"How can responsible companies pursue profitable activities that have an inherently significant physical, social or cultural impact, ensure that their operations are not undermining the rights of indigenous peoples particularly when working in geographical areas that may have land right conflicts or complex histories or that are in or contiguous to protected areas or their margins?"

Indigenous peoples are especially vulnerable due to their culture and historical circumstances including dispossession and colonisation. In many instances they will often enjoy only limited socio-economic development and protection of their rights may not be properly articulated in law, meaning they are more susceptible to the economic and social impacts of business activity. In addition, it is particularly challenging for businesses to recognise and respect the interests and values of such groups. It is therefore important to consider factors specific to indigenous peoples in processes of consultation and dialogue with local stakeholder groups. The standard of free, prior and informed consent (FPIC) may be new to business, government and community actors.

The operations of certain types of companies in specific sectors like mining, oil and gas, infrastructure development, agro-commodities production, tourism, logging and pharmaceuticals, can sometimes impact the way of life of indigenous peoples. For example, mineral, hydrocarbon and other resources may be located in areas where the rights of indigenous peoples have not been properly documented and they might offer attractive commercial opportunities that under present policy frameworks could be disadvantageous to indigenous peoples. Or, in the case of tourism, for example, it may be that land considered sacred and upon which indigenous communities rely for their livelihoods, is to be developed. Ill-conceived developments might negatively impact the integrity of the community and their way of life.

As a result, it is unlikely that such business activity can take place without any consequential impacts on the rights of indigenous peoples. Nonetheless, companies should seek to minimise and mitigate these impacts to the best of their ability. To do so will require a thorough understanding of indigenous culture, religion, norms and values, which company employees may often find alien, obscure or difficult to understand, but which nonetheless is vital to do meticulously and effectively so that negative impacts can be monitored, mitigated and managed responsibly.

Moreover, businesses should be cognisant of the need to respect the rights of indigenous peoples as articulated by the UN Declaration on the Rights of Indigenous Peoples (DRIP) and the ILO Convention 169 on Tribal and Indigenous Peoples.1 These instruments necessitate that consultation processes are guided by the free, prior and informed consent of indigenous peoples who may be affected by the business activities.

Defining indigenous peoples

The United Nations estimates that some 370 million indigenous peoples live in more than 90 countries around the world.2 There are indigenous peoples on every continent, representing thousands of cultures, languages and unique backgrounds. International organisations, including the United Nations, acknowledge that at the present time there are approximately 30 ‘uncontacted' peoples in countries such as Brazil, Peru and Papua New Guinea, known only through anthropological evidence.3

In countries such as Bolivia and Guatemala, indigenous peoples represent the majority, while in others they represent a very small minority. Some states contain hundreds of distinct peoples and language groups, while others contain only a few major groupings. In many locations dispersed globally, based on birth rate trends, indigenous groups represent fastest-growing population segments.4

There has been no singular definition of indigenous peoples adopted at the international level. Rather, self-identification has been deemed to be the key criterion. The prevailing view among various stakeholders working on indigenous issues is that a specific definition is not necessary to safeguard the recognition and protection of their rights.

The ILO Convention 169 on Indigenous and Tribal Persons uses the following language in describing the peoples it aims to protect:

"Peoples in independent countries who are regarded as indigenous on account of their descent from the populations which inhabited the country, or a geographical region to which the country belongs, at the time of conquest or colonisation or the establishment of present state boundaries and who, irrespective of their legal status, retain some or all of their own social, economic, cultural and political institutions".5

This dilemma will deal with indigenous peoples' rights only, as other similar groups – such as religious and ethnic minorities – are approached at length in separate dilemmas.

• See dilemma analyses and case studies on ethnic minorities and religious freedom

While indigenous communities reside in a variety of locations, including in urban and semi-rural areas, many groups inhabit rural and remote areas which set them apart from the rest of the population. In this latter context, these groups are often dependent on subsistence-based activities such as hunting, fishing, gathering and small-scale herding and farming. In many contexts they rely on traditional medicine to maintain health.

Many countries have not extended formal legal recognition to indigenous groups, which in some circumstances put them at risk of discrimination and without access to remedy for the violations they might encounter as a consequence. In many African countries tribal people make up the majority of the population and ruling elites may be concerned that if different indigenous groups were to receive recognition, the result could be a further fracturing of states that are already lack cohesion.

Issues of concern

Based on historical political relationships as well as contemporary economic dynamics, indigenous peoples generally represent the most marginalised populations around the world.6

The following are recurring areas of concern that are raised by different stakeholders involved in the protection and promotion of indigenous peoples:

• Impeded access to formal decision making structures at the national level, which may be manifest in the denial of citizenship and social services
• Lack of or diminished access to justice for rights infringements
• Lack of legal recognition of landownership, including subjecting them to dispossession of land and forced displacement
• Lack of acceptance or integration of customary decision-making structures by state systems
• Lack of access to capital to support economic initiatives
• High levels of discrimination and prejudice from society at large
• Inadequate consultation related to development projects that have direct livelihood implications7

This treatment is often based on several factors including physical remoteness and racial prejudice by the government or non-state actors aligned to interests contrary to the rights of indigenous peoples. At the extreme level, according to the UN Permanent Forum on Indigenous Issues' 2010 publication on the ‘State of the World's Indigenous Peoples', "forced removal, clear-cutting of forests, military abuses, and deaths and disappearances are taking place in India, the Philippines, Panama, the United States, Canada, Malaysia, Costa Rica and Chile".8

Real-world examples

There are myriad examples of the ways in which businesses may encounter indigenous rights issues within their operations. This is further complicated by the fact that different indigenous groups take vastly disparate approaches to their relationships with business and national governments.

While some groups would prefer isolation and immunity from forces that would act to undermine their traditional way of life, others seek vigorous engagement with business groups in order to seize the opportunity to prosper from their patrimony. Sometimes those seeking benefit are not representative of the overall indigenous communities they purport to speak for. Women are sometimes disadvantaged relative to ruling male chiefs, or they are not included in consultation processes. Given this range of approaches, it is critical for businesses to understand the specifics of the local operating environment in which they have a presence to appreciate the types of risks and formulate proper consultation and mitigation techniques.

Security forces kill 34 indigenous protestors near Bagua, Peru

In June 2009, 34 individuals died and dozens were injured when security forces aggressively responded to a protest by indigenous groups.9 The protesters were blocking a road near an oil pumping station close to Bagua to demonstrate against legislative decrees that they feared would threaten indigenous land within the Amazon rainforest and open formerly protected areas to oil and gas extraction, mining and hydropower development. Although three senior army officers and policemen were charged, according to NGOs such as Survival International and EarthRights International, the indigenous communities remain concerned about the laws regulating the mineral sector enacted under President Garica.

North American Tribe seeks to prosper from natural resource exploitation

The Colorado-based Southern Ute Tribe seeks active economic engagement and has, among other things, a casino resort complex in addition to a fund that manages investments in energy, real estate, construction, materials, and private equity. The net worth of the tribe is estimated to be approximately US$1.5 billion, the bulk of which has been earned from the leasing of its coal bed methane reserves to various businesses.

International human rights NGO campaigns for a moratorium on mine development in Ecuador demonstrating reputational risk

In July 2010, the International Federation for Human Rights (FIDH) published a report expressing concerns about the human rights violations surrounding mining operations in provinces of Zamora and Morona Santiago. The report points out that some of the risks involved include lack of appropriate consultation mechanisms, pervasive environmental damage, including inadequate access to water and forced evictions. The report also notes that indigenous leaders and human rights defenders that campaign for their rights face persecution and spurious legal proceedings. Although the FIDH is seeking a large audience, the campaign is directed at the governments of Ecuador and Canada (where one of the businesses in question is based) in the hope that they will intervene on behalf of the affected population.

Human rights of the indigenous population in Mato Grosso do Sul continue to deteriorate

In March 2010, the Special Rapporteur on the human rights and fundamental freedoms of indigenous people, James Anaya, expressed concern regarding the continued exacerbation of indigenous peoples' rights in the state of Mato Grosso do Sul. Specifically, he is concerned about the "allegations of violence against the Guarani people and the severe impact that the aggressive policy of governments in the past to sell large tracts of traditional lands to non-indigenous farmers has had on the Guarani communities".10 This policy has had the effect of seriously impinging on the means of subsistence for the group. The Special Rapporteur notes that the "dire conditions" experienced by the community have prevailed despite various attempts at interventions by the government.

