Respecting Indigenous rights (actionable due diligence toolkit)

Anna Triponel

April 21, 2023
Our key takeaway: Respecting Indigenous rights is not a plea from Indigenous communities that companies and their investors can choose to pay attention to if they would like to. No: Indigenous communities have specific international human rights protections, that go above and beyond those of other groups. This means that providing jobs or charitable donations to Indigenous community members isn't a way to offset negative impacts on people. Respecting these rights is so much more - and starts with a deep understanding of Free, Prior and Informed Consent, and how to properly obtain it. Not respecting Indigenous rights comes with a whole host of growing risks - from reputational to business to legal. A member of the Sarayaku people (Kichwa Indigenous people located in the centre of the Ecuadorian Amazon) - alongside a number of other Indigenous communities, organizations, and advocates - provides guidance for companies and their institutional investors to spell out what this respect means in practice. They specifically point the finger at companies in the following sectors: oil and gas; mining; renewable energy; agri-business as well as carbon credit offset projects. 

Respecting Indigenous Rights: An Actionable Due Diligence Toolkit for Institutional Investors’ has been published with the support of Amazon Watch (April 2023). The Toolkit was authored by Emil Sirén Gualinga, member of the Kichwa people of Sarayaku, with contributions from Dr. Michelle Cook, J.D., Water Protector Legal Collective; Summer Blaze Aubrey, Esq., Divest Invest Protect; Moira Birss, Amazon Watch; Roshan Krishnan, Amazon Watch; Christen Dobson, Business & Human Rights Resource Centre; Shona Hawkes, Rainforest Action Network; and Eugene Kung, Staff Lawyer at West Coast Environmental Law:

  • Who are we talking about? “Indigenous peoples inhabit all continents of the world except Antarctica, speak three quarters of the world’s approximately 6,000 languages, and live in over 70 countries worldwide.” Other terms used include Tribes, First Peoples/Nations, Aboriginals, Ethnic groups, Adivasi, or Janajati. The guide makes clear that “in many parts of the world, the history of Indigenous Peoples has been marked by efforts to negate or erase their identities.” There are several factors that help us understand the concept of Indigenous, as set forth by the Chairperson of the Working Group on Indigenous Populations; and in Africa, “the use of the term Indigenous has focused less on aboriginality and more on groups whose modes of living differ significantly from dominant society, and whose cultures are under threat.” The guidance describes how the rights of Indigenous peoples are protected under core human rights treaties and also explicitly recognized by several international instruments. At the same time, there is a “significant implementation gap, as demonstrated by the experience of Indigenous peoples. The expansion of business activities into Indigenous lands without the Free, Prior, and Informed Consent (FPIC) of Indigenous peoples, is reflective of and drives increasing adverse impacts on the human rights of Indigenous peoples.”
  • The business case: The report delves into the business case for companies to respect Indigenous rights which includes operational delays, increased production costs, and permanent obstruction of projects; reputational damage, which can reduce access to capital and demand for products; and legal and related obstacles and costs. This in turn can lead to investor risk: first financial (negative impact on returns); reputational (loss of credibility, press scrutiny) and regulatory (failure to meet potential due diligence regulation). The report provides a range of examples, such as: the reputational impact of the Dakota Access Pipeline in the US; the EDF wind project that was cancelled in Mexico; and the rejection of  KGHM Ajax’s proposed mine in Canada. The report also delves into how protecting Indigenous rights is critical for addressing systemic risks arising from nature and biodiversity loss, as well as the fact that Government non-compliance with international and domestic law increases the risk of Indigenous rights violations.
  • What are investors and companies to do? The report delves into elements of rights-respecting practice that investors should expect from their investee companies and assess investee companies against. Delving into how the UN Guiding Principles apply, the report describes that “[f]or Indigenous peoples, the severity of impacts may not just relate to human rights impacts on individuals, but also, irremediable impacts on their cultural survival, dignity, and well-being as peoples.” The report highlights that CSR projects, such as hiring Indigenous community members or providing charitable activities, can't stand in for a company's responsibility to avoid negative human rights impacts. The report delves into FPIC, and how to meet all three thresholds of being free, prior, and informed in practice. When it comes to the sectors to watch out for, the report describes that “[t]he extractives sector, in particular oil and gas, has generally been seen as the worst human rights offender in relation to Indigenous peoples.” When it comes to mining, “[a]lthough the mining sector has taken steps to recognize Indigenous peoples’ rights in the last few decades, the gap between industry standards and actual practice is still wide.” Further, “[a]gribusiness-related adverse impacts on Indigenous peoples’ rights stem from land-grabbing and destruction of Indigenous lands for timber and pulp, rubber, agricultural plantations such as palm oil and soy, and for cattle ranching.” In addition, “the renewable energy sectors are also increasingly severely affecting Indigenous peoples” and when it comes to carbon credits and offset projects, they “have failed to respect the right to FPIC; failed to share benefits with Indigenous communities; and often restricted the rights and livelihoods of or even displaced Indigenous peoples from their territories.” Part B of the report delves provides a range of questions and checklists for investors to consider as they assess the practices of their investee companies in this area.

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