Authored by Andy Randell, published on LinkedIn August 13th, 2014
History is regularly punctuated by uprisings and revolutions, where the general populous finally has enough of the ‘status quo’ and demands change. We have seen this recently with the ‘We Are The 99%’ protests against big business, banks and corporate greed, leaving the majority of the population feeling neglected and angry as their savings dwindle and living costs soar while a few, the 1%, prosper.
These revolutions can be quiet; slowly creeping and permeating a slice of society, changing gradually for the better. Others can be rapid and violent, altering a political scene practically over night.
There has been no shortage recently of stories in the Mining and Exploration world that relate to the downfall of the industry. They have sparked many conversations and debates, which in turn is firing the need for a change from the old ways and on to something more enlightened and in keeping with modern values.
Let Them Eat Cake
Let us take a specific point in history as a reference: The French Revolution. This uprising changed the face not only France but also world politics and hierarchical structure between 1789 ad 1799. Leading up to this, the French population was divided into three clearly defined castes; Clergy, Nobles and everyone else, the latter comprising over 90% of the people.
Taxes were rising so much at this time that poverty became widespread – the proceeds of which were simply being used to fund the extravagant lifestyles of the Clergy and Nobles, building palaces like Versailles and hosting extravagant banquets whilst for the majority of the French could not afford bread, a staple of the time.
The rulers of France had a duty to their countrymen to protect them and define a political landscape that not only provided for them, but allowed them to prosper. The success of the population would ensure ongoing support for the noblemen and the church. But greed took over, and the need for them to maintain their own lifestyles led to the uprising we refer to as The French Revolution.
Why is this relevant today, especially in relation to mining and exploration activities? Here is why.
When you break down the corporate scene, you have three distinct castes; The Upper Managers (The Nobles), The Government (The Clergy) and everyone else (the geologists and everyone else linked to the industry, including the public). For years, companies have been run in a rigid way that benefits the Nobles and the Clergy, often at the expense of the peasants. Sure, some of the peasants get paid well, but their jobs are fleeting and they are not valued for their knowledge and input.
If you took a peasant farmer and kicked him out of his fields, do you think that the Noble could really come down and raise the crops to feed his kingdom? Probably not, because he lacks that intimate knowledge of the soil. This is of course not to say that the nobles do not have an important role, but they need to understand that they cannot do it alone and for it to work, and that to run any Kingdom, it takes a team with a united approach.
The Government is the next caste that is involved. Like the Clergy, they should stand for moral moderation and guidance, standing for the greater good of the society that they serve. Yes, that THEY SERVE! A government is elected by its people, and should stand as a pillar of strength and guidance, reflecting the needs and wants of the voting majority.
But in recent years we have seen more and more how sticky and convoluted the relationships of the government has become with its populace in order to increase its own revenue, regardless of public demands. In Canada we can look at the recent XL Pipeline conversations, where we have seen National Parks conveniently dismantled to accommodate the proposed pipe route. Then the intricate ties these companies have with the government; funding parties, sitting on provincial and federal boards etc. Are they doing this to protect the interests of the people, or their own? So now we have the Nobles and the Clergy in cahoots, while the peasants pay for their lifestyles and plans, regardless of cost. Sounding familiar yet?
The 80’s Business Hangover
But we cannot blame these people too rapidly, for they are the product of the era in which they cut their business teeth – the 1980’s.
The 80’s were a tumultuous time, both in North America and Europe. When Reagan was elected, he took a hard line to reduce inflation and the higher level taxes. He did this by cutting interest rates, meaning that savings were no longer as beneficial as before, but buying a house on a loan was the new ‘piggy bank’. Initially the general population of the States poorly received this, but the assassination attempt on his life saw his popularity ratings go from the low 50’s to over 75%.
But what really changed things was his stand off with Russia, which brought the world to within 4 minutes of a nuclear war. People living under this climate really adopted the sense that there would be ‘no tomorrow’, and so saving was replaced by spending money on luxury items and housing – living for the moment.
This was the beginning of the ‘entitlement mentality’ – people wanted the best of everything. For $4000 you could have a newly invented cellular phone installed in your car, or for $15.99 you could buy a plastic ‘cellular phoney’ so you could at least look like you were rich. This led to companies doing whatever they could to turn a profit. The 1980’s are full of examples in business of bribery, illegal contracting practices, influence peddling, deceptive advertising, financial fraud and transparency issues.
Now, that is not to say that the people who were probably interned at this time have brought those exact negatives to their current work places, but the mentality of ‘stretching the rules’ most certainly exists. You cannot visit any news website without a story of bribery, fraud or any of the other bad habits popping up.
And Then Came The Flood
This professional demographic is now being recycled through every boardroom, behind every CEO desk and every investment deal in the industry, with little space for ‘younger’ blood. They continue to fight the system – wanting to maintain their lifestyles and battling modern environmental and First Nations policies despite their being a huge shift on that front in the last 30 years.
You do not have to search too hard to find details on specific people to get their histories. Websites like Bloomberg summarizes careers and earnings readily. Let’s take one example; Bryan Kynoch of Imperial Metals.
