International and local shifts 8 min read
As part of the increasing focus on Environmental, Social and Governance (ESG) in Australia and overseas, there is a spotlight on the principle of 'free, prior and informed consent' (FPIC) in the context of Indigenous engagement and protection of cultural heritage. It is being discussed extensively in the context of proposed legislative reform for protection of cultural heritage in Australia.
In this Insight we explore what FPIC means and stakeholder expectations concerning FPIC, the Australian landscape, developments in Canada as a recent example of legislative moves toward FPIC, the consequences of not meeting the FPIC standard and what companies should be doing to operationalise FPIC.
- FPIC is fast becoming the expected standard of engagement with Indigenous and land-connected peoples in Australia and the world, regardless of the status of domestic law in Australia.
- Amidst increasing stakeholder and community expectations on the protection of Indigenous heritage, companies operating in Australia need to review and consider their approach to Indigenous engagement and how FPIC is incorporated into their policies, procedures and practices on the ground.
- Global and local shifts towards the adoption of FPIC principles will only continue to impose greater pressure on project developers and their financiers to engage in early, thorough and considered consultation with Indigenous peoples.
FPIC is a specific human right applying to Indigenous peoples, including those who self-identify as Indigenous, tribal people, groups with ancient historical ties with a specific territory, or groups with cultural distinctiveness that is voluntary and handed down through generations.
It is derived from the right that all people enjoy to self-determination and to freely pursue their economic, social and cultural development, both of which are contained within Article 1 of the International Covenant on Economic, Social and Cultural Rights which applies to all people. FPIC is intended to protect a number of other human rights afforded to Indigenous peoples under international law, such as the right to self-determination, property, health, development and cultural life.
The principle of FPIC is enshrined in international law, including:
- the 2007 United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP); and
- the International Labour Organisation's Indigenous and Tribal Peoples Convention 169 (ILO 169).
A range of soft law standards, such as the IFC Performance Standards, provide further guidance around the principle.
There are also industry standards that seek to assist in the operationalisation of FPIC obligations, eg in the resources industry there is the ICMM Indigenous Peoples and Mining Position Statement, the IRMA Standard, and the Global Industry Standard on Tailings Management.
There are some differences between international law, soft law standards and industry standards as to when FPIC is required. In our experience, the nuance of this difference is not significant to stakeholders, and stakeholders are setting their expectations to the highest standards set under international human rights law (UNDRIP and ILO 169). This means achieving FPIC:
- for relocation of Indigenous peoples from their land;
- where cultural, intellectual, religious and spiritual property is impacted;
- in relation to the storage or disposal of hazardous materials on customary lands or territories; and
- prior to approval of any project affecting the lands or territories of Indigenous peoples.
Under relevant soft law standards, the requirements are similar, but with somewhat higher thresholds in some cases.
Stakeholder expectations concerning FPIC
There is growing stakeholder expectation that companies will understand and adopt the principle of FPIC in their operations. This presents a range of operational challenges, including:
- identifying when FPIC is required;
- providing sufficient time for Indigenous peoples to consider the project and reconciling this with project and asset timelines;
- working out how FPIC is maintained when material new information arises or when project activities change; and
- acknowledging that FPIC does give communities the right to say 'no' in certain circumstances.
On 18 October 2021, the Commonwealth Parliament Joint Standing Committee on Northern Australia released its final report into the destruction of Indigenous heritage sites at Juukan Gorge (Final Report). The Final Report made eight recommendations to the Federal Government, including some that aim to ensure domestic law obligations concerning protection of cultural heritage more closely align with international law FPIC standards.
The Inquiry and Final Report highlighted that while there are a number of state and federal laws that concern protection of cultural heritage, native title and Indigenous engagement, in all cases there is a gap between domestic law and international FPIC standards. The Final Report recommends significant legislative changes to address this gap including (but not limited to):
- Legislating a new framework for cultural heritage protection to be co-designed with Aboriginal and Torres Strait Islander peoples. This new legislation would set a minimum standard for state and territory heritage protections consistent with international law. It may include:
- decision-making processes that ensure Traditional Owners and native title holders have primary decision-making power in relation to their cultural heritage;
- an ability for Traditional Owners to withhold consent for the destruction of cultural heritage;
- a process for the negotiation of Cultural Heritage Management Plans which reflects the principles of FPIC as set out in the UNDRIP; and
- a process by which decisions can be reconsidered if significant new information about cultural heritage comes to light.
- Providing the Government with the ability to extend protection to, and/or override, decisions made under inadequate state or territory protections that would destroy sites which are contrary to Aboriginal and Torres Strait Islander peoples' consent.
- Review of the Native Title Act 1993 (Cth), including to develop standards for the negotiation of agreements that require proponents to adhere to the principle of FPIC as set out in the UNDRIP.
