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This chapter covers indigenous issues (UNDRIP and ILO Convention 169) under the broad umbrella of community engagement.

What is community engagement?

Following ISO 26000,2 we understand community engagement as stakeholder engagement that is able to comply with the social responsibility of an organisation for the impacts of its decisions and activities on society and the environment, through transparent and ethical behaviour.3

Stakeholder engagement is defined by ISO 26000 as the activity undertaken to create opportunities for dialogue between an organisation and one or more of its stakeholders, with the aim of providing an informed basis for the organisation’s decisions.4

The definition of social dialogue5 by ISO 26000 provides the basis to identify the range of activities that may be undertaken to create opportunities for dialogue between an organisation and one or more of its stakeholders.

According to ISO 260006 community engagement or stakeholder engagement, is as follows:

  • a range of activities undertaken to create opportunities for dialogue between an organisation and one or more of its stakeholders;
  • activities that can be grouped under the categories of negotiation, consultation and exchange of information;
  • those same activities must be able to comply with the social responsibility of the organisation for the impacts of its decisions and activities on society and the environment; and
  • as such, those activities must be able to:
    • contribute to sustainable development, including health and the welfare of society;
    • take into account the expectations of stakeholders;
    • be in compliance with applicable law and consistent with international norms of behaviour; and
    • be integrated throughout the organisation and practised in its relationships.

Principles of community engagement

ISO 26000

As a particular type of dialogue that falls within the social responsibility of an organisation, the principles of social responsibility7 set out by ISO 26000 fully apply to community engagement. All principles are listed below – those with a closer connection to community engagement include a brief explanation in the words of ISO 26000:

  • accountability;
  • transparency:
    • an organisation should disclose in a clear, accurate and complete manner, and to a reasonable and sufficient degree, the policies, decisions and activities for which it is responsible, including its known, and likely impacts on society and the environment;
  • ethical behaviour:
    • an organisation’s behaviour should be based on the values of honesty, equity and integrity. These imply a concern for people, animals and the environment, and a commitment to address the impact of its activities and decisions on stakeholders’ interests;
  • respect for stakeholders’ interests:
    • an organisation should respect, consider and respond to the interests of its stakeholders;
  • respect for the rule of law;
  • respect for international norms of behaviour; and
  • respect for human rights.

International Council on Mining and Metals (ICMM)

The ‘Indigenous peoples and mining’ position statement ‘sets out ICMM members’ approach to engaging with indigenous peoples and to free, prior and informed consent (FPIC)’. It adds the following:

ICMM’s vision is for constructive relationships between mining and metals companies and indigenous peoples that are based on mutual respect, meaningful engagement, trust and mutual benefit.

ICMM thus provides the fundamental principles for engagement with indigenous peoples:

  • mutual respect;
  • meaningful engagement;
  • trust; and
  • mutual benefit.

These principles are further recognised and developed through the commitments required from members:

  • to respect the rights, interests, special connections to lands and waters, and perspectives of indigenous peoples where mining projects are to be located on lands traditionally owned by or under customary use of indigenous peoples;
  • to adopt and apply engagement and consultation processes that ensure the meaningful participation of indigenous communities in decision-making, through a process that is consistent with their traditional decision-making processes and that is based on good faith negotiation; and
  • to work to obtain the consent of indigenous people where required according to the position statement.

Consistency with international norms of behaviour

Principles 5, 6 and 7 of social responsibility in the ISO 26000 provide that an organisation should respect the rule of law, international norms of behaviour and human rights. Commercial mining ventures face an increasingly complex and challenging framework of international regulations that touch upon different aspects of their activities.

This chapter will focus on those international instruments that (i) provide general norms and principles of behaviour that are not specific to the mining sector but fundamental to comprehend the responsibility of an organisation in the context of community engagement, and (ii) regulate general or specific aspects of community engagement, whether they are specific to the mining sector or generic to all commercial ventures.

Non-mining-specific international norms of behaviour

The following provide for general norms and principles of behaviour that are not specific to the mining sector:

  • the United Nations Guiding Principles on Business and Human Rights;
  • the International Labour Organization's Indigenous and Tribal Peoples Convention, 1989 (No. 169) (ILO 169);
  • ISO 26000; and
  • the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).

Mining-specific international norms of behaviour

The following are international instruments that regulate general or specific aspects of community engagement, whether they are specific to the mining sector or generic to all commercial ventures:

ILO 169

  • Indigenous consultation or duty to consult indigenous peoples; and
  • FPIC and consultation in case of relocation.

UNDRIP

  • Consultation and FPIC.