Indigenous communities are forcibly evicted in favour of development projects and foreign investment in Cambodia

In its 2011 Annual Report detailing global human rights violations, Human Rights Watch found that there was an escalation in illegal land confiscation and forced evictions impacting indigenous communities. The report section notes that the United Nations Committee on the Elimination of Racial Discrimination (CERD) has criticised the government for "granting numerous concessions on indigenous peoples' lands without their consent and harassing peaceful protesters".11 For instance, in Kampong Speu in Cambodia, a Singaporean concession holder partnered with Prime Minister Hun Sen's sister to oversee the clearing of farmland belonging to indigenous Suy people, threatening the resource base of 350 families.

Local discontent is expressed regarding Liquid Natural Gas (LNG) production in Papua New Guinea (PNG)

On 18 November 2010, Credit Suisse and Citigroup announced that a US$15bn joint venture led by ExxonMobil for the production of Liquid Natural Gas (LNG) in Papua New Guinea (PNG) will start to produce 6.9m tonnes per year. Although this venture bodes well for PNG's economy as a whole, in the months following the announcement, discontentment amongst local communities and alleged human rights abuses by the national police force posed significant risks to foreign investors engaged in the extractive industry. Some local communities feel that they are not sufficiently benefiting from PNG LNG. Energy and mining projects also face disruption as a result of tribal land disputes. Such disputes are a regular occurrence in PNG where more than 97% of territory is owned and managed in accordance with local custom. For instance, in July 2010, a tribal dispute erupted into a gun battle at PNG's main domestic airport in Port Moresby. In February 2010, ExxonMobil was forced to suspend work after four local villagers were killed in a tribal dispute between two rival coastal villages near the capital.

Security forces violently respond to protests against forced evictions in the Philippines

In August 2010 the UN Committee on the Elimination of Racial Discrimination expressed concern that indigenous peoples were not adequately consulted with regard to infrastructure and natural resource exploitation projects in the Philippines. The Committee also highlighted the effect internal displacement had on the livelihoods, health and education of indigenous peoples.12 In October 2010, about 100 armed police and a demolition crew violently dispersed residents from a protest site in Didipio, Nueva Vizcaya province. The residents were protesting against the forced eviction of hundreds of Indigenous Peoples and rural dwellers from their homes in Didipio to make way for mining exploration. The police reportedly used unnecessary and excessive force and discharged tear gas towards the residents.

Rio Tinto takes a proactive approach to hiring indigenous peoples in Australia

In response to regulatory changes invoked through the Native Title Act (1993), Rio Tinto has sought to develop relationships with the aboriginal community and the Australian government in order to enhance the degree to which they are engaged in the local economy. The company is of the perception that employing local indigenous persons - either directly within their operations or through contractors - can help distribute the wealth generated through mining and deliver sustainable economic benefits. Their indigenous employment policy notes that the company is focusing on building skills and supporting development programmes that strengthen local community capacity through education, training and enterprise facilitation.13

Indigenous campaigners confront AES Corporation over environmental and social concerns attached to Panama dam

Cultural Survival, the International Human Rights Clinic at Harvard Law School and the Center for Biological Diversity sent representatives to the AGM of AES Corporation in order to express concerns related to the prospective environmental and indigenous rights violations stemming from the planned construction of a dam on the Changuinola River. The river feeds into La Amistad International Park, a UNESCO World Heritage Site and will flood thousands of acres of land, destroying the homes of hundreds of Ngöbe indigenous people. Members of this group have condemned the company for its failure to follow through on promised compensation plans for lost territory. In addition, according to Cultural Survival, the company has promised to allocate funds towards resettlement assistance and community centres, but has not yet followed through on their commitments. In response, CEO Paul Hanrahan assured shareholders the company will build community centres for all communities, including Guayabal, impacted by the dam.

• Please contribute your commentary or suggestions to our online discussion forum:
  Indigenous rights online discussion forum

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There are several themes or issues relating to indigenous peoples that tend to converge, regardless of the specific geographic location:

Historical lack of trust directed at governments and business

In many different settings indigenous groups have experienced varying degrees of social marginalisation or even outright persecution at the hands of the government or groups within society that have been able to act with impunity. The level of discrimination has been so severe that in some cases – such as in Canada14 and Australia15 – the government has been compelled to issue a formal apology to the community and compensate victims for their complicity in human rights violations.

This negative treatment might have physical manifestations in some instances, which, could come in the form of environmental contamination of their land from old mines that were insufficiently reclaimed after production ceased. Alternatively, it could be found through deterioration in living conditions faced by communities that were re-located against their will or were exposed to a wave of in-migration that changed the economic and social conditions to their detriment. In both cases, the lack of trust could stem from broken promises or insufficient consultation by government and/or business that resulted in harm to indigenous communities.

The lack of trust could be exacerbated by insufficient access to mechanisms (such as judicial remedies and/or company complaints procedures) that could help to rectify these issues. Consequently, in some settings, indigenous groups are hesitant to engage with different stakeholders when responding to project proposals or government statements promising improved practices and better regulations. Different stances and approaches taken by business are also relevant in this area; if one company fails to consult the indigenous population adequately, for instance, the indigenous groups' perspective of business in general could be tainted.

National government policy fails to promote indigenous rights

According to the Secretariat of the UN Permanent Forum on Indigenous Peoples, "many indigenous communities are adversely affected by policies, projects and programs, since their distinct visions of development, their concerns and way of life are all too often ignored by national or local level policy makers or administrators".16

Examples include Moroccan law, which prevents the inclusion of children with Amazigh (Berber) names in the civil registry of births because of the manner in which "Moroccan name" is conceived; Nepalese law, which prohibits any Indigenous person from holding office in the judiciary; and Cameroon, where many Batwa have difficulty obtaining citizenship identification papers.

For most indigenous groups, their relationship with the national government is the point of departure for their existential concerns because it can be difficult for them to seek fruitful engagement or assistance at the international level in order to bypass ill treatment at the hands of the State.

According to the UN Permanent Forum on Indigenous Peoples, the United Nations system does not provide specific juridical mechanisms for the resolution of conflicts to which indigenous peoples are a party or which resulted in the violation of the rights of group members.17 For instance, the International Court of Justice (ICJ) does not provide legal standing to indigenous individuals or collectives to pursue litigation against states or third parties such as multi-national corporations.18 This is added to the fact that states need to endorse complaint mechanisms and/or optional protocols associated with regional courts and UN treaty bodies before the grievance mechanisms can be activated. Although the substance of national policy is not always prejudicial to the rights of indigenous peoples, in many locations some of the following concerns would resonate with members of indigenous communities:

• Political agendas that view indigenous peoples as an obstacle to national development
• Economic mechanisms that transfer benefits from mining to national or provincial centres instead of the local area
• Decisions that limit resources to critical social services
• Lack of coordination among different branches of government on issues of concern to indigenous groups resulting in convoluted or conflicting policies
• Implementation shortcomings of existing laws that promote the rights of marginal groups, including indigenous peoples

Rights relevant to indigenous groups that are recognised by national governments vary. Typically they relate to self-government, landownership (either individually or collectively), land access, environmental conservation, resource rights and the protection of cultural heritage. General rights related to non-discrimination, equality and a prohibition on racism are also applicable.

Because of the complexity of the legal frameworks that govern these issues at national levels, there is no exhaustive list of all the countries that provide some protection.

Land rights are fragile, poorly documented and or ambiguous

The land indigenous peoples have traditionally owned, occupied or otherwise used is extremely significant; it can aptly be described as a physical representation of their culture, spirituality and identity. Moreover, the land often represents the source of food, medicine, clothing and shelter and provides the basis for self-government and economic viability. Spiritual attachment and a sense of collective belonging to land – including in relation to burial rituals – is an especially salient issue for indigenous peoples.19

Commercial activities ranging from natural resource extraction, ranching, infrastructure projects, tourism and bio-prospecting can put immense pressure on land held by indigenous groups. This can be compounded by unclear property rights arrangements which are a vital issue for businesses to consider prior to investment.

Land and resource rights may be formally recognised by treaty or land claim settlements with the national government, or they may be enshrined in national legal frameworks through recognition of customary law at the local level. Specific laws that identify indigenous groups for special treatment are relatively rare – Australia, Bangladesh, Cambodia, Cameroon, Canada, Chile, Guyana, India, Japan, Malaysia, New Zealand, Nicaragua, Russia, Taiwan, Thailand and the United States fall into this category but the majority of the rest of the globe does not have a unique set of arrangements.

The international human rights law standard for indigenous ancestral land requires states to give legal recognition and protection to the right to lands and territories which indigenous peoples have traditionally owned or occupied.20 The Inter-American court judgments elucidate these standards in Awas Tigini v. Nicaragua and Saramaka v. Suriname.

In countries where land rights are governed by customary law, such as Papua New Guinea, negotiations take place with each traditional owner involved, which may be an individual, a family clan or a more complex set of actors. In addition to the complexity related to the multiplicity of stakeholders involved, ownership could be overlapping and relate to different categories of land use.