Imperial has been in the news a lot recently due to the dam breach at their Mount Polley Mine in British Columbia that unleashed the contents of the tailings pond into the local environment. Now, I refuse to jump on the media bandwagon here until all the facts are known, but the water has tested and passes to within drinking water standards, and the slurry has low metal contents. The biggest issue is the obvious destruction to the local rivers, lakes and forests. There are a lot of details to cover, many of which will likely never be revealed to the public.
Did Mr Kynoch make a mistake? It is unlikely that he personally designed the dam or signed off on anything but the cheque to build it. But as the figurehead of the company, he must take control, and some of the blame associated with it. But he has built a company, and its procedures, that inevitably allowed the breach to happen, regardless of how it got to that point.
The worry here is the links to several other companies, either as a Director or President, in which the same company attitudes could have been adopted. Bloomberg lists his salary as $466,350 in 2013 – not bad and on a magnitude of several times higher than the people working in the mine.
But what has really come from Mt. Polley has been the discussion amongst the ‘peasant’ geologists and engineers who are really tired of watching these mistakes happen and often taking the fall for them, either directly or through dwindling public trust. They are torn between being raised in a profit-driven corporate culture that does not reward the science of geology or truly work towards the environmental and socio-economic ideals the rest of the population strives for. They are being forced to tow the line for their ‘entitlement mentality’ masters, often at the expense of their own morals.
What has the average geologist endured over the past few years? Here is a list to start:
- Working for the profits of others
- No long term job security
- Commonly being conflicted between company policies and social convention
- Little personal control or impact to the company overall
- No career progression or realistic training or succession planning
- They often have ideas on how to do something ‘ better’, but these ideas are rarely entertained, especially if they conflict with established company culture.
A revolution happens when people rebel against the government or the way other people treat them. From the comments and conversations we are seeing online and in person, it seems that many geologists are getting tired of the ‘Old Ways’ that endure in their profession, and are keen to take this current downturn and use it as an excuse to ‘clean house’ and put in place methods and structures that they feel will operate better in the future of the industry.
A New Mining Utopia
Unlike the French Revolution, this change will not end in executions or wars, but (I think) in a much more subtle way. New companies will be formed by a younger, more forward thinking collective. Their policies will be written based on modern, ethical practices; ethics based in positive environmental, human resource, and socio-economic policies.
The company structure will alter, with more long term planning and the reintroduction of traditional HR roles to ensure training and assessment is provided to all. People will be employed based on their skills and what they can truly offer a company, versus the power and status behind their name alone.
New investors will come to these ethical companies, knowing that this is a long-term investment and not a ‘quick cash’ scheme. From this, the major banks will start to realize their popularity and establish the ‘ethical funds’ that were so popular back in the 1990’s, filled with mining companies who meet a certain number of criteria and pass regular reassessments. This investor and financial institutional backing will, in the long term, help to smooth out the ‘boom / bust’ cycle as more people realize that exploration and mining is not a quick win.
By lessening the cyclicity of the industry, companies will similarly not have the ‘all or nothing’ mentality with exploration. It will approach this as a steady project over a long term, which in turn allows professionals working within the company to really develop and understand their properties. This will also draw out a focus on a project and prevent future land grabs whereby a company will hold a lot of land and spread their funds thinly over all of them.
The New Thinkers (or are we just ‘Liberal Twits’?)
There are a lot of people out there who feel that a change is required, and soon. They are the ones who will instigate this silent revolution, and some companies should be scared.
I had this conversation the other day with a CEO who was in the finance sector in the 1980’s, and now is on this fifth (or sixth) exploration company, none of which have existed for more than two years or have significant discoveries. He is the sole full time employee of his company right now, and apart from his own salary and the office costs, nothing is being invested into the properties he leases. I admit that I admire his tenacity – many would have quit before now.
I asked him what he needed to change to really succeed – his answer was along the lines of that Government needed to silence the environmentalists and the First Nations. He placed blame at the geologists he had working for him over the years – that they had no staying power and were not willing to work as hard has he did (in the financial world where he got to go home each night to his wife?). Sure, I acknowledged that people’s attitudes have changed, but that is not necessarily a bad thing.
When I told him my ideas of what the future of mining looked like, he called me a ‘liberal twit with no basis in the real world’. Fine, everyone is entitled to his or her own opinion, but to shoot down an idea in one sentence because it does not fit their lifestyle is wrong.
He is scared, I see that now. This new future does not include his adopted mentality, moreover does not fit his sense of entitlement. I fully expect similar sentiments sent to me through posting this article.
When the French Aristocrats first heard of these new ideas challenging their world, it led to a time where these revolutionaries and their Bourgeoisie supporters were executed in the hundreds to try and quash the insolence and take back control. But in the end the revolution happened, and a new constitution was drawn up (admittedly with a few hiccups). In the end, the King and his wife, Marie Antoinette, lost their heads so a new order could be established.
In the words of George Santayana, “Those who cannot remember the past are condemned to repeat it”. The opportunity is in the here and now – who will grab it and change things for the better?