by Dora Banyasz, Darcy Doyle and Lia Mikaelian · 26 March 2024
Embedding first nations protection into systems and processes
The recognition and protection of First Nations rights is an important part of the ESG landscape in Australia and globally.
There is a broad spectrum of activity in relation to strengthening respect for, and protection of, First Nations rights. This includes law reform, policy initiatives in certain sectors, comissions of inquiry like the proposed federal Makarrata Commission and treaty processes, and the establishment of state- or territory-based Voices to Parliament.
The UN Declaration on the Rights of Indigenous Peoples is becoming increasingly prominent in setting the benchmark for how companies engage and consult with First Nations groups globally, including in relation to the concept of free, prior and informed consent (FPIC).
Boards need to understand the touchpoints their company has with First Nations people. They must ensure there are appropriate mechanisms in place to effectively engage and consult with them, and protect their cultural heritage and broader human rights, in line with these international standards.
Has the company developed and implemented systems and processes to ensure consultation and engagement with First Nations peoples is occurring when required?
Initially, companies should take steps to understand the scope of First Nations rights that are potentially impacted by their business operations, in line with the UNGPs. This includes by engaging in meaningful consultation with First Nations people to better understand those potential impacts.
Where the rights of First Nations people may be impacted by a company's business operations, the company should establish a clear position on, and approach to, consultation and engagement with Indigenous peoples, as well as how and when FPIC will be implemented. They should then work on ensuring this approach is effectively operationalised, including through being built into systems and processes (such as compliance baselines, risk assessments and due diligence, data systems, cultural heritage management plans and training).
What are the risks to be aware of?
In Australia, there is increasing scrutiny by stakeholders of whether companies have adequately consulted or engaged with First Nations people including whether they have obtained consent in relevant circumstances. Where there are alleged failures to do so, attention may be focused on the company's connection to human rights impacts. This scrutiny can lead to legal, commercial, reputational and operational risk. For example, following the Juukan Gorge Parliamentary Inquiry, we have seen governments, regulators and other stakeholders such as financiers and investors raise their expectations regarding engagement and consultation with Indigenous peoples. As a result, projects with perceived deficiencies in engagement and consultation may experience delays in obtaining approvals and finance. Projects have also faced legal proceedings (and consequent project delays), with causes of action relating to alleged failures to complete adequate consultation with First Nations communities.
What is next for boards?
Boards need to have strong oversight and responsibility for these issues, and they need to know how the company's approach to protection of First Nations rights is embedded in systems and processes across their business, and across all stages of a project.
Boards should also continue to monitor potential upcoming reforms to laws and standards concerning First Nations rights, such as to the Environment Protection and Biodiversity Conservation Act 1999 (Cth) and the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth).