Indigenous Peoples and the oil and gas industry - CommDev

Indigenous Peoples and the oil and gas industry - CommDev

Indigenous Peoples and the oil and gas industry Context, issues and emerging good practice Second edition, March 2012 Social responsibility 2012 www...

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Indigenous Peoples and the oil and gas industry Context, issues and emerging good practice

Second edition, March 2012

Social responsibility 2012 www.ipieca.org

The global oil and gas industry association for environmental and social issues 5th Floor, 209–215 Blackfriars Road, London SE1 8NL, United Kingdom Telephone: +44 (0)20 7633 2388 Facsimile: +44 (0)20 7633 2389 E-mail: [email protected] Internet: www.ipieca.org

© IPIECA 2012 All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior consent of IPIECA. This publication is printed on paper manufactured from fibre obtained from sustainably grown softwood forests and bleached without any damage to the environment.

Indigenous Peoples and the oil and gas industry Context, issues and emerging good practice

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

IPIECA

Contents

Foreword

1

Case studies

Acknowledgements

2

Case study 1: Repsol Policy on relationships with indigenous communities

Introduction

3

Case study 2: Talisman Talisman report on free, prior and informed consent

Overview of Indigenous Peoples and the oil and gas industry

4

Who are Indigenous Peoples?

4

Policy and regulatory context

6

International regulation and policy

6

International finance institutions

8

Building trust with the Guaraní Indigenous People in Bolivia

Village response teams in Arctic Alaska

Company policies and approaches

11

Case study 5: Hunt Oil

Links with the broader extractives sector

12

Participatory environmental and social monitoring in rural Andean communities

Nexen Aboriginal Education Award Program (AEAP), scholarships and bursaries

16

Management of impacts and issues

24

Case study 7: Woodside

Land tenure and land access

24

Woodside’s Reconciliation Action Plan

Resettlement

26

In-migration

27

Traditional knowledge and cultural heritage

27

Natural resource use and environmental issues

30

36

Employment and procurement

36

Financial benefits

37

Sustainable development commitments and funds

39

Summary of emerging good practice

44

Appendices

47

Useful resources

47

Useful websites

48

ii

31

32–35

Case study 6: Nexen

Engagement: consultation, participation and grievance management

Managing opportunities and benefits

21–23

Case study 4: BP

10

16

20

Case study 3: Total E&P Bolivie

National legislation

Key issues: engagement, impacts and opportunities

14–15

40–41

42–43

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

Foreword

IPIECA formed a Social Responsibility Working Group (SRWG) in 2002 to share good practice on social responsibility issues including human rights, social impact assessment in countries where our industry is active, and community outreach. The SRWG gives IPIECA members a unique forum in which to share information and coordinate responses to some of the social responsibility issues and challenges surrounding the oil and gas industry. In 2008, the SRWG established a task force to examine Indigenous Peoples issues relating to the oil and gas sector. The objectives of the task force were to focus on these issues at an industry level and to share lessons from the various interactions that member companies have with indigenous groups. This issues review, Indigenous Peoples and the oil and gas industry: Context, issues and emerging good practice was commissioned by the task force to provide a summary of the policy and legal context, and an overview of key issues and emerging good practices for the oil and gas industry’s interface with Indigenous Peoples. As such, it is intended to be a reference tool for companies seeking an overview of the issues they may face when operating in areas where Indigenous Peoples live, or which they customarily use, and to provide an understanding of trends in company interactions with Indigenous Peoples. It is not intended to be an industry standard or to provide detailed guidelines for companies. The document is organized along the following lines: ●

The Introduction outlines the rights of Indigenous Peoples and some of the reasons why these



The section entitled Overview of Indigenous Peoples and the oil and gas industry provides

warrant special consideration by oil and gas companies. an overview of Indigenous Peoples and the policy and regulatory context relevant to the sector’s interaction with them. ●

The section on Key issues: engagement, impacts and opportunities provides a summary of some of the issues for oil and gas companies to specifically consider when operating in areas used or occupied by Indigenous Peoples, set around the three themes of consultation and engagement, key issues to manage, and benefits sharing.



The Summary of emerging good practice provides a summary of good practice considerations that have emerged from oil and gas companies’ interactions with Indigenous Peoples.

The document was revised in February 2012.

1

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Acknowledgements This document was prepared by the IPIECA Indigenous Peoples Task Force, under the auspices of the Social Responsibility Working Group. IPIECA gratefully acknowledges the assistance of Kathryn Tomlinson and Synergy Global Consulting Ltd. in preparing the first edition of this document in 2011. In addition, various individuals and organizations have kindly offered their input and advice throughout the drafting of this document, to which IPIECA is equally grateful. These include: Scott Klinger (First Peoples Worldwide); Tracey Draper; and Roger Hammond (Living Earth).

Photographs reproduced courtesy of the following: cover (top left, and bottom row), pages 3, 9, 17, 23, 37, 38, 40, 41: Shutterstock.com; cover (top centre and right), pages 4–8, 10, 11, 13–16, 20, 25, 26, 28, 30, 31, 39, 42, 45, 46: iStockphoto.com; pages 21–22: Total E&P Bolivie; pages 32–35: Hunt Oil.

2

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

Introduction The oil and gas industry and Indigenous Peoples



Legal compliance: In some countries, national

have been increasingly coming into contact with

law may require businesses to adhere to

each other over the past few decades as the search

particular legal standards where Indigenous

for new oil and gas resources has engendered more exploration and development in lands that

Peoples are affected by projects. ●

Access to land: Indigenous groups may have

Indigenous Peoples traditionally occupy or

legally recognized ownership or control over the

customarily use. Although oil and gas companies

land, territories and resources that oil and gas companies are seeking to access.

need to consider all social groups and communities who are situated close to, and are impacted by,



Accessing international financing: Many

their operations, Indigenous Peoples are distinct

international financing institutions have specific

social groups that warrant special consideration.

lending requirements relating to Indigenous Peoples, for example through the Equator Principles (see International finance institutions

Indigenous Peoples hold specific rights under

on page 8).

international law and in many national legislative contexts. While it is the responsibility of



Protecting investments: Irresponsible development

governments to uphold and protect Indigenous

with respect to Indigenous Peoples can expose a

Peoples’ rights, international policy makers,

company to financial, operational, legal, and

indigenous advocates and wider civil society expect

reputational costs and risks.

companies to respect these rights. Furthermore,



‘Social licence to operate’: Indigenous Peoples expect companies operating on their lands to

Indigenous Peoples typically have cultures and ways of life that are distinct from the wider societies in

respect their rights, mitigate any adverse impacts

which they live: they are often reliant on the land

and provide opportunities for communities to

and its natural resources for their livelihoods; they

benefit from their presence. It can be difficult for

may also have strong cultural, spiritual and

a company to obtain official permits or operate

economic ties to their land; and in some parts of the

successfully in indigenous areas if the company is

world, Indigenous Peoples have suffered from a

unable to gain and maintain community support.

history of discrimination and exclusion that has left

Further, without the support of the indigenous

them on the margins of the larger societies in which

communities, companies may miss opportunities

they live.

to benefit from local experience, skills and knowledge that can add value to a project’s development.

These characteristics can expose Indigenous Peoples to different types of development challenges and



Compliance with international law and policy:

impacts as oil and gas projects are developed in

International organizations such as the United

their territories, as compared to other social

Nations (UN), the International Labour

communities. At the same time, investment in such

Organization (ILO) and the World Bank have

projects has the potential to generate benefits and

recognized Indigenous Peoples as having distinct

development opportunities for Indigenous Peoples.

rights. These institutions have adopted policies

This document therefore seeks to address some of the

concerning indigenous rights, which create

potential issues, impacts and opportunities that

expectations and, in some cases, requirements

companies may need to consider when interacting

on how company interactions with Indigenous

in areas used or occupied by Indigenous Peoples.

Peoples should be handled. ●

Competitive advantage: Doing business in a

A number of potential business drivers can be

manner that respects Indigenous Peoples may

identified that guide the response of the industry in

enhance relationships with host governments and

addressing these challenges, including:

communities, and provide a competitive 3

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advantage when seeking access to new business

actors often expect corporations to act as good

opportunities, as reported by some companies in

citizens, going beyond compliance with national

this review.

law where such requirements do not exist.

Societal expectations of good corporate citizenship: Operating responsibly in areas of Indigenous Peoples can be considered one element of a company’s broader commitment to corporate social responsibility and ethical conduct. Shareholders, international policy makers, news media and other civil society

Overview of Indigenous Peoples and the oil and gas industry Who are Indigenous Peoples?

Indigenous Peoples have come to be recognized over the past few decades as a distinct social and

The term ‘Indigenous Peoples’1,2 has been applied

4

cultural group under international law and in some

to, or claimed by, peoples who consider themselves

countries’ national law. The degree of recognition

to be the descendants of the pre-colonial peoples of

of Indigenous Peoples varies widely across different

the Americas, Australia, New Zealand and the

countries. In countries such as Canada, the USA,

circumpolar Arctic, such as the wide variety of

Australia, and most Latin American countries,

groups living in the Amazon, Native Americans in

Indigenous Peoples are officially recognized in law.

the USA, Inuit of the Arctic, Aboriginal Australians

However, in some countries, only certain groups

and the New Zealand Maoris. Furthermore, in

are recognized as ‘indigenous’ though other

various Asian and African countries, marginalized

groups might claim that designation, and in other

minority ethnic groups (often described as ‘tribal

countries indigenous groups are not officially

populations’) with a culture distinct from the

recognized at all. While there is variation across

national model and who have historically occupied

different national contexts, the adoption of the UN

certain regions, also define themselves as

Declaration and the ILO Convention on Indigenous

Indigenous Peoples (for example the hill tribes in

Peoples suggests a trend toward greater

Thailand and the Ainu in Japan).

recognition of indigenous rights.

1

This section has drawn from several public resources, including the website of the international human rights NGO International Work Group for Indigenous Affairs: www.iwgia.org; the ICMM Good Practice Guide on Mining and Indigenous Peoples; Jose Martínez Cobo’s Study of the Problem of Discrimination Against Indigenous Populations (www.un.org/esa/socdev/unpfii/en/spdaip.html); and the website of the UN Permanent Forum on Indigenous Issues: www.un.org/esa/socdev/unpfii/index.html.

2

For a comprehensive overview of Indigenous Peoples in the world today see the UN 2009 report, State of the World’s Indigenous Peoples: www.un.org/esa/socdev/unpfii/documents/SOWIP_web.pdf.

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

The term ‘Indigenous Peoples’ has come to encompass a great diversity of peoples and cultures, and it is partly due to this diversity that there is no internationally recognized legal definition of ‘Indigenous Peoples’.3 According to the UN there are more than 370 million Indigenous Peoples in some 70 countries worldwide today. However, notwithstanding their differences, Indigenous Peoples are considered to have many similarities between their historical experiences, structural positions within their respective nation-states, interests, aspirations and grievances. The UN and the ILO have outlined various defining inclusive characteristics of Indigenous



Legal: They have particular rights under

Peoples, aiming to encompass the diversity of

international law and in many national legislative

Indigenous Peoples worldwide whilst still

contexts. These rights may entitle them to have a

separating them from other minorities, and have

say in whether industrial development can be carried out on their land.

particularly emphasized the importance of selfidentification4. These characteristics, which are



Historical: They have usually experienced a

considered to be partly and/or fully attributable

particular history of marginalization and

to Indigenous Peoples, are:

discrimination, which can still affect their



self-identification as indigenous;



occupation and use of a specific territory prior to the arrival of other groups;

relationship with the government and the wider society they live in. ●

Cultural: They will often have distinct cultural,



Land and natural resources: They will usually

economic and political practices.



collective attachment to specific lands;



a common experience of marginalization and discrimination;

have a particular attachment to their land and



distinct cultural, economic, social and/or political

ancestral territories, and a dependency on their

systems;

natural resources. Indigenous groups may use a



a distinct language; and

far wider territory than just the lands in the



the aspiration to transmit to future generations

immediate vicinity of their villages, and even if

their lands, and their distinct culture and identity.

they are fully integrated into the wider market economy, may still practice some form of subsistence economy linked to their lands.

Indigenous Peoples can therefore be considered as a distinct category of stakeholder for oil and gas companies for the following broad reasons:



Political: Most Indigenous groups have their own political representative organizations that companies may need to engage with directly.

3

The issue of setting a single definition for ‘Indigenous Peoples’ has been extensively debated in United Nations working group sessions over the years, and it has come to be officially accepted that no single definition can fully capture the diversity of Indigenous Peoples.

4

The two most commonly cited international documents on the definition of Indigenous Peoples are the UN Special Rapporteur Jose Martínez Cobo’s Study of the Problem of Discrimination Against Indigenous Populations (www.un.org/esa/socdev/unpfii/en/spdaip.html) and the ILO Convention 169.

5

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Indigenous Peoples have been organizing

Policy and regulatory context

themselves politically for several decades, and Indigenous Peoples’ representative political bodies

Indigenous rights are a type of collective human

can be found at: the local level (representing

right specifically for Indigenous Peoples.

individual tribes, bands or peoples, for example the

International human rights instruments protect the

Asamblea del Pueblo Guaraní de Bolivia (APG),

rights of individuals; however international law

the New Brunswick Aboriginal Peoples Council in

recognizes that Indigenous Peoples also have

Canada, or the Federación Interprovincial de

specific rights to protect their survival as a group.

Centros Shuar in Ecuador); the sub-national regional level (for example La Confederación de

Indigenous rights movements have been mobilizing

Pueblos Indígenas de Bolivia (CIDOB), or the

over the past few decades to have their rights

Kimberley Land Council Aboriginal Corporation

recognized by states, the international community

(KLC)); the national level (such as the Assembly of

and multilateral institutions, and business

First Nations (AFN) in Canada, the Consejo

corporations. This has resulted in rapidly developing

Nacional Indio de Venezuela (CONIVE), the

international and intra-national policy and regulation

Confederación de Nacionalidades Indígenas del

concerning Indigenous Peoples in recent years. There

Ecuador (CONAIE), or the Russian Association of

are now international treaties, policy statements and

Indigenous Peoples of the North (RAIPON)); and at

declarations, conditions imposed by international

the wider regional level (including the Amazonian

finance institutions and other funding agencies,

indigenous organization Consejo de

including private-sector banks, national bodies of

Organizaciones Indígenas de la Cuenca

law, and company and industry policies, which take

Amazónica (COICA), or the Inuit Circumpolar

account of, and promote, Indigenous Peoples’ rights.

