MAC: Mines and Communities

Global miners improve policies on community consent

Published by MAC on 2015-07-29
Source: Oxfam America

... but does this mean improved practice?

Oxfam USA have launched an updated research briefing on company policies on social license to operate (particularly with a focus on free, prior, informed consent (FPIC). The research in terms of public commitments does note a general, continued improvement in policy terms, with more companies reviewed respecting the right of indigenous peoples to FPIC (with Oxfam extending FPIC as a principle beyond indigenous peoples).

Like the previous report (see: Oxfam USA finds mining companies are improving on social commitments), it is not an attempt to review implementation, but is focussed on what companies say they will do - rather than what they actually do. The report also highlights where even these policy commitments can be weak in themselves, and includes case studies on two of the companies with public FPIC commitments, which both clearly highlight the gap between policy and practice. 

At the report launch, the UN Special Rapporteur on the Rights of Indigenous Peoples, Vicky Tauli-Corpuz, pointed emphatically to the gulf between words and deeds. It is worth listening to the comments at:

As the summary says, "[t]he main purpose is not to evaluate company commitments in practice but to highlight changing trends across the industry in order to encourage a race to the top among company policies," and then "Oxfam hopes that this report will serve as a tool for civil society organizations working to improve the social performance and policy of extractive companies, and for companies aiming to build trust with local communities and reduce the risk of social conflict around their projects."

The report can be downloaded here:

Oxfam’s new report reviews the public policy commitments of 38 oil, gas, and mining companies around issues of community engagement and rights.

Emily Greenspan (Senior Policy Advisor for Extractive Industries at Oxfam America)

24 July 2015

For oil, gas, and mining companies, gaining access to land and water can make or break a project. For many communities living on that land and relying on that water, the stakes are much higher. Their land is their lifeline, and this can be lost when they don’t have a say and their rights are ignored. “The first I heard of the [Benga Coal in Mozambique] mine coming was when the trucks and machines were in my field,” said a Mozambican woman interviewed by Oxfam in November 2014. “I asked them what they were doing and they told me approval had been given…I had no choice but to move.”

Today, Oxfam launched a new report reviewing the public policy commitments of 38 oil, gas, and mining companies around issues of community engagement and rights, with a particular focus on free, prior, and informed consent (FPIC). FPIC is seen as the “gold” standard in terms of community engagement, defined as the principle that indigenous peoples and local communities must be adequately informed about projects that affect their lands in a timely manner, free of coercion and manipulation, and should be given the opportunity to approve or reject a project prior to the commencement of all activities.

For indigenous peoples, FPIC is established as a right under international law. For others, it is a process which helps to safeguard other human rights and to reduce the risk of social conflict. Oxfam recommends that oil, gas, and mining companies adopt an explicit and public policy commitment to FPIC and develop detailed accompanying implementation guidelines.

Over the last year, Oxfam reached out to 38 companies and invited them to discuss their FPIC or other community engagement policies with us. We spoke to companies headquartered in the US, Australia, Brazil, Canada, France, and South Africa, among other locations. Oxfam developed a spectrum of community engagement applicable to extractive industry projects that ranges from low (one-way information sharing) to high levels (recognition of FPIC). The figure below summarizes companies’ public commitments along the spectrum. All 38 companies in the sample at least commit to consultation or dialogue with communities.

Here are some highlights from the report:

More companies respect the right of indigenous peoples to FPIC

Fourteen mining companies now have public commitments to FPIC for projects that affect indigenous peoples–almost three times as many as in 2012. This is a significant and welcome development that emerges from the recognition of indigenous peoples’ collective rights and right to self-determination. New FPIC requirements established by the World Bank’s private-sector lending arm, the International Finance Corporation, and the International Council on Mining and Metals helped to turn the tide on the issue. Nonetheless, civil society and project-affected communities now must ensure that these policy commitments translate to practice on the ground. More work needs to be done both to support companies aiming to implement FPIC effectively and to hold them accountable when they fail to make good-faith efforts to meet their policy commitments. If not, these commitments will be reduced to mere green washing.

Existing FPIC policy commitments remain weak

The FPIC policy commitments we reviewed provide little detail on how FPIC will be implemented in practice. Further, they fail to provide unequivocal commitments to withdraw from a project if a community says no to a project. In addition, the commitments apply only to projects that will affect indigenous peoples (unlike FPIC commitments from several of the largest food and beverage companies, which apply to any project-affected local community). This represents a missed opportunity for companies to build trust and facilitate shared decision-making with all project-affected communities.

