International CSR standards and free, prior and informed consent
Free Prior and Informed Consent is a concept that is increasingly important in the context of consultation with Indigenous communities, and therefore for CSR management wherever mining operations affect Indigenous Peoples. In the CSR Strategy for the Extractive Sector (CSR Strategy) the Canadian Government endorsed the IFC Performance Standards on Environmental and Social Sustainability (IFC Performance Standards) as a key benchmark for performance by Canadian companies operating abroad. The original 2009 CSR Strategy specifically endorsed the 2006 IFC Performance Standards, which did not contain the concept of Free, Prior and Informed Consent (FPIC). The “enhanced” CSR Strategy announced in 2014 contemplated endorsement of the IFC Performance Standards version released in 2012, which includes the concept of FPIC in Performance Standard 7 (PS 7). As such, the parameters of FPIC in the context of PS 7 is a useful guide to the expectations surrounding FPIC for Canadian companies operating abroad.
Generally, PS 7 addresses the potential for adverse social impacts that a private sector company may have on the Indigenous Peoples and populations residing on the lands that the company intends, or is, operating on or nearby. Indigenous Peoples are deemed to be ‘uniquely’ vulnerable to the extent they have been historically marginalized peoples who suffer from a lack of political representation and access from decision-making processes that have directly, or indirectly affected them. As a minority group, they are distinct “due to the linkage between their cultural identity and the lands on which they live and resources on which they depend”.
The objectives of PS 7 are to: ensure the preservation of Indigenous culture and way of life; the avoidance of adverse impacts to Indigenous communities where possible; the compensation of Indigenous Peoples who have been adversely affected by the company’s project(s); and the promotion of sustainable relationships with the Indigenous Peoples that are directly or indirectly affected by the company’s project.
PS 7 encompasses a wide range of Indigenous communities, given the complexity of defining Indigenous Peoples. PS 7 applies to Indigenous Peoples that are on their ancestral lands, as well as those who are not living on the land, but have maintained ties with it. In addition to those Indigenous Peoples who have been forcibly displaced from their ancestral lands. In order to determine if a group or community qualifies to be identified as an Indigenous People, the company can analyze applicable national law, engage in archivist and ethnographic research and obtain the assistance of the relevant Indigenous groups. In assessing which, if any, Indigenous communities are to be affected by a project, a company applying PS 7 must first determine if Indigenous communities exist in the project’s zone of influence.
Like all of the IFC Performance Standards, PS 7 sets a performance baseline for CSR performance that may interrelate and overlap with domestic and international legal obligations, but which must be met especially where the rights of Indigenous Peoples are not safeguarded by States or legal systems. PS 7 itself draws from international legal instruments relating to the rights of Indigenous Peoples. In 1989, the International Labour Organization (ILO) promulgated the Indigenous and Tribal Peoples Convention (commonly known as ILO Convention No.169. The legal effects of ILO Convention 169 have been limited, as it is only legally binding on the States that have ratified it – to date, it has only been ratified by 22 countries The emphasis of the Convention is on recognizing Indigenous Peoples’ rights over their “own social, cultural and economic development.” These concepts have been adopted by the Inter-American Court of Human Rights in several decisions identifying consultation obligations on member States to consult with Indigenous communities affected by major development projects.
While there is no universally accepted definition of FPIC, in the context of PS 7, it contemplates that consultation is conducted prior to the development activity, through good faith negotiations between the project proponent or State and the affected Indigenous communities, that will ideally lead to an agreement between the two sides. FPIC is widely understood as a process that permits communities of Indigenous Peoples to define a collective position in response to a project while recognizing the fact that different and diverging viewpoints may exist within those communities. This does not, in the context of PS 7, necessitate the unanimous support of the members of Indigenous communities and many would argue that it also does not provide a “veto” right over development. That being so, PS 7 does not provide a singular definition of FPIC and the concept is highly contentious. Despite the challenges in implementation, in light of the CSR Strategy and the pervasive role of the IFC Performance Standards, including in financing decision making, it will serve CSR and mining managers well to become familiar with the topic and how it could relate to their projects.
Michael Torrance is a lawyer in Northern Rose Fulbright’s Toronto office.