On August 9, many people around the world will observe International Day of the World’s Indigenous People, which was first established by the United Nations in 1994. This year, many stakeholders are using the opportunity to urge the United States to endorse the U.N. Declaration on the Rights of Indigenous Peoples. As was noted in an earlier post, the United States government is undertaking a formal review of its position on the Declaration.
Members of the socially responsible investment community have been among the many groups urging the United States to endorse the Declaration. Calvert Investments, a investment company which manages over $14.5 billion in assets, recently observed, in a letter to Secretary of State Hillary Clinton (.pdf), that U.S. support for the Declaration might "allow more companies to be responsive to our requests to develop policies and programs to promote Indigenous Peoples’ rights or to publicly disclose those that are already established as a model for others."
As discussed in our recent report on free, prior, and informed consent, the Declaration on the Rights on Indigenous Peoples is soft law, not legally binding on states, but the rights and values set forth within the Declaration are increasingly being recognized by national governments.
Companies, especially those in the extractive sectors, should be familiar with the key international instruments recognizing the rights of indigenous peoples, including both the Declaration and ILO Convention No. 169. Familiarity with the requirements of these international standards is essential to effective engagement with a wide range of stakeholders.
Ultimately, companies will be most impacted by the ways in which these standards are integrated into national legislation and regulations. It is crucial that companies understand national-level requirements, especially regarding indigenous peoples’ consultation rights, as set forth in legislation, regulations, administrative guidelines, and court decisions. Recent national level developments include:
- In May 2010, Peru adopted legislation in May 2010 recognizing indigenous peoples’ consultation rights with regard to project that impact their collective rights.
- In November 2009, Chile’s Supreme Court applied ILO Convention No. 169, which Chile ratified in 2008, in finding that indigenous communities had customary rights to a specific source of groundwater. The case involved attempts by a company to secure rights to bottle and sell freshwater from a source historically used by members of the Aymara indigenous population.
Failure to understand and integrate current requirements regarding consultation with indigenous peoples, or to anticipate future changes that may have retroactive effect, could be quite costly for companies. For example, in 2003, the South African Constitutional Court found that the Richtersveld indigenous community had a right of communal ownership to land which South Africa had granted to Alexkor Ltd., a diamond mining company. The Court ordered the land returned to the community.
Failure to consult with indigenous populations can lead to significant reputational, as well as legal, liability. A recent report (.pdf) by EIRIS, an investment research firm, observed that, by failing to adequately consult with indigenous communities in Orissa, India before proceeding with plans to develop a bauxite mine, Vedanta Resources had subjected itself to intense scrutiny, as well as several divestment actions, on the part of major investors.
In light of the increasingly clear expectations of the international community, and well as the requirements of national law, companies engaged in operations that have, or may, impact indigenous populations are well-advised to verify that their activities have been conducted in a manner consistent with relevant consultation requirements.