Council (ICC), which represents Inuits in Alaska,

The following section outlines this context and some

Canada, Greenland, and Chukotka (Russia)).

of its key documents and initiatives.

At the UN level, the Permanent Forum on indigenous issues is an advisory body to the

International regulation and policy

Economic and Social Council, with a mandate to:

Within the international legal framework for the

provide expert advice and recommendations on

protection of the rights of Indigenous Peoples there

indigenous issues to the UN system through the

are two main instruments:

Council; raise awareness and promote the integration and coordination of relevant activities



The ILO Convention on Indigenous and Tribal

within the UN system; and prepare and disseminate

Peoples (No. 169),5 adopted in 1989: ILO 169

information on indigenous issues. The Forum holds

is a legally binding treaty which, when ratified

annual, two-week conferences in which Indigenous

by individual countries, becomes part of national

Peoples’ organizations are invited to participate and

law.6 ILO 169 has to date been ratified by 20

present their views.

countries (a large majority of these are in Latin America).7 Since its adoption, Convention

6

5

www.ilo.org/public/english/region/ampro/mdtsanjose/indigenous/derecho.htm

6

ILO 169 replaced the previous 1957 Indigenous and Tribal Populations Convention (No. 107). Though certain countries are still signatories of ILO 107, ILO 169 is the only one open to ratification today.

7

Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Denmark, Dominica, Ecuador, Fiji, Guatemala, Honduras, Mexico, Nepal, The Netherlands, Norway, Paraguay, Peru, Spain, Bolivarian Republic of Venezuela.

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

No. 169 has been crucial in shaping national

Both instruments cover a range of indigenous collective

laws and policies regarding Indigenous and

rights and State obligations towards Indigenous

Tribal Peoples. It covers a wide range of issues,

Peoples. There are, however, some differences

including land rights, access to natural resources,

between the contents of the two documents. Though

health, education, vocational training and

the UN document draws out similar rights and

conditions of employment. The fundamental

responsibilities as ILO 169, its content is more explicitly

principle of the Convention is that Indigenous

focused on rights, whereas the content of ILO 169 is

and Tribal Peoples should be consulted, and

more explicitly focused on the responsibilities of

participate fully at all levels of decision-making

States. The UN document accordingly extends a

processes that concern them. The ILO

broader and stronger set of rights in relation to

international labour standards, including ILO

culture, self-determination, land and resource use,

169, are backed by a supervisory system that

and puts more emphasis on the need to seek the

aims to ensure that countries implement the

consent of Indigenous Peoples in relation to any

conventions they ratify. The supervisory system

decisions that might affect them. However, there are

has received numerous complaints over the years

a number of principles and rights outlined in both

from Indigenous Peoples over the conduct of

ILO 169 and the UN Declaration that may have

companies. These complaints have formed part

implications for oil and gas projects taking place in

of the supervisory bodies’ reviews and reports,

areas inhabited by Indigenous Peoples, including:

though their ultimate recommendations are



Indigenous Peoples should be consulted in an effective way whenever development activities

directed only towards governments.

are being planned or executed in their lands, ●

The United Nations Declaration on the Rights of Indigenous

Peoples,8

and that they should participate in the planning,

adopted in 2007: The UN

implementation and evaluation of these activities

Declaration on the Rights of Indigenous Peoples

(UN Declaration: Articles 18, 23, 32;

was adopted in 2007 by the General Assembly

ILO 169: Articles 6, 7, 15).

of the United Nations with a majority of 144



states in favour, 4 votes against (Australia,

Indigenous Peoples have rights to the lands which they traditionally occupy, including their natural

Canada, New Zealand and the United States)

resources. They may have these rights even when

and 11 abstentions (Azerbaijan, Bangladesh,

the country concerned has not yet identified the

Bhutan, Burundi, Colombia, Georgia, Kenya,

lands or the rights they have (UN Declaration:

Nigeria, Russian Federation, Samoa and

Article 26; ILO 169: Articles 13 to 19).

Ukraine).9 The Declaration is not a convention,



In cases of resource extraction projects taking

and therefore is not legally binding, however it

place on Indigenous lands, Indigenous Peoples

has become a primary point of reference for

have the right to participate in the benefits of

many indigenous groups and their advocates

such projects and to be fairly compensated for

around the world.

any damages which they may sustain as a result of such activities (UN Declaration: Articles 28, 32; ILO 169: Article 15).

8

www.un.org/esa/socdev/unpfii/en/declaration.html

9

Since its adoption, Australia and New Zealand have reversed their positions and now endorse the Declaration. Colombia and Samoa have also reversed their positions and indicated their support for the Declaration. In November 2010, the Government of Canada endorsed the UN Declaration and, in April 2010, the United States indicated that it will also review its position regarding the Declaration. For further updates see the website of the UN Permanent Forum of Indigenous Peoples: www.un.org/esa/socdev/unpfii/en/declaration.html

7

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The social, cultural, religious and spiritual values

with due diligence to avoid infringing on the rights

and practices of Indigenous Peoples should be

of others. According to the SRSG, what this means in

recognized and protected (UN Declaration:

practice is a due diligence process whereby

Articles 5, 12, 13, 20, 25, 31; ILO 169: Article 5).

companies become aware of, prevent and address

Indigenous Peoples have the right to participate

adverse human rights impacts. Key elements of

in the use, management and conservation of the

corporate human rights due diligence include a

natural resources on their lands (UN Declaration:

statement of policy, regular assessment of the

Articles 26, 29; ILO 169: Article 15).

potential for impacts on human rights, integration of

Indigenous Peoples should not be resettled from

the respect for human rights into the core activities of

their lands without their free and informed

a business, and tracking and reporting on human

consent (UN Declaration: Articles 10; ILO 169:

rights performance. In addition, the application of

Article 16). (See Resettlement on page 26 for

grievance mechanisms links the corporate

further information on Indigenous Peoples and

responsibility to respect with the SRSG’s third pillar,

resettlement.)

access to remedy (see Engagement: Consultation, Participation and Grievance Management on page

Although these instruments are directed towards the

16 for further information). The UN Guiding

State’s duty to protect and enforce these rights, and

Principles for Business and Human Rights, proposed

therefore are not legally binding on companies,

by the former SRSG of the UN Secretary General,

some companies have made a commitment to

Professor John Ruggie, that were unanimously

respecting ILO 169 in their company policy (either

endorsed by the UN Human Rights Council in June

in relation to human rights in general or Indigenous

2011, further elaborate on these aspects.

Peoples specifically). Additionally, as both ILO 169 and the UN Declaration are frequently invoked by indigenous activists and their supporters as

International finance institutions

examples of existing international norms, it may be

International financial institutions such as the World

considered beneficial for companies to conduct their

Bank, the International Finance Corporation (IFC),

affairs in the spirit of both documents.

regional development banks and many private banks have adopted policies concerning Indigenous

Furthermore, in line with the work carried out by the

Peoples. These policies do not form part of

Special Representative of the UN Secretary-General

international law; however, they contain conditions

(SRSG)10 on Business and Human Rights, Professor

set by the financial institutions which relate to the

John Ruggie, and the ‘Protect, Respect and Remedy’

provision of financial loans for projects, including

framework, the responsibility of companies to respect

those affecting Indigenous Peoples. Companies

human rights (including indigenous rights) is

receiving finance from these institutions are obliged

increasingly becoming clarified and accepted.

to satisfy these conditions in relation to projects that

Indeed, the SRSG has proposed a policy framework

impact Indigenous Peoples. In particular, the IFC’s

for business and human rights based on three pillars:

Performance Standards are often used as a

the state duty to protect against human rights abuses

reference for environmental and social performance

by third parties, including business; the corporate

by companies and their stakeholders, including

responsibility to respect human rights; and greater

Performance Standard 7 on Indigenous Peoples (see

access by victims to effective remedies. The corporate

below), even where they are not receiving finance

responsibility to respect human rights means acting

directly from the IFC.

10

8

See www.business-humanrights.org/SpecialRepPortal/Home

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

The following list summarizes some of the key

• ensure that the right of affected communities of

policies and guidelines applied by international

Indigenous Peoples to Free, Prior and Informed

finance institutions to projects that affect

Consent (FPIC) is upheld when the

Indigenous Peoples:

circumstances described in this Performance Standard are present; and



The IFC Performance Standard 7 on Indigenous

• respect and preserve the culture, knowledge,

Peoples (PS7)11 (2012): This standard, which is part of a set of eight social performance

and practices of Indigenous Peoples. PS7 is also accompanied by Guidance Notes.12

standards, applies to any private sector project seeking IFC financing. These Performance



The World Bank Operational Directives (OD) 4.10 on Indigenous Peoples13 (2005): This

Standards define companies’ roles and responsibilities for managing their projects and

standard, which is part of the Bank’s social

minimizing their impact on the environment and

safeguard policies, applies to public sector

on affected communities. The IFC Performance

projects, which have World Bank funding (this

Standards are considered to be key social

can include public private partnership projects)

performance standards for the private sector and

and replaces the earlier policy (OD 4.20,

have been used as the basis for most other

Indigenous Peoples). OP/BP 4.10 applies to all

financial institutions’ policies and internal

investment projects for which a Project Concept

company policies. The stated objectives of PS7 as

Review took place on or after 1 July 2005.

it applies to private sector projects are to:

Similar to IFC PS7, the standard stresses the

• ensure that the development process fosters full respect for the human rights, dignity,

Peoples, consult with them, promote their

need for borrowers to identify Indigenous

aspirations, culture and natural resource-based

participation in, and benefit from, Bank-funded

livelihoods of Indigenous Peoples;

operations in a culturally appropriate way, and ensure that adverse impacts on them are

• anticipate and avoid adverse impacts of projects on communities of Indigenous Peoples,

avoided, or where avoidance is not feasible,

or when avoidance is not possible, minimize

minimized or mitigated.

and/or compensate for such impacts; • promote sustainable development benefits and



The European Bank for Reconstruction and

opportunities for Indigenous Peoples in a

Development (EBRD) Performance

culturally-appropriate manner;

Requirement 714 (EBRD Environmental and

• establish and maintain an ongoing relationship

Social Policy, 2008): The EBRD Performance

based on Informed Consultation and

Requirement 7 (PR7) is closely aligned with the

Participation (ICP) with the Indigenous Peoples

IFC PS7, although a notable exception is that it

affected by a project throughout the project’s

explicitly acknowledges the need for free, prior

life cycle;

and informed consent, rather than just free, prior

11

www1.ifc.org/wps/wcm/connect/1ee7038049a79139b845faa8c6a8312a/PS7_English_2012.pdf?MOD=AJPERES

12

www1.ifc.org/wps/wcm/connect/50eed180498009f9a89bfa336b93d75f/Updated_GN7-2012.pdf?MOD=AJPERES

13

http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/EXTPOLICIES/EXTOPMANUAL/0,,contentMDK:20553664~ menuPK:4564187~pagePK:64709096~piPK:64709108~theSitePK:502184,00.html

14

www.ebrd.com/downloads/research/policies/2008policy.pdf

9

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and informed consultation (Paragraph 4). The significance of this distinction is addressed in Box 4 on page 19. ●

The Asian Development Bank Safeguard Policy Statement (SPS) (2009):15 The SPS aims to avoid, minimize or mitigate harmful environmental impacts and social costs, and to help borrowers/clients strengthen their safeguard systems. The SPS builds upon ADB’s previous safeguard policies on the environment, involuntary resettlement and Indigenous Peoples, and brings them into one single policy. The SPS applies to all ADB-financed projects.



The Inter-American Development Bank Operational Policy on Indigenous Peoples (2006):16 The policy applies to all Banksupported operations and activities, and contains two sets of directives. The first requires the Bank to take a proactive approach in promoting the systematic inclusion of indigenous issues in Bank policies and projects. The second creates safeguards designed to prevent or minimize adverse impacts that Bank operations might have on Indigenous Peoples.



The Equator Principles (2006):17 These principles are a financial industry benchmark for determining, assessing and managing social and environmental risk in project financing. They were endorsed by more than 20 commercial banks (known as the Equator Banks) who provide more than 75% of all development project financing around the world. The principles refer back to the IFC’s Performance Standards for all Category A projects, which includes oil and gas projects.

National legislation The legal recognition of indigenous rights at the international level has been augmented by evolving national legislation in many countries. Many countries with significant indigenous populations have legally recognized indigenous rights in some shape or form. For example, in the past two decades, most Latin American countries have undergone some form of constitutional reform and enshrined indigenous rights in national constitutions. In Australia and Canada, courts have recognized the rights of different indigenous groups to their territories based on the notion of ‘aboriginal title’ (i.e. that Indigenous Peoples were there first, and have rights that remain in existence and are legally protected). The legal implication is therefore one where governments are not being asked to grant Indigenous Peoples their rights, but rather to recognize and enforce these rights. However, the recognized rights of Indigenous Peoples are varied and evolving both within and across different national contexts. There are significant national differences in the extent to which the rights of Indigenous Peoples are formally recognized and afforded legal protection, and in governments’ treatment of customary land ownership and the procedural requirements that govern access to indigenous lands. For example, the rights of Indigenous Peoples to the land they occupy and use may vary considerably between different countries, as well as within the same country. In some cases, within the context of an oil and gas project, though the state might own the sub-surface rights, indigenous groups may have a significant degree of control over access to the land (though the degree of control will vary). In other more rare cases, indigenous groups have gained both surface land rights and sub-surface mineral

10

15

www.adb.org/Documents/Policies/Safeguards/Safeguard-Policy-Statement-June2009.pdf#page=60

16

http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=691261

17

www.equator-principles.com/index.php/the-eps-and-official-translations

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

rights, thus giving them control over whether an oil

how oil and gas companies access and operate in

and gas project takes place at all and on what

indigenous lands and territories. In many contexts

terms. In more common cases, indigenous groups do

there is some disjuncture between the legal

not legally hold surface or sub-surface rights, but

framework governing Indigenous Peoples’ land

they may exercise some rights such as notification

rights and that governing oil and gas companies’

and consultation rights, or they may be pursuing

access to land, and exploration and production

land claims in the courts. Finally, in some national

rights; however, in some countries, the incorporation

contexts there is no customary or formal legal

of indigenous land rights in national legislation has

recognition of Indigenous Peoples’ rights to land.

led to changes in the policy and legislative

Furthermore, countries with ostensibly similar legal

procedures governing oil and gas companies’

regimes can differ considerably in the extent of

access to indigenous areas. For example, the

enforcement and compliance. However, a useful first

Bolivian government has recently developed a

step indicator of national level acceptance of

regulation which deals specifically with consultation,

indigenous rights is to check whether the country in

participation and compensation requirements for oil

which they are operating has signed up to ILO 169

and gas operations in indigenous territories.19

or the UN Declaration.18 Notwithstanding these differences, there is a trend

Company policies and approaches

in countries with significant indigenous populations

Oil and gas companies follow a range of

to incorporate indigenous rights in national

approaches to managing relations with Indigenous

legislation. This may have a significant impact on

Peoples. Some do this through implementation of

18

See footnotes 7 and 9 for further details on current signatories to ILO 169 and the UN Declaration.

