Part 2 of two articles summarizing presentations from the IIPWG investor roundtable Indigenous-Defined FPIC: Best Practices for Investment and Corporate Governance. Watch the full video or jump to Part 1: Self-Determination, Sovereignty and a Model for Long-term, Relational Engagement.
“It is not our role as investors to define FPIC, but to understand the best practices and promote them in our engagement,” said Nick Pelosi, Associate Director of Engagement at EOS at Federated Hermes. Pelosi was among presenters at the June 15 investor roundtable Indigenous-Defined FPIC: Best Practices for Investment and Corporate Governance to discuss how to accelerate operationalization of Indigenous-led protocols for free, prior and informed consent (FPIC) and to parse common questions about FPIC from companies.
When engaging with companies that have impacts on Indigenous Peoples, EOS encourages adoption of policy commitments to FPIC. If companies are unwilling to do so, they ask the company to clarify their stance or their position on FPIC. They also look for companies to show evidence of community agreements. Investors can ask companies a litany of questions to assess how well these agreements embody the principles of FPIC:
- Do these agreements use FPIC language, and does the language embody minimum standards as articulated in the UNDRIP?
- Are the terms and conditions made public?
- Was the agreement negotiated in a way that was broad and inclusive?
- Does the agreement include provisions for not just benefit sharing, but ongoing consultation and impact assessment?
Companies should also provide grievance mechanisms because access to remedy is an important part of FPIC and the UNGPs. When there are reports of opposition from Indigenous Peoples, investors “expect disclosure from companies in the annual report, preferably under critical risk factors of the company's response as well as the financial impacts.”
Shareholders can help move industry to fully integrate Indigenous Peoples’ right of FPIC into due diligence by calling for better data. While the data market is saturated, it is still a challenge to find data coming directly from communities. Shareholders can build demand for that data in their relationships with ratings agencies or other data providers.
Pelosi encouraged Investors to listen and engage more with Indigenous Peoples: “There's potential for learning, and there's also potential for both Indigenous Peoples and investors to benefit economically from those interactions. But they're more likely to be successful if there is a baseline assumption of FPIC and respect for tribal sovereignty,” he said.
The roundtable culminated with a robust Q&A, where several additional questions were raised (see the full transcript) and concluded with one of the most often asked FPIC questions from companies and investors alike: What do we do when Indigenous communities hold different positions on a project?
The presenters gave guidance and considerations:
- No two Indigenous groups are the same, which is fundamental to the sovereignty and self-determination at the center of FPIC.
- Companies need to be ready for disagreements and opposition and understand that “no” offers a pause point for reassessment and that it may never get to “yes” – "there is no caveat to FPIC."
- Understand that some Indigenous communities have walked the path before and have developed sophisticated agreement and consultation protocols, while others may not have; you must meet with each impacted Indigenous community where they are at.
- Things cannot happen without trust. Listening and engaging will help build that trust, so companies are encouraged to meet with Indigenous leaders and communities early and often.
- It takes time to discuss the issues, find the truth, frame discussion, and come to consensus; build in time for long-term and iterative engagements.
- Agreement often means people don't all get what they want but the final decision helps everyone.
- Draw from tools in the investor toolbox: relationship building, mediation practices, communication and collaboration tools, conflict avoidance agreements, etc.
- Companies talk about division but don't always acknowledge how their own behavior affects decision; make that part of the process.
- Engagement with Indigenous Peoples means addressing the history of Indigenous erasure and invisibilizing through dominant power structures: companies need to understand this and seize the opportunity to rectify historic imbalance so Indigenous Peoples are respected and have agency.
Great strides have been made from Indigenous leaders and investor allies to lay a foundational understanding of FPIC globally. The talking points and strategies discussed at the roundtable can move the needle towards effective and equitable operationalization of FPIC and help build a world where every company that impacts Indigenous Peoples – either directly or indirectly – has Indigenous-defined FPIC protocols. Investors must continue to encourage companies to develop policy that necessitates minimum FPIC due diligence standards as articulated in the UN Declaration on the rights of Indigenous Peoples that are inclusive of all priorities and concerns put forward by Indigenous Peoples.
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Addendum – Common Questions about FPIC From Companies
The following list of recurring questions from companies about FPIC were culled from participants of the Investors & Indigenous Peoples Working Group and engagements First Peoples Worldwide has participated in. Investors are encouraged to prepare for these and other questions that may arise on Indigenous issues, and to invite Indigenous leaders into conversations.
- Can you define FPIC for us and/or can you give us an example of when FPIC has worked for a company?
- How do we begin to operationalize FPIC?
- What are the core values and protocols Indigenous Peoples require in FPIC policy?
- How can we create iterative FPIC processes, especially for projects that span generations?
- How do we navigate situations where two or more Indigenous communities don't align on one course of action?
- We secured FPIC at the beginning of the project. Do we need to re-secure FPIC or revisit FPIC parameters?
- The country where our project is based does not require FPIC. Is FPIC a realistic standard to achieve here?
- Do we need FPIC policy when our clients bear sole responsibility for obtaining FPIC?
- Does our policy on “prior consultation” suffice to ensure FPIC?
- Does our policy to secure consent from local communities encompass Indigenous Peoples right to FPIC?
- What are the legal ramifications of securing FPIC?