In countries such as Peru or Venezuela, which have sought to formalise landownership through the issuing of titles, the boundaries may be more discrete, but the customary use of the land and rights to any shared resources could still be a legal quagmire.

In Canada, Australia, the Philippines, New Zealand and the United States (on a smaller scale), there are hundreds of active claims and treaty processes in the courts as a result of judicial decisions or new legislation. As a result, formal title in some areas is contentious and litigation can extend for years – a process which is expensive and time consuming for all parties with equity at stake.

Free, Prior, Informed Consent (FPIC)

Also relevant under this category is the concept of Free, Prior Informed Consent (FPIC) as it relates to land use and physical and intellectual property rights.21 The duty to consult is affirmed as an overarching principle in Art. 19 of UNDRIP and also referred to in ILO No. 169. General Recommendation No. 23 (1997) promulgated by the Committee on the Elimination of Racial Discrimination (CERD) requires states to "Ensure that members of indigenous peoples have equal rights in respect of effective participation in public life and that no decisions directly relating to their rights and interests are taken without their informed consent".22

FPIC encompasses varying requirements and methodology that is applicable to policies, programmes, projects, and administrative and legislative measures impacting indigenous rights in an increasing number of national, international and regional venues.

The need to embark on a FPIC exercise is attached to a wide variety of bodies and sectors "ranging from the safeguard policies of the multilateral development banks and international financial institutions; practices of extractive industries; water and energy development; natural resources management; access to genetic resources and associated traditional knowledge and benefit-sharing arrangements; scientific and medical research; and indigenous cultural heritage".23

The International Labour Organization's Indigenous and Tribal Peoples Convention No. 169 refers to the principle of free and informed consent in the context of relocation of indigenous peoples from their land (Art. 16). In addition, the Convention requires that States fully consult with indigenous peoples and ensure their informed participation as it relates to development projects, national institutions and programmes, land and resources.24

Similarly, the Committee on the Elimination of Racial Discrimination (CERD) has promulgated General Comment 23 that calls upon States to "ensure that members of indigenous peoples have rights in respect of effective participation in public life and that no decisions directly relating to their rights and interests are taken without their informed consent".25

At the regional level, the Inter-American Commission on Human Rights interprets human rights law to include the taking of "special measures to ensure recognition of the particular and collective interest that indigenous people have in the occupation and use of their traditional lands and resources and their right not to be deprived of this interest except with fully informed consent, under conditions of equality, and with fair compensation".26 The Inter-American Developmental Bank (IDB) Strategies and Procedures on Socio-Cultural Development mandate that the IDB will not support projects affecting tribal lands and territories "unless the tribal society is in agreement."

Within Europe, the European Union Council of Ministers' 1998 Resolution entitled, ‘Indigenous Peoples within the framework of the development cooperation of the Community and Member States' provides that "indigenous peoples have the right to choose their own development paths, which includes the right to object to projects, in particular in their traditional areas."27

The World Bank does not necessitate undertaking FPIC. However, Operational Manual 4.10 (2005) requires obtaining indigenous peoples' broad community support through culturally appropriate and collective decision-making processes subsequent to meaningful and good faith consultation and informed participation at each stage and throughout the life of the project. Projects that fail to attract this threshold of support are not eligible for financing provided by the World Bank.

Thus, even though FPIC is generally a "soft law" obligation, it has been gaining normative strength at the regional and international level meaning that the implementation will be less discretionary over time. As a result, businesses could avoid challenges to business continuity as well as reputational and legal risks associated with complicity in the abuse of indigenous peoples' rights by considering the feasibility of undertaking such a process at the outset of a new venture if relevant. This should form part of the impact assessment work.

Numerous local community stakeholders with conflicting priorities

There is an additional level of risk for companies that operate in areas where the ‘local community' is composed of both indigenous and non-indigenous peoples, or more than one group of indigenous peoples, as navigating obligations, responsibilities and requirements of several groups simultaneously can pose conflicts and confusion.

While groups may have similar interests in terms of the desire for employment opportunities, security of land tenure and revenue from taxes to be re-invested for the benefit of locals, the following divergent perspectives on pivotal issues may emerge:

• Indigenous peoples will focus their efforts on securing and retaining tenure to their "ancestral lands", not just land as defined in the western notion of individual property rights. As a result, they will be much less amenable to particular land uses (i.e. disruptive activities that cause irrevocable changes to the ecosystem) as compared to the general population and have the potential to be much less flexible in this area

• Because of this ancestral attachment and the spiritual and cultural significance of the land, there will be more calls to accommodate special concerns about land and resource use and about the protection of specific areas than would otherwise be the case

• Indigenous parties will place a greater emphasis on retaining and strengthening customary collective structures, including landownership and decision making, and will likely make the role of customary structures an indispensible element of any choices that are made

Risks and responsibilities associated with resettlement

Various studies have shown that the consequences of re-location for the affected groups can be devastating if not managed responsibly. This topic has warranted an individual dilemma that deals with resettlement at length. According to a study undertaken by the International Council on Mining and Metals (ICMM) re-settlement is often associated with the following:

• Permanent dispossession of ancestral lands and loss of land rights
• Loss of cultural integrity and the breakdown of family and governance structures
• Loss of spiritual and knowledge systems
• Loss of identity and collective cohesion

These findings have prompted most international institutions to develop guidelines regarding resettlement activity. For natural resource–dependent peoples, the challenge is significant as attempts are made not to socially engineer the move and cause further dislocation that would otherwise be the case. For institutions such as development banks, this has led to intensified efforts to integrate and coordinate policies regarding indigenous peoples with guidelines on resettlement.28

Capacity constraints, lack of special expertise on the part of both indigenous groups and business

Different indigenous groups have varying degrees of experience and success dealing with businesses and government agencies in addition to disparate organisational structures within tribes. Groups that are well organised and educated will be better equipped to negotiate and manage relationships with businesses as compared to those that have not had such an interaction the past.

On the other hand, negotiating with indigenous representatives and maintaining a constructive relationship with the group throughout the course of a project or investment also requires business to exercise the following skills:

• Cross-cultural communication
• Land use planning and resource management expertise
• Cultural assessment skills
• Knowledge of indigenous rights
• Conflict resolution expertise
• Community capacity building/economic development capabilities

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Business dilemmas involving indigenous issues can be found in the majority of BRICs and N-11 emerging economies.29 Research indicates that there are similarities among the types of rights violations that occur in these countries and they are often concentrated in the following topics: land issues, political disenfranchisement, economic discrimination and poor development indicators when compared to general population.

Examples of scenarios companies might face when operating in emerging economies include:

Brazil: The National Indigenous Foundation (FUNAI) estimates that there are 460,000 indigenous people living on indigenous lands and an additional 100,000 to 190,000 in other areas, including urban areas. Some rainforest indigenous settlements contain groups that still live in voluntary isolation. In 2009, the UN Special Rapporteur on the Rights of Indigenous Peoples travelled to Brazil in order to get a firsthand sense of the degree to which indigenous rights were protected and promoted – specifically in relation to self-determination. The report indicates that Brazil has both constitutional and other legal protections for indigenous peoples, and the government has developed a number of programmes in areas of indigenous land rights, development, health and education. However, indigenous peoples' right to self-determination is limited. The Special Rapporteur found that many groups were unable to exercise control over their lives, communities and lands to the degree stipulated in various international human rights law instruments.

Many of the surviving indigenous groups in Brazil no longer live on their traditional lands, which has resulted in an erosion of their cultures, traditions and languages. According to the Brazilian Institute of Geography and Statistics (IBGE), while 15.5% of the Brazilian population lives in extreme poverty, the rate for indigenous people is 38%. Extreme poverty and a range of social ills notably afflict the Guarani-Kaiowá and Nhandeva peoples of Mato Grosso do Sul. The state has the highest rate of childhood mortality due to precarious health conditions and inadequate access to water and food.

The Special Rapporteur noted that there has been inadequate consultation with indigenous peoples affected by major development projects and large-scale mining operations, including activities in areas outside demarcated indigenous lands but that nonetheless affect these communities. Recent activism targeted at the Belo Monte dam30 led to a formal request by the Inter-American Commission on Human Rights to suspend the project in April 2011, citing the project's potential harm to the rights of traditional communities living within the Xingu river basin.31

For decades the fertile and mineral-rich territories of the Yanomami indigenous tribe have been exploited for gold mining, timber production, and development purposes by both the government and private enterprise. The discovery of gold 30 years ago in an area inhabited by the Yanomami (an area located in the Amazon and the regions surrounding Orinoco which include both Brazil and Venezuela today) has led to serious threats to their survival. Gold mining has caused the destruction of their natural environment and has had numerous deleterious health consequences for the community, including widespread mercury poisoning. At the same time, the gold miners themselves have posed a violent threat to this group as indigenous peoples have been victims of numerous beatings and killings.

