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Vol. 15, No. 38 Week of September 19, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Arctic Directory: Donlin contractor maps new territory

Innovative Native shareholder-hire program builds effective work force for support services capable of growing with mine project

Rose Ragsdale

For the Petroleum Directory

Chiulista Services Inc. is a support services contractor that offers its employees the best kind of job – one with a paycheck and a future.

The Alaska Native 8(a) contractor specializes in support services for mining, construction and federal projects and operations with full camp services, facility management, base operation support services, fuel management, logistics and staffing.

A subsidiary of Alaska Native regional corporation Calista Corp., Chiulista got its start in 1995 providing services to Placer Dome at Donlin Creek, then a small gold exploration project in the Yukon-Kuskokwim Region.

“The remoteness of Alaska is hard to understand until you experience it,” said Chiulista President Joe Obrochta. “It’s not rural Alaska; it’s remote Alaska. When we’re out to Donlin Creek, it is like being in the service, pretty much like a deployment.”

Obrochta served in the U.S. Army before entering the private sector.

Growth and expertise

In 15 years, new opportunities have taken Chiulista to numerous challenging job sites, from Alaska’s North Slope to Arizona’s arid deserts, and from the riverbanks of western Alaska to the shores of the Pacific Ocean.

Today, the contractor has a proven record of delivering everything from catering to computer systems operations and from road construction to equipment and lab testing services.

But Chiulista’s biggest accomplishment, so far, may well be at its first Alaska worksite. The contractor is emerging as one of modern mining’s most successful employers of Alaska Natives.

This distinction did not come easily.

When the Calista subsidiary developed a shareholder-hire program in 1995 with Placer Dome, the venture went downhill fast. During the first year, Chiulista hired 152 people just to keep 48 full-time positions filled.

The contractor’s overall employee turnover rate jumped to 318 percent, due mainly to enforcement of a strict alcohol and drug policy. About half of the new hires failed drug screenings and some 70 percent quit after only a short time on the job.

“Alcohol use was above industry standards when this all started under my predecessor, George Gardner,” Obrochta said.

Persistence and communication

But Chiulista didn’t give up.

Instead, the contractor helped Placer Dome establish a comprehensive, cross-cultural outreach program to identify and overcome roadblocks to developing a successful work force.

The effort paid off handsomely for Calista shareholders. After hiring a local program coordinator and conducting numerous community meetings, the team developed a new approach to hiring.

Changes included adding hard and fast penalties to the company’s drug policy but allowing workers to re-apply for employment following a violation, provided they met certain milestones. Employees could hope to improve their performance and be supported by incentives to remain drug- and alcohol-free. 

The company also shortened the number of 12-hour work shifts from 20 days on/10 days off to two weeks on/two weeks off. This change gave employees more time at home and time for traditional subsistence activities, along with a good monthly wage.

Offering cultural sensitivity training for both Native and non-Native employees and communal-style camp dining and recreation rooms were other important changes.

Chiulista also took the unusual step of hiring two shareholder coordinators to act as permanent liaisons between the workers and the mining company.

“Their primary responsibilities are to ensure that employees are successful and grow within their jobs,” said Monique Henriksen, Chiulista’s senior vice president of operations.

The shareholder coordinators also act as Chiulista’s main point of contact for employees who need additional training, and they serve as job counselors, regularly meeting with workers in groups and individually to discuss problems, both professional and personal.

“Both coordinators have worked at the project for over nine years, and they have grown professionally, from starting as a general laborer and a driller’s assistant,” Henriksen said.

Upward mobility

The redesigned program then took raw recruits from local villages and gave them on-the-job training focused on improving and enhancing occupational skills.

“Every success we have had was the result of overcoming hurdles, and communication was one of our earliest challenges,” said Henriksen.

Obrochta said the company found that some recruits had never before left their villages. “They didn’t know about the importance of showing up on time. It is a learning curve,” he said.

Since the majority of Chiulista’s work force grew up in small villages and the Donlin Creek camp is a much bigger place with people from all over the world, it was very important to prepare the new workers to thrive in this bigger community, said Henriksen, who is a Calista shareholder who worked her way up the management ladder to senior VP in 2007.

“We are pleased to report that in 2005, the turnover rate dropped to a low of 10 percent,” she said.

In 2008, Chiulista employed 172 employees at Donlin Creek, and enjoyed a substance abuse-related turnover rate of less than 5 percent and an overall turnover rate of less than 10 percent. Today, the contractor employs about 25 workers at the Donlin camp.

Chiulista also emphasizes workplace safety in its training regime, which contributes to building a professional work force. The contractor has logged more than 1 million manhours at Donlin Creek with zero lost-time incidents.

The firm also created an open learning environment that encourages employees to stretch in the workplace.

“What we have at Donlin Creek is an opportunity for people to try things,” said Obrochta. “Sometimes it works out, and sometimes not.

“Where at some projects, people say, ‘That’s not possible.’ At Donlin Creek, the folks say, ‘Let’s see if we can make it happen,’ ” he explained.

As a result, upward mobility is now the norm. In 1996, shareholder hire was a strong 70 percent, but shareholders filled one in 10 supervisory roles.

According to a report prepared by The McDowell Group in January 2009, about 86 percent of the 210 people who worked at Donlin Creek in 2008 were Calista shareholders, and nine out of 10 crew supervisors were Alaska Natives.

“We have seasoned workers that have been out there 13 or 14 years, and they may retire before the first ounce of gold is pulled out of the ground,” said Obrochta.

Strong employee relations

“One of our best-kept secrets is employee and community relations – ensuring our employees are well-trained and continually develop,” Henriksen said.

Obrochta attributed much of the success in maintaining positive momentum to Chiulista’s managers. “They do a great job. They are voices for their villages, and ambassadors for the project, a communications conduit,” he said.

Today, the Donlin Creek project – operated by Donlin Creek LLC, a 50-50 partnership between NovaGold Resources Inc. and Placer Dome successor, Barrick Gold Corp.– is in transition from primarily exploration to a development project with construction targeted to begin in 2012 and production in 2015.

During the construction phase, the need for skilled labor is expected to balloon to 1,500 to 2,000 jobs, and once in production, Donlin Creek likely will employ 600 to 800 people for 20 years.

As the sole contractor for camp services at the 30-million-ounce-plus gold mining project, Chiulista will face additional challenges as Donlin Creek matures. For example, a new gas pipeline study underway at the project required the contractor to recruit and specially train six new employees.

Obrochta envisions more such work in the future. “We will be working to provide the green work force from the villages for the construction phase of the mine. That’s 500-650 people, plus all those that have worked and are still working on the project!” he added.

Said Henriksen, “We believe the shareholder hire program for Chiulista employees at the Donlin Creek site is a model for how best to work with indigenous people.”

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