sharing in governance of extractive industries
A new public commitment by Shell may mark a shift in companies’ adoption of free, prior, and informed consent.
For years oil companies have been reluctant to commit to the principle of Free, Prior, and Informed Consent (FPIC), but this trend might be on the brink of a shift. Oil giant Shell just included a public commitment to FPIC in their 2016 Sustainability Report, the first of the Big Oil companies to do so. FPIC requires that communities be adequately informed about projects that affect their lands in a timely manner, free of coercion and manipulation, and should be given the opportunity to approve or reject a project before activities begin.
In a 2016 discussion paper, the Canadian Association of Petroleum Producers recognized FPIC as grounded in the right to self-determination and says that its “member companies regularly seek to and achieve FPIC with indigenous communities.” In fact, Canada’s largest oil producer Suncor participates in a group of companies, First Nations, and NGOs that have called on the Canadian government and industry to adopt FPIC. This newfound openness is encouraging, but public evidence on how these commitments look on the ground are hard to come by. Other large oil companies like Exxon and Statoil participate in the oil industry association (IPIECA) task force on indigenous peoples and FPIC, but have yet to adopt FPIC policy commitments.
In the past, I’ve written about improved company commitments to FPIC, an encouraging trend that Oxfam has observed in the mining sector as well as the food and beverage sector. This development demonstrates that indigenous peoples’ struggles, both in the courts and on their land, have led to a political context where some companies have incorporated FPIC into their public policies. However, our 2015 Community Consent Index, which reviewed oil, gas, and mining company public positions on FPIC, noted a lack of progress in the oil and gas sector. None of the oil companies listed in the index had FPIC policies.
The reason why is uncertain. It may have something to do with the distinct cultures of the two sectors or perhaps their different footprints. Mining companies may have less flexibility in adapting project design to avoid impacts to land than oil companies (which can adjust the location of pipelines, for example), forcing them to deal with FPIC issues head on. Or differences in industry associations may play a role: the mining industry association (ICMM) is CEO-led and has a set of sustainability requirements for members, including a binding FPIC policy requirement, while IPIECA brings companies together more loosely, with no policy requirements for members.
For indigenous peoples, FPIC is their right under international law. Oxfam has called on mining and oil companies for years to respect FPIC for indigenous peoples and nonindigenous communities. Yet the jury is still out on whether corporate FPIC commitments made to date will lead to meaningful change in practice. It makes sense that civil society and communities view these commitments with a healthy dose of skepticism, especially when viewed alongside of frequent corruption scandals (think Shell’s involvement in a bribery scheme in Nigeria just uncovered by Global Witness) and environmental impacts which can be devastating to their health, lands and livelihoods (recall the 2015 BHP tailings dam disaster in Brazil).
However, the decision last month by mining giant AngloGold Ashanti to suspend its La Colosa project in Colombia after a referendum revealed overwhelming local opposition to the project, offers one hopeful example. The company publicly recognized the outcome of the consultation (about 98 percent of voters opposed the project) in an April communique, stating that they “accept the position expressed by the community” and that they will halt all project-related activities as a result. Most countries don’t have a legal framework as strong as Colombia’s around issues of indigenous community consultation. Still, this decision and Shell’s new policy may mark further movement towards respect for FPIC by extractive companies.
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