The International Finance Corporation (IFC) Performance Standards

  • Stakeholder consultation and informed consultation and participation (ICP) (Performance Standard 1 (PS1)); and
  • ICP and FPIC (Performance Standard 7 (PS 7)).

ICMM

  • Consultation and work to obtain FPIC (‘Indigenous peoples and mining’ position statement); and
  • consultation and work to obtain FPIC (Good Practice Guide on Indigenous Peoples and Mining).8

Other international instruments and initiatives

There are a number of other international instruments that provide requirements regarding community or stakeholder engagement that are context-specific to their respective subjects, including:

  • the Global Reporting Initiative – in the context of sustainability reporting;
  • the Extractive Industry Transparency Initiative – the global standard to promote the open and accountable management of extractive resources;
  • the Voluntary Principles on Security and Human Rights;
  • the OECD Guidelines for Multinational Enterprises;
  • the Kimberley Process – an international certification scheme that regulates trade in rough diamonds and aims to prevent the flow of conflict diamonds; and
  • the International Cyanide Management Code – a voluntary initiative that focuses exclusively on the safe management of cyanide that is produced, transported and used for the recovery of gold and silver, and on mill tailings and leach solutions.

Though these instruments are a key part of international norms of behaviour relevant to the mining industry, they will not be reviewed in this chapter as its focus will be the international instruments mentioned above.

The United Nations Guiding Principles on Business and Human Rights

One of the core principles of social responsibility according to ISO 26000 entails that an organisation should respect human rights and recognise both their importance and their universality. This principle is at the core of an organisation’s duty to respect international norms of behaviour, and its relevance should be emphasised accordingly.

In 2011, the United Nations Guiding Principles on Business and Human Rights (Guiding Principles),9 were adopted outlining a corporate responsibility to respect human rights.

These Guiding Principles are grounded in recognition of . . . [t]he role of business enterprises as specialized organs of society performing specialized functions, required to comply with all applicable laws and to respect human rights.10

The Guiding Principles thus acknowledge the fact that businesses, regardless of their size, sector, location, ownership and structure, do influence the enjoyment of human rights. The corporate responsibility to respect human rights is therefore grounded on a core foundational principle: business enterprises should avoid infringing on the human rights of others and should address adverse human rights impacts caused by projects that they are involved with. This responsibility to respect human rights refers to internationally recognised human rights as set out in the International Bill of Human Rights, consisting of the Universal Declaration of Human Rights and the main instruments through which it has been codified: the International Covenant on Civil and Political Rights, and the International Covenant on Economic, Social and Cultural Rights, as well as the ILO’s Declaration on Fundamental Principles and Rights at Work.

Guiding Principle No. 15 further states that in order to meet their responsibility to respect human rights ‘business enterprises should have in place policies and processes appropriate to their size and circumstances.’11 These policies and processes include the following:

(a) 
a policy commitment to meet their responsibility to respect human rights;

(b) 
a human rights due diligence process to identify, prevent, mitigate and account for how they address their impacts on human rights; and

(c) 
processes to enable the remediation of any adverse human rights impacts they cause or to which they contribute.12

Even though the Guiding Principles constitute a voluntary set of provisions, the responsibility to respect human rights is by no means voluntary. In other words, business enterprises have a responsibility to respect human rights, but they also have a choice of tools (policies and processes among them) to comply with that responsibility.

Therefore, according to the Guiding Principles, the corporate responsibility to respect human rights entails that organisations within the mining industry should make an explicit effort to identify the range of specific human rights that are relevant to mining activities. Moreover, the Guiding Principles provide specific guidance on stakeholder engagement actions that businesses are encouraged to carry out as appropriate when implementing the principles.13

ICMM

The ICMM’s regulation applying to its member companies rests upon a Sustainable Development Framework of 10 Principles. Even though all 10 Principles can be said to be related to community engagement, Principle 10 is key:

Proactively engage key stakeholders on sustainable development challenges and opportunities in an open and transparent manner. Effectively report and independently verify progress and performance.

In addition to existing commitments under the Sustainable Development Framework, the ICMM has delivered the position statement ‘Mining partnerships for development’, according to which ICMM member companies commit to actively support or help develop partnerships with other stakeholder groups with the aim of enhancing the social and economic contribution of mining through development partnerships.

IFC

The IFC Sustainability Framework articulates the IFC’s strategic commitment to sustainable development, including its Policy and Performance Standards on Environmental and Social Sustainability.