19

Reglamento de consulta y participación para actividades hidrocarburíferas—Decree Nº 29033 of the 16 of February 2007 amended by Decrees Nº 29124 of 9 May 2007 and Nº 29574 of 21 May 2008.

Box 1: Some online links to national legislation concerning Indigenous Peoples • Australia, Parliamentary Library online resources for Indigenous Peoples and the law: www.aph.gov.au/library/intguide/law/indiglaw.htm. • The Government of Canada online resource to Aboriginal claims and treaties: www.aboriginalcanada.gc.ca/acp/site.nsf/eng/ao20009.html. • The Alaska Native Claims Settlement Act (ANCSA) Resource Center: www.lbblawyers.com/ancsa.htm. • Venezuelan Organic Law on Indigenous Peoples and Communities (Ley Orgánica de Pueblos y Comunidades Indígenas): www.mes.gov.ve/documentos/marcolegal/lopci.pdf. • Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), Laws and Decrees webpage (including the Consultation and Participation Regulation for Hydrocarbon activities, Decree Nº 29033): www.ypfb.gov.bo/leyes_ds.php. • Inter-American Development Bank Latin America and the Caribbean databank on Indigenous Legislation: www.iadb.org//Research/legislacionindigena/leyn/index.cfm.

11

IPIECA

broader human rights and community relations

edition), which also covers company interactions

policies, some have chosen explicitly to follow IFC

with Indigenous Peoples.

PS7, and others have adopted their own specific policies and standards. In addition to corporate policies, there are also

Links with the broader extractives sector

reporting guidelines for companies that cover

Experiences and initiatives of the mining industry’s

Indigenous Peoples issues. For example, many oil

interactions with Indigenous Peoples can also be

and gas companies adhere to the Global Reporting

relevant to the oil and gas industry. In May 2008

Initiative20

the ICMM approved a Position Statement on Mining

(GRI), which has reporting

requirements21 for companies operating in areas of

and Indigenous Peoples23 after extensive stakeholder

Indigenous Peoples, and IPIECA, the Oil and Gas

consultation and preparatory work over several

Producers Association (OGP) and the American

years. The Statement stressed the need for

Petroleum Institute (API) have developed joint

constructive relationships between the mining and

guidance entitled Oil and Gas Industry Guidance

metals industry and Indigenous Peoples based on

on Voluntary Sustainability Reporting22 (second

respect, meaningful engagement and mutual benefit,

20

www.globalreporting.org/NR/rdonlyres/8EB7E930-F586-49CF-92B9-34833FA3C5C1/0/G3_IP_ HumanRights.pdf

21

GRI oil and gas sector supplement has been developed: https://www.globalreporting.org/resourcelibrary/OGSS-G3.1-Complete.pdf, https://www.globalreporting.org/reporting/sector-guidance/oil-and-gas/Pages/default.aspx

22

www.ipieca.org/library

23

www.icmm.com/page/ 208/indigenous-peoples

Box 2: Examples of company policies and approaches on Indigenous Peoples • REPSOL —see Indigenous Community Relations at: www.repsol.com/es_en/corporacion/responsabilidad-corporativa/comunidades_locales/comunidades_ indigenas/default.aspx • ConocoPhillips —see Indigenous Communities at: www.conocophillips.com/EN/susdev/communities/indigenous/Pages/index.aspx • BG —see Indigenous Communities and Vulnerable People at: www.bg-group.com/sustainability/society/Pages/society_our_strategy.aspx • Total —see Guidelines and Principles regarding Indigenous and Tribal Peoples at: www.total.com/MEDIAS/MEDIAS_INFOS/3537/EN/Charte_peuples_autochtones_en.pdf?PHPSESSID=b 2c173f006beb34df685c20c8966f83a • ExxonMobil: www.exxonmobil.com/Corporate/community_rights_mgmt.aspx • Woodside: www.woodside.com.au/NR/rdonlyres/20F327FB-D3FB-429B-A2DE-00B15D11A319/ 0/indigenouscommunitiespolicyjune2008.pdf • Talisman: http://www.talisman-energy.com/upload/editor/File/10417493%20%20GLOBAL%20COMMUNITY%20RELATIONS%20POLICY%20-%20DECEMBER%209%202010%20%201%20-%20TLMPRD.pdf

12

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

with particular regard for the specific and historical

While this review makes reference to mining

situation of Indigenous Peoples.

industry examples and the work of the ICMM, there remain some important features that distinguish the

In 2010, ICMM launched The Good Practice Guide (GPG): Indigenous Peoples and

Mining,24

interaction that oil and gas projects, as opposed to mining projects, can have with Indigenous Peoples.

to support ICMM members in implementing the underlying vision and the specific commitments set

For example:

out in the Position Statement. The GPG is a



than mining sector projects.

and metals companies navigate the cultural, social, economic and political complexities of

Financial flows: financial flows from royalties, taxes, etc. can be orders of magnitude greater

comprehensive guide, designed to help mining ●

Physical footprint: physical footprints from oil and

developing, operating and closing projects that

gas extraction are typically less than for solid

are on, or near, indigenous lands, or that may

mineral extraction, although processing plants

otherwise have an impact on indigenous

and other infrastructure may require significant

communities. It highlights good practice

land take. Extensive pipeline networks mean that

principles, discusses the challenges in applying

oil and gas sector projects often have to deal more with linear developments.

these principles at the operational level, and provides examples of how mining projects have addressed these challenges.



Employment generation: oil and gas sector projects generally require fewer and higher skilled jobs than in the mining sector.

24

www.icmm.com/library/indigenouspeoplesguide

13

IPIECA Case study 1: Repsol

Policy on relationships with indigenous communities

Repsol operates in areas occupied by indigenous communities in Argentina, Bolivia, Colombia, Ecuador and Peru. In all, around 80,000 individuals from different ethnic groups live in these areas. In order to establish effective guidelines for action regarding the company’s relationships with indigenous communities that are affected, either directly or indirectly, by Repsol’s projects and activities, a Policy on Relationships with Indigenous Communities was drawn up during 2007–08, and was passed in December 2008. This process was characterized by the involvement of all of the company’s business units and corporate areas responsible for future implementation, together with the involvement of an external group of experts, including collaboration from Intermón Oxfam. The process followed is set out below: 1. Awareness of the situation: information was analysed and compiled from various sources including: • an internal workshop on relationships with the community (April 2007); • the establishment of contacts with non-governmental organizations (NGOs) and sectorrelated organizations; • meetings with companies in the sector, with prior experience; and • an analysis of relevant documentation and prior experiences. 2. Creation of a work group: a work group was established by the Corporate Responsibility Committee, to produce an initial draft of the Policy (November 2007).

14

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

3. Initial consultations: consultations took place with the group of external experts made up of NGOs, including Intermón Oxfam (February 2008). 4. Preparation of the internal draft: comments made by the group of external experts were addressed by the company and the internal draft produced (March 2008). 5. Consultations on the internal draft: consultations took place with the company’s business units responsible for future implementation, and the corporate areas involved. The external group of experts was consulted once again to evaluate the implementation of their contributions. 6. Preparation of the definitive document for approval: a final draft was prepared for approval by the Executive Committee (May 2008). 7. Approval: the Policy on Relationships with Indigenous Communities was approved (December 2008). On 9 June 2010, the company approved the new standard for action with respect to the company’s relationships with indigenous communities. The new standard aims to establish the principles for action set out in the Policy on Relationships with Indigenous Communities. This commits the company to: identifying the socio-economic background of the particular indigenous communities which live in areas where new projects are scheduled to take place; establishing communication channels with them in order to discover their expectations and aspirations; preventing, minimizing or restoring the impact on their environmental services; and, where appropriate, creating a plan for relationships with these communities which is in line with the development model chosen for each indigenous group. 15

IPIECA

Key Issues: engagement, impacts and opportunities This section sets out a range of considerations for oil

more generally. In this regard, when carrying out

and gas companies that are specific to operating in

consultation with Indigenous Peoples, oil and gas

areas of Indigenous Peoples. It is structured around

companies can refer to general good practice

the three broad theme areas of engagement,

guides on how to carry out stakeholder

management of key issues, and opportunities for

engagement, such as the IFC Stakeholder

Indigenous Peoples to benefit.

Engagement: A Good Practice Handbook for Companies Doing Business in Emerging Markets.25

Engagement: consultation, participation and grievance management

However, companies should note certain special considerations for engaging with Indigenous Peoples. First of all, key international policy and legal documents include specific sections on consultation with Indigenous Peoples and their right

The importance of effective engagement through

to be involved in decisions that affect them. One of

open, transparent and meaningful consultation

the key underpinning principles of the UN

processes, adequate information disclosure and

Declaration is Indigenous Peoples’ right to be

listening to Indigenous Peoples in order to achieve

involved in all decisions that affect them. Other

inclusive and informed decisions and agreements is

examples are Articles 6 and 15 of ILO 169, and

one of the key issues commonly emphasized in

Statements 9 and 10 of IFC PS7. Furthermore, in

companies’ interaction with Indigenous Peoples.

many countries there are special legal, statutory

Emerging good practice emphasizes the importance

and/or regulatory obligations for consulting

of establishing a relationship that endures

Indigenous Peoples if they are to be impacted by a

throughout the life of the project.

project (for example in Bolivia and Australia). Companies need a clear understanding of the

Effective engagement with Indigenous Peoples is

requirements wherever they operate.

emphasized for the following reasons: ●

It is an important indication that a company is

Considerations for effective engagement with

respecting Indigenous Peoples’ rights.

Indigenous Peoples, drawn from a review of



In many cases, due to their particular history and

international policy and regulation as well as

current situations, Indigenous Peoples may

company good practice, can be summarized as

distrust governments and developers. Effective,

follows:26

meaningful and respectful engagement is an important step in beginning to overcome that historical legacy. In many ways, good practice engagement with



Socio-economic context: • Identify Indigenous Peoples that may be affected and any relevant national laws that concern them.

Indigenous Peoples is not that different to good practice engagement with affected communities

16

25

www.ifc.org/ifcext/sustainability.nsf/Content/Publications_Handbook_StakeholderEngagement

26

For further good practice reference on engagement with Indigenous Peoples, see: the ICMM Good Practice Guide: Indigenous Peoples and Mining, Chapter 2: Engagement and Indigenous Participation; the Business for Social Responsibility and First Peoples Worldwide (2004), Resource/Extractive Companies and Indigenous Peoples Engagement: Recipe for Dialogue Project Guidebook, Chapters 4 & 5: http://commdev.org/content/document/detail/1923; and the IFC Stakeholder Engagement: A Good Practice Handbook for Companies Doing Business in Emerging Markets, p47 to 55.

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

• Identify indigenous customary land use and claims.

to obtain input from these groups by alternative

• Gain an understanding of the specific historical context of Indigenous Peoples within

baseline studies, or through informal discussions

means (for example, via household surveys and with small groups). However, traditional

the project area.

decision-makers may not be supportive of this

• Carry out socio-economic baseline and impact assessments with the participation of

approach and companies need to take this into consideration when making decisions to seek

Indigenous Peoples, and share the findings of

input in secondary ways.

the assessments with them. ●

• Develop reasonable timeframes with indigenous groups for consultation and decision-making processes.

Culturally appropriate engagement: • Allow sufficient time. • Consult in a language readily understood by affected Indigenous Peoples. • Provide information in culturally appropriate forms. • Carry out consultation and information disclosure in locations easily accessible for Indigenous Peoples. • Review engagement mechanisms, including grievance mechanisms, to make sure they are culturally appropriate and accessible.



Good faith negotiation and decision-making with the objective of achieving agreements, seeking consent or broad community support: • Information disclosure: provision of access to project related information (including information on all potential project impacts), acknowledging that a range of views on the project are likely to exist. • Transparency: potential involvement of external advisors, observers or assessors to ensure transparency of the process.



Inclusion, working with indigenous representative institutions and consideration of customary decision-making processes: • Identify, and engage with, existing indigenous representative institutions (for example chiefs, councils of elders, village councils, women’s groups or associations, youth groups or associations). • Be inclusive of different groups (women and men, young and old) in a culturally appropriate, as well as open and transparent manner, taking care to identify and engage with potentially vulnerable groups within

• Timing: consultation takes place as early as possible, before key project decisions are made and impacts occur. • Capacity building: communication and capacity building programmes to enhance the effectiveness of consultation. • Respectful dialogue: seek to establish a dialogue in which the participating sides listen to each other, allowing for appropriate solutions to be agreed in an atmosphere of mutual respect and full participation. • Seeking consent (see Box 4) or broad community support: gaining broad community

indigenous communities, who might be

support or approval for a project and/or

disproportionally impacted.

project decision from indigenous stakeholders

• When engaging with formal representative institutions, realize that these might not always represent all interests in the community. In particular, companies may need to be sensitive to those sections of the community who may be

effectively means that parties have strived to achieve a consensus from all those who will be affected by the project. • Seeking negotiated agreements: emerging good practice amongst companies operating

excluded from the decision-making process,

significant projects on indigenous lands is to

such as women and youth. It may be necessary

come to negotiated agreements (either 17

IPIECA

formalized or not) with affected indigenous

Box 3: IFC definition of ‘Negotiation in good faith’

groups. To achieve this, negotiation should take place in a spirit of ‘good faith’ (see Box 3). In

‘Negotiations with stakeholders should be

some cases, agreements may be mandated by certain pieces of legislation or by policy

entered into in “good faith,” that is, conducted

makers at the regional levels. For example, in

with an open mind, a willingness to engage in

Canada, many modern indigenous land claim

the process, and a genuine desire to build solutions and to reach agreement. Good faith

agreements expressly identify the need for

negotiations are transparent, considerate of the

agreements (for example the Nunavut Land

available time of the negotiating parties, and

Claims Act). In Australia, the Native Title Act

deploy negotiation procedures and language

provides for Indigenous Land Use Agreements

readily understood and agreed to by all parties.’