India: The government has recently taken steps to amend legislation on the protection of indigenous peoples. The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act 2006 is described as a "landmark piece of legislation" that stipulates the rights of forest dwellers and others who depend on forests for their livelihoods and cultural identity. The 2006 Act is coupled with many examples of judicial decisions that demonstrate a willingness to proactively ensure that indigenous rights are safeguarded in the justice system.

However, the government's overall record in this area remains mixed. Indian law automatically classifies all underground minerals as state property and does not require groups seeking to exploit the resources to obtain consent from affected communities.

A 2011 report by the Asia Indigenous Peoples Pact funded by the ILO has found that more than half of India's mineral wealth has been obtained through the violation of indigenous rights. Of particular concern is the high concentration of mineral deposits in areas inhabited by the Adivasi indigenous group which lacks constitutional protection of their land and resources.32 The report also indicates that legislation allows the government to acquire lands upon payment of cash compensation for any public purpose, including mining.33

Mexico: The Inter-American Commission on Human Rights (IACHR) held a thematic hearing on 28 March 2011 on the topic of land tenure and the human rights situation of indigenous peoples. Petitioners participating in the hearing discussed the prevalence of ‘agrarian conflicts' whereby indigenous people defending their land faced harassment. The IACHR meeting also revealed that progress made toward re-distributing land back to indigenous groups though a policy shift made several decades ago has receded considerably.

Levels of impoverishment among indigenous peoples continue to be extremely high. As a result, many indigenous groups feel compelled to sell their land which often only results in a short-term solution to the serious destitution they face. Private ownership of ancestral land and the consequent dispossession are serious problems that are compounded by the fact that indigenous peoples are poorly represented in the bodies that defuse agrarian conflicts and have the power to make pivotal political decisions.

Philippines: There are an estimated 12-15 million indigenous peoples in the Philippines, or 15% of the total population.34 They occupy more than 10 million hectares of the total landmass of 30 million hectares.

The Indigenous Peoples Rights Act (IPRA) requires the consultation of indigenous groups prior to any projects that might be implemented or have an adverse impact on their communities. However, according to the Indigenous Peoples Rights Monitor, other parallel legislation including the 1995 Mining Act conflicts with the IPRA. The Mining Act allows 100% foreign ownership of mineral resources and makes the legal eviction of indigenous communities possible. In addition, the National Integrated Protected Area Systems (NIPAS) restricts the conduct of indigenous groups within their own lands if they overlap with areas designated as national parks.

Given the dispersed presence of indigenous groups throughout the country, they are exposed to a variety of economic activities including mining, dams and other energy projects, large agri-business operations and eco-tourism. The adverse impacts from these ventures are manifold: livelihoods are compromised, the environment is degraded and in some cases such activities have caused socio-political divisions and animosity between and within groups.

Illegal deforestation and the resultant land degradation are serious problems in the Philippines. This has been caused by inequitable land distribution and failed conversation policies. Many of the areas that are especially adversely impacted - such as the island of Mindanao – have large indigenous communities who suffer from the exploitation of their land without receiving compensation or sufficient protection to stop the practice.

In 2006 a fact-finding team led by Rt Honourable Clare Short, British Member of Parliament, investigated the effects of mining in the Philippines with a particular focus on indigenous communities.35 The research indicated that mining causes major problems related to the livelihood, health, and human rights of indigenous peoples and other local communities. The Society for Threatened Peoples has reported that in a number of cases, the indigenous peoples' consent to some projects within their territories was obtained by means of misinformation, misrepresentation, bribery and intimidation.

Botswana: On 3 March 2011, the Special Rapporteur on the Rights of Indigenous Peoples expressed grave concern over the treatment of Bushmen and Bakgalagadi tribes in the Central Kalahari Game Reserve at the hands of the government. The government is seeking to evict the groups by putting pressure on them through the denial of essential services – including water - from the area despite the fact that a 2006 High Court ruling legitimised their land claims. This treatment is particularly controversial given the hypocrisy of the government consenting to both diamond exploration and eco-tourism elsewhere in the Game Reserve.36

Cambodia: The Asian Development Bank (ADB) views Cambodia as a "paradox" when compared to other indigenous rights protection frameworks within Asia.37 While these groups are obliged to seek state assistance in order to ensure their rights are protected, the public authorities are instrumental in the rights violations faced by these communities. According to the ADB, even when legal instruments that protect communal land rights and resources are in place, poor enforcement of laws, corruption among public officials and the privileging of economic growth above other priorities restricts the applicability of these rights to indigenous peoples. The encroachment of development projects and foreign businesses on traditional lands, forests, and water resources has resulted in deterioration in the quality of life and prospects for cultural preservation for a variety of groups within the country.

Nigeria: The Movement for the Survival of the Ogoni People represents a community of approximately 850,000 residing in the Niger Delta region.38 The Movement has documented an array of human rights violations against the population, the majority of which are associated with oil and gas development and include governmental neglect, lack of access to social services, and political marginalisation. Assassinations and violence perpetrated by security forces in the area have been a long standing issue and have resulted in a high profile court case against Shell in the 1990s.

In June 2009, Shell paid US$15.5 million in an out of court settlement relating to accusations that it was complicit in the deaths of nine activists in 1995, including Ken Saro-Wiwa. Despite the payment to the activists' families, Shell denies liability. The case was filed in the US under the Alien Tort Claims Act. In the early 1990s, Saro-Wiwa was a vocal critic of Shell, as well as its impact on local Ogoni communities and the environment. All nine activists were reportedly tortured by Nigerian security forces and were hanged for allegedly murdering political rivals in November 1995 following a trial that human rights activists denounced as a sham. The plaintiffs claimed Shell provided the military with transportation, including helicopters.

UNPO has reported that the Nigerian Land Use Act effectively divests the Ogoni people of their rights of ownership and possession of land and its resources.39 In addition, the Petroleum Decree denies the right to consultation and participation in the exploitation of natural resources to the local Niger Delta population, placing this right only in the hands of foreign corporations in collaboration with the Nigerian federal government. As this area of Nigeria becomes increasing militarised – an observation provided by Human Rights Watch40 - the risk for abuses to occur during encounters with security forces intensifies.

Iran: The Balochi people are indigenous to West Balochistan, which is a territory that spans Pakistan, Iran and Afghanistan. In Iran, they are represented by the Balochistan People's Party which seeks to put an end to a variety of human rights infringements including mass displacements, extrajudicial killings and discrimination in both the political and economic sphere. The lawlessness and impunity for human rights infringements is particularly rife in the part of the West Balochistan that lies within Pakistan's borders.

According to UN data published in 2003, Balochistan is the poorest region in Iran with the worst indicators for life expectancy, adult literacy, primary school enrolment, access to water and sanitation, and childhood mortality. These low development indicators exist despite the fact that Balochistan produces 40% of Iran's energy.

Colombia: BHP Billiton, Anglo American and Xstrata co-own the opencast Cerrejon coal mine situated in La Guajira state, North-eastern Colombia. The mining operation has attracted controversy, in part because the Wayuu indigenous community has suffered a series of human rights violations including forced displacement of Tabaco residents without just compensation.

In August of 2007, Cerrejón and its shareholders requested a review of its corporate social responsibility practices and its relationship with neighbouring communities of La Guajira by an independent panel. The final report indicates that the mine owners could "do more to contribute to a better life for those in the affected communities" especially on the topic of land use and resettlement decisions. The owners of the mine have responded by implementing community programmes that deal with health, education, culture and recreation. Although the mine has won corporate social responsibility awards for their efforts, campaigning by activists – particularly related to compensation for relocation that took place in the past – continues.

In a 2010 report by the UN Special Rapporteur on human rights defenders, the risks experienced by campaigners within the country is described to be ‘extreme'. Individuals lobbying on sensitive topics such as indigenous rights or corruption have been the targets of violence by both the government and non-state actors. Between 1 January 2002 and 10 December 2009, the Special Rapporteur sent 39 communications to the government related to killings or enforced disappearances of defenders or their relatives, and 119 communications on threats or murder attempts against defenders or their relatives.41

Indigenous leaders have become the most vulnerable group of defenders because the internal conflict has moved to their areas. At the end of his visit to Colombia in July 2009, the Special Rapporteur on the situation of human rights and fundamental freedoms of indigenous people stated that "the situation of indigenous people in Colombia is grave, critical and very worrying".42

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International law

The right to be free from discrimination can found in several international human rights instruments as it is a part of the core prohibited aspects of discrimination. Several international human rights covenants outlaw discrimination based on race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. Indigenous rights could fall under general anti-discrimination categories or be dealt with in specific laws that are tailored to their collective rights.