The Performance Standards are directed towards clients, providing guidance on how to identify risks and impacts, and are designed to help avoid, mitigate, and manage risks and impacts as a way of doing business in a sustainable way, including stakeholder engagement and disclosure obligations of the client in relation to project-level activities.14

Even though all eight Performance Standards provide for some degree of stakeholder engagement, for the purposes of this chapter we will focus on PS 1 (Assessment and Management of Environmental and Social Risks and Impacts) and PS 7 (Indigenous Peoples). Together, all Performance Standards establish standards that the client is to meet throughout the life of an investment by the IFC.

Community engagement dialogue activities continuum

We have characterised community engagement dialogue activities, taking into account the definition of social dialogue by ISO 26000 as a range of activities that can be grouped under the categories of negotiation, consultation and exchange of information.

In this chapter we will review the specific standards and requirements set out by international norms of behaviour as related to community engagement, making an explicit effort to place them in the continuum formed by those categories.

Community engagement dialogue activities are all part of a dialogue continuum whose defining criteria are the level of incidence of each activity. In its basic enunciation, this continuum goes from exchange of information on one end to negotiation on the other, passing through consultation (see Figure 1).

Figure 1

Exchange of information

->

Consultation

->

Negotiation

However, a more elaborate enunciation that takes into account the specific standards and requirements set out by international norms of behaviour shows a continuum that goes from information on one end to consent on the other, passing again through consultation (see Figure 2).

Figure 2

Information

->

Overall consultation

->

Indigenous consultation

->

FPIC

If we overlap both figures, what we see is that there are elements of negotiation, consultation and exchange of information in all specific standards and requirements (see Figure 3).

 

Figure 3

Exchange of information ->

 

Consultation ->

 

Negotiation ->

 

Information

->

Overall consultation

->

Indigenous consultation

->

FPIC

               

Consultation

IFC PS 1

PS 1 establishes from the very beginning the importance of ‘effective community engagement through disclosure of project-related information and consultation with local communities on matters that directly affect them’.

Accordingly, one of the objectives of PS 1 is as follows:

Promote and provide means for adequate engagement with Affected Communities throughout the project cycle on issues that could potentially affect them and to ensure that relevant environmental and social information is disclosed and disseminated.

Environmental and Social Assessment and Management System and stakeholder engagement

In a manner consistent with its objective, PS 1 requires clients, in coordination with other responsible government agencies and third parties as appropriate, to (i) conduct a process of environmental and social assessment, and (ii) establish and maintain an Environmental and Social Assessment and Management System (ESMS) appropriate to the nature and scale of the project, and commensurate with the level of its environmental and social risks and impacts.

PS 1 further establishes that the ESMS will incorporate the following elements:

  • policy;
  • identification of risks and impacts;
  • management programmes;
  • organisational capacity and competency;
  • emergency preparedness and response;
  • stakeholder engagement; and
  • monitoring and review.

 

The stakeholder engagement ESMS element required pursuant to PS 1 is seen as ‘the basis for building strong, constructive, and responsive relationships that are essential for the successful management of a project’s environmental and social impacts’.15

According to PS 1, ‘stakeholder engagement is an ongoing process that may involve, in varying degrees, the following elements’:

  • stakeholder analysis and planning;
  • disclosure and dissemination of information;
  • consultation and participation;
  • a grievance mechanism; and
  • ongoing reporting to affected communities.

Elements of stakeholder engagement

PS 1 acknowledges that ‘The nature, frequency and level of effort of stakeholder engagement may vary considerably and will be commensurate with the project’s risks and adverse impacts, and the project’s phase of development.’

Element 1 – Stakeholder Analysis and Engagement Planning

Activities required under this element can be summarised as follows:

  • identification of the range of stakeholders that may be interested in the client’s actions;
  • identification of the affected communities (where projects are likely to generate adverse environmental and social impacts to affected communities); and
  • compliance with the relevant requirements:
    • development and implementation of a Stakeholder Engagement Plan with particular attention to vulnerable groups and community representatives; and
    • preparation of a Stakeholder Engagement Framework (as part of an ESMS) outlining general principles and a strategy to identify affected communities (in cases where the exact location of the project is not known, but it is reasonably expected to have significant impacts on local communities).

Element 2 – Disclosure of Information

According to PS 1, ‘disclosure of relevant project information helps affected communities and other stakeholders understand the risks, impacts and opportunities of the project.’

Therefore, PS 1 requires clients to provide affected communities with access to relevant information on the following:

  • the purpose, nature and scale of the project;
  • the duration of proposed project activities;
  • any risks to and potential impacts on such communities and relevant mitigation measures;
  • the envisaged stakeholder engagement process; and
  • the grievance mechanism.