(ILUAs) to be made between native title holders

Source: IFC Stakeholder engagement: A good practice handbook for companies doing business in emerging markets (pp. 64–65).

or claimants and other interested parties about how land and waters in the area covered by the agreement will be used and managed in the future.27

as the IFC Good Practice Note on Addressing ●

Grievances from Project-Affected Communities.29

Culturally appropriate grievance mechanisms: Even with successful engagement and consultation

It should be noted that effective grievance

processes, disputes over the impacts of company

mechanisms that allow concerns and grievances

activities can occur at any time during the life of a

to be recognized and resolved in an open and

project. The SRSG for Business and Human Rights

transparent manner, are best developed in

discusses the importance of companies setting up

participation with affected Indigenous Peoples,

effective grievance mechanisms in order to help

and in a culturally appropriate manner.

identify, mitigate and possibly resolve grievances before they escalate.28 In many ways, setting up effective company grievance mechanisms for

18



Establishment of long-term mutually beneficial relationships throughout the life of the project:

Indigenous Peoples is not that different to setting

Application of the above elements on a continuous

one up with affected communities more

basis throughout the life of a project can help a

generally. In this regard, oil and gas companies

company establish an ongoing respectful

can refer to a general good practice guide such

relationship with affected Indigenous Peoples.

27

For further information on company and Indigenous Peoples agreements see the ICMM Good Practice Guide: Indigenous Peoples and Mining, Chapter 4: Agreements; the Australian Government, Department of Industry, Tourism and Resources (2007), Working with Indigenous Communities, Chapters 6 and 7: www.ret.gov.au/resources/Documents/LPSDP/LPSDPIndigenousCommunitiesHandbook.pdf; and the IBA Community Toolkit: www.ibacommunitytoolkit.ca.

28

See Business and human rights: Towards operationalizing the ‘protect, respect and remedy’ framework, Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, p24–26: http://www2.ohchr.org/english/bodies/hrcouncil/docs/11session/A.HRC.11.13.pdf.

29

For further information on grievance mechanisms see: the IFC Good Practice Note on Addressing Grievances from ProjectAffected Communities (www.ifc.org/ifcext/sustainability.nsf/AttachmentsByTitle/p_GrievanceMechanisms/$FILE/IFC+ Grievance+Mechanisms.pdf); the ICMM October 2009 pilot testing version of a guide on Handling and Resolving Local Level Concerns and Grievances (www.icmm.com/page/14809/human-rights-in-the-mining-and-metals-industry-overviewmanagement-approach-and-issues); the ICMM Good Practice Guide: Indigenous Peoples and Mining, Chapter 6: Dealing with Grievances; and the guidance tool on Rights Compatible Grievance Mechanisms, produced by the Corporate Social Responsibility Initiative of the Harvard Kennedy School in January 2008 (www.hks.harvard.edu/mrcbg/CSRI/publications/Workingpaper_41_Rights-Compatible%20Grievance%20Mechanisms_May2008FNL.pdf).

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

Box 4: Free prior informed consent (FPIC) and free prior informed consultation The issue of the extent to which Indigenous Peoples have the right to free, prior and informed consent (FPIC) with regard to projects in their territories is widely debated both internationally and within national contexts. FPIC refers to a process whereby affected Indigenous Peoples have the free choice, based on sufficient and timely information concerning the benefits and disadvantages of the project, of whether and how these activities occur, according to their systems of customary decision-making. Specifically, FPIC means: • Free—people are able to freely make decisions without coercion, intimidation, punishment or manipulation. • Prior—sufficient time is allocated for people to be involved in the decision-making process before key project decisions are made and impacts occur. • Informed—people are fully informed about the project and its potential impacts and benefits, and the various perspectives regarding the project (both positive and negative). • Consent—there are effective processes for affected Indigenous Peoples to approve or withhold their consent, consistent with their customary decision-making processes, and that their decisions are respected and upheld. FPIC is therefore more than just a process of consultation. It is about a negotiated process involving all interested parties, the aim of which is to allow Indigenous Peoples to either give or withhold their consent. Although there is a certain amount of consensus between governments, NGOs and companies on the need for free, prior and informed consultation with Indigenous Peoples in negotiation and decision-making processes, the concept of consent is not universally accepted.

Many governments question the right to consent for Indigenous Peoples over oil and gas developments of national significance in their territories, while many companies have concerns over the practicalities of applying and enforcing FPIC. Company concerns include ambiguities around ‘consent’ such as: • Would consent require full community support, or just a majority? • Would consent be granted through representative institutions or individual choice mechanisms, such as a referendum? • How is ‘consent’ defined throughout the life of a project— could ‘consent’ which is given at the outset of an investment be withdrawn at a later stage? These questions have precluded the acceptance of FPIC by many policy makers and companies, who instead choose to apply the approach of ensuring free, prior and informed consultation leading to broad community support. Conversely, advocates of FPIC see it as the exercise of Indigenous Peoples’ rights to their lands and ancestral territories, as well as their rights to self-government. FPIC is used in different contexts; in some cases it is used in terms of being a right to approve or veto activities, and in others in terms of being a principle which decision-making processes should aim to achieve. FPIC has been mandated or recommended in a number of international and national legal and policy documents30 and promoted by NGOs advocating for indigenous rights. Regardless of the debate, companies benefit from ongoing engagement with Indigenous Peoples in the places where they operate, and from their broad support and participation. The application of the good practice approaches summarized in this section can assist companies and indigenous communities in reaching this position. For further reading see the Appendices.

IFC PS 7 states that the circumstances requiring FPIC are: • Impacts on lands and natural resources subject to traditional ownership or under customary use. • Relocation of Indigenous Peoples from lands and natural resources subject to traditional ownership or under customary use. • Where significant project impacts on critical cultural heritage that is essential to the identity and/or cultural, ceremonial or spiritual aspects of Indigenous People’s lives are unavoidable. • Where a project proposes to use the cultural heritage including knowledge, innovations or practices of Indigenous Peoples for commercial purposes. See IFC PS7 for details: www1.ifc.org/wps/wcm/connect/1ee7038049a79139b845faa8c6a8312a/PS7_English_2012.pdf?MOD=AJPERES 30

These include: the UN Declaration on the Rights of Indigenous Peoples (2007): Articles 10, 11, 19, 28, 29 & 32; ILO 169: Article 16; IFC: Performance Standard 7 (2012); the EBRD Environmental and Social Policy (2008): Performance Requirement 7 on Indigenous Peoples; the Philippines’ Indigenous Peoples’ Rights Act (1997); and the Australian Aboriginal Land Rights (Northern Territory) Act 1976.

19

IPIECA Case study 2: Talisman

Talisman report on free, prior and informed consent

During 2008 and 2009, Talisman Energy engaged in dialogue with socially responsible investors Bâtirente and Regroupement pour la Responsabilité Sociale des Enterprises (RRSE) related to indigenous rights and the concept of free, prior and informed consent (FPIC). In response to this dialogue, Talisman commissioned the Corporate Social Responsibility practice group, Foley Hoag LLP (a Washington-based law firm) to prepare a report (the Report) on the benefits and challenges related to the adoption and implementation of a corporate policy on FPIC. Talisman, Bâtirente and RRSE also invited the World Resources Institute (WRI), an environmental think tank with FPIC expertise, to provide a third-party commentary on the Report. The Report, entitled Implementing a Corporate Free, Prior, And Informed Consent Policy: Benefits and Challenges, reflects discussions which have taken place within the international community interested in this issue. It includes the opinions of a body of experts on indigenous rights from governments, companies and civil society organizations. The Report focuses not only on the advantages that may be associated with the adoption of an FPIC policy, but also the significant challenges of implementing an FPIC approach, particularly where governments are not supportive, or where promoting a consent process may conflict with sovereign constitutional frameworks, regulations and remedies for addressing indigenous issues, land rights and development. Talisman has agreed to respond to the recommendations and accordingly the company will use the Report to assess our global community relations policies and procedures and to inform our engagement approach to future projects. Further, Talisman aims to put in place enhanced measures to address community engagement issues, and which mandate practices that lead to a clear expression of support from indigenous communities residing in areas where Talisman proposes to work. In considering such measures, the objective remains one of striking a balance between the company’s business needs, a responsible approach to its projects and the expectations of communities, the Shareholder Group and other external stakeholders.

20

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY Case study 3: Total E&P Bolivie

Total building trust with the Guaraní Indigenous People in Bolivia

Petroleum industry in Bolivia On 1 May 2006, the Government of Bolivia, under President Evo Morales, nationalized oil and gas reserves and the exploitation of hydrocarbons through Supreme Decree 28701. This move had been preceded by the introduction in May 2005 of the Hydrocarbons Law (Law 3058), ratified in February 2007, which sets out a detailed process for ‘Consultation and Participation’ of Indigenous Peoples concerning oil and gas developments in Bolivia. Under the Law, the process is conducted by the Ministry of Hydrocarbons, with the involvement of the company limited to preliminary consultation, provision of information, financing of the process and revision of the resulting ‘Validation Agreement’ reached by the Government, indigenous groups and other landowners.

Total in Bolivia: the Ipati Block In November 2007, Total E&P Bolivie commenced 3-D seismic exploration in the Ipati Block. The Block, which is located within the Chaco region of southern Bolivia, is inhabited by the Guaraní Indigenous People, as well as other farmers. The main economic activity of both groups is agriculture and livestock, however there has been a history of conflict over land rights between them. The Guaraní people are a nation of culturally related Indigenous Peoples of South America. The traditional range of the Guaraní people includes Paraguay, southern Bolivia, northern Argentina, southern Brazil and the west of Uruguay. The Guaraní are the third largest indigenous group in Bolivia. They work to assure their daily sustenance under principles of self-sufficiency and reciprocity, promoting an integral harmony with nature. Their main economic activities are hunting, fishing, and cultivating maize, peanuts, beans and pumpkins. Total E&P Bolivie’s 3-D seismic programme was subject to the first formal ‘Consultation and Participation’ process under the 2005 Hydrocarbons Law. The success of the project was due to strong relationships with local people, including the

Total E&P Bolivie’s

leaders of the Guaraní

community

representative organizations,

relations team

the Mayors of Lagunillas and Muyupampa and other landowner representatives. Total E&P Bolivie’s community relations team, which includes national and international social development experts, was able to explain the company’s activities and potential 21

IPIECA Case study 3: Total E&P Bolivie

… Total building trust with the Guaraní Indigenous People in Bolivia (continued)

impacts to the population, while ensuring that the project would be developed based on a robust understanding of the cultural, social, spiritual and environmental context. As a result, local people were aware of the potential impacts of the activities prior to the formal Consultation and Participation process.

Outcome of the Consultation and Participation process As a result of the process, Total E&P Bolivie agreed to provide compensation for impacts identified. In addition, the company worked with Guaraní representative organizations to develop agricultural projects to benefit the people. Leaders of the Iupaguasu organization arranged partnerships with some national and international NGOs to install in its territory a storage centre and a maize seed-sorter machine, for example, while other groups (including non-indigenous) quickly became involved in the project. Further benefits for the Guaraní and other local people resulted from their participation in implementing the project. For example, a further seven community relations staff were hired locally, including four Guaraní. In addition, building on the model of a previous project in 2003, three Guaraní people designated by the Guarani People’s Assembly, an organization that represents the Guarani people in Bolivia, were employed as environmental monitors. Following a period of training and familiarization with the company, the monitors were involved in ensuring compliance of the Environmental Impact Assessment. Additionally, and in a complementary way, they were able to report back to their people, in their own language, the characteristics of the project, and provided support in the recruitment of personnel and the establishment of training workshops.

Guaraní employees working as environmental monitors

22

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

Lessons learned • The importance of respecting each other’s culture and exchanging knowledge: through ongoing consultation, Total E&P Bolivie learned about the Guaraní’s ñandereko (way of living), as well as the local geography. In turn, through local employment opportunities, the Guaraní were able to develop their understanding of the company’s culture, as well as technical aspects of oil and gas exploration. • The involvement of indigenous technicians as environmental monitors of our activities eliminated prejudices about the company. By training local Guaranís to play a role in ensuring strict compliance with the environmental parameters described in the Environmental Impact Assessment Study and environmental regulations, further mutual learning was achieved. • Responding quickly to new legislation, and demonstrating a commitment to go beyond compliance, was very well received by the Guaraní and created bonds of respect and reciprocity. • The need to involve the indigenous population from the outset is critical to business success. Relationships of trust come about through ongoing exchange of knowledge and experiences between companies and the indigenous population before, during and after any activity which takes place within their territory. • Local employment of Indigenous Peoples should be considered a long-term process to ensure mutual benefits, requiring investment in training.

‘It is fundamental for the operating company to create a climate of trust in the community, to prevent any operations from grinding to a halt. If there is no such trust, it is highly likely that the operations negotiated and agreed will not be sustainable. Trust is not something which is gained in a lengthy conversation, but something that is nurtured and consolidated by reliable and consistent behaviours over time …’ Claudio Cardama, Quality Control Manager, Total E&P Bolivie

23

IPIECA

Management of impacts and issues

Peoples’ connection to their territories often carries an ancestral obligation to protect and preserve it for

This section provides an overview of various key

future generations.

issues that oil and gas companies may face when seeking to operate in Indigenous Peoples’ lands and

In many parts of the world, Indigenous Peoples

territories. The selection of issues presented is not

have experienced loss of land, physical and

intended as a comprehensive list of all issues specific

economic displacement, and a lack of recognition

to Indigenous Peoples, rather it focuses on those that

of their rights to land. The issue of land tenure is

companies have commonly encountered, or for

therefore a critical subject for indigenous groups.

which clear guidelines or policy requirements exist.

