Our Commitment to Canada is Clear – Tito Martins, President and CEO, Vale Inco Limited (March 18, 2010)


Labour disputes, like the ones affecting two-thirds of our Canadian operations, generate a lot of questions from a lot of different perspectives. We have a question of our own – does anyone really believe that Canada and Canadians are so intolerant that race and heritage are suitable excuses for ridicule and recrimination?

This is the Canada the USW leadership would have you believe we live in, as it sets about looking for anyone and anything to blame for strikes that have kept our employees off the job for more than eight months in Ontario and more than seven months in Newfoundland and Labrador.

It’s a regrettable tactic. It’s also a deflection that conveniently allows them to ignore the real issues at dispute.

We have shared our objectives with the USW leadership from the very beginning – to build a long-term, sustainable future for our Canadian operations. It seems straightforward – even worthy of support. In the rush to further their own objectives, however, the USW describes it as “an assault on Canada” – questioning our commitment, our values and our “Third World” ethnicity every step of the way.

What do the facts say?

• In the first two years after the acquisition, employment at our Canadian operations rose 16% – with more than 1,000 new hires.

• Expenditures on employee recruitment, education, apprenticeship and training programs were 24.6% higher than levels prior to the acquisition and expenditures on student employment programs were 112% higher than levels prior to the acquisition.

• Vale’s greenfield exploration in Canada grew from nickel alone to include uranium, copper and potash. Expenditures on greenfield exploration in Canada rose 162% above levels prior to the acquisition and the number of individuals employed in this pursuit more than tripled.

• Sustaining capital expenditures in Canada of $674 million were 70% higher than levels prior to the acquisition in 2007 and 84% higher in 2008 at $729 million. Vale Inco was the only major nickel producer in the world to increase production in 2008 – primarily as a result of capital investments in Canada.

• Capital expenditures on environmental projects in Canada of $88.7 million in 2007 were 36% higher than levels prior to the acquisition. In 2008, capital expenditures on environmental projects in Canada of $122.7 million were 88% higher than levels prior to the acquisition.

• Those same years Vale Inco’s charitable contributions were on average 107% greater than levels prior to the acquisition.

In 2009, the world experienced a global economic downturn the likes of which hasn’t been seen since the Great Depression, the company was forced to make some tough decisions and the USW leadership took employees out on strike. Nevertheless, our commitment to Canada remains strong.

• We are proceeding with a $450 million project at Totten Mine, the first new Vale Inco mine in Ontario in close to 40 years – providing new employment for Canadians and scheduled for completion in 2011.

• While other producers in Canada and abroad scaled back, we proceeded with the construction of a $2.8 billion (U.S.) processing plant in Long Harbour, Newfoundland – providing new employment for Canadians and scheduled for completion in 2013. This project commenced in the middle of the economic crisis when others in the global mining industry slashed their capital budgets and delayed growth projects for many years.

• We are continuing with a $116 million investment in our Thompson, Manitoba nickel refinery to add automated equipment, substantially improve working conditions, maintain high standards of product quality and incorporate leading-edge technologies.

• We are in the early stages of developing an exciting new potash project in Saskatchewan. The Regina project is at exploration stage, with estimated annual output of 2.8 million tons. The project site is already equipped with water, power and logistics infrastructure, enabling the final product to be transported to Vancouver, on the west coast of Canada, facilitating access to Asian markets.

• We are committed to facing the sustaining capital requirements in our 108-year-old mining operations in Ontario and our 52-year-old mining operations in Manitoba head-on – including mining deeper, upgrading infrastructure and spending some $1.5 billion alone to meet new and stricter emission standards by 2015.

• Even in the face of a recession and a strike, we were honoured to maintain and enhance the relationships that define us in our communities. In 2009, we invested in local and national initiatives including the development of a mining curriculum for Aboriginals through the National Aboriginal Achievement Foundation; the ‘One Laptop Per Child’ pilot program in partnership with the Belinda Stronach Foundation; a Mobile Trades Trailer with Cambrian College; and continued support for the Thompson Community Centre, Sudbury Food Bank, United Way and Memorial University in St. John’s.

Clearly, we are committed to Canada. We are here today . . . and we are building for tomorrow.

In the face of that commitment, we are confronted with a union in Newfoundland and Labrador that is doing everything in its power to avoid addressing the real issues – and is content to keep its members on strike so long as it supports the USW strike in Ontario.

There is nothing new in the USW approach – we have seen it before with the USW in its attacks on other North American employers. It’s an irresponsible approach that benefits no one – not the company and certainly not the employees the union represents. It would appear name calling comes easier than negotiating.

Would the USW appreciate it if we were to criticize an American union for trying to bully a Canadian workforce? Why then are they in such a rush to create unfounded fear and paranoia through unsubstantiated smears and innuendo? The USW has left no stone unturned in their attempt to find someone to blame for their troubles – the only place they haven’t looked is in the mirror.

It is somewhat ironic that the USW – itself a foreign union – has relied so heavily on a global campaign of misinformation, racism, intolerance and xenophobia (an unreasonable fear or hatred of foreigners), to further its position in a country like Canada that prides itself as a model of multiculturalism.

The international union in Pittsburgh has cast some of the largest stones – while occupying the role of architect and head cheerleader for a ‘Buy America’ protectionist policy meant to preserve jobs in the United States and that some have linked to plant closures and job losses in Ontario.

In recent media interviews, USW leaders say Vale “came to the community to tell the workers to give up their pension plan” and that “they could not participate in profit sharing any more”.

How does a $250 a month increase to an already generous defined benefit pension plan and the introduction of one of the richest defined contribution pension plans in North America for new employees support those claims? How does a bonus plan that allows employees to make 20 per cent above an average base wage of more than $60,000 a year discourage participation?

Other USW leaders say they are “sick and tired of foreign capitalists coming in and undermining the Canadian way of life.”

How do across the board wage increases, production bonuses, profit sharing and pension improvements threaten Canada’s national heritage or quality of life? Is the USW leadership that out of touch with reality?

The labour movement has demonstrated its ability to accept change when change is forced upon it. Economic turbulence left many industries reeling and near bankruptcy in recent year after decades of prosperity. The unions were among the most vocal proponents of government bailouts, and accepted the need to work cooperatively on collective bargaining agreements that allowed the business to survive.

Do we have to get to that point? Does the patient have to be on life support before the doctor administers treatment? According to the USW – the answer is yes.

Make no mistake – this labour dispute is not about countries or nationalities. This is about the difference between clinging to years gone by and building for the years to come. It’s about the difference between refusing to let go of the past and embracing a sustainable future – and it’s about the difference between aspiring to ‘one day longer’ as adversaries or many years longer as a successful mining operation.

We know the path we prefer.

Tito Martins
President and CEO
Vale Inco Limited