Element 3 – Consultation

‘Consultation’ is the title given by PS 1 to the activities required when adverse impacts exist but are not significant:

When Affected Communities are subject to identified risks and adverse impacts from a project, the client will undertake a process of consultation in a manner that provides the Affected Communities with opportunities to express their views on project risks, impacts and mitigation measures, and allows the client to consider and respond to them.

PS 1 further provides the rules with which the consultation process should comply:

  • the extent and degree of engagement required by the consultation process should be commensurate with the project’s risks and adverse impacts, and the concerns raised by the affected communities;
  • effective consultation is a two-way process that should as follows:
    • begin early in the process of identification of environmental and social risks and impacts, and continue on an ongoing basis as risks and impacts arise;
    • be based on the prior disclosure and dissemination of relevant, transparent, objective, meaningful and easily accessible information that is in a culturally appropriate local language and format, and is understandable to affected communities;
    • focus inclusive engagement on those directly affected as opposed to those not directly affected;
    • be free of external manipulation, interference, coercion or intimidation;
    • enable meaningful participation, where applicable; and
    • be documented; and
  • the client will tailor its consultation process to the language preferences of the affected communities, their decision-making process and the needs of disadvantaged or vulnerable groups.

Element 4 – ICP

ICP is the standard required by PS 1 for projects with potentially significant adverse impacts on affected communities.

PS 1’s requirements for the ICP process state that it should as follows:

  • be built upon the steps outlined for consultation (see Element 3);
  • be built to result in the affected communities’ informed participation;
  • involve a more in-depth exchange of views and information, and an organised and iterative consultation;
  • have the goal of incorporating into the client’s decision-making process the views of the affected communities on matters that affect them directly, such as the proposed mitigation measures, the sharing of development benefits and opportunities, and implementation issues;
  • capture both men’s and women’s views, if necessary, through separate forums or engagements, and reflect men’s and women’s different concerns and priorities about impacts, mitigation mechanisms and benefits, where appropriate;
  • be documented, in particular, the measures taken to avoid or minimise risks to and adverse impacts on the affected communities; and
  • give information to those affected about how their concerns have been considered.

Element 5 – Indigenous Peoples

PS 1 establishes that projects with adverse impacts to indigenous peoples are required to engage them in a process of ICP unless there are specific circumstances (certain significant impacts) where the client is required to obtain their FPIC.

Requirements related to indigenous peoples and the definition of the special circumstances requiring FPIC are regulated in PS 7 and described under Element 6.

Element 6 – Private Sector Responsibilities Under Government-Led Stakeholder Engagement

PS 1 establishes special rules for cases where stakeholder engagement is the responsibility of the host government:

  • The client will collaborate with the responsible government agency, to the extent permitted by the latter, to achieve outcomes that are consistent with the objectives of PS 1.
  • Where government capacity is limited, the client will play an active role during the stakeholder engagement planning, implementation and monitoring.
  • In cases were the process conducted by the government does not meet the relevant requirements of PS 1, the client will conduct a complementary process and identify supplemental actions (as appropriate).

Grievance mechanisms and ongoing reporting

PS 1 prescribes that the stakeholder engagement process should include, among other elements, grievance mechanisms and ongoing reporting to affected communities. Therefore PS 1 requires clients to establish the following:

  • a procedure for external communications;
  • a grievance mechanism for affected communities; and
  • ongoing reporting to affected communities.

The procedure for external communications should include methods to do the following:

  • receive and register external communications from the public;
  • screen and assess the issues raised, and determine how to address them;
  • provide, track and document responses, if any; and
  • adjust the management program, as appropriate.

In addition, clients are encouraged to make publicly available periodic reports on their environmental and social sustainability.

Grievance mechanisms are required to receive and facilitate the resolution of concerns and grievances from affected communities about the client’s environmental and social performance.

According to PS 1, grievance mechanisms should:

  • be scaled to the risks and adverse impacts of the project;
  • have affected communities as its primary user;
  • seek to resolve concerns promptly, using an understandable and transparent consultative process that is culturally appropriate and readily accessible;
  • be at no cost and without retribution to the party that originated the issue or concern; and
  • not impede access to judicial or administrative remedies.

The client should inform the affected communities about the mechanism in the course of the stakeholder engagement process.

Finally, PS 1 requires clients to provide periodic reports to the affected communities:

  • describing progress of the implementation of the project action plans on issues that involve ongoing risk to, or impacts on, affected communities;
  • addressing issues that the consultation process or grievance mechanism have identified as a concern to those communities; and
  • communicating updated relevant mitigation measures or actions in cases where the management programme results in material changes in, or additions to, the mitigation measures or actions described in the action plans on issues of concern to the affected communities.