As with all human rights, it is incumbent on the state to promote and enforce the rights of indigenous peoples. Nonetheless, as is stipulated in the UN Special Representative on Business and Human Rights' Guiding Principles, companies have a duty to respect and support this right as applicable.

States that ratify international human rights treaties will have relevant national legislation in place implementing the terms of these legal instruments and allowing for adjudication at the national level. That said, this by no means ensures the provision of equal legal protection across all countries, not least because no international human rights treaties have achieved universal ratification.

International Labour Organisation's Indigenous and Tribal Peoples Convention No. 169 stipulates that governments have the responsibility for "developing co-ordinated and systematic action to protect the rights of indigenous and tribal peoples (Article 3) and ensur[ing] that appropriate mechanisms and means are available (Article 33)."43 The Convention maintains a focus on consultation and participation, with a view to stimulating dialogue between governments and indigenous and tribal peoples and has been used as a tool for development processes, as well as conflict prevention and resolution.

The UN DRIP (Art. 33) indicates that "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".

Domestic law

In certain jurisdictions where there is well established, highly articulated legislation in place prohibiting the violation of indigenous peoples' rights together with effective enforcement, legal risks associated with complicity in human rights violations are likely to be serious. On the other hand, jurisdictions with comprehensive legal regimes and a strong rule of law provide businesses with regulatory predictability and certainty which plays an important role in risk mitigation as the standards attached to business conduct are clear.

In ‘weaker jurisdictions' characterised by variables such as legal loopholes, corruption and flawed judicial processes, the reputational risk related to indigenous rights infringements eclipses legal risks because the likely upshot of such a setting could be poor regulatory enforcement.

Nonetheless, it is useful to examine legislation and legal cases from a mix of countries in order to identify the higher legal standards that MNCs should aspire to – and which will, over time, become more common in a wider range of jurisdictions as the movement to ensure that companies are held to account for complicity in human rights violations proceeds apace.

Strict Free, Prior Informed Consent (FPIC)

One of the domains in which litigation is common in relation to indigenous rights is on the topic of free, prior and informed consent obligations placed on government and, in some cases, businesses.

The following is a survey of the requirements in different countries which businesses in certain sectors often encounter indigenous communities:

• In Australia, Canada, the US, Papua New Guinea, Indonesia and Peru, in order to purchase the land from traditional owners, industry representatives must establish a mutual agreement with the landowners

• In the Philippines, according to the Mining Law (1995) and Indigenous Peoples Rights Act (1997) ‘prior informed consent' is required at least at the exploration stage. This is same requirement is found in Australia under the auspices of the Northern Territory Aboriginal Land Rights (1976)

• In Canada, where land titles have been solidified, (for instance, on reserves, as well as in Nunavut), consent is required. On land where land settlements have yet to be finalised, there is a ‘right to consult' which is verified by officials dealing with the permitting process

• In the US, on Native American reservations and trust lands, tribes often have not only surface rights but also mineral rights, and in this context, tribal council approval is required

It is noteworthy that "public interest litigation" in many developing countries such as India and the Philippines has become a very popular vehicle to access environmental justice for many groups including indigenous peoples. In jurisdictions where there are liberal rules attached to "standing", NGO have been able to prepare interventions on behalf of individuals and groups helping to vindicate their claims.44

Land claims

In many countries throughout the globe land claims disputes between governments and indigenous peoples are ongoing, which has the effect of placing property rights in certain territories in a state of flux. However, landmark rulings in the follow countries have determined the legal requirements attached to land claims in definitive terms:

• The Supreme Court of Canada in Delgamuukw v. British Columbia (1997) defined the nature of aboriginal title as a collective-proprietary right. In doing so, the court established a distinction between the proprietary rights to which all Canadian citizens are entitled and aboriginal title. The ruling indicated that aboriginal title "is not a mere private property right, but a communal right that includes governmental authority and therefore is more in the nature of title to territory than title to land"

• Courts in Australia have recognised the customary and traditional property rights of indigenous peoples through Mabo v. Queensland (1992), a High Court case. The ruling dictates that native land titles are both communal in nature and emerge from traditional laws of indigenous tribes

• The US Supreme Court in its decision in Lyng v. Northeast Indian Cemetery Protective Association (1988) accepted the connection between tribal cultural survival and legal protection of the natural environment

Legal risks

The legal risks emanating from indigenous rights litigation can be immensely costly for business. There are numerous examples of multinational businesses engaged in lengthy legal battles over allegations of human rights abuses and environmental degradation.45 One of the most high profile cases involves ChevronTexaco's previous operations in Ecuador.

Ecuadorean Amerindian groups filed lawsuits in US courts in the early 1990s, alleging that Texaco, which was acquired by Chevron in 2001, polluted the jungle and damaged their health by dumping 68bn litres of contaminated water into the jungle over a period of 20 years (between 1972 and 1992). Chevron acknowledges that there has been pollution in the Amazon but denies that it is legally responsible for the cleanup.46

In June 2009, Chevron said it had exhausted attempts to reach a settlement with the plaintiffs. Lawyers for the company also alleged that the trial was influenced by Ecuadorean politics. The verdict handed down by Ecuadorean courts in early 2011 resulted in a fine of US$9.5bn (less than the maximum amount of US$27bn) will be appealed by both parties to the suit.

Chevron has accused lawyers and supporters of indigenous groups who brought the case of "corrupting the trial" and the plaintiffs are dissatisfied with the size of the fine.47 This case also has elements of reputational risk as Chevron has been widely criticised for its conduct in Ecuador by both civil society and other businesses.

The Endorois case (CEMIRIDE v. Kenya) at the African Commission on Human and Peoples Rights is one of the most recent and prominent examples of legal risks that businesses could potentially face on the topic of indigenous rights. A ruby mining concession was granted to a MNC on Endorois ancestral land. The judgment suggested that the Endorois should have their land restored, titled and demarcated. In addition, the Commission found that the eviction, with minimal compensation, violated the Endorois' right as an indigenous people to property, health, culture, religion, and natural resources.48

In November 2009, Chile's Supreme Court applied ILO Convention No. 169, which Chile ratified in 2008, in finding that indigenous communities had customary rights to a specific source of groundwater.The case involved attempts by a company to secure rights to bottle and sell freshwater from a source historically used by members of the Aymara indigenous population.

Operational risks

Extended litigation can consume valuable management time, resulting in considerable operational disruption. In many instances, executives must give lengthy depositions as a part of the adjudication process. In addition, they are also likely to be involved in litigation strategy, including harm mitigation and publicity.

If companies are the recipients of loans from international financial institutions like the World Bank they are subject to conditions related to upholding human rights and environmental standards. The World Bank's policies also address the need for consultation with communities, both indigenous and non-indigenous. The World Bank Safeguard on Environmental Assessment requires that the project proponent "consults project-affected groups and local non-governmental organisations about the project's environmental aspects". In the event that businesses are found to be falling short of the strict criteria set out by the Bank, they could face penalties and/or be placed in a situation where forthcoming tranches of funding are withheld.49

The tactic of blocking roads and disrupting the transporting of products and supplies has been used on numerous occasions by disgruntled indigenous groups. On 6 February 2011, hundreds of indigenous persons blocked the routes into an oil installation located in Arauca, north-east Colombia. They were protesting the detention by security forces of three of their leaders who are accused of links with the National Liberation Army. Operational disruptions occurred as a consequence.

In areas that are heavily militarised, the tension created by road blocks can escalate rapidly and result in violent encounters. This occurred in Bagua, Peru when violence erupted in 2009 after a group of indigenous people blocked a road for several weeks and security forces were brought in to dismantle it. Human Rights Watch reports that the incident resulted in upwards of 32 causalities. 50

Reputational risks

Even where allegations of complicity do not result in legal action, companies can still face a range of non-legal risks – and reputational risk in particular. If a company is perceived to abuse the rights of indigenous communities, it may end up alienating a range of stakeholders including consumers, investors, current employees, prospective employees and civil society members.

This has the potential to result, for example, in:

• Reduced sales as a result of brand erosion amongst consumers who are either part of, or sympathetic to, indigenous groups that are perceived to be subject to discriminatory practices
• Divestment by ethical investment organisations who perceive a discriminatory approach to indigenous rights

There is a vast range of groups campaigning on behalf of indigenous communities that seek maximum exposure for their concerns. The Declaration of Lima, promulgated in 2010, is but one example of the networks of civil society groups rallying for the cause of indigenous peoples on topics such as climate change and issues surrounding the extractives sector. Evidently, the signatories of this Declaration will seek to cause legal and/or reputational damage to businesses they view to be operating in an unscrupulous manner.