Oil and gas companies lag behind the mining sector on their public commitments to FPIC

Not one of the 17 oil and gas companies in Oxfam’s sample has publicly committed to FPIC. This is unacceptable. A few oil and gas companies claim that although they do not have explicit FPIC commitments their policies align with the concept of FPIC. This assertion is not enough. Oxfam views a comprehensive policy framework—which includes a public FPIC commitment—as vital to promoting corporate accountability and respect for human rights. Also, transparency of policies and commitments is critical to give local communities a more meaningful role in controlling their resources and to build trust between companies and communities. In short, companies need to dust off their policies and put them in the public domain to ensure accountability.

Companies reviewed say little publicly about gender in the context of community engagement

The impacts of the extractive industries are not gender-neutral. Women face a particular disadvantage, bearing the brunt of the negative impacts while receiving few, if any, of the benefits. They also often face exclusion from decision-making processes. Gender analysis requires specific attention in order to mitigate negative impacts and ensure equal participation. Yet, few of the 38 companies included in the sample had any mention of gender in the context of community engagement in their publicly available policy documents or guidelines.

In light of these findings, Oxfam recommends that companies:

For more findings and recommendations from this research, please see:

Global miners improve policies on community consent, while oil and gas lag

Oxfam America blog

23 July 2015

As conflicts with local communities are a problem for oil, gas and mining companies around the world, a new report from international relief and development organization Oxfam finds that the number of mining companies with commitments to “Free, Prior and Informed Consent (FPIC)” has almost tripled since 2012. While positive, this trend masks a number of weaknesses related to protecting the rights of local communities and indigenous people near large-scale projects.

The 2015 Community Consent Index examined policies regarding community rights and community engagement of 38 oil, gas, and mining companies, including ExxonMobil, Chevron, Shell, Anglo American, CNOOC, Petrobras, BHP Billiton, RioTinto, Total, Vale, and BG Group, among others. The Index found that extractive industry companies are increasingly seeing the relevance of FPIC to their operations, but the oil and gas sector is lagging and companies are struggling to implement FPIC as clearly defined by international bodies and law.

“As demand for resources increases, the potential for negative impacts on communities and social conflicts also rises,” said Raymond C. Offenheiser, president of Oxfam America. “Communities are calling for a greater voice in the development of their natural resources, and companies are recognizing the business case for meaningful engagement. But companies need to strengthen their policies on engaging with communities in order to protect their human rights and avoid negative outcomes.”

Oxfam defines Free, Prior, and Informed Consent (FPIC) as the principle that indigenous peoples and local communities must be adequately informed in a timely manner about projects that affect their lands, free of coercion and manipulation, and should be given the opportunity to approve or reject a project before any activity starts.

Although many companies have strengthened their FPIC and human rights policy commitments in recent years, much needs to be done to ensure the protection of the human rights of people in affected communities. Oxfam’s report outlines recommendations for industry and governments: Those companies that have not yet done so should adopt an explicit and unambiguous policy commitment to FPIC and develop publicly available implementation guidelines. All companies should conduct thorough and participatory monitoring and evaluation of FPIC processes being implemented. Companies also need to recognize the gender-specific effects of oil, gas, and mining projects on women and ensure they have policies to better engage with women and prevent negative results.

Oxfam recommends that all local communities facing potential significant adverse impacts from oil, gas, and mining projects should have the opportunity to access full information, participate meaningfully in impact assessment and negotiations, and give or withhold their consent to project development.

The key findings of the report include:

“Companies must respect the rights of all project-affected communities to be informed about projects and have the opportunity to participate in decision-making processes that affect them,” said Offenheiser. “FPIC processes will help to safeguard human rights and reduce the risk of social conflict.”

FPIC serves as an invaluable risk management tool for extractive companies. Ensuring that projects begin with free and fully informed community consent helps protect against the high cost of future tension and conflict. A recent study by the Corporate Social Responsibility Initiative (CSRI) at Harvard Kennedy School in the US and the Centre for Social Responsibility in Mining (CSRM) at the Sustainable Minerals Institute at The University of Queensland in Australia found that a world-class mining project stands to lose approximately $20 million per week in lost productivity as a result of production delays stemming from social conflict.

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