The frequency of these reports will be proportionate to the concerns of affected communities, but not less than annually.

IFC PS 7

PS 7 does the following:

[R]ecognizes that Indigenous Peoples, as social groups with identities that are distinct from mainstream groups in national societies, are often among the most marginalized and vulnerable segments of the population. In many cases, their economic, social, and legal status limits their capacity to defend their rights to, and interests in, lands and natural and cultural resources, and may restrict their ability to participate in and benefit from development.

Accordingly, one of its objectives is as follows:

To establish and maintain an ongoing relationship based on Informed Consultation and Participation (ICP) with the Indigenous Peoples affected by a project throughout the project’s life-cycle.

Consistently with the above objective, PS 7 requires clients to do the following:

  • identify, through an environmental and social risks and impacts assessment process, all communities of indigenous peoples within the project area of influence who may be affected by the project;
  • identify the nature and degree of the expected direct and indirect economic, social, cultural (including cultural heritage) and environmental impacts on them;
  • avoid, where possible, adverse impacts on affected communities of indigenous peoples;
  • where alternatives have been explored and adverse impacts are unavoidable, minimise, restore or compensate, or both, for these impacts in a culturally appropriate manner commensurate with the nature and scale of such impacts and the vulnerability of the affected communities of indigenous peoples;
  • develop actions with the ICP of the affected communities of indigenous peoples and contain such actions in a time-bound plan, such as an Indigenous Peoples Plan, or a broader community development plan with separate components for indigenous peoples; and
  • undertake an engagement process with the affected communities of indigenous peoples as required in PS 1.

The engagement process should include the following:

  • stakeholder analysis and engagement planning;
  • disclosure of information;
  • consultation; and
  • participation, in a culturally appropriate manner.

In addition, the engagement process should do the following:

  • involve indigenous peoples’ representative bodies and organisations (eg, councils of elders or village councils), as well as members of the affected communities of indigenous peoples; and
  • provide sufficient time for indigenous peoples’ decision-making processes.

ILO 169 and indigenous consultation

The ILO has made clear that ‘the establishment of appropriate and effective mechanisms for the consultation of indigenous and tribal peoples regarding matters that concern them is the cornerstone of Convention No. 169.’16

Article 6 of ILO 169 provides that governments have a specific duty to consult indigenous peoples, through appropriate procedures, and in particular through their representative institutions, whenever consideration is being given to legislative or administrative measures that may affect them directly. Article 6 goes on to say that the consultations carried out in application of the latter, shall be undertaken in good faith and in a form appropriate to the circumstances, with the objective of achieving agreement or consent to the proposed measures.

However, ILO 169 further establishes a specific duty to consult relating to the development of mining activities:

In cases in which the State retains the ownership of mineral or sub-surface resources or rights to other resources pertaining to lands, governments shall establish or maintain procedures through which they shall consult these peoples, with a view to ascertaining whether and to what degree their interests would be prejudiced, before undertaking or permitting any programmes for the exploration or exploitation of such resources pertaining to their lands. The peoples concerned shall wherever possible participate in the benefits of such activities, and shall receive fair compensation for any damages which they may sustain as a result of such activities.17

Therefore, in countries where the state is the owner of mineral resources, the government must consult indigenous peoples before authorising exploration or exploitation activities of such resources ‘pertaining to their lands’. The latter provision should not be read in isolation but rather in connection with ILO 169’s general duty to consult, as outlined in article 6. The key issue, then, is to assess whether the implementation of article 6’s general duty to consult is able to meet the specific consultation duty set out in article 15 – an assessment that can only be done case by case.

The duty to consult set forth in article 6 comprises the following elements:

  • carried out by governments;
  • prior to the issuance of an administrative or legislative measure;
  • carried out whenever consideration is being given to legislative or administrative measures that may affect indigenous peoples directly;
  • carried out through appropriate procedures;
  • carried out through indigenous peoples’ representative institutions;
  • undertaken in good faith and in a form appropriate to the circumstances; and
  • carried out with the objective of achieving agreement or consent.

