Municipality of Kommuneqarfik Sermersooq – True North Gems Greenland – 2014 – Impact Benefit Agreement

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Basic information



Community party

Municipality of Kommuneqarfik

Company signatory

True North Gems Greenland


Ruby and Sapphire

Project phase covered



National government: signatory?


Local government: signatory?


Was the agreement required by law?



Agreement ends after fulfillment of the conditions in Art. 19

Date of contract signature





Lake Ukkaata Qaava

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OpenCorporates ID

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Summary of contract

  • Negotiation, representation, and other relevant context

    This impact benefit agreement is signed under the guidelines of the social impact assessment developed by True North Gems and approved by the Government of Greenland (Art. 1). The purpose of the agreement is to promote the cooperation among the Municipality of Kommuneqarfik, the Government of Greenland and True North Gems to develop a sustainable corundum mining project as an integrated part of the Greenlandic society. The agreement aims to enhance the positive socio-economic impacts of the mining project, maximize beneficial opportunities, prevent and reduce unintentional adverse effects (Arts. 2.1). True North Gems has to appoint a Liaison Officer from its management team who will be responsible for the contact with the community. The Village Council of Qeqertarsuatsiaat will appoint a contact person that can be reached out in case of concerns or complaints by the citizens or other stakeholders. (Art. 12)

  • Governance, implementation, dispute resolution

    The agreement is divided into two sections; the first section frames the general objectives of the agreement, how cooperation between the parties will be organized and which areas will be included. The second part contains the appendices with the achievable targets considering the general objectives of the agreement. Whereas the first part of the agreement is non-negotiable, the appendices in the second part are dynamic working documents that will be negotiated yearly based on the preceding year’s performance (Art. 1, 20). The implementation of the agreement shall be annually evaluated (Art. 1.4). The co-licensees shall be jointly and severally liable for the performance and obligations of all licensees. True North Gems shall appoint a senior manager as a decision-maker and responsible for implementing the agreement (Art. 4). True North Gems shall monitor the performance of the agreement and present yearly a monitoring report to the other parties. True North Gems shall draft an annual evaluation report and send it to the other parties. The parties shall hold at least one annual evaluation meeting to discuss the draft evaluation report and other matters. After consultation with the Greenland Authorities, True North Gems shall make a final evaluation report each year (Art. 6). True North Gems shall ensure that its contractors, suppliers and service providers submit annual reports including number of positions offered to Greenland workers, number of hirings, description of the training offered, number of workers dismissed and enterprises engaged as subcontractors (Art. 11). Any disputes arising out of the agreement shall be settled by the Greenland or Danish courts, and the Court of Greenland in Nuuk shall be the court of first instance (Art. 26). If True North Gems does not fulfill an obligation or commitment it shall pay, no later than 30 days after the request for payment, a compensation to be established by the Greenland Government. To establish the compensation, the Greenland Government shall consider the cost of fulfilling the obligation and allow the expenses that would be incurred by having a third party fulfill the obligation. After paying the compensation, True North Gems shall have no other obligations with respect to the unfulfilled obligation. True North Gems shall indemnify the Greenland Government and the Kommuneqarifk Municipality for any claim made by third parties and caused by the performance or non-performance of True North Gems, provided that the claim has been decided by a final judgment, arbitral award or settlement approved by True North Gems and that True North Gems had time to defend itself against such claim (Art. 22).

  • Fiscal obligations: content

    True North Gems will allocate in 2014 and 2015 DDK $250,000, and DDK $1,000,000 each year from 2016 till the decommissioning of the mine, to educational funds aiming to improve workers’ opportunities in relation to mining, economics, health, safety, environment and social aspects. True North Gems can use up to 50% of this funds to finance the training as long as it is conducted in cooperation with an official education institution (Art. 10.3) True North Gems will allocate DDK $100,000 in 2014 and 2015, and DDK $250,000 each year from 2016 till the decommissioning of the mine, to promote local culture and sport initiatives benefiting the local citizens. The cost of the local center for gemstone production can be paid with these funds (Art. 12). True North Gems shall pay all costs connected with obtaining, preparing and submitting data under this agreement (Art. 14). True North Gems shall reimburse the Municipality of Kommuneqarfik reasonable costs in relation to the negotiation of this agreement as well as the annual participation in the follow-up and implementation of the agreement, but the costs may not exceed DKK $150,000 per year and True North Gems is entitled to request the Municipality a budget of the expected expenses for each year (Art. 24).

  • Community development obligations: Infrastructure and social services

    True North Gems shall extend studies directed towards public health (Art. 12).

  • Community development obligations: Other

    The parties shall support the participation of women on an equal basis and True North Gems shall take measures to ensure programs directed towards women’s skills, advertising campaigns encouraging women to apply for vacant positions and scholarships for female students related to mining (Art. 10.4). True North Gems shall encourage the formation of alliances and joint ventures between foreign enterprises and Greenland enterprises (Art. 11). True North Gems will outsource the transport and service of the camp to local business (Appendix 2). True North Gems shall offer corundum (ruby and sapphire) for local sale at market prices (Appendix 9).

  • Environmental and social protection

    True North Gems shall provide measures allowing workers to remain connected with their culture by: constructing and maintaining a cultural site where traditional food can be stored and prepared; providing traditional food in the cantinas through supplies from local hunters and fishermen; establishing programs promoting healthy habits and preventing drugs, tobacco and alcohol use; organizing a cultural day; securing internet access and cell phone coverage at a normal cost; participating in interviews, broadcasting, newsletters and keeping a website in Greenlandic to inform residents about the activities under the mining licence; cooperating with the Greenlandic Authorities on reestablishing the local center for gemstone production; cooperating on establishing courses in cutting and polishing. True North Gems shall use its best efforts to organize work schedules that are appropriate and fair for the employees and itself (Art. 12).

  • Transparency or confidentiality

    Except for business confidential matters and personal data, all data, information, and reports provided by True North Gems are public; however, all reports shall be discussed by the parties before being made public (Art. 16). True North Gems shall submit to the Greenland Authorities statistics and relevant information on the labor force that has been hired pursuant to the mining license (Art. 14). The public access to documents under the agreement shall be decided in accordance with the principles of the Greenland Parliament on Public Access to Documents on Public Files (Art. 15.1).

  • Reference to investor-state contract

    True North Gems has been granted a mineral exploitation license (Art. 1.1). One of the purposes of the agreement is to set up systems to assist True North Gems to achieve the requirements in its exploitation license to promote the use of Greenland enterprises and workers and building competences in the Greenlandic workforce (preamble). If True North Gems does not perform an obligation under the agreement that is not due to force majeure, the Greenland Government may, among others, suspend or revoke the mining license according to the provisions in the Mineral Resources Act and the exploitation license (Art. 18).