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According to the UN's "Protect, Respect and Remedy"51 policy framework ("the framework"), business has a responsibility to respect all human rights. To meet its responsibility the framework states that a responsible company should engage in human rights due diligence52 to the level commensurate with the risk of infringements posed by the country context in which a company operates, its own business activities and the relationships associated with those activities.53

The framework also specifies the four main components of the human rights due diligence: a statement of policy articulating the company's commitment to respect human rights, serving as guidance underpinning specific actions; periodic assessment of actual and potential human rights impacts of company activities and relationships; integration of these commitments into internal control and oversight systems; and tracking and reporting performance.

Companies can seek specific guidance on this and other issues relating to international labour standards from the ILO Helpdesk.54 This aims to help company managers and workers understand the ILO approach to socially responsible labour practices and to assist in the development of good industrial relations. The ILO Helpdesk website also contains detailed factsheets and links to information, resources and frequently asked questions on labour issues, using the ILO Declaration of Principles concerning Multinational Enterprises and Social Policy as the framework.

Specific actions that responsible business might take include: 55

1. Impact assessment and the determination of engagement partners

As a starting point, companies should undertake a scoping process to determine the extent to which their activities might affect indigenous communities. This investigation could take a variety of forms, including on-the-ground reconnaissance, a search of government documents (which will include, among other things, consultations with the land registry), engagement with local civil society stakeholders and, if relevant, other businesses operating in the area.

This step is a vital precursor to embarking on any sort of presence in a new location, even if there is an absence of strict free, prior, informed consent regulations embedded within the jurisdiction. Meeting with local communities – both indigenous and non-indigenous – before commencing operations will help to cultivate good faith and start the engagement in a positive manner. This initial contact is vital if the ultimate goal is to develop a positive, mutually beneficial relationship that can be the foundation for effective sustainable development activities moving forward.

At the outset, it is important for companies to keep the following considerations in mind during this process and through the duration of the investment:

• interaction should be culturally sensitive and projects should be undertaken in a way that is respectful of and consistent with indigenous peoples own cultural norms, values, aspirations and development goals
• determining the decision making structures of the affected populations is critical, but engagement should be as comprehensive as is feasible
• finding methods of effective communication is essential
• indigenous peoples' right to self-determination should be protected so thatdevelopment projects are based on a real equitable partnership between indigenous peoples, states, companies

Indeed, according to the ICCM's Guide on Mining and Indigenous Peoples, successful community engagement in an Indigenous context was broadly recognised as critical to achieving a legal licence to operate in many areas and a social licence to operate in all areas, and it is integral to maintaining company reputation.56

• Transfield Services – an integrated construction company - has developed a comprehensive indigenous peoples policy that includes provisions related to corporate governance, cultural competency, cultural recognition as well as concerns about growth and employment.
• See: Transfield Services (Australia)
• Congolaise Industrielle des Bois worked with the Tropical Forest Trust to develop innovative methods of engagement with the local Pygmy population in order to obtain the consent necessary for their venture.
• See: Congolaise Industrielle des Bois (Republic of the Congo)
• Anglo American has developed a Socio-Economic Toolkit (SEAT) that serves as a process to create and implement the company's sustainable development policies. These include, among other things, education, training and local enterprise development.
• See: Anglo American (UK)
• The IFC has published a best practice guide related to stakeholder engagement in emerging economies.
• See: IFC (Global)
• The ICCM has created a ‘Community Development Toolkit' which includes 17 tools which cover the assessment, planning, management, and evaluation phases of community development as well as stakeholder relationships.
• See: ICCM (Global)
• Please contribute your commentary or suggestions to our online discussion forum:
• Indigenous rights online discussion forum

2. Obtain free, prior and informed consent (FPIC)57

For many stakeholders (indigenous peoples, development institutions, NGOs and some investors), FPIC has become the focal point of the discussion with regard to any kind of activity in Indigenous territories. According to socially-responsible investment firm, Ethical Funds, "the social license to operate is outside of the government or legally-granted right to operate a business. A company can only gain a social license to operate through the broad acceptance of its activities by society or the local community. Without this approval, a business may not be able to carry on its activities without incurring serious delays and costs."58

Indeed, the duty of states to undertake some form of consultation with indigenous communities is enshrined in a variety of both regional and international human rights instruments, including the International Convention on the Elimination of All Forms of Racial Discrimination (ICERD)59, the International Covenant on Economic, Social and Cultural Rights (ICESCR), the UN Convention on Biodiversity60 and the International Covenant on Civil and Political Rights (ICCPR). Additionally, the duty to consult arises from the obligations assumed by countries under the American Convention on Human Rights, as affirmed by the Inter-American Court of Human Rights.61

In carrying out its duties to advise on treaty compliance through the assessment of state reports, the Committee on the Elimination of Racial Discrimination has called upon Canada, Indonesia, New Zealand, the Democratic Republic of the Congo, the US, Ecuador, Sweden, and Namibia to ensure that proper consultations are carried out on matters that impact the rights and interests of indigenous peoples.62

While there are broad principles underpinning agreed elements of FPIC, a recent proliferation of guidelines from various organisations has resulted in the process being framed in different ways. The ICCM makes the following observations:

• "The demand to apply the principles of FPIC has been directed towards national governments, on the one hand, and towards international institutions (such as the World Bank) and private-sector actors, on the other
• FPIC has been applied to both indigenous peoples and to local communities more generally
• FPIC has been defined both inclusively (as a process in which indigenous peoples or local communities are part of a mix of actors that must be involved in decision-making processes) and exclusively (when affected indigenous peoples or communities have the final right of refusal)
• The use of FPIC has been demanded both on the basis of being a right (especially with regard to indigenous peoples) and as an operating principle under the broad rubric of corporate social responsibility".63 This latter point relates to the integral role participatory engagement plays in CSR broadly defined

ILO Convention 169 on Indigenous and Tribal Peoples summarises FPIC in the following way:

"The peoples concerned shall have the right to decide their own priorities for the process of development as it affects their lives, beliefs, institutions and spiritual well-being and the lands they occupy or otherwise use, and to exercise control, to the extent possible, over their own economic, social and cultural development. In addition, they shall participate in the formulation, implementation and evaluation of plans and programmes for national and regional development which may affect them directly".64

In the Final Report of the International Finance Corporation's Extractive Industries Review (EIR), FPIC is elaborated further and is articulated in this manner:

"Free prior and informed consent should not be understood as a one-off, yes-no vote or as a veto power for a single person or group. Rather, it is a process by which indigenous peoples, local communities, government, and companies may come to mutual agreements in a forum that gives affected communities enough leverage to negotiate conditions under which they may proceed and an outcome leaving the community clearly better off. Companies have to make the offer attractive enough for host communities to prefer that the project happen and negotiate agreements on how the project can take place and therefore give the company a ‘social license' to operate".65

The Permanent Forum on Indigenous issues convened an international workshop on methodologies related to FPIC in 2005. There was a multitude of interested stakeholders66 that relayed their experiences with FPIC with a view to gaining consensus about both process and content of the mechanism.

The discussions highlighted the fact that some of the fundamental elements that need to be included in FPIC are good faith, representativeness, and decision making through indigenous peoples' own systems.67 In addition, the need for ‘equal opportunity' in the sense of equal access to financial, human and material resources in order for all parties to fully and meaningfully debate the matter at hand is viewed to be critical.

The workshop pointed out that FPIC is relevant in relation to:

• Indigenous lands and territories, including sacred sites
• Extractive industries, conservation, hydro-development, other developments and tourism activities in indigenous areas, leading to possible exploration, development and use of indigenous territories and/or resources.
• Access to natural resources including biological resources, genetic resources and/or traditional knowledge of indigenous peoples leading to possible exploration, development or use thereof
• Development projects encompassing the full project cycle including but not limited to assessment, planning, implementation monitoring, evaluation and closure, whether the projects are directed towards indigenous communities or, while not directed towards them, may affect or impact upon them68

Additionally, the findings of the workshop indicated that each component of FPIC, in its most comprehensive, ideal form, should be informed by the following principles:

• Free should imply no coercion, intimidation or manipulation

• Prior should imply that consent has been sought sufficiently in advance of any authorisation or commencement of activities and that respect is shown for time requirements of indigenous consultation/consensus processes

• Informed should imply that information is provided that covers (at least) the following aspects:

o The nature, size, pace, reversibility and scope of any proposed project or activity

o The reason(s) for or purpose(s) of the project and/or activity

o The duration of the above

o The locality of areas that will be affected

o A preliminary assessment of the likely economic, social, cultural and environmental impact, including potential risks and fair and equitable benefit-sharing in a context that respects the precautionary principle

o Personnel likely to be involved in the execution of the proposed project (including indigenous peoples, private sector staff, research institutions, government employees and others)

o Procedures that the project may entail

• Consent should be undertaken in good faith and involve the establishment of a dialogue that enables the parties to "find an appropriate solution in an atmosphere of mutual respect in good faith, and full and equitable participation".69 It requires time and an effective system for communicating among interest-holders. Indigenous peoples should be able to participate through their own freely chosen representatives and customary or other institutions.