Concerning the nature of consultation, the ILO’s Committee of Experts has concluded that the obligation to consult under ILO 169 was intended to mean the following:

Good faith and appropriate procedures:

  • ‘Consultations must be formal, full and exercised in good faith; there must be a genuine dialogue between governments and indigenous and tribal peoples characterized by communication and understanding, mutual respect, good faith and the sincere wish to reach a common accord.’
    • ‘Appropriate procedural mechanisms have to be put in place at the national level and they have to be in a form appropriate to the circumstances.’
    • ‘It is clear from the above that pro forma consultations or mere information would not meet the requirements of the Convention.’
  • Representative institutions:
    • ‘Consultations have to be undertaken through indigenous and tribal peoples’ representative institutions as regards legislative and administrative measures.’
  • Objective of achieving agreement or consent:
    • ‘Consultations have to be undertaken with the objective of reaching agreement or consent to the proposed measures.’
    • ‘Consultations do not imply a right to veto, nor is the result of such consultations necessarily the reaching of agreement or consent.’18

FPIC

As a community engagement dialogue standard, FPIC has different enunciations across international norms of behaviour. The following, which are more relevant to community engagement in the context of mining activities, will be reviewed:

  • UNDRIP;
  • ILO 169;
  • IFC PS 7; and
  • ICMM's position statement ‘Indigenous peoples and mining’.

UNDRIP

UNDRIP’s article 32, No. 2 provides as follows:

States shall consult and cooperate in good faith with the indigenous peoples concerned through their own representative institutions in order to obtain their free and informed consent prior to the approval of any project affecting their lands or territories and other resources, particularly in connection with the development, utilization or exploitation of mineral, water or other resources.

Under UNDRIP, therefore, FPIC requires states to consult and cooperate in good faith with the indigenous peoples concerned. Consultation and cooperation must be carried out through the indigenous peoples’ own representative institutions; the purpose of the consultation is to achieve FPIC. Consultation and cooperation must be carried out prior to the approval of any project affecting indigenous peoples’ lands or territories, and other resources. Consultation and cooperation in order to obtain FPIC for such projects must be carried out particularly in connection with the development, utilisation or exploitation of minerals, water or other resources.

Commenting on FPIC, the United Nations Global Compact has clarified as follows:

Consultation and consent are separate but related concepts. FPIC implies a decision-making right to either permit, agree to a modified version, or to withhold consent to a project or activity. While a business should always engage in meaningful consultation with indigenous peoples before commencing activities that impact on their rights, and during the project lifecycle, FPIC is legally required in certain circumstances.19

One such circumstances is the hypothesis of article 32.

ILO 169

ILO 169’s general standard is that consultation with indigenous peoples shall be undertaken with the objective of achieving agreement or consent to proposed measures. The ILO’s Committee of Experts reinforces this standard and observes that consultations, therefore, do not imply a right to veto, nor is their result necessarily the reaching of agreement or consent.

However, there is one hypothesis where the standard requested by ILO 169 is more demanding, and that is relocation or resettlement.

Article 16 provides a set of rules when relocation of indigenous peoples is considered. Subject to the following rules, the peoples concerned shall not be removed from the lands that they occupy:

  • in cases where relocation is considered necessary as an exceptional measure, such relocation shall take place only with their free and informed consent;
  • where their consent cannot be obtained, such relocation shall take place only following appropriate procedures established by national laws and regulations, including public inquiries where appropriate, which provide the opportunity for effective representation of the peoples concerned;
  • whenever possible, concerned indigenous peoples shall have the right to return to their traditional lands, as soon as the grounds for relocation cease to exist;
  • when such return is not possible, as determined by agreement or, in the absence of such agreement, through appropriate procedures, these peoples shall be provided in all possible cases with lands of quality and legal status at least equal to that of the lands previously occupied by them, suitable to provide for their present needs and future development;
  • where the peoples concerned express a preference for compensation in money or in kind, they shall be so compensated under appropriate guarantees; and
  • persons thus relocated shall be fully compensated for any resulting loss or injury.

IFC PS 7

PS 7 recognises the following:

Affected Communities of Indigenous Peoples may be particularly vulnerable to the loss of, alienation from or exploitation of their land and access to natural and cultural resources. In recognition of this vulnerability, in addition to the General Requirements of this Performance Standard, the client will obtain the FPIC of the Affected Communities of Indigenous Peoples in the circumstances described in paragraphs 13–17 of this Performance Standard.

FPIC under PS 7 is as follows:

  • it builds on and expands the process of ICP described in PS 1 and will be established through good faith negotiation between the client and the affected communities of indigenous peoples;
  • it applies to project design, implementation and expected outcomes related to impacts affecting the communities of indigenous peoples;
  • when any of the above circumstances apply, FPIC requires clients to engage external experts to assist in the identification of the project risks and impacts; and
  • it requires clients to document (i) the mutually accepted process between the client and affected communities of indigenous peoples, and (ii) evidence of agreement between the parties as to the outcome of the negotiations. FPIC does not necessarily require unanimity and may be achieved even when individuals or groups within the community explicitly disagree.

