sharing in governance of extractive industries

What is Benefit Sharing? Respecting Indigenous Rights and Addressing Inequities in Arctic Resource Projects

First published on LinkedIn

International standards refer to Indigenous peoples’ right to benefit from resource development, participate in decision-making and determine priorities in development planning that directly affects them. This article just published in the Resources journal (open access) explores the requirements of international standards and guidance alongside different models of benefit sharing in practice by oil, gas and mining industries in the Arctic and sub-Arctic. It highlights good practice within mainstream development scenarios and identifies models of benefit sharing that represent a greater degree of Indigenous participation and control. It concludes that there is a need to consider benefit sharing within an overall paradigm that allows greater space for Indigenous voices in decision making, including at the strategic planning stage.

All the case studies discussed in the article are embedded within an extractivist development model, which James Anaya—in his role as UN Special Rapporteur on the Rights of Indigenous Peoples—identified as the ‘prevailing model’ of resource development. Anaya presented a ‘preferred model’ of resource development in which Indigenous peoples have greater control over planning decisions and project implementation, and consequently a more equitable share of the benefits. From the outset of developments, the extractivist bias that currently dominates in priorities and mindsets tends to compromise the ability of Indigenous resource users to benefit equitably from resource development on their lands. In particular, this relates to a lack of involvement in strategic decisions—including the allocation of land and the granting of exploration licences.

While it may be an unfamiliar development paradigm for many governments, Anaya’s ‘preferred’ model is already being implemented, at least partially, in some Arctic and sub-Arctic contexts. This includes efforts by the public and private sectors, including policy incentives and support for Indigenous enterprise development, preferential contracting, and embedding the principle of FPIC in decision-making structures and processes. Corporate approaches, such as those implemented by multinational corporations in response to the requirements of international financial institutions, or by enterprises that are simply more in touch with the communities in which they operate, provide the opportunity to analyse the results and effectiveness of such approaches. This can lead to greater adoption by industry associations and individual companies, and within government regulation at the national and sub-national levels.

Greater participation of Indigenous peoples at the strategic level in extractive industry planning and programme development—to determine priorities for their own development—may also prove to be a more effective foundation for equitable benefit-sharing and a stronger social licence to operate for extractive projects, if they are to go ahead. This offers potential benefits to governments—through reduced risk of social unrest and opposition, and increased security and predictability for investors. This may require a longer time frame for developing the natural resources, and may also require some resource-rich lands to be set aside and not developed, as part of strategic zoning agreements with Indigenous representative institutions and local Indigenous landowners and land users. However, in the longer term it may prove to be a more effective, sustainable and stable development model.

It is likely that the extractivist model of resource development will continue to prevail for some time to come, although increasing awareness of the potential for Anaya’s ‘preferred’ model may lead to wider innovation in that direction. This would more closely reflect government obligations under international law to ensure continuing improvement of Indigenous peoples’ economic and social conditions and to ensure that Indigenous peoples are able to determine priorities and strategies for development that takes place on their lands, and to ensure ‘fair and equitable sharing of benefits’ arising from resource development.

The full article can be downloaded here as a pdf: https://www.mdpi.com/2079-9276/8/2/74/pdf

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