Timing considerations –

• FPIC should be sought sufficiently in advance of commencement or authorisation of activities, taking into account indigenous peoples' own decision-making processes, in phases of assessment, planning, implementation, monitoring, evaluation and closure of a project

Companies considering adopting a policy that incorporates FPIC into their internal governance structures would be well advised to weigh the costs and benefits of taking such an action.

Benefits

• Pre-emption of possible litigation and resulting reputational damage – especially in countries that have endorsed the DRIP70 even if local implementing legislation is missing
• Enhancement of a company's ability to maintain a social licence in particularly contentious settings
• Improve the reputation of the company from the view point of responsible investors, civil society and indigenous groups themselves
• Broader market access might be obtained if the setting involves social unrest and the government is sensitive to inflaming tensions
• Regulators might view companies with FPIC policies in place in a more positive light and expedite the permitting process

Costs

• Resource expenditure in terms of manpower and financial costs can be significant. In some settings it can be difficult to identify relevant indigenous peoples and define an appropriate negotiation process. In the event that it is determined that engagement should last the duration of the investment/project, the financial expenditure extended over years can be considerable
• Tensions between indigenous and non-indigenous communities could escalate or be created where none existed before
• Governments might not see it as necessary as they seek to exploit their natural resources as rapidly as possible. In this scenario, companies might lose out to other firms that haven't created any self-imposed impediments to their operations
• Efforts by companies to secure consent could adversely affect relations with the host government if the companies are construed to be undermining national sovereignty though direct interaction with an indigenous group

A critical aspect of FPIC is that the consultation is not a formality; it can genuinely result in a stoppage of plans if the parties involved are dissatisfied. An example of such a case occurred in Russia involving the Gazprom gas exploration project in the Yamal-Nenetz autonomous district.

The FPIC process included an ethnologic study conducted with the assistance of academic experts commissioned by the Russian Association of Indigenous Peoples of the North (RAIPON). The findings of the research concluded that the project would have negative effects on the community, and Gazprom ceased exploration plans accordingly.

• Talisman Energy commissioned an extensive report on the optimal parameters of a FPIC policy for a company in the extractives sector. Drawing on the report's findings, in 2010, it published a ‘Global Community Relations Policy' which includes the company's specific FPIC commitments. The nuanced treatment of FPIC provides an interesting assessment of the costs and benefits of applying variants of the mechanism.
• See: Talisman Energy (Global)
• The Akwe Kon Voluntary Guidelines published by the Secretariat of the UN Convention on Biodiversity call for both states and businesses engaged in development projects to share information with indigenous peoples regarding obligations under national and sub-national laws as well as sub-regional, regional, and international agreements.
• See: Akwe Kon Guidelines
• Anglo-American, in its Pebble Creek project located in Southwest Alaska, has implemented an impact-benefit agreement with the community. The agreement outlines the benefits that will accrue to the community, and the compensation it will receive for project impacts. As a part of the project, there is an independently facilitated stakeholder dialogue that addresses environmental and economic development issues related to the project.
• See: Anglo-American
• The Treaty 8 First Nations of Alberta have developed their own consultation policy and consultation guidelines framework. This document lays out their expectations regarding what information should be provided to them, how their interests will be addressed, as well as the need for capacity building to ensure informed decision-making
• See: Treaty 8 First Nations of Alberta
• De Beers, Repsol and Xstrata have embedded variants of FPIC obligations into corporate policy.
• See: De Beers, Repsol, and Xstrata
• The World Resources Institute has developed a business case for companies contemplating the implementation of FPIC. Among other topics, the report identifies and describes the various types of risks associated with developing projects that lack the support of their host community.
• See: World Resources Institute

3. Community engagement

Research indicates that it is imperative to enable indigenous communities to participate in a meaningful way when the contours of engagement are being planned and throughout the duration of the interaction.

This can be achieved by keeping the following considerations in mind:

• Respect indigenous customary institutions and governance structures – This includes learning about and involving different structures within each group, as well as structures that work to govern inter-group relationships, at the very beginning of project exploration and throughout the life of the activity in question

• Respect indigenous peoples' lives and priorities – This might involve accommodating longer discussion periods and decision making processes, as well as learning how the proposed project may be interacting with other pressures and activities within the affected communities

• Respect indigenous peoples' knowledge of their land and the local environment – This means involving traditional knowledge holders in the earliest stage of project design, assessment and implementation

• Respect indigenous peoples' responsibilities towards their land and their members – This involves providing them with all the information necessary, in a form that is accessible and in a time frame that is realistic for the local situation, so that they can make informed decisions about the relative costs and benefits associated with a project

Understand indigenous peoples' particular situations and their capacity to interact with companies – Quite often indigenous peoples have very limited resources and so will need assistance if they are to undergo extensive, intensive technical discussions and negotiations. Most have little or no experience with mining projects or large-scale commercial projects in general and have limited access to education systems that could assist in their learning process

• In Australia indigenous leaders and uranium industry representatives collaborated to form a dialogue group exchanging perspectives on topics of interest.
• See: Uranium Dialogue Group (Australia)
• The International Institute for Environment and Development (IIED) has published a report on business-led approaches to conflict management in the forest sector. Included in the content are useful case studies about how different companies have rectified rifts with the local population and have cultivated fruitful engagement instead of animosity.
• See: International Institute for Environment and Development (IIED)
• Gold Fields seeks to engage with local communities prior to commencement of operations. The company uses traditional decision-making structures and processes as methods of external communications. The company's engagement is based on a risk-based ethnographical and archaeological programme to identify relevant heritage sites. It includes comprehensive community consultations, predictive modelling and site identification surveys.
• See: Gold Fields (Global)
• The Alliance on Responsible Mining (ARM) works with artisanal and small-scale mining communities and organisations in order to instil a bottom-up approach to building on local traditional knowledge. ARM seeks to respond to community initiatives aimed at poverty reduction and locally-based control of the community's own natural resources.
• See: Alliance on Responsible Mining (Global)

4. Participatory monitoring

External monitoring of a company's environmental and social commitments can strengthen stakeholder engagement processes by increasing transparency and promoting trust between the project and its key stakeholders.

Companies could benefit by receiving an objective assessment of their environmental and social performance, which can help defuse external criticism and strengthen support from local stakeholders, including indigenous groups.

Participatory monitoring might include, for example:

Involvement of affected stakeholders in scientific sampling methods and analysis. In some settings, capacity building will be required for the participants to understand the techniques employed in the exercise.

Observations by affected parties could be triangulated to strengthen and validate group discussions on the success of mitigation, areas where improvement is needed and how to manage issues that emerge after the initial impact assessments have been carried out

Adapting conventional participatory techniques to the purpose of assessing changes in the physical and socio-economic environment over time

For particularly complex or controversial projects, establishing an independent monitoring panel or group to oversee and report on the project's environmental and social performance could be a prudent step to take. This body might include project stakeholder representatives, internationally recognised technical experts and/or eminent persons.

If this step is taken, it is essential that the composition of the panel represents diverse expertise, a high level of technical competency and is well respected by stakeholders. The reports prepared should be disseminated publically.71

5. Contribute to local development

Plans by businesses to contribute to development within the local community in a positive way require careful consideration and planning. Insufficient interaction or poorly conceived/implemented plans can pose a serious risk to business continuity and also to reputation.

Plans in this realm are heavily context specific as different territories will have vastly disparate socioeconomic conditions as a starting point. This could, in some instances be manifested in the absence of a cash economy and access to financial capital, little or no infrastructure or access to public services such as education opportunities. In all cases, the distribution of resources and benefits should be carefully contemplated so that benefits are allocated as evenly as possible.

In settings where poverty is endemic, indigenous peoples experience high rates of diseases such as diabetes, malaria and TB, as well as chronic malnutrition. Also related to destitution and isolation can be social ills such as substance abuse and domestic violence.