The struggle for possession, legal recognition,

However, there are other existing and emerging

demarcation and protection of traditional lands

issues that may be encountered by companies

and their resources has been a focus of various

operating in areas of Indigenous Peoples, for

indigenous political movements.

example, issues relating to previously uncontacted people, water tenure in the case of riverine and

ILO 169 (Part II: Land) and the UN Declaration

coastal communities, and company interaction with

(Articles 26 & 26) recognize Indigenous Peoples’

indigenous communities affected by other challenges,

traditional rights to their lands, territories and

such as those resulting from climate change. See the

resources.31 However, the extent to which land

list of useful resources on page 47 for further

tenure for Indigenous Peoples is recognized in

information relating to these and other issues.

national law varies from country to country. In some national contexts indigenous land rights are fully

It should also be noted that the issues set out here

recognized by national legislation, while in other

are described as they relate specifically to

cases Indigenous Peoples may hold no legal rights

Indigenous Peoples. Many of the issues also apply

to the lands that they have traditionally occupied.

in general to other, non-indigenous communities

However, over the past two decades, the general

living in areas affected by oil and gas

trend has been for increasing recognition of

developments. Additionally, good practice principles

Indigenous Peoples’ land rights (see National

and approaches to social and environmental

legislation on page 10). In practice this means that

performance (as developed by IPIECA and other

oil and gas companies may need to provide some

organizations, for example) can apply equally to

form of accommodation of Indigenous Peoples’

company relationships with Indigenous Peoples as

rights or financial payment to Indigenous Peoples to

they do to other communities.

access their land (depending on the particular circumstances, financial payment might be seen as a form of compensation payment or a right-of-way

Land tenure and land access

payment). In many cases, access to land payments

Land is often of particular cultural, spiritual,

may be negotiated on a life-of-project basis, or

historical and economic importance to Indigenous

might have to be re-negotiated over time.

Peoples, and they will often claim rights to areas that they consider ancestral territories. These rights are collective, in that the territory belongs to all

traditional territories also varies across different

those Indigenous Peoples (often living in different

national contexts. In some national contexts, the

communities) who inhabit and use it. Indigenous

identification, demarcation and denomination of

31

24

The process of identifying and demarcating

See ILO 169 Part II: Land; and the UN Declaration Articles 25 and 26.

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

specific land areas as indigenous territories is clear



Economics and livelihoods: Understand the

even if those demarcated lands in question are not

difference between individual or community rights

legally titled (for example in many Latin American

of use and the collective right. Is the land used by

countries). In other contexts, indigenous groups may

Indigenous Peoples to support traditional livelihoods

lay claim to land areas that have not yet been

(for example nomadic grazing, harvesting, fishing,

properly demarcated or mapped, thus making it

hunting, utilization of forest resources)?

difficult to identify the boundaries of the territory in question. Furthermore, over the years, indigenous

Furthermore, in the case of projects taking place on

groups may have experienced the loss (partial or

Indigenous Peoples’ land that will engender impacts,

entire) of their traditional lands, which may have

the IFC Performance Standard 7 recommends the

been titled to other groups or individuals. This can

following approach:

lead to disputes over overlapping land claims. In



direct payments (or another accommodation) to

Document efforts to avoid and otherwise minimize the area of land proposed for the project.

practice, this can lead to confusion over whether to ●

Document efforts to avoid and otherwise

Indigenous or non-Indigenous People for access to

minimize impacts on natural resources and

the same piece of land, or it can mean that a

natural areas of importance to Indigenous People.

company might have to accommodate both.



Identify and review all property interests and traditional resource uses prior to purchasing or leasing land.

When aiming to access an indigenous territory, the following are key considerations for oil and gas



Assess and document the Affected Communities

companies, as well as broader extractives

of Indigenous People’s resource use without

companies.32 Understanding these issues is often an

prejudicing any Indigenous People’s land claim.

integral part of socio-economic baseline studies

The assessment of land and natural resource use

conducted in the early stages of a project.

should be gender inclusive and specifically consider women’s role in the management and



Legal context: This includes both national and international laws and regulations, as well as



use of these resources. ●

any contestations or land claims that are in

Peoples are informed of their land rights under

process.

national law, including any national law

Traditional and cultural land governance: This includes indigenous groups’ historical, spiritual

recognizing customary use rights. ●

Offer Affected Communities of Indigenous Peoples

and cultural connection to the land, current uses

compensation and due process in the case of

of the land, as well as decision-making processes

commercial development of their land and natural

and governance structures around land. For

resources, together with culturally appropriate sustainable development opportunities.

example: is the land accessed (or avoided) for cultural purposes now, or was this the case in the

32

Ensure that Affected Communities of Indigenous



Enter into good faith negotiation with the affected

past (for example religious ceremonies, festivals);

communities of Indigenous Peoples, and

and how are decisions made about land—at the

document their informed participation and the

community level, the territorial level, or both?

successful outcome of the negotiation.

For further guidance on dealing with this issue see the ICMM Good Practice Guide: Indigenous Peoples and Mining, Chapter 3, Section 3.2; and the Business for Social Responsibility and First Peoples Worldwide Resource/Extractive Companies and Indigenous Peoples Engagement: Recipe for Dialogue Project Guidebook (2004), Chapter 3: Indigenous Peoples’ Land Rights: http://commdev.org/content/document/detail/1923.

25

IPIECA

Resettlement Given the particular sensitivities of land rights issues to Indigenous Peoples, as discussed under Land tenure and land access (above), the resettlement of Indigenous Peoples as a result of project-related activity can be controversial. According to the IFC, because the physical relocation of Indigenous Peoples is particularly complex and may have significant and irreversible adverse impacts on their cultural survival, companies should make every effort to explore feasible alternative project designs to avoid physical relocation of Indigenous Peoples from their traditional lands.

procedures established by national laws and regulations, including public inquiries where appropriate, which provide the opportunity for effective representation of the peoples concerned’. Furthermore, whenever possible, resettled Indigenous Peoples ‘shall have the right to return to their traditional lands, as soon as the grounds for relocation cease to exist’ (Article 16). The IFC states that its clients should avoid the resettlement of Indigenous Peoples whenever possible, but that when this is ‘unavoidable’, the resettlement should be carried out in ‘good faith negotiation’ with affected Indigenous Peoples. IFC Performance Standard 733 recommends the following: ●

designs to avoid the relocation of Indigenous

According to ILO Convention 169 and the UN

Peoples from their communally held traditional or

Declaration, the resettlement of Indigenous Peoples should only be considered as an exceptional

customary lands under use. ●

measure and should only take place with the

a good faith negotiation with the affected

consent (Articles 16 and 10 respectively).

communities of Indigenous Peoples, and documents their informed participation and the

However, ILO 169 states that in those cases where exceptional measure and the affected Indigenous Peoples do not give their consent, ‘such relocation shall take place only following appropriate 33

26

If such relocation is unavoidable, the client will not proceed with the project unless it enters into

Indigenous Peoples’ free, prior and informed

resettlement is considered necessary as an

The client will consider feasible alternative project

successful outcome of the negotiation. ●

Any relocation of Indigenous Peoples will be consistent with the Resettlement Planning and Implementation requirements of Performance Standard 5.

www1.ifc.org/wps/wcm/connect/1ee7038049a79139b845faa8c6a8312a/PS7_English_2012.pdf?MOD=AJPERES

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY



Where feasible, the relocated Indigenous Peoples

These negative impacts may be further exaggerated

should be able to return to their traditional or

in cases where Indigenous Peoples live in isolation

customary lands, should the reason for their

and have had only limited contact with outsiders.35

relocation cease to exist (see IFC Performance Standard 5, 2006).34

In many ways, the effective management of inmigration into indigenous territories is no different

The lack of a requirement to secure the consent of

to that associated with project-induced in-migration

an indigenous community prior to proceeding with

more generally. Good practice approaches, such as

development-related resettlement in IFC Performance

those set out in the 2009 IFC publication Projects

Standard 7 has been a contentious point for many

and People: A Handbook for Addressing Project-

indigenous organizations.

Induced In-Migration,36 are therefore applicable to cases of in-migration to indigenous lands.

In cases where land access or acquisition has been negotiated previously by a third party, including

However, the potential and specific nature of in-

government, conduct due diligence to identify

migration impacts on indigenous areas may require

whether legacy issues may exist that could impact

comprehensive analysis and management plans,

the relationship with indigenous communities.

which should be carried out and developed in consultation with affected Indigenous Peoples.

In-migration

The related term, ‘influx’, is often used to refer to

In-migration refers to the movement of people to an

temporary movements of people to, and heightened

area seeking economic opportunities as a result of a

activities in, a project-affected area, which can also

current or potential development activity taking

have negative impacts on indigenous groups. These

place, or planned to take place, in that area.

impacts require similar assessment and

Indigenous Peoples have often experienced

management.

encroachment on their lands by outsiders, exposing them to the threat of new diseases, cultural change, internal and external conflict, or the loss of their traditional lands and access to resources on which their livelihoods depend. In-migration into

Traditional knowledge and cultural heritage Cultural heritage and traditional knowledge with

indigenous areas can, therefore, threaten an

regard to Indigenous Peoples refers to tangible or

indigenous group’s way of life or ability to maintain

intangible assets of biological, spiritual, aesthetic,

and develop their identities and cultures. Furthermore,

cultural and/or economic value. Tangible forms of

large-scale in-migration may also have unintended

indigenous cultural heritage can refer to sites or

impacts on local cultural heritage, including the

natural environmental features with archaeological,

desecration and destruction of sacred sites (for

paleontological, historical, cultural, artistic and

example graves, waterways, sacred forests, etc.).

religious values such as sacred rocks or trees.

34

www1.ifc.org/wps/wcm/connect/3d82c70049a79073b82cfaa8c6a8312a/PS5_English_2012.pdf?MOD=AJPERES

35

For further information on Indigenous Peoples living in isolation see: the UN article, Indigenous peoples living in voluntary isolation, www.un.org/events/tenstories/06/story.asp?storyID=200; the UN report State of the World’s Indigenous Peoples (page 233), www.un.org/esa/socdev/unpfii/documents/SOWIP_web.pdf; and UN General Assembly (Reference A/HRC/EMRIP/2009/6), Draft Guidelines on the Protection of Indigenous Peoples in Voluntary Isolation and in Initial Contact of the Amazon Basin and El Chaco, www2.ohchr.org/english/issues/indigenous/ExpertMechanism/2nd/docs/A_HRC_EMRIP_ 2009_6.pdf

36

www.ifc.org/ifcext/sustainability.nsf/AttachmentsByTitle/rep_influx_full.pdf/$FILE/Influx_Full.pdf

27

IPIECA

Traditional cultural resources, knowledge and

Article 8(j) of the Convention on Biological Diversity

practices can be referred to as intangible cultural

(Traditional Knowledge, Innovations and Practices)38

heritage or traditional knowledge (for example

commits governments to respect, preserve and

language, oral traditions, performance arts, rituals,

maintain the traditional knowledge of indigenous

environmental and resource knowledge, etc.).

communities embodying traditional lifestyles relevant for the conservation and sustainable use of biological

Indigenous Peoples often have, over the course of

diversity. In addition to the conservation of biological

generations, developed their own sets of knowledge

diversity, the Convention also has the objectives of:

about their environments, health, technologies and techniques, rites and rituals and other cultural



indigenous groups may attribute special spiritual, cultural or historical value to specific sites or areas

the sustainable use of the components of biological diversity; and

expressions. Furthermore, in many cases, ●

the fair and equitable sharing of the benefits arising out of the utilization of genetic resources.

in their traditional territories. Indigenous Peoples’ traditional knowledge, particularly with regard to

Both of these objectives may have implications for

their environment, has often been ignored or under-

companies operating in areas of Indigenous Peoples

valued by authorities and in some cases, indigenous

as, in some circumstances, their traditional

sacred objects, symbols or knowledge have been

relationship to the environment and biodiversity

placed in the public domain and threatened, used

makes them key users in the sustainable use equation.

or patented for commercial purposes.

In addition, Indigenous Peoples’ rights to the

In the past few decades there has been a trend in

the need for compensation for resources removed

the international policy and regulatory context to

and add complexity to the issue of compensation in

develop measures to protect Indigenous Peoples’

the event of land take and resettlement.

ecosystems on which they depend may both increase

traditional knowledge and cultural heritage, both from outsiders using it without consent or equitable

Parties to the Convention on Biological Diversity

sharing of benefits, and to value and preserve it for

have also dedicated a work programme on

future generations.

Article 8(j) aimed at findings ways to protect indigenous traditional knowledge from the impacts

For example, the IFC Performance Standard 8 on

of development projects that take place in

Cultural Heritage37 aims to protect cultural heritage

indigenous lands. The main outcome of this work

from the adverse impacts of project activities and

programme has been the development, in

support its preservation, as well as promote the

cooperation with indigenous and local communities,

equitable sharing of benefits from the use of cultural

of the Akwé: Kon Guidelines 39 (Voluntary guidelines

heritage in business activities. It also makes specific

for the conduct of cultural, environmental and social

reference to the intangible cultural heritage of

impact assessments regarding developments

Indigenous Peoples (IFC Performance Standard 7,

proposed to take place on, or which are likely to

Section 11).

impact on, sacred sites and on lands and waters traditionally occupied or used by indigenous and local communities). These guidelines provide

28

37

www1.ifc.org/wps/wcm/connect/dd8d3d0049a791a6b855faa8c6a8312a/PS8_English_2012.pdf?MOD=AJPERES

38

www.cbd.int/traditional

39

Pronounced ‘agway-goo’. A holistic Mohawk term meaning ‘everything in creation’ provided by the Kahnawake community located near Montreal, where the guidelines were negotiated. www.cbd.int/doc/publications/akwe-brochure-en.pdf

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

general advice on the incorporation of cultural,

governance, ceremonies, spiritual practices and

environmental (including biodiversity-related) and

traditional knowledge.

social considerations of indigenous and local communities into impact assessment procedures.

The following are examples of good practices that companies can consider with regard to the

Finally, the United Nations Educational, Scientific

management of indigenous cultural heritage

and Cultural Organization (UNESCO) has a

issues:41

specific

programme40

whose aim is to protect

Indigenous Peoples’ tangible and intangible



Assessing potential impacts on cultural heritage in consultation with Indigenous Peoples as part of

heritage.

the social and environmental assessments (refer to the Akwé: Kon guidelines).

Cultural heritage protection may also be subject to legal regulation at the national level. In several



plans in consultation with Indigenous Peoples.

countries, physical and sacred sites, artefacts and remains, and certain landscapes are protected by

Developing effective cultural heritage management



Respecting Indigenous Peoples’ use of traditional

law, and companies are required to avoid

knowledge. For example, the use of indigenous

damaging such sites, obtain government

names can be sensitive, and therefore it is

authorizations, or to provide proper compensation

recommended that companies consult with the

where some damage is unavoidable. For example,

relevant communities before using any form of

Aboriginal people in Australia hold specific and

indigenous knowledge, even for such purposes as naming project sites or pieces of equipment.

identified legal, procedural and cultural rights with regard to their cultural heritage. However, few



Recognizing the value of indigenous traditional

countries currently have laws in place to protect

knowledge—indigenous groups have often

intangible cultural heritage.

developed environmental and natural resource knowledge of their territories, which can

Within this overall context, companies operating

complement the company’s technical expertise. For

in indigenous lands should respect Indigenous

example, Indigenous Peoples may be a primary

Peoples’ cultural heritage and traditional

source of knowledge of the occurrence, behaviour

knowledge. One of the ways a company can deal

and distribution of species in some areas.

with indigenous cultural heritage issues is to



Supporting indigenous aspirations to preserve

develop and implement cultural management

and enhance their cultural heritage and

processes in participation with Indigenous

traditional knowledge: this can be done through

Peoples. Cultural heritage management and

targeted social investment projects or community

preservation encompasses the protection and

development plans (such as funding the

enhancement of the tangible aspects of cultural

recording of languages and stories or sponsoring

heritage, as well as traditional practices around

cultural centres or festivals).