Circumstances requiring FPIC are the following:

  • impacts on lands and natural resources subject to traditional ownership or under customary use;
  • relocation of indigenous peoples from lands and natural resources subject to traditional ownership or under customary use; and
  • impacts on critical cultural heritage that is essential to the identity, or cultural, ceremonial or spiritual aspects of indigenous peoples’ lives.

Impacts on lands and natural resources subject to traditional ownership or under customary use

According to PS 7, when adverse impacts can be expected from projects located on lands traditionally owned by or under the customary use of indigenous peoples, or projects that commercially develop natural resources on such lands, clients are required to do the following:

  • avoid and otherwise minimise the area of land proposed for the project, documenting efforts to that purpose;
  • avoid and otherwise minimise impacts on natural resources and natural areas of importance to indigenous peoples, documenting efforts to that purpose;
  • identify and review all property interests and traditional resource uses prior to purchasing or leasing land;
  • assess and document resource use of affected communities of indigenous peoples without prejudicing any of their land claims, specifically considering the role of women in the management and use of said resources;
  • ensure that affected communities of indigenous peoples are informed of their land rights under national law, including any national law recognising customary use rights; and
  • offer affected communities of indigenous peoples compensation and due process in the case of commercial development of their land and natural resources, together with culturally appropriate sustainable development opportunities, including providing land-based compensation or compensation-in-kind, and ensuring continued access to natural resources, among other requirements detailed in PS 7.

Relocation of indigenous peoples from lands and natural resources subject to traditional ownership or under customary use

PS 7 requirements when relocation is considered are the following:

  • clients are required to consider feasible alternative project designs to avoid the relocation of indigenous peoples from communally held lands and natural resources subject to traditional ownership or under customary use;
  • if such relocation is unavoidable, the client will not proceed with the project unless FPIC has been obtained;
  • any relocation of indigenous peoples will be consistent with the requirements of PS 5; and
  • where feasible, the relocated indigenous peoples should be able to return to their traditional or customary lands, should the cause of their relocation cease to exist.

Impacts on critical cultural heritage

The third hypothesis where PS 7 requires FPIC to be obtained is where a project may have significant impacts on critical cultural heritage that is essential to the identity, or cultural, ceremonial or spiritual aspects of indigenous peoples’ lives.

In such cases, PS 7 prescribes the following:

  • priority will be given to the avoidance of such impacts;
  • where significant project impacts on critical cultural heritage are unavoidable, the client will obtain the FPIC of the affected communities of indigenous peoples; and
  • where a project proposes to use the cultural heritage, including knowledge, innovations or practices, of indigenous peoples for commercial purposes, the client must do the following:
    • inform the affected communities of indigenous peoples of (i) their rights under national law, (ii) the scope and nature of the proposed commercial development, (iii) the potential consequences of such development and (iv) obtain their FPIC; and
    • ensure fair and equitable sharing of benefits from commercialisation of such knowledge, innovation or practice, consistent with the customs and traditions of the indigenous peoples.

ICMM

Pursuant to ICMM’s position statement ‘Indigenous peoples and mining’, in addition to existing commitments under the ICMM Sustainable Development Framework, member companies commit to work to obtain the consent of indigenous communities under specific circumstances.

FPIC requirements under this position statement may be described as follows:

  • the requirement to ‘work to obtain the consent’ of indigenous communities, which applies to:
    • new projects and changes to existing projects; and
    • projects that are located on lands traditionally owned by or under customary use of indigenous peoples and are likely to have significant adverse impacts on indigenous peoples, including where relocation of indigenous peoples or significant adverse impacts on critical cultural heritage are likely to occur;
  • consent processes should focus on reaching agreement on the basis for which a project (or changes to existing projects) should proceed;
  • consent processes should neither confer veto rights to individuals or subgroups nor require unanimous support from potentially impacted indigenous peoples (unless legally mandated); and
  • consent processes should not require companies to agree to aspects not under their control.

Further, according to ICMM, FPIC comprises a process and an outcome. FPIC as a process means that indigenous peoples are:

  • able to freely make decisions without coercion, intimidation or manipulation;
  • given sufficient time to be involved in project decision-making before key decisions are made and impacts occur; and
  • fully informed about the project and its potential impacts and benefits.

As an outcome, FPIC entails that indigenous peoples ‘can give or withhold their consent to a project, through a process that strives to be consistent with their traditional decision-making processes while respecting internationally recognized human rights and is based on good faith negotiation’.

A final note must be made on the meaning of the requirement ‘work to obtain consent’. ICMM recognises that if consent is not forthcoming, despite the best efforts of all parties, the government might determine that a project should proceed, and specify the conditions that should apply. If that is the case, ICMM provides that members will determine whether they ought to remain involved with the project.