While these recommendations are non-binding, regardless of the position taken by the federal and state governments, in our view it is likely the recommendations will become the de facto expected standard for stakeholders, including Traditional Owners (similar to what we have seen occur with the recommendations in the Australian Human Rights Commission's Respect@Work: Sexual Harassment National Inquiry Report 2020). In this respect, it is important that companies understand and proactively engage with these recommendations.
In 2016, the Canadian Government endorsed UNDRIP and committed to fully implementing it, after originally voting against it in 2007.
In a significant step to implementing its 2016 commitment to UNDRIP, in June 2021 Canada enacted the United Nations Declaration on the Rights of Indigenous Peoples Act 2021, which establishes a framework to implement UNDRIP in Canada. The Act requires the responsible minister to prepare and implement, in consultation and cooperation with Indigenous peoples, an action plan to achieve the objectives of UNDRIP. This must be done as soon as practicable, but at least within the next two years. The action plan must include measures to:
- address injustices, combat prejudice and eliminate all forms of violence, racism and discrimination against Indigenous peoples;
- promote mutual respect and understanding, including through human rights education; and
- establish monitoring, oversight and remedy or other accountability measures in connection with the implementation of the Declaration.
The plan must also include mechanisms to review and monitor implementation of the plan.
Given FPIC is a key principle in UNDRIP, this represents a significant milestone towards incorporating FPIC in domestic legislation.
This comes against a backdrop of Canada facing criticism of its alignment with FPIC by the UN Committee on the Elimination of Racial Discrimination (CERD), which in 2019 issued a decision under its early warning and urgent action procedure following the Canadian Government's approval of the Trans Mountain Pipeline. Early warning measures are intended to prevent existing structural problems escalating into conflicts, and include confidence-building measures to identify structures to strengthen racial tolerance and solidify peace. Urgent procedures respond to problems requiring immediate attention to prevent or limit the scale or number of serious violations of the International Convention on the Elimination of All Forms of Racial Discrimination. This procedure is an additional avenue for Indigenous peoples to bring action in connection with alleged non-achievement of FPIC, and the mechanism is being utilised in connection with issues in Australia, too, with the recently filed request regarding the Aboriginal Cultural Heritage Bill 2020 (WA).
CERD recommended the establishment of a legal and institutional framework to ensure adequate consultation with the view to:
- obtaining FPIC;
- incorporating FPIC into domestic legislation; and
- urging Canada to freeze present and future approval of large-scale development projects affecting Indigenous peoples that do not enjoy FPIC.
The Committee followed up in November 2020 and expressed its disappointment that Canada was interpreting FPIC as a process right to consultation rather than an outcome.
Canada is the most recent jurisdiction to mandate substantive action towards FPIC, though there are a number of other countries that have already taken steps to incorporate FPIC into domestic law in some form, eg the Philippines, Colombia, Peru and South Africa.
Following in the footsteps of Canada, New Zealand recently committed to developing a Declaration Plan to guide the implementation of UNDRIP principles. It is set to be released in early 2023 following a series of consultation, drafting and Cabinet approval processes. Like Canada, New Zealand will likely develop its own legislative processes giving effect to the principles of UNDRIP rather than adopting the Declaration directly into its domestic law.
FPIC is fast becoming the expected standard of engagement with Indigenous and land-connected peoples in Australia and the world, regardless of the status of domestic law in Australia.
- Companies need to be engaged in ongoing and meaningful consultation with Indigenous and land-connected peoples throughout the life of a project, and obtain FPIC in a range of circumstances. This shift is consistent with the broader trends towards companies being expected to ask 'should we?' questions instead of 'can we?' ones, driven by stakeholder expectations and the growing importance of international law and soft law standards in setting the bar for corporate conduct well beyond compliance with domestic law.
- Companies should proactively consider whether their Indigenous peoples and cultural heritage management frameworks align with best practice and, in particular, assess how expectations regarding FPIC are reflected within these compliance controls. This should be done from both a systems and functions perspective (eg by establishing a clear company position/approach to FPIC, building FPIC considerations into risk assessments, baseline studies and cultural heritage management plans, and delivering training on FPIC) and a project lifecycle perspective (eg by setting and embedding expectations about when and how FPIC should be obtained throughout a project's lifecycle, from exploration through to decommissioning and closure).
Non-alignment with this approach has the potential to generate legal, operational and reputational risks for companies. We are seeing a range of actions being taken by stakeholders in relation to what is perceived to be deficient engagement with Indigenous peoples or protection of cultural heritage, including activism at AGMs, investor campaigns and monitoring, stakeholder information requests and resort to international forums about what is being done in practice to improve compliance and risk management in this area.