40

http://portal.unesco.org/culture/en/ev.php-URL_ID=35393&URL_DO=DO_TOPIC&URL_SECTION=201.html

41

For further guidance on dealing with cultural heritage issues see the ICMM Good Practice Guide: Indigenous Peoples and Mining, Chapter 5, Section 5.4, ‘Cultural Preservation’; and the Business for Social Responsibility and First Peoples Worldwide guidebook entitled Resource/Extractive Companies and Indigenous Peoples Engagement: Recipe for Dialogue Project (2004), Chapter 2, Section VI, ‘Traditional Ecological Knowledge and Sustainability’, http://commdev.org/content/document/detail/1923. For more information on the Australian context see the Australian Government, Department of Industry, Tourism and Resources’ Working with Indigenous Communities (2007), Chapter 8, ‘Cultural Heritage’, www.ret.gov.au/resources/Documents/LPSDP/ LPSDP-IndigenousCommunitiesHandbook.pdf.

29

IPIECA

Emerging good practice considerations for companies when dealing with environmental and natural resource issues include:42 ●

Consulting widely with affected Indigenous Peoples to understand their environmental concerns about oil and gas operations and how these concerns can be addressed.



Developing specific response measures, for example in relation to oil spill contingency plans, in consultation with Indigenous Peoples where particular vulnerabilities are identified.



Partnering with Indigenous Peoples in identifying, mitigating and monitoring environmental impacts, for example, by including Indigenous Peoples in the environmental impact assessment teams and on environmental monitoring committees, and involving them in the collection

Natural resource use and environmental issues

and analysis of monitoring data. ●

Ensuring, where relevant, that the traditional

The natural environment can be of central

knowledge of Indigenous Peoples is incorporated

importance to many Indigenous Peoples, not only

into environmental impact assessments and

because they often depend wholly or partly on it for

management plans, through effective consultation.

their livelihoods, but also because it has strong cultural, and often spiritual, significance. Traditional



Finding opportunities to involve indigenous

livelihoods, such as pastoralism, hunting and

groups in environmental protection, rehabilitation

gathering, fishing, rotation agriculture in tropical

and restoration. Examples include gathering

forests, and reindeer herding and whaling in the

seeds of native plants for use in rehabilitation,

Arctic, are highly dependent on specific ecosystems

fire management and wildlife management.

and usually hold specific cultural significance for indigenous groups. Adverse changes to the ecosystem may have a negative impact on livelihoods, or potentially contribute to poverty in indigenous communities, but may also have an impact on their cultural way of life and possibly even their cultural survival. Indigenous Peoples can therefore be particularly vulnerable to modifications in the environment brought on by the potential environmental impacts of oil and gas operations.

42

30

For further guidance on dealing with natural resource issues see the ICMM Good Practice Guide: Indigenous Peoples and Mining, Chapter 5, Section 5.5, ‘Environmental Protection, Rehabilitation and Monitoring’; and the Australian Government, Department of Industry, Tourism and Resources’ Working with Indigenous Communities (2007), Chapter 9, Environmental Co-Management, www.ret.gov.au/resources/Documents/LPSDP/LPSDP-IndigenousCommunitiesHandbook.pdf.

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY Case study 4: BP

Village response teams in Arctic Alaska

BP has been active in Alaska for more than fifty years. The company opened its first office in Anchorage in 1959, and the first team of geologists and engineers arrived during the following year. After the first discovery of oil in 1968, BP and the other companies with oil and gas leases began to develop the Prudhoe Bay field. The first oil flowed in 1977. Over the years, BP has worked closely with the government of the North Slope Borough and the local communities in the region. Since 1979, BP has maintained a staffed office in Barrow, the seat of the North Slope Borough government. The company also has one senior staff member who has worked as the main point of contact between BP and the North Slope Borough government, scientists and subsistence communities for the past 20 years. A number of emergency response teams are trained and ready to respond to emergencies on Alaska’s North Slope. Beginning with Barrow, and now including individuals from five communities within the 90,000 square miles of the North Slope Borough’s region, the Village Response Teams (VRTs) are trained and ready to assist the oil and gas industry, local governments or other communities in oil spill clean-up or other emergencies on the North Slope. The local knowledge of the Inupiat whalers is extremely important to the industry. No one understands how to move small vessels around in broken ice better than these whalers, and most of the response team members are whaling captains or crew members. The Barrow village response team was formed around 1998 during the permitting efforts for BP’s Northstar development, which was the first offshore oil and gas field in the Arctic. Local residents, who value their marine resources and hunt the bowhead whale under a quota from the International Whaling Commission, were initially opposed to the Northstar development because of concerns about the potential for oil spills. Residents were not confident that the industry could respond to spills in Arctic waters. Residents from several other villages have since become part of the village response teams, training and drilling with Alaska Clean Seas (ACS—the industry spill response cooperative) and working directly with the producers. Members receive ‘hazwoper’ training which involves techniques in hazing birds and other wildlife away from a spill. All members have knowledge of ocean survival, and are also trained to monitor impacts on subsistence resources. The members are part-time and are paid during training sessions, drills and if they should be required to respond to an actual emergency. Many of the members were also trained to captain specialized spill response vessels operated by ACS. Although there is some turnover of staff within the village response teams, as they move on to other jobs within the oil and gas industry, local whaling captain Charles Hopson, who worked with BP to form the first group, considers that to be a success in itself, and believes that the village response teams are not only valuable for incorporating traditional knowledge into response efforts, but also as a ‘jumping off’ point for workforce development efforts. 31

IPIECA Case study 5: Hunt Oil

Participatory environmental and social monitoring in rural Andean communities

The PERU LNG Project The PERU LNG Project (the Project), operated by Hunt Oil, is located in the southern region of Peru and comprises a natural gas transportation pipeline that traverses the Andes to a liquefaction plant and marine terminal on the Pacific coast. The 408-km pipeline crosses diverse landscapes and ecosystems, reaching a maximum elevation of 4,900 m and passing through 22 districts in the departments of Ayacucho, Huancavelica, Ica and Lima, many of which are remotely located.

Social profile Within the pipeline area of influence are 34 rural Andean communities and 15 localities. Many communities in Ayacucho and Huancavelica depend heavily on subsistence agricultural practices for their livelihoods. According to the United Nations Development Programme (UNDP), they are considered among the poorest communities in Peru, with the region of Huancavelica having the lowest human poverty index (UNDP, 2006). Given this social context, PERU LNG decided to augment the social baseline conducted as part of the Environmental and Social Impact Assessment (ESIA) by conducting in-depth socioeconomic and cultural evaluations of the communities likely to be affected by the Project. This was done early enough in the Project planning phase to implement the necessary plans and procedures to minimize any potential impact, and included a robust stakeholder engagement process, a systematized grievance mechanism, and local hiring and purchasing procedures. A Rural Andean Community Management Strategy was developed to ensure that appropriate consideration was given to the most vulnerable populations along the pipeline. Further, a comprehensive participative community monitoring programme was established during pipeline construction.

Participatory environmental and social monitoring The Participatory Environmental and Social Monitoring Programme (PESMP) was implemented by a prestigious and experienced national non-profit organization. This ensured that the programme was appropriate for the social context. The primary objective of the PESMP is to provide an opportunity for community members to actively participate in the monitoring of the overall environmental and social performance of the Project during construction. In doing so, perceptions about the impacts of pipeline construction are addressed. While the PESMP was not developed specifically for indigenous people, participatory monitoring of this kind should arguably be conducted in all cases, and perhaps most importantly in communities with a strong connection to natural resources.

32

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

Programme design Specific objectives of the PESMP included: ●

community participation in the project assurance processes;



a guarantee that community concerns be effectively addressed;



ensuring that communities receive accurate information regarding social and environmental performance;



using feedback to improve the social and environmental performance of the Project; and



providing information to local, regional, national and international stakeholders.

The development of the PESMP involved, on a voluntary basis, the active participation of stakeholders from the Project-affected communities, and also local authorities, civil society, governmental offices and international financial institutions. Information about the programme design and objectives was provided to the communities through a series of informative meetings. Follow-up meetings were held to ensure each community had a clear understanding of the scope, and particularly the benefits and management arrangements. This allowed expectations about the programme to be validated.

Selection of community monitors Programme monitors, representing each community, were selected by the individual communities. This process followed criteria that were set to ensure that the monitors had the necessary background for the role. Women and young members of the communities were encouraged to seek nomination. All communities in the area of influence were to be represented by one or more community monitors, the actual number being commensurate with the amount of community land used by the project. The monitors were selected at communal assemblies that neither the company nor the implementing team could attend.

Training The training programme for community monitors included a review of programme objectives and the roles and responsibilities of the monitors. The monitors were further trained in construction processes, the potential and actual impacts of specific construction activities, the Project’s social and environmental commitments, and the use of monitoring protocols and equipment.

33

IPIECA Case study 5: Hunt Oil

… Participatory environmental and social monitoring in rural Andean communities (continued)

Seventy-seven monitors passed the training and were chosen to commence monitoring. The implementing technical team is made available to assist the monitors and provide skills transfer throughout the duration of the programme.

Programme implementation Monitors spend 10 days a month in the field to inspect work activities and reinstatement works, accompanied by a member of the implementing organization. The monitors record all findings in coordination with the specialist to ensure their observations are objective, based on Project commitments or actual impacts, and that every finding can be substantiated. All findings are classified as requiring ‘No Action’ or ‘Action’. Information about the observations and any associated actions are registered in a database used as a consulting tool, which determines action priorities for a community. The monitors and implementing team hold daily coordination meetings and are in continuous coordination with the Project team to define the monthly monitoring plan. The status of each finding can be tracked to closure, though observations cannot be modified by the Project team.

34

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

Monitoring results The PESMP has been implemented in all 34 communities. More then 2,000 observations had been reported as at May 2010. Of these, the majority (75%) were classified as ‘No Action’. The remaining 25% required ‘Action’, of which 80% were solved by scheduled construction activities and the remaining 20% by the devising of new activities.

Conclusions The PESMP represents the first participatory monitoring programme that has been carried out in the construction phase of a major oil and gas development project in Peru. It is considered a successful programme that could serve as a model for similar projects in South America and beyond, and particularly in the context of vulnerable communities. Community participation in Project assurance processes was achieved through careful selection of a specialist organization to implement the programme. The monitors have provided the Project with timely and valuable information, helping to guarantee that community concerns are addressed effectively. A significant amount of trust has been built between the monitors, implementing organization, Project and contractor staff. Monitors ensure that their communities receive accurate information regarding the overall social and environmental performance of the Project. In doing so, they also address any inaccurate perceptions that their community may have about project activities. Testimonies from the implementing organization and community monitors themselves show that the monitors feel confident and are better informed regarding environmental and social management during pipeline construction. In addition, monitors are becoming more efficient communicators with the Project, their own communities and with local authorities, indicating that objectives relating to continuous training and mentoring are being met. This has also contributed to the monitors gaining respect of their community members and neighbouring communities. Finally, due to community involvement in the social and environmental aspects of pipeline construction, potential conflicts have been avoided and grievances related to community expectations have decreased. Local training and participation have helped in the interpretation of the construction process, mitigation measures and Project performance, and have promoted transparency and trust with local community members. Positive impacts are now viewed as far outweighing any negative impacts.

35

IPIECA

Managing opportunities and benefits

Employment and procurement The employment of Indigenous Peoples in project-

Oil and gas projects can often generate

related activities is one possible benefit that oil and

opportunities for Indigenous Peoples to participate

gas companies can provide to Indigenous Peoples.

in and benefit from activities that may help them

This is something that Indigenous Peoples are

fulfil their aspiration for economic and social

increasingly demanding of oil and gas companies

development. International policy makers,

operating on their lands. For example, in Australia,

Indigenous Peoples and their advocates usually

Canada and Alaska, it is common for employment

now expect this from companies operating in

and procurement arrangements to be included as

indigenous territories.

part of agreements with affected indigenous groups. The Surface Use agreement between the Native

The scale and nature of appropriate benefit and

Alaskan Kuukpik Corporation and Atlantic Richfield

development opportunities that can be provided by

Corporation, which included provisions for the

oil and gas companies to Indigenous Peoples will

preferential hiring on the Alpine oil project of local

vary according to the size and scale of the project,

indigenous residents, as well as first preference for

as well as aspirations and needs of Indigenous

local Indigenous Peoples for available contract

Peoples. For example, in certain cases, indigenous

work, is another good example.43

groups might be more focused on benefits that support their traditional livelihoods and culture,

Employment opportunities may be either direct, i.e.

while in other cases, they might seek benefits which

staff, or indirect though procurement of goods and

support their aspirations to participate in the

services. Indigenous Peoples can be under-

mainstream economy. In other cases, indigenous

represented in oil and gas industry employment and

groups may seek benefits which support their

contracting relative to their representation in the

traditional ways and rights, as well as provide both

population around the project. Employment and

immediate and long-term economic opportunities. In

procurement provisions may therefore offer

all cases, it is important to identify, plan and

opportunities for Indigenous Peoples to benefit,

implement benefit sharing and development

particularly in areas where there are few other

programmes in close consultation with affected

economic opportunities.

communities of Indigenous Peoples. Employment and procurement provisions for Project benefit sharing arrangements can involve

Indigenous Peoples can take various forms (some of

financial and non-financial arrangements, some of

these can be equally applicable to local

which are outlined below.

communities more generally). These provisions include:44 ●

a general principle to preferentially employ or contract Indigenous Peoples;

36

43

Haley, Sharman (2004). ‘Institutional Assets for Negotiating the Terms of Development: Indigenous Collective Action and Oil in Ecuador and Alaska’. In: Economic Development and Cultural Change, Vol. 53, No. 1, October 2004.