Agreement making as an activity deriving from FPIC

IFC PS 7

PS 7 provides that FPIC ‘will be established through good faith negotiation between the client and the affected communities of indigenous peoples’ and further adds that ‘the client will document (i) the mutually accepted process between the client and affected communities of indigenous peoples and (ii) evidence of agreement between the parties as the outcome of the negotiations.’

The link between FPIC and agreement making is determined by the following elements:

  • FPIC must be established through good faith negotiation between the client and the affected communities of indigenous peoples;
  • the client must document as follows:
    • the mutually accepted process with the affected communities of indigenous peoples; and
    • evidence of agreement between the parties as the outcome of the negotiations.

ICMM’s position statement and Good Practice Guide

ICMM’s position statement, 'Indigenous peoples and mining', when describing the members’ commitment in working to obtain the consent of indigenous communities, states the following:

Consent processes should focus on reaching agreement on the basis for which a project (or changes to existing projects) should proceed.

The Good Practice Guide’s focus is ‘the use of negotiated agreements to define and regulate relations between mining companies and indigenous communities’.20 Along the same lines, the Good Practice Guide states the following:

Negotiated agreements between companies and indigenous groups . . . provide a means through which a community’s consent for a project, and the terms and conditions of projects negotiated through the process of FPIC, can be formalized and documented.21

And as follows:

There is now broad recognition among the leading companies in the global mining industry that strong, but flexible agreements with indigenous groups are mutually beneficial for both companies themselves and the communities they operate in. Agreements also provide a governance mechanism to define roles and responsibilities which can support engagement and dialogue into the future.22

For indigenous peoples, agreement-making processes can be a positive step in redefining their relationship with mining companies operating on their lands. The joint appreciation of both the position statement and the Good Practice Guide makes clear that for the ICMM consent processes should focus on reaching agreements that:

  • refer to the basis for which a project (or changes to existing projects) should proceed;
  • are signed between companies and indigenous groups;
  • provide a means through which a community’s consent for a project can be formalised and documented (including the terms and conditions of projects negotiated through the process of FPIC); and
  • provide a governance mechanism to define roles and responsibilities, which can support engagement and dialogue into the future.

Finally, it must be added that some national legislation requires project developers to negotiate and subscribe agreements with the indigenous peoples concerned, in which case agreement making as a specific stakeholder activity is mandatory.23

Footnotes

[1]     Sebastián Donoso is a partner and Francisca Vergara is an associate, at Sebastián Donoso & Asociados.

[2]     ISO 26000 is a guidance on social responsibility issued in 2010 by the International Organization for Standardization.

[3]     ISO 26000, Terms and definitions, 2.12.

[4]     ISO 26000, Terms and definitions, 2.21.

[5]     ISO 26000, Terms and definitions, 2.17.

[6]     ISO 26000, Terms and definitions, 2.12.

[7]     ISO 26000, Principles of social responsibility, page 10.

[8]     www.icmm.com/en-gb/publications/mining-and-communities/indigenous-peoples-and -mining-good-practice-guide.

[9]     John Ruggie, UN Special Representative, ‘Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework’ (U.N. Doc. A/HRC/17/31 Mar. 21, 2011) (adopted by the UN Human Rights Council on 16 June 2011).

[10]     Guiding Principles, General Principles, page 1.

[11]     Guiding Principles, Principle 15, page 15.

[12]     Guiding Principles, Principle 15, page 16.

[13]     See Guiding Principles 3(d), 18(b), 29 and 31(h).

[14]     IFC, Overview of Performance Standards on Environmental and Social Sustainability.

[15]     PS 1, paragraph 25, page 7.

[16]     Indigenous and Tribal Peoples’ Rights in Practice. A Guide to ILO Convention No. 169, paragraph 5.1, page 59.

[17]     ILO 169, article 15, No. 2.

[18]     Committee of Experts on the Application of Conventions and Recommendations, General Observation 2010/81, page 10.

[19]     The United Nations Global Compact, The Business Reference Guide to the UN Declaration on the Rights of Indigenous Peoples, page 25.

[20]     Good Practice Guide, paragraph 4.1.

[21]     Good Practice Guide, paragraph 2.5.

[22]     Good Practice Guide, Chapter 4, Introduction, page 39.

[23]     One example of this is the Nunavut Land Claims Agreement Act of the Nunavut province of Canada, whose article 26 provides that proponents of development projects located in lands owned by the Inuit shall negotiate and subscribe an ‘Impact Benefit Agreement’ with the corresponding Inuit body.


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