As a basic approach to contributing to local Indigenous development companies might broadly consider activities in the following areas:

• employment, along with educational services for youths and practical job training
• small business development and local contracting related to the economic activity, keeping in mind that any contracting should approximate the working conditions of expatriate employees as much as possible
• support of basic education and health care
• infrastructure development

• The De Beers Fund supports the Bleek and Lloyd Archive which comprehensively documents the language, ideas, narratives and oral history of the /Xam San people. The written collection contains over 11 000 pages of phonetic /Xam folklore – a language that is extinct. The collection is considered as the "Rosetta Stone" of San culture and has enabled scholars from across the globe to decipher and interpret rock art dispersed around the world.
• See: De Beers (Global)
• At Gold Field's Cerro Corona mine, in-house operator and electro-mechanical skills training is offered to 60 members of the local community each year. This programme is aimed at improving employability within the broader Peruvian mining sector.
• See: Gold Fields (Peru)

Corporate-led development initiatives require careful consideration because in some settings, it may not be appropriate to intercede with the aim of modernising the local economic dynamics thereby potentially undermining local social cohesion. In addition, formulating a development plan that makes the targeted indigenous group too dependent upon the presence of the business will result in dissention upon the departure from the area.

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Under the basic principles of universality, equality and non-discrimination, indigenous peoples are entitled to the full range of rights established under international law. Most international human rights instruments (with the exception of the DRIP) protect the rights of the individual.

However, according to a comprehensive study by the Office of the High Commissioner for Human Rights (OHCHR) indigenous peoples need the recognition of specific collective rights for their survival as a social group.72 These rights include indigenous peoples' rights to their lands, territories and resources, to maintain their cultures, to recognition of their distinct identities, to self-government and self- determination, and to be asked for their free, prior and informed consent in decisions that may affect them.73

In general terms, states have been slow to sign onto international instruments that extend legal recognition to indigenous groups and, among other things, oblige states to allocate resources to and consult with these communities. Even states such as Canada, the US and Australia that are generally well-regarded for their human rights records have been hesitant to support soft law declarations on indigenous rights.

It is worth noting, however, that in the last decade indigenous issues are arguably receiving higher levels of visibility at the international level – not least through the Expert Mechanism on the Rights of Indigenous Peoples, the Permanent Forum on Indigenous Issues and the Special Rapporteur on the situation of human rights and fundamental freedoms of indigenous peoples. The fact that the 2007 UN Declaration on the Rights of Indigenous Peoples received near universal endorsement and that the abstaining countries received intense pressure to reconsider their positions is perhaps a testament to an emerging consensus within the international community on the topic.

International law

In 1971, the UN Sub-Commission on the Protection and Promotion of Human Rights commenced the process of compiling a multi-volume work (also known as the Martínez Cobo Study) on various topics related to global indigenous issues. The definition of indigenous peoples, which is the basis of many subsequent efforts to characterise groups in this category is the following:

Indigenous communities, peoples and nations are those which having a historical continuity with pre-invasion and pre-colonial societies that developed on their territories, consider themselves distinct from other sectors of societies now prevailing in those territories, or parts of them. They form at present non-dominant sectors of society and are determined to preserve, develop, and transmit to future generations their ancestral territories, and their ethnic identity, as the basis of their continued existence as peoples, in accordance with their own cultural patterns, social institutions and legal systems.74

Many other definitions are still employed at both national and international levels, and various UN agencies re-work the language to suit their particular purposes. One definition that often used by indigenous organisations working internationally, and is suitable in relation to the current business-focused context, is found in the International Labour Organization's Convention 169 on Indigenous and Tribal Populations:

Peoples in independent countries who are regarded as indigenous on account of their descent from the populations which inhabited the country, or a geographical region to which the country belongs, at the time of conquest or colonisation or the establishment of present state boundaries and who, irrespective of their legal status, retain some or all of their own social, economic, cultural and political institutions.75

This definition emphasises self-identification as a critical criterion of the definition. Other provisions in the Convention are worth noting for their specificity:

• Article 15(1): The rights of the peoples concerned to the natural resources pertaining to their lands shall be specially safeguarded. These rights include the right of these peoples to participate in the use, management and conservation of these resources.
• Article 15(2): 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.

In 2007, the UN Declaration on the Rights of Indigenous Peoples (DRIP) was finalised with a view to consolidating international law and international human rights pertaining to indigenous peoples into one text. The text approved by consensus received overwhelming support from the international community.

Categorised as "soft law", the DRIP is not legally binding in the manner of a national statute, but carries with it important normative value in the form of international customary law and may solidify into an international treaty in the future. Moreover, soft law is binding in a country where it has been either expressly enacted or has become part of domestic law when superior courts use it in interpreting domestic law as applicable to a particular situation.

The UN Declaration on the Rights of Indigenous Peoples of 2007 deals with indigenous peoples' proprietary right to land in much clearer language than that of ILO Convention 169. Article 26 takes a very broad approach by putting together notions of ownership, possession, and use:

• Article 26(2): Indigenous peoples have the right to own, use, develop and control the lands, territories and resources that they possess by reason of traditional ownership or other traditional occupation or use, as well as those which they have otherwise acquired.
• Article 27: States shall establish and implement, in conjunction with indigenous peoples concerned, a fair, independent, impartial, open and transparent process, giving due recognition to indigenous peoples' laws, traditions, customs and land tenure systems, to recognize and adjudicate the rights of indigenous peoples pertaining to their lands, territories and resources, including those which were traditionally owned or otherwise occupied or used. Indigenous peoples shall have the right to participate in this process.

The notion of collective rights as construed in the DRIP has proven contentious for several states, including the UK, Canada and the US. However, this right has existed since 1965 in the widely ratified International Convention on the Elimination of All Forms of Racial Discrimination. Article 5(d)(v) stipulates that states should guarantee "the right to own property alone as well as in association with others."

High risk countries

Maplecroft's Indigenous Peoples' Rights Index 2012 measures the risk of complicity in violations committed against indigenous groups, including discrimination, violence and barriers to enjoying full societal participation. The ways in which these sorts of infringements can impact business activity includes both minor and major infringements:

Minor infringement

• Inadequate constitutional/legislative recognition of fundamental rights of indigenous groups
• Societal discrimination
• Failure to allocate sufficient public resources to protect indigenous lands
• Limitations on access to education, health-care, and other public amenities. Depending on the specific circumstances, this could constitute a major infringement if the discrimination is overt and not as a result of proximity issues.
• High infant-mortality rates. Depending on the specific circumstances, this could be characterised as a major infringement if the discrimination is overt and not a consequence of the practicality of service delivery in remote areas.

Major infringement

• Destruction of traditional means of subsistence, including, for instance, the depletion of natural resources, extensive pollution and land expropriation
• Erosion of lifestyle and culture
• Forced displacement
• Killing, torture, disappearance, AAD, intimidation and harassment of indigenous peoples and leaders (especially those trying to defend their ancestral lands)
• Insufficient input into governance decisions related to social welfare, culture and land

According to the Maplecroft Indigenous Peoples' Rights Index 2012, the 10 highest risk countries (all of which are considered to present an ‘Extreme Risk') are:

Figure 1: 10 highest risk countries for indigenous peoples' rights protection

Myanmar	DR Congo
Bangladesh	Nigeria
Côte d'Ivoire	Uganda
Guatemala	Mexico
Colombia	India

Figure 1: Maplecroft – Global Map of Indigenous Peoples' Rights 2012

Human rights impacts

The following rights can potentially be impacted alongside indigenous peoples' rights violations:

Right to self-determination (UNDRIP, Article 3): Indigenous peoples are often not able to participate fully in public life and are rarely pivotal in decision-making bodies of the state or in senior levels of the administration. While there are some exceptions, indigenous peoples have far less political leverage than other groups of society.

Right to be secure in subsistence and development (UNDRIP, Article 20): Indigenous peoples' lands have been disproportionately affected by development activities because they often contain valuable natural resources including timber, minerals, biodiversity resources, water and oil. Land and resource issues are often at the crux of the tensions between indigenous communities and the general population

Right to traditional lands, territories and resources (UNDRIP, Article 26): Lands and territories have material, cultural and spiritual dimensions for indigenous peoples. They are required for their survival and economic sustainability and are intrinsically linked to the identity and existence of communities.

Right to conservation and protection of environment and productive capacity of lands, territories and resources (UNDRIP, Article 29): Many indigenous peoples are highly dependent on their lands and natural resources and any changes to the ecosystem may impact on their way of life and survival. Environmental degradation can result in serious impoverishment in indigenous communities due to their strong reliance on the local ecosystem for their livelihoods.

Right to determine and develop priorities and strategies for development, including the right to free, prior and informed consent (UNDRIP, Article 32): The principle of free, prior and informed consent is an integral part of the human rights based approach. Participation implies going further than mere consultation; indigenous groups should have a veto if the proposed economic activity imperils the enjoyment of their rights.

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