At the last day of the Parliamentary Autumn session the Greenlandic Parliament passed a controversial law paving the way for large scale extraction projects (the act on construction and works in relation to large scale projects).
Greenland is in the process of redefining its foundation for its future development: From being a country primarily relying on fisheries as its main export, to becoming an industrialized country with 5-7 active mines, off shore oil production and aluminum production. One of the companies, ready to start a 2-billion US dollars mining project, is London Mining Plc. Another company considering investing in Greenland is Alcoa Inc. This change is required, as Greenland wishes to become gradually independent from Denmark.
In order to facilitate this process, the Government of Greenland (Naalakkersuisut) submitted a number of new legislation including an amendment to the Mineral Act, an amendment to the trade regulations and a new act on large scale projects.
The first draft of the law was heavily debated in Greenland as it allows foreign companies to contract foreign workers on foreign collective agreements. The challenge appeared to balance the need for foreign workers to build huge construction sites with the need for protecting local Greenlandic business, maximizing the benefits of the projects as well as ensuring the rights of both the foreign and local workers. In addition, local NGOs, in particular Transparency Greenland, believed that the first draft did not contain sufficient transparency safeguards.
The final text took into consideration some of these concerns.
The large scale project act – high lights
The large scale project act envisages that any company considering initiating a project larger than 5 billion Danish Kroner (approximately 950 million US Dollars) need to obtain a license from Naalaakkersuisut. Before granting the license, the company has to fulfill a number of requirements, e.g. an environmental as well as a social impact assessment and the conclusion of an Impact Benefit Agreement. The local trade unions, the local employer associations and local NGOs are given the right to be heard and to complaint to the Naalaakkersuisut.
Once the company is granted the license, it has to register in Greenlandic Registry for Companies and establish a local company. This company becomes the project company. The project company may contract other foreign companies for the purpose of building roads, harbor, airport, the actual mine etc.
These sub-contracted companies are not required to establish a local company in Greenland and may contract foreign workers on foreign employment contracts subject to foreign collective agreements. Such collective agreements have to be fair and in accordance with Greenlandic legislation and Greenland's international obligations (these are not necessarily equivalent to Denmark's international obligations). The foreign workers appear likewise entitled to the same labor rights as Greenlandic workers, including the right to strike, to organize and collective bargain. The foreign workers are also entitled to a certain minimum wage equivalent to the Greenlandic, and with a limitation on possible deductions from the wage. Local trade unions, employer's associations and NGOs are entitled to have access to the collective agreements.
Greenlandic companies providing services to the project company are, on the other hand, required to use Greenlandic workers and applying the Greenlandic collective agreements.
During the construction period the estimated number of foreign workers may vary from 500-750 foreign workers in average at the site. Greenland does not have its own immigration service or Alien Act, as the immigration issues are still falling within the jurisdiction of Denmark. Consequently, all applications will be handled by the Danish immigration authorities. Like the immigration service, the Danish Working Environment Authority will be responsible for monitoring the site as the working environment is still part of the Danish jurisdiction.
Once the construction of the site has finished the project company can no longer use foreign workers. Greenland's ambition is to have sufficient capacity and competences to provide the mines with professional workers during the production period.
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