44

For further information on this issue see the ICMM Good Practice Guide: Indigenous Peoples and Mining, Chapter 5, Section 5.3, ‘Strengthening the Community Asset Base’; and the Australian Government, Department of Industry, Tourism and Resources Working with Indigenous Communities (2007), Chapters 10 and 11: www.ret.gov.au/resources/Documents/LPSDP/LPSDPIndigenousCommunitiesHandbook.pdf

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY



recruitment and procurement strategies focused on enhanced opportunities for Indigenous Peoples;



the establishment of recruitment procedures that



skills development for Indigenous Peoples and

are fair and transparent, and culturally sensitive; indigenous businesses to increase their opportunities to be recruited or engaged; ●

adaptations to working practices to



requirements for contractors to employ or sub-



time-bound targets for indigenous employment



providing indigenous apprenticeship/traineeship,

accommodate indigenous customs and values; contract Indigenous Peoples; and procurement; on-the-job training schemes and mentoring; ●

the provision of cultural awareness programmes for all employees—indigenous and non-



indigenous—as part of induction and re-induction

and Australia) companies may be required by law to

processes;

provide financial compensation to the indigenous

the establishment of culturally sensitive retention

groups on whose land they wish to operate.

strategies, such as the provision of ongoing





mentoring and support for indigenous

Financial arrangements vary and can cover

employees;

compensation, benefit sharing and revenue sharing

partnering with an institution that is well

arrangements that can be disbursed either in cash

positioned to attract additional public funding

or as financing for specific community development

and technical support, and attract external

projects. In practice, the nature and scale of these

clients that can share the cost and achieve

arrangements vary according to the demands of

economies of scale; and

indigenous groups, the legal context, the company’s

addressing racism and other forms of

willingness to negotiate and the scale of the project

discrimination in the workplace.

in question. For example, with regards to the scale of a project, an exploration project will usually only enter into a straightforward arrangement involving

Financial benefits

compensation for impacts, whilst a large-scale

Benefits for Indigenous Peoples can also take the

project operating over several decades would be

form of various types of financial compensation and

better suited to a more comprehensive life-of-project

benefit sharing

arrangements.45

Indigenous Peoples

compensation and benefit sharing arrangement.

often seek some form of financial compensation package from companies wishing to operate on their

Examples of financial arrangements, which can

land, and in some national contexts (such as Bolivia

comprise one or a combination of the following, are

45

For further information on financial arrangements between companies and Indigenous Peoples see: O’Faircheallaigh, C. 2003. ‘Financial Models for Agreements between Indigenous Peoples and Mining Companies’, Aboriginal Politics and Public Sector Management Research Paper No. 12, Griffith University, Brisbane, www.griffith.edu.au/business/griffith-businessschool/pdf/research-paper-2003-financial-models.pdf.

37

IPIECA

listed below. All of these benefit sharing

• One-off payments related to particular events that may happen at an undetermined time in

arrangements are subject to compliance with relevant anti-corruption requirements. They include:

the future. These can include payments linked to fixed milestones such as project closure, or



Fixed payments—these may be:

provision for unexpected events such as

• Formally agreed milestone payments, such as a sign-on payment, or a payment on approval

compensation for oil spills.

of permits, or at the commencement of

Production- or revenue-based payments—an annual payment (royalty) for use of the resource

incentives for communities to participate in the

or land, based on a percentage of production or

development of the project.

profits. Production- or revenue-based payments

• Single up-front payments, usually for a right of way (for example for a pipeline project) or for compensation for specific losses (for example loss of land, access to resources or assets). • Fixed annual payments, which are usually disbursed into community development funds or

38



operations. Such payments can provide

usually take one of three forms: • a percentage or an amount based on annual production; • a percentage of the annual revenue; or • a percentage of annual profits.

programmes. Depending on the context, these

Production- or revenue-based arrangements are

payments may be defined as benefit sharing

negotiated on a case-by-case basis as there is

payments or social investment payments. In

often no overriding framework for fiscal

some cases there is no basis for their amount. In

arrangements. Because royalties are subject to

other cases these annual payments may be

variation (for example, due to oil and gas price

based on a certain proportion of the total

fluctuations if they are value-based or due to the

capital expenditure on a project (capex)

financial success of the project in the case of

(typically in the range of 0.5% to 1.0% of capex

royalties on profit), in many cases a guaranteed

in Australia, although the exact amounts may

annual minimum payment can be built into

not be directly and explicitly linked to capex).

royalty-type arrangements to provide consistency.

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY



Equity—a share of ownership in the project, and

examples demonstrate the importance of developing

subsequent share of dividends paid to

and implementing sustainable development

shareholders, in return for financial investment,

commitments in consultation and partnership with

or in recognition of the value of support from the

Indigenous Peoples.

indigenous group or the rights which the group has over the resource. The principal benefits of

One way of managing these investment flows is

an equity share are that the shareholder will

either through an internal company fund or an

have a direct share of the profits from the project

external fund subject to standard governance and

and hold some degree of control in the company

transparency procedures. Funds are a form of

or project. However, the income stream from an

institutional arrangement to manage and disburse

equity share is less guaranteed than from

financial streams.

production- or revenue-based payments, and equity participation poses the risk of negative

In the case of external funds, these are usually

returns and exposure to project capital injections,

legally distinct institutions set up as separate entities

for example, for expansion. This type of payment

independent of the company, the indigenous

is less common and is usually found in

representative body or the government, and with the

circumstances where indigenous groups hold

specific purpose of managing and disbursing the

strong land rights (for example in Canada).

financial streams. The financial streams in trusts may be disbursed immediately or invested for future use.

The basis of these payments and the choice of which

There are often strict legal rules that determine what

financial arrangements to include in an overall

a trust can or cannot do, how it is managed and

agreement will depend on the particular context, the

how it relates to its original donor. The independent

regulatory framework, and on what is considered to

status of trusts may also allow them to be tax-

be fair and reasonable by all concerned parties.

efficient and attract funding from other sources, such as government revenues or financial streams

Sustainable development commitments and funds

from other companies. In the case of an internal company fund or

Sustainable development commitments are another

programme, this type of disbursement involves

type of benefit that oil and gas companies can

financial streams being managed internally within

provide to Indigenous Peoples. Development

the company, or within a specially set up fund,

commitments can be made toward supporting a

which is usually a formal organizational structure

variety of programmes, which can include:

within the business, with agreed budgets and



education and training programmes;

decision-making criteria that may involve external



livelihood support programmes;

stakeholders.



cultural heritage preservation and enhancement programmes;



health and well-being programmes; and



local infrastructure projects.

These commitments will usually take the form of a specified financial amount and a specific range of activities, so that investments are made in programmes, which the indigenous groups may not otherwise be able to create. Good practice 39

IPIECA Case study 6: Nexen

Nexen Aboriginal Education Award Programme (AEAP), scholarships and bursaries

Aboriginal peoples in Canada have certain rights and special status under government legislation and, as such, many aspects of the oil and gas industry’s interactions with Aboriginal peoples are regulated. These conventions provide guidance and consistency on how the industry engages with Aboriginal peoples, and ensure respect for a valued culture and preservation of traditional lifestyles. Nexen has a comprehensive approach to Aboriginal relations, focused on the development of mutually-beneficial relationships. This includes a goal of having company workforce demographics reflect local demographics, including Aboriginal peoples. To achieve this, Nexen offers scholarships and bursaries to provide financial support to Aboriginal students enrolled in programmes that align with Nexen’s business needs and, ultimately, with the sustainability of the Aboriginal community. Additionally, partnerships are in place with universities and colleges that promote skills development within the Aboriginal population. Nexen’s Aboriginal scholarships are accessed by students through their respective educational institution or chosen through the in-house Nexen Aboriginal Education Award Programme (AEAP). AEAP was established in 2002 and, since then, has provided support to more than 100 Aboriginal students. The programme also serves as a mechanism to identify and track the academic progress of top students, so that they might be recruited upon graduation. Many AEAP recipients also participate in Nexen’s Summer Student Employment Programme. During the summer of 2010, Nexen provided summer employment to 12 Aboriginal students from universities across Western and Eastern Canada. Nexen also works closely with educational and training institutions to develop programmes that prepare Aboriginal peoples for employment. The company’s current post-secondary and education coalition partners include: The University of Calgary, Mount Royal University and

40

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

Southern Alberta Institute of Technology in Calgary, Alberta; University of Alberta and Northern Alberta Institute of Technology in Edmonton, Alberta; University of Manitoba; University of Saskatchewan; First Nations University of Canada; and the University of British Columbia. Nexen is pleased to continue its support of the University of Calgary’s Native Ambassador PostSecondary Initiative. This programme of having students inspire Aboriginal children to stay in school and pursue post-secondary education is proving to be successful, and Nexen’s support ensures that the programme reaches as many students and families in the community as possible. Nexen is also the lead partner of the Aboriginal Leadership and Management Programme at The Banff Centre. This programme is designed to provide capacity-building leadership training to First Nations, Métis and Inuit communities. The company’s contributions assist participants by providing resources to offset the cost of tuition. Nexen has recently re-directed its support towards the Nexen Chair in Aboriginal Research, to conduct research over the next few years that will strengthen Aboriginal communities in meaningful and lasting ways. That vision is consistent with the company’s policy statement regarding Aboriginal Relations at Nexen, which is to create mutually-beneficial relationships with Aboriginal people and communities. Nexen is also a supporter and sponsor of the Sunchild E-Learning High School. The programme is online, allowing students to access course materials, programme tools and instructor aids at any time, anywhere. In some areas, additional support is needed to ensure Aboriginal students complete their secondary school requirements in order to achieve the entrance standards for University. Nexen has a bursary programme for students in Grades 8 to 12, at schools in Alberta and Saskatchewan that are in proximity to our operations. These mathematics and science bursaries reward those who stay in school, as well as promote excellence in courses that are core to technology-based industries such as that of Nexen. The results of these and other Aboriginal relations efforts are tangible. Today, Nexen employs a number of people of Aboriginal ancestry, and encourages all employees to embrace the rich and diverse culture of the Aboriginal community in Canada. Nexen’s efforts to develop Aboriginal employment opportunities contributed to the company’s inclusion in the list of Canada’s Best Diversity Employers for 2010.

41

IPIECA Case study 7: Woodside

Woodside’s Reconciliation Action Plan

Woodside is Australia’s largest independent energy company, producing liquefied natural gas, liquefied petroleum gas, condensate and oil for customers around the world. A substantial portion of Woodside’s business activities cover operations and development opportunities in the remote Pilbara and Kimberley regions of northern Western Australia. In 2006, Reconciliation Australia, an independent, not-for-profit entity, launched the Reconciliation Action Plan (RAP) initiative. This programme encourages organizations to make a public commitment to the national effort to close the unacceptable gap in life expectancy between indigenous and other Australians. In 2009 Woodside developed its own RAP, which contained more than 30 commitments across the areas of relationships, respect and opportunities. Woodside has now been able to achieve all of the commitments in the 2010 RAP. Further to the inaugural RAP, Woodside has released the 2011–2015 Reconciliation Action Plan which will underpin the companies efforts over the next five years to advance reconciliation within Woodside and the wider Australian community. Woodside has learned that a RAP is as much a process as an outcome, with the final document reflecting a wide range of collaborative input from the indigenous communities in which the company operates, as well as from indigenous and non-indigenous employees. Woodside’s approach created new avenues for dialogue, and a fresh message for indigenous communities and technical staff.

42

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

The five-year timeframe of the Woodside RAP allows for longer-term commitments, which Woodside is determined to translate into better outcomes for indigenous communities. Every commitment in this RAP, grouped under the headings of Respect, Relationships and Opportunities, is defined by a set of measurable goals to be achieved between now and 2015. These include: ●

tripling the Indigenous workforce in the 2009–2012 period, and having Woodside’s Australian-based workforce reflect the demographics of Western Australia’s Indigenous population by 2015;



15 indigenous university students with Woodside cadetships, and a further 10 with Community cadetships;



supporting more than 200 indigenous students to participate in science and engineering training camps;



supporting 100 indigenous students to participate in the Clontarf Foundation programme that utilizes football as a conduit to gaining improved outcomes for indigenous education;



supporting five indigenous organisations to complete governance training; and



a 100% increase in Woodside’s Reconciliation Interest Group membership.

These commitments build on achievements under Woodside’s first RAP and are just the first steps on a long journey of reconciliation for Woodside. Woodside was the first Australian oil and gas company to develop a RAP, and views the Plan as integral to its business. It is a high-visibility reference framework and is becoming the foundation for key initiatives in indigenous engagement. Woodside’s full commitments can be viewed at, and downloaded from, the following link: www.woodside.com.au/Sustainable+Development/Social+Contribution/Our+Communities/ Indigenous+Communities.htm More information on the RAP initiative can be viewed on Reconciliation Australia’s website at: www.reconciliation.org.au/home/reconciliation-action-plans

43

IPIECA

Summary of emerging good practice The objective of this issues review, Indigenous Peoples and the Oil and Gas Industry: Context, Issues and Emerging Good Practice, is to provide a summary of the policy and legal context, key issues and emerging good practices in relation to the oil and gas industry and its interaction with Indigenous Peoples. This section sets out some good practice considerations that have emerged for companies operating in Indigenous Peoples’ territories, drawing

• Carry out engagement in a culturally appropriate manner. • Provide internal cultural training for company staff who are engaging with Indigenous Peoples. • Work with indigenous representative institutions, as well as organizations that represent their interests. • Aim to be inclusive, taking into consideration customary decision-making processes while

on the discussion and case studies in this review.

being sensitive to those sections of the community

The list below is not intended as a comprehensive

who may be excluded from the decision-making

set of guidelines; rather, it provides general, entry-

process, such as women and youth.

point considerations for companies:

• Inform Indigenous Peoples of their rights as set out in national law.

1. General principles

• Include Indigenous Peoples in decision making, and develop a relationship through which

• Respect the rights of Indigenous Peoples. • Minimize adverse impacts. • Maximize the benefits resulting from a company’s operations.

respectful dialogue can occur. • Aim to reach agreements, where relevant, with Indigenous Peoples through good faith negotiation.

2. Socio-economic context • Determine whether there is potential for Indigenous Peoples to be affected. • Understand the national and international legal context. • Check whether the country in question has signed up to ILO Convention No. 169 and the UN

• Document formal consultations. • Develop a register of company commitments. • Set the objective of broad community support. • Aim to maintain broad community support through ongoing engagement and implementation of effective grievance mechanisms.

