment.
On both these fronts, the Company has engaged industry leading consultants with experience in Greenland and with the development of successful socio-economic benefit strategies implemented at the Argyle Mine in Australia and with diamond mining operations in Northern Canada. These programs are in development and will eventually be presented to the Greenland government and the local communities through report and public meetings. Should the results of our exploration conclude that a commercially viable ruby operation can be developed in Greenland.
