Foley Hoag Releases Summary Report on Good Practices for Oil Pipelines, as Commissioned by the Dakota Access Consortium of Lenders

On May 9, we released a public summary of our report “Good Practice for Managing the Social Impacts of Oil Pipelines in the United States.” A copy of the public summary of the report is available here.

The independent report was prepared by Amy LehrCicely Parseghian, and Gare Smith. It was commissioned by a consortium of banks that provided project finance to the Dakota Access Pipeline Project.

The banks requested a report evaluating the current U.S. legal framework for community engagement, tribal consultation, and the provision of security in the development of oil pipelines, and how that framework compares to international industry good practice. The report focused particularly on Indigenous Peoples. The Dakota Access Pipeline was a case study in the evaluation.

The report found that legal compliance in the United States, by itself, is unlikely to be sufficient for a pipeline company to gain and maintain a social license to operate in the current environment. This is due to in part to:

  • gaps between U.S. law and international industry good practice (some of which incorporates international hard and soft law, including the UN Declaration on the Rights of Indigenous Peoples);
  • inconsistent legal requirements in different states;
  • ongoing disputes between Indian tribes and the federal government regarding tribal rights; and
  • a changing security environment for pipeline companies.

Notably, the public summary report includes good practice guidance for companies considering the development of pipelines in the United States. The guidance includes:

  • creating and implementing stakeholder engagement plans;
  • establishing appropriate grievance mechanisms at an early stage of project development;
  • conducting due diligence to understand and respect tribal interests and rights with regard to potential projects;
  • engaging early and proactively with tribes as a two-way dialogue; and
  • requiring private security contractors to act in a manner consistent with the Voluntary Principles on Security and Human Rights.

The report may provide a useful potential starting point for pipeline companies that wish to carry out their responsibility to respect human rights under the UN Guiding Principles on Business and Human Rights, while developing stronger relationships with communities near pipelines. The report’s recommendations also may prove helpful to members of the banking sector that are committed to respecting human rights according to the UN Guiding Principles, and that are considering loans to pipeline companies.

Questions regarding Foley Hoag’s release of the public summary report should be directed to Amy Lehr or Gare Smith.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please complete the following equation: *