Oil, gas, and mining company public positions on Free, Prior, and Informed Consent
As large-scale oil, gas, and mining projects move to increasingly remote areas, they threaten to generate adverse impacts for the local communities and indigenous peoples who inhabit these areas. For many project-affected communities, Free, Prior, and Informed Consent (FPIC) represents a critical tool for ensuring that they have a say in whether and how extractive industry projects move forward. This policy brief examines publicly available corporate commitments regarding community rights and community engagement. The results suggest increasing commitments to FPIC in the mining sector but disappointing trends in relation to the oil and gas sector and women’s participation in decision making.
As large-scale oil, gas, and mining projects move to increasingly remote areas, they threaten to generate adverse impacts on the land and natural resources of the local communities and indigenous peoples who inhabit these areas. For many project-affected communities, Free, Prior, and Informed Consent (FPIC) represents a critical tool for ensuring that they have a say in whether and how extractive projects move forward.
Oxfam defines FPIC 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, reflecting their standing as distinct, self-determining peoples with collective rights. However, FPIC is emerging more broadly as a principle of best practice for sustainable development, used to reduce conflict and increase the legitimacy of the project in the eyes of all stakeholders.
This policy brief examines publicly available corporate commitments and policies regarding community rights and community engagement with a particular focus on FPIC – the gold standard in terms of extractive industry community engagement practices.1 The research includes 38 oil, gas, and mining companies, and provides an update to our 2012 Community Consent Index. The 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.
This report suggests that extractive industry companies are increasingly seeing the relevance of FPIC to their operations. This includes more robust engagement with the concept and an increasing number of companies using the term. The number of companies with commitments to FPIC has almost tripled since 2012. Importantly, this list now also includes smaller, non-ICMM companies—a promising development that again highlights wider acceptance of FPIC within the industry. However, this trend masks a number of issues. First, the oil and gas sector is clearly lagging in adopting FPIC policies, with no public commitments from any of the companies included in this report. Second, although policy commitments to FPIC are increasing, these lack detailed implementation guidance, and some companies have reservations relating to the core right to withhold consent. Companies that use vague and hedging language with regard to FPIC risk abusing a concept that has been defined clearly by international bodies and law.
No companies reviewed for this report have made public commitments to uphold FPIC for non-indigenous project-affected people. However, community engagement is recognized as being crucially important for the sector, and the emergence of language around community “support” and “agreement” shows a general upward trend. Many company policies now require more than mere community consultation and require companies to seek community support as well.
Unfortunately, there is very little consensus across the industry about the language used in community support. Definitions of terms such as “broad community support” and “social license to operate” vary widely among companies. This is problematic on a number of fronts. Without clear commitments from companies to incorporate community input and respect community decisions, and clear and public guidelines on consultation process, it will be difficult for affected communities to influence company plans, participate in decision-making processes, and negotiate benefit-sharing agreements. Furthermore, without a shared understanding of the meaning behind these community engagement concepts, the risk of conflict among and within communities is increased and corporate accountability is weakened.
Oxfam has developed a spectrum of community engagement applicable to extractive industry projects that ranges from low (one-way information sharing) to high levels (FPIC). The figure below summarizes companies’ public commitments along the spectrum. Note that companies may refer to various levels of engagement in their public policies and statements but are listed here only under their highest-level commitment. Importantly, all 38 companies in the sample at least commit to consultation or dialogue with communities.