Looking back at Kinross in Ecuador

In 2013, Kinross decided not to proceed with the development of the Fruta del Norte (FDN) project in Ecuador after being unable to reach an acceptable development agreement with the Government of Ecuador. Although we are not bringing the deposit into production, looking back we are able to list tangible results that are expected to provide ongoing socio-economic benefits for stakeholders in the area of the project.

Local Government

Kinross supported a process led by the local authorities to develop a Territorial Development and Zoning Plan. The Parish Board developed a participatory budgeting process with the 17 communities that make up the parish, permanently strengthening local governance capacity and accountability.

Indigenous Peoples

By working with the Shuar Federation of Zamora Chinchipe to develop Living Plans for the communities in the area of influence of the FDN project, Kinross helped support institutional development of the Federation. As a result, the Shuar Federation broadened its relations with public institutions, such as the Ministry of Urban Development and Housing, and other entities that it will continue to work with after Kinross activities cease.

Local Business and Livelihoods

Kinross worked with The Association of Small Organic Producers of the Southern Amazon Region of Ecuador (APEOSAE in Spanish) to transform a group of approximately 472 producers into an association with a sustainable agricultural export business. With Kinross support, the Association equipped a production line and consolidated distribution and transportation, achieving Fairtrade certification for coffee, cacao, and banana chips produced by its members.

Artisanal Miners

Kinross worked with authorities to help formalize artisanal miners on the FDN concessions. Seventeen local artisanal groups have signed contracts and have applied to the government to form an association that would allow them to pursue international Fairtrade certification.

Local Communities

Kinross worked with the Ministry of Education, the American Junior College, and local educational centres to establish basic education upgrade programs and distance-learning high school programs. Secondary school graduation rates have increased by 11% over the course of the program.

Managing The Exit Process

Closure Process

Workforce

As progress in negotiations with the government slowed and Kinross began contemplating exiting the project, plans were put in place to manage workforce reductions. A paid training program was created for workers from the local area to develop skills in computer literacy and business entrepreneurship, welding, electricity, and catering. Kinross also contributed $100,000 to create a credit union to help with small business generation. Legal support and advice was provided to workers. Severance packages, which were 1.5 times the minimum granted by law, were reviewed with each employee.

Environmental and Social Obligations

We also commissioned an independent review of the status of all Kinross’ environmental and social commitments. The consultant found that Kinross was in compliance with regulatory licences, and that required site restoration activities had been completed by the Company in accordance with its licence obligations. The audit did not find evidence of soil contamination, air quality impacts, surface water impacts in receiving water streams, or other environmental impacts other than short-term effects, associated with Kinross activities.

The review found that 36 of the 39 commitments in the project Community Development Support Plan had been completed, two were in progress, and one was no longer applicable; by December 2013, all 38 applicable commitments had been completed. The review concluded that all grievances have been resolved, and that full records of consultations, programs, and stakeholder feedback have been compiled and are available to be transferred with project ownership.

“We would like to express our immense gratitude for your welcoming nature and the trust you instilled through each one of the social, cultural, and community development projects within your project area which has forged the bonds of brotherhood and humanitarian commitment with the forgotten class of the Amazon region; our utmost gratitude for your valuable support, through which we have strengthened 81 communities and new associations affiliated with the organization.”

Jorge Chumapi Terietsa, President
Hugo Roberto Ushpa Sharup, Vice-President
Shuar Federation of Zamora-Chinchipe