Businesses and investors have a responsibility to respect the rights of Indigenous Peoples during project development and after project completion under the United Nations Guiding Principles on Business and Human Rights. As such, they must perform adequate due diligence that optimizes mutually beneficial development opportunities.
Implementing fulsome due diligence concerning Indigenous Peoples’ human rights can expose risks that could materially affect the project’s success, and can expose potential harms to Indigenous Peoples, their lands or their resources. A proper human rights due diligence strategy examines implications of risk in project implementation or project outcomes to better understand whether, where and how a project intersects with and affects society, peoples or individuals.
Where Indigenous Peoples may be impacted, human rights due diligence considers impacts on Indigenous land, territories, resources, health and safety, cultural heritage and communities, among other factors. When performing human rights due diligence on impacted or potentially impacted Indigenous Peoples, a primary principle to consider and assess is whether free, prior and informed consent (FPIC) has been solicited, and to what extent the process conforms to international standards of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).
How to operationalize FPIC was one among several topics discussed in the webinar Collaboration and Consent: Prioritizing Indigenous Rights in Investment. Presented on March 18, 2021, by the Investors & Indigenous Peoples Working Group, and featuring panelists from First Nations Community Financial, NDN Collective, Forest Peoples Programme, Boston Common Asset Management and First Peoples Worldwide, the webinar broadly outlined priorities and considerations for those looking at social investment in alignment with Indigenous Peoples' human rights.
At the top of the discussion, First Peoples’ Executive Director Kate R. Finn highlighted basic tenets of the UNDRIP as the international consensus on the "minimum standards for the survival, dignity and well-being of the indigenous peoples of the world" (Article 43). As FPIC is enumerated by the UNDRIP, Finn outlined some broader concepts for its operationalization, noting:
- FPIC safeguards the rights of Indigenous Peoples; ensures equity in negotiation, participation and outcomes; and provides a framework to ensure an equitable and fair engagement throughout the process.
- While FPIC is a process to solicit consent, that decision could be a veto or approval with conditions – FPIC is never merely a process to get to a "yes".
- "Consent" in the FPIC framework can be understood in the business world as a decision tree, where Indigenous Peoples have influence at multiple branches.
- FPIC engagement needs to occur long before a project is initiated in order to fully understand and consider Indigenous Peoples perspectives and asks, and, importantly, to understand that a project may be a non-start from the very beginning.
(First Peoples produced a series of infographics, shared below, further detailing FPIC basics, drawn from the webinar discussion and First Peoples’ Free, Prior and Informed Consent Due Diligence Questionnaire.)
When operationalizing FPIC in project development, another critical factor is to utilize the UNDRIP through international norms as opposed to domestic interpretations. For example, the United States’ endorsement of the UNDRIP in 2010 was a consultation regime and not a consent regime, which severely undermines the FPIC process. In their article Free, prior and informed consent: how to rectify the devastating consequences of harmful mining for indigenous peoples, Forest Peoples Programme explains further:
International human rights law and business good practice recognize that extractive projects should not be established on indigenous peoples’ lands without recognition and respect of their prior rights to the land, and of their right to control what happens on that land – especially in States where weak national frameworks provide little protections for customary tenure rights. FPIC is the core international standard that allows these rights to be realized if the safeguard is properly applied in good faith and fully in line with its core principles.
In light of this it is deeply concerning that some States continue to oppose and undermine the FPIC human rights standard. At the time of its endorsement of the UN Declaration in 2010, the United States indicated that FPIC calls for “a process of meaningful consultation with tribal leaders, but not necessarily… agreement” (US Department of State, 2010). The following year, at the Commission on Sustainable Development’s Working Group on Mining, Canada, Australia, New Zealand and the United States asked for the deletion of FPIC fromtext regarding indigenous and local communities.
Many Indigenous communities are establishing their own FPIC protocols, which must be respected by businesses. In her article Operationalizing Free, Prior, and Informed Consent, Carla Fredericks, Director of The Christensen Fund, and former Director of First Peoples Worldwide and the American Indian Law Clinic at Colorado Law, wrote “ultimately, self-determination is achieved by indigenous communities establishing their own FPIC rules, enabling them to take control of their own business interactions.” She specified:
Although the United States and major extractive companies are moving toward a respect for tribal rights, it will be tribes themselves that are vested with the unique opportunity to proactively engage stakeholders with respect to FPIC as a condition for companies engaging with a tribe.94 A consent regime recognizes this right and this reality, and considers both best interests and self-determination.95 Tribes can move toward establishing their own “consent regime[s,]” shaping the requirement under Montana v. United States96 that nonmembers must be engaged in a consensual relationship with a tribe in order to fall under tribal jurisdiction.97
The due diligence and process necessary when obtaining free, prior and informed consent upholds Indigenous Peoples’ right to self-determination and their sovereignty, respects and protects Indigenous lands and resources, reduces or eliminates risk of physical harm and material loss, and facilitates equitable partnerships throughout the duration of a project lifecycle and long afterwards.
Corporations and governments must implement meaningful consultation with Indigenous Peoples to obtain their free, prior and informed consent as enumerated in the UNDRIP. Likewise, banks and insurers that finance or support projects that impact Indigenous Peoples and their land and resources must use the UNDRIP as a minimum standard for risk assessment.