Looking Ahead: Indigenous Peoples and Free, Prior, and Informed Consent

2010 was a big year for indigenous rights. By the end of the year, the four countries that had voted against the U.N. Declaration on the Rights of Indigenous Peoples (“UNDRIP”) in 2007 – the United States, Canada, Australia, and New Zealand – had reversed their positions and declared their support for the Declaration. This development reflects the rising importance of indigenous rights on the international stage, and points to specific implications for business in 2011 and beyond.

Although the UNDRIP is not binding international law, it nevertheless will have an increasingly significant impact on the acquisition of land and intellectual property by companies in situations where indigenous peoples have conflicting property claims.

The UNDRIP sets forth the responsibility of governments to gain free, prior, and informed consent from indigenous peoples for development projects. It has already been cited in national court cases, particularly in Latin America, as support for the requirement that governments seek free, prior, informed consent from indigenous peoples and cease giving concessions to companies until consent is obtained. Thus, although the UNDRIP addresses governments, it will directly impact companies.

In an upcoming development, this spring the International Finance Corporation ("IFC") will release a revised version of its Environmental and Social Performance Standards, which apply to companies receiving its loans. It is rumored that the IFC will add language requiring free, prior, informed consent of indigenous peoples to the revised standards.

Companies engaged in oil, gas, mining, or other projects with significant physical footprints should consider the implications of evolving indigenous peoples’ rights. Companies seeking to use products that are the cultural heritage of indigenous peoples for pharmaceutical or beauty products may also be impacted by recent trends.

Foley Hoag’s recent report, Implementing a Free, Prior, and Informed Consent Policy: Benefits and Challenges, outlines some of the considerations for companies seeking to effectively address indigenous rights in their policies and practices. For companies seeking to address concerns about indigenous peoples’ rights in specific national contexts, the following due diligence steps may help manage potential legal, reputational, and operational risks:

  • Identify national laws regarding consultation or consent of indigenous peoples.
  • Evaluate whether the national government, in fact, observes laws on consultation, and work with the government, to the extent possible, to ensure that the relevant law(s) are fully implemented. 
  • Review any pending cases against the host country in national courts or regional courts, such as the Inter-American Court of Human Rights, regarding the taking of land from indigenous peoples for development projects. 
  • In challenging country contexts, consider following the IFC Performance Standards as a way to demonstrate to investors, civil society, and indigenous groups that the company is following best practices.

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