Declaration on the Rights of Indigenous Peoples. • Understand the historical context. • Carry out socio-economic baseline and impact assessments in participation with Indigenous Peoples, and share the findings of these assessments. • Source advice from experts in international, national and local Indigenous Peoples issues.

4. Managing impacts and issues a) Generally: • Understand how impacts may affect Indigenous Peoples differently from other community stakeholders. • Identify, manage and monitor impacts in consultation and participation with affected Indigenous Peoples.

3. Engagement and consultation • Establish relationships with indigenous communities and their representative

• Develop an Indigenous Peoples Development Plan, or similar, for use as the key management tool and broader engagement purposes.46

institutions at an early stage.

46

44

The IFC Performance Standard 7 (PS7) requires its clients to manage the impacts on Indigenous Peoples of their operations through an Indigenous Peoples Plan (IPP), or a broader community development plan with separate components for Indigenous Peoples (see Annex A of PS7 for a description of the content of the IPP).

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

• Develop partnerships with relevant organizations to manage aspects of the company’s approach to indigenous relations. b) With regard to specific issues: • Land: - Avoid culturally sensitive areas and minimize the size of land used by the project to the extent possible. - Understand the rights claimed by affected Indigenous Peoples with respect to their lands, as well as those rights as recognized under national law. - Offer affected communities of Indigenous Peoples fair compensation and due process. - Offer land-based compensation or compensation-in-kind in lieu of cash compensation where feasible. - In cases where land access or acquisition

• Resettlement: - Avoid the physical resettlement of Indigenous Peoples. - Physical relocation should only be considered after the company has established that there is no feasible alternative to avoid relocation. - Enter into good faith negotiations with affected Indigenous Peoples and seek their broad support before considering resettlement. • In-migration: - Assess and analyse the potential and specific nature of in-migration impacts in Indigenous Peoples’ lands. - Develop and implement, where relevant, measures to avoid, minimize or manage project related in-migration in consultation

has been negotiated previously by a third

with affected Indigenous Peoples.

party, including government, conduct due

- Develop measures to strengthen the

diligence to identify whether legacy issues

resilience of indigenous groups to the effects

may exist that could impact the relationship

of in-migration.

with indigenous communities.

45

IPIECA

• Traditional knowledge and cultural heritage: - Assess potential impacts on cultural heritage and traditional knowledge in consultation with Indigenous Peoples as part of the social and environmental assessments. - Develop measures to protect cultural heritage, where relevant, in consultation with Indigenous Peoples. - Respect and value Indigenous Peoples’ traditional knowledge and seek their consent for any use of their traditional knowledge. - Support indigenous aspirations to preserve and enhance their cultural heritage and traditional knowledge. • Natural resource use and environmental issues: - Consult with affected Indigenous Peoples to understand their environmental concerns about oil and gas operations and how these can be addressed. - Partner with Indigenous People in identifying, mitigating and monitoring environmental impacts. - Involve indigenous groups, where relevant, in environmental protection, rehabilitation and restoration programmes. 5. Managing opportunities and benefits • Employment and procurement: - A general principle to preferentially employ or contract Indigenous Peoples as feasible. - Time-bound targets for indigenous employment and procurement. - Skills development for Indigenous Peoples and indigenous businesses to increase their opportunities to be recruited or engaged. - Adaptations to working practices to accommodate indigenous customs and values. - Cross-cultural training for indigenous and non-indigenous employees and contractors.

46

- Partnering with an institution that is well positioned to attract additional public funding and technical support, and engage with external clients that can share the cost and achieve economies of scale. - Establish measures to address racism and other forms of discrimination in the workplace. • Financial benefits and sustainable development: - Provide, where relevant, a combination of financial and non-financial benefit sharing packages to Indigenous Peoples (including financial compensation and benefit sharing packages and non-financial benefits such as preferential employment and procurement). - Develop and manage benefit sharing arrangements in participation with Indigenous Peoples. - Provide capacity building and training to Indigenous Peoples in relation to the management and implementation of benefit sharing arrangements.

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

Appendices Useful resources General—Indigenous Peoples Anaya, Prof. S. James. 2011. Extraction of natural resources a key cause of abuse of indigenous peoples’ rights. http://ohchr.org/EN/NewsEvents/ Pages/DisplayNews.aspx?NewsID=11405&LangID=E

Whiteman, Gail and Mamen, Katy. 2002. Meaningful Consultation and Participation in the Mining Sector? A Review of the Consultation and Participation of Indigenous Peoples within the International Mining Sector. The North-South Institute. http://network.idrc.ca/uploads/userS/10606988501lit_rev_final.pdf

Free, prior and informed consent (FPIC) ARPEL. 2009. Relations with Communities Management System: Socio-Environmental and Reputational Risk Management Manual. www.arpel.org/library/publications/search/?page=3 Australian Government, Department of Industry, Tourism and Resources. 2007. Working with Indigenous Communities. www.ret.gov.au/resources/Documents/LPSDP/LPSDPIndigenousCommunitiesHandbook.pdf Business for Social Responsibility and First Peoples Worldwide. 2004. Guidebook: Resource/Extractive Companies and Indigenous Peoples Engagement: Recipe for Dialogue Project. http://commdev.org/content/document/detail/1923 Cobo, Jose Martínez. 1981–83. Study of the Problem of Discrimination Against Indigenous Populations. http://social.un.org/index/IndigenousPeoples/Library/ Mart%C3%ADnezCoboStudy.aspx United Nations Development Group. 2009. Guidelines on Indigenous Peoples’ Issues. www.un.org/esa/socdev/unpfii/documents/UNDG_ guidelines_EN.pdf United Nations. 2009. State of the World’s Indigenous Peoples. The Secretariat of the Permanent Forum on Indigenous Issues. www.un.org/esa/socdev/unpfii/documents/SOWIP_ web.pdf

Committee on the Elimination of Racial Discrimination. 1998. General Recommendation XXIII (51) Concerning Indigenous Peoples. Adopted at the Committee’s 1235th meeting, 18 August 1997. UN Doc. CERD/C/51/Misc.13/Rev.4. www.austlii.edu.au/au/journals/AILR/1998/6.html The Extractive Industries Review. 2003. Striking a Better Balance (The Final Report of the Extractive Industries Review). Volume I: ‘The World Bank Group And Extractive Industries’. Forest Peoples Programme. 2004. In search of Middle Ground: Indigenous Peoples, Collective Representation and the Right to Free, Prior and Informed Consent. Marcus Colchester and Fergus MacKay. Paper presented to the 10th Conference of the International Association for the Study of Common Property, Oaxaca, August 2004. www.forestpeoples.org/documents/law_hr/fpic_ips_ aug04_eng.pdf Forest Peoples Programme. 2004. Indigenous Peoples’ Right to Free, Prior and Informed Consent and the World Bank’s Extractive Industries Review. Fergus MacKay. www.forestpeoples.org/sites/fpp/files/publication/ 2010/10/eiripsfpicjun04eng.pdf Forest Peoples Programme. 2007. Making FPIC— Free, Prior and Informed Consent—Work: Challenges and Prospects for Indigenous Peoples. Marcus Colchester and Maurizio Farhan Ferrari. FPIC Working Papers. www.forestpeoples.org/sites/fpp/files/publication/ 2010/08/fpicsynthesisjun07eng.pdf 47

IPIECA

IFC. 2012. Performance Standard 7. www1.ifc.org/wps/wcm/connect/1ee7038049a79 139b845faa8c6a8312a/PS7_English_2012.pdf? MOD=AJPERES Mehta, Lyla and Stankovitch, Maria. 2000. Operationalization of Free Prior Informed Consent. Contributing paper to the World Commission on Dams. www.dams.org/docs/kbase/contrib/soc209.pdf Oxfam. 2010. Guide to Free Prior and Informed Consent. http://resources.oxfam.org.au/filestore/originals/ OAUs-GuideToFreePriorInformedConsent-0610.pdf Stoll, Julie Ann; Barnes, Rodger; and Kippen Eleanor. 2008. Uranium Mining—Information Strategy for Aboriginal Stakeholders. Paper presented at the Minerals Council of Australia annual Sustainable Development Conference, Darwin, 15–19 September 2008. United Nations Economic and Social Council, Commission on Human Rights. 2004. Standard Setting: Preliminary working paper on the principle of free, prior and informed consent of indigenous peoples in relation to development affecting their lands and natural resources that would serve as a framework for the drafting of a legal commentary by the Working Group on this concept. Submitted by Antoanella-Iulia Motoc and the Tebtebba Foundation to the Sub-Commission on the Promotion and Protection of Human Rights, Working Group on Indigenous Populations, Twenty-second session, 19–23 July 2004. www2.ohchr.org/english/issues/indigenous/docs/ wgip22/4.pdf United Nations Economic and Social Council, Commission on Human Rights. 2004. Review of developments pertaining to the promotion and protection of the rights of indigenous peoples, including their human rights and fundamental freedoms: Indigenous peoples and conflict resolution. Working paper submitted by Miguel Alfonso Martínez to the Sub-Commission on the 48

Promotion and Protection of Human Rights, Working Group on Indigenous Populations, Twenty-second session, 19–23 July 2004. www2.ohchr.org/english/issues/indigenous/docs/ wgip22/2.pdf Foley Hoag LLP. 2010. Implementing a Corporate Free, Prior, and Informed Consent Policy: Benefits and Challenges. A report commissioned by Talisman Energy Inc. www.foleyhoag.com/NewsCenter/Publications/eBo oks/Implementing_Informed_Consent_Policy.aspx?re f=1

Useful websites United Nations (UN) Anaya, Prof. S. James—Special Rapporteur on the rights of Indigenous Peoples www.ohchr.org/EN/Issues/IPeoples/SRIndigenous Peoples/Pages/SRIPeoplesIndex.aspx Office for the United Nations High Commissioner for Human Rights—‘Indigenous Peoples’ home page. www.ohchr.org/EN/Issues/IPeoples/Pages/Indigenous PeoplesIndex.aspx United Nations Permanent Forum on Indigenous Issues. www.un.org/esa/socdev/unpfii/index.html UN Secretary-General’s Special Representative on Business and Human Rights—’Indigenous Peoples’ home page. www.business-humanrights.org/ SpecialRepPortal/Home/Materialsbytopic/ Groupsaffected/Indigenouspeoples United National Educational, Scientific and Cultural Organization (UNESCO) and Indigenous Peoples: Partnership for Cultural Diversity. http://portal.unesco.org/culture/en/ev.phpURL_ID=35393&URL_DO=DO_TOPIC&URL_SECTION =201.html

INDIGENOUS PEOPLES AND THE OIL AND GAS INDUSTRY

World Bank—’Indigenous Peoples’ home page. http://web.worldbank.org/WBSITE/EXTERNAL/TO PICS/EXTSOCIALDEVELOPMENT/EXTINDPEOPLE/0 ,,menuPK:407808~pagePK:149018~piPK:149093~ theSitePK:407802,00.html

Forest Peoples Programme. www.forestpeoples.org Indigenous Peoples’ Center for Documentation, Research and Information. www.docip.org Cultural Survival. www.culturalsurvival.org

The Oil, Gas and Mining Sustainable Community Development Fund (CommDev)—’Indigenous Peoples’ home page. http://commdev.org/ section/topics/ indigenous_peoples

ICMM

Survival—The movement for tribal peoples. www.survivalinternational.org International Indian Treaty Council. www.treatycouncil.org

General webpage on Indigenous Peoples. www.icmm.com/page/208/indigenous-peoples

First Peoples Worldwide. www.firstpeoplesworldwide.org

ICMM. 2005. Mining and Indigenous Peoples Issue Review. www.icmm.com/page/1161/mining-andindigenous-peoples-issues-review

Cordillera Peoples’ Alliance, Philippines. www.cpaphils.org

ICMM. 2010. Good Practice Guide: Indigenous Peoples and Mining. www.icmm.com/library/indigenouspeoplesguide

IPIECA IPIECA Publications Library: www.ipieca.org/library See the following titles in the ‘Social Responsibility’ section: • Human rights and ethics in the oil and gas industry • Guide to operating in areas of conflict for the oil and gas industry • A Guide to Social Impact Assessment in the Oil and Gas Industry

Inuit Circumpolar Council. www.inuitcircumpolar.com Interprovincial Federation of Shuar Centres (Federación Interprovincial de los Centros Shuar)— FICSH, Ecuador. www.diablouma.net/36shuar.html Russian Association of Indigenous Peoples of the North (RAIPON). www.raipon.org Tebtebba (Indigenous Peoples’ International Centre for Policy Research and Education), Philippines. www.tebtebba.org

Indigenous Peoples organizations, NGOs and research institutes International Work Group for Indigenous Affairs. www.iwgia.org Indigenous Peoples of Africa Coordinating Committee (IPACC). www.ipacc.org.za Center for World Indigenous Studies (CWIS). http://cwis.org 49

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IPIECA is the global oil and gas industry association for environmental and social issues. It develops, shares and promotes good practices and knowledge to help the industry improve its environmental and social performance, and is the industry’s principal channel of communication with the United Nations. Through its member-led working groups and executive leadership, IPIECA brings together the collective expertise of oil and gas companies and associations. Its unique position within the industry enables its members to respond effectively to key environmental and social issues.

Company members

Association members African Refiners Association (ARA)

Addax Petroleum

Occidental

BG Group

OMV

American Petroleum Institute (API)

BP

Petrobras

Australian Institute of Petroleum (AIP)

Chevron

Petronas

Brazilian Petroleum, Gas and Biofuels Institute (IBP)

CNOOC

Petrotrin

Canadian Association of Petroleum Producers (CAPP)

ConocoPhillips

PTT EP

Canadian Petroleum Products Institute (CPPI)

eni

Qatargas

European Petroleum Industry Association (EUROPIA)

ExxonMobil

RasGas

International Association of Oil & Gas Producers (OGP)

Hess

Repsol

Petroleum Association of Japan (PAJ)

Hunt Oil

Saudi Aramco

Husky Energy

Shell

Regional Association of Oil and Natural Gas Companies in Latin America and the Caribbean (ARPEL)

KPC

SNH

Mærsk

Statoil

Marathon

Talisman

Nexen

Total

NOC Libya

Woodside Energy

South African Petroleum Industry Association (SAPIA) The Oil Companies’ European Association for Environment, Health and Safety in Refining and Distribution (CONCAWE) United Kingdom Petroleum Industry Association (UKPIA) World Petroleum Council (WPC)

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