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The Indigenous Rights Risk Report: How Violating Indigenous Peoples' Rights Increases Industry Risk


November 10, 2014
Contact: Katie Cheney, communications@firstpeoples.org
www.firstpeoples.org

New report finds that US extractive companies expose shareholders to risks by neglecting Indigenous Peoples' rights

COLORADO SPRINGS, CO – 4 November 10 2014

First Peoples Worldwide released the Indigenous Rights Risk Report at the SRI Conference on Sustainable, Responsible, Impact Investing, a product of two years of consultations with investment analysts, industry professionals, and Indigenous Peoples. The report analyzes 52 U.S. oil, gas, and mining companies with projects operating on or near Indigenous territories around the globe, impacting some 150 Indigenous communities. These projects were assessed against five indicators (Country Risk, Reputation Risk, Community Risk, Legal Risk, and Risk Management) to determine their risk of Indigenous community opposition or violations of Indigenous Peoples’ rights. The report found that most of the U.S. extractive companies analyzed are poorly positioned to manage the risks they face when working on Indigenous lands. Furthermore, the Report shows that poor governance and negligible policies for Indigenous peoples in host countries is bad for business. Nearly 60% of all projects operating in high-risk countries were rated as high risks themselves. You can read the full report athttp://www.nationalunitygovernment.org/pdf/2014/Indigenous-Rights-Risk-Report-Nov-2014.pdf.

When analyzing risks associated with the operating country, companies’ reputation, the engaged Indigenous community, legal action, and risk management, the report found that 35% of the 330 projects assessed had high risk exposure, and 54% had medium risk exposure. Despite these risks, the vast majority of companies and projects are exhibiting suboptimal efforts to establish positive relations with Indigenous communities, and 92% of the companies assessed do not address community relations or human rights at their board level in any formal capacity. Companies with high risk scores at 100% of their projects on or near Indigenous territories were Alpha Natural Resources, Kosmos Energy, Southwestern Energy, and Whiting Petroleum. Other companies with high risk scores at 50% or more of their projects on or near Indigenous territories were Anadarko Petroleum, Chevron Corporation, Continental Resources, Murphy Oil, Royal Gold, SM Energy, Southern Copper, and WPX Energy. A searchable database of the 330 oil, gas, and mining projects assessed under the new methodology is available on First Peoples' website athttp://firstpeoples.org/wp/.

FPW also analyzed risks associated with Indigenous recognition by host governments, land rights, and community consultation, demonstrating how resource-rich countries’ negligible or non-existent policies towards Indigenous peoples affect the companies that work within their borders. This is becoming increasingly evident in Canada, Indonesia, Ecuador, Peru, and other emerging resource economies. In 2013, a consortium of Canadian leaders (including industry representatives) warned that Canada is “heading for a gridlock in energy development that will rob the country of future wealth unless it can solve vexing environmental and Aboriginal conflicts.” Indonesia has become saturated with violent resource conflicts, with more than 2,230 Indigenous communities requesting investigations into violations of their land rights. Also in 2013, auctions for oil and gas concessions in Ecuador and Peru encountered both vehement opposition from Indigenous Peoples and “underwhelming” interest from companies – raising speculations that the Indigenous protests influenced companies’ decisions. Poor governance is bad for business – governments that disregard Indigenous rights are propagating volatile business environments that threaten the viability of investments in their countries.

Not only are Indigenous voices becoming louder, the media spotlight on Indigenous Peoples and resource extraction is shining brighter: 126 projects were exposed to negative attention from the media in 2014. Legal risks are also becoming more prominent, as legal protections for Indigenous Peoples' rights around the world continue to strengthen. Indigenous community opposition is an especially perilous investment risk because Indigenous Peoples have the international legal framework for Free, Prior, and Informed Consent (FPIC) – the right for a community to give or withhold consent to projects that may affect their lands. Over the past several decades, Indigenous Peoples have secured unprecedented recognition of their rights from governments, but these impressive legal gains are matched with chronic gaps in implementation, especially as they relate to resource extraction. Using market forces to financially incentivize business practices that respect Indigenous Peoples' rights – including the right to Free, Prior, and Informed Consent – presents opportunities for communities to exert powerful leverage over corporations operating on or near their lands.

First Peoples Worldwide is an Indigenous-led organization that builds upon a foundation of Indigenous values and rights to achieve a sustainable future for all. Our Keepers of the Earth Fund provides grants directly to Indigenous-led development projects. Since 2007, we've given $1.7 million in grants to hundreds of Indigenous communities across 58 countries. Our corporate engagement program makes the business case for respecting and upholding Indigenous Peoples' rights through vigilant monitoring of corporate practices, affecting policy change, and advocating best practices in Indigenous community engagement.

View the full report online at http://www.nationalunitygovernment.org/pdf/2014/Indigenous-Rights-Risk-Report-Nov-2014.pdf.

Contact Katie Cheney at First Peoples Worldwide for media inquiries at (713) 560-6378 orcommunications@firstpeoples.org

Learn more about First Peoples Worldwide at www.firstpeoples.org.