FIRST PEOPLES WORLDWIDE
CORPORATE MONITOR
NOVEMBER 2012
Investors Request FPIC from Canadian Oil Sands Producers
On October 22, a group of 49 investors with US$2 trillion in assets under management submitted
a statement of expectations to Canada’s Oil Sands Innovation Alliance (COSIA), an industry-led
group formed in March 2012 with the specific goal of improving the industry’s sustainability
performance.
The investors were organized by CERES, which advocates for sustainable
business practices by bringing together companies, investors, and NGOs. The statement focuses
on the environmental impacts of oil sands, and specifically calls on COSIA to require Free, Prior,
and Informed Consent (FPIC) from Indigenous Peoples impacted by oil sands production.
Oil sands development is more resource-intensive than traditional oil development, posing
greater social and environmental impacts and has met significant resistance from Indigenous
Peoples in Canada. Investors are concerned that these impacts will threaten the industry’s longterm financial viability. “This is a clear sign that investors are dissatisfied with the status quo in
Canada’s oil sands, but the expectations it lays out are achievable,” said Mindy Lubber, president
of CERES. In 2010, CERES commissioned the report, Canada's Oil Sands: Shrinking Window
of Opportunity, further detailing the financial and environmental risks of oil sands development.
Sources: CERES, Indian Country Today
Russia Suspends Indigenous NGO
The Russian government ordered the Russian Association of Indigenous Peoples of the North
(RAIPON), which advocates on behalf of the estimated 300,000 Indigenous Peoples in Russia, to
suspend operations until April 2013. The government claimed the suspension resulted from
inconsistencies between the organization’s bylaws and Russian federal law. In a letter to the
First Peoples Worldwide | 857 Leeland Rd Fredericksburg, VA 22405 | (540) 899-6545
Arctic Council, RAIPON leaders argued that the organization legally operated under their
bylaws for 22 years, and that the decision was motivated by RAIPON’s criticism of Russian
energy policies. Many Indigenous Peoples represented by RAIPON live in remote regions of
Siberia and have meager representation in government.
When companies base their Indigenous Peoples practices off government policies that violate
Indigenous Peoples’ rights, they become exposed to the risks associated with these policies.
Using NGOs as intermediaries for interacting with Indigenous Peoples also poses risks, as NGOs
can be subject to closure from governments. RAIPON’s suspension highlights the importance of
establishing relationships with Indigenous communities directly.
Sources: Arctic Council Indigenous Peoples Secretariat, Bellona Foundation
Opportunities from Misguided Government Policies
The Brazilian Congress is currently debating Directive 303 which, if legalized, would halt the
process of expanding Indigenous lands and allow certain development projects to be carried out
on Indigenous territory without community consultation. To protest the directive, Guajajara and
Awa villagers blockaded a main railway of Brazilian mining firm Vale (NYSE:VALE), and
suspended cargo transport along the line. Vale issued an injunction to lift the blockade, and
announced an end to the protests on October 5. However, the company also provided the
communities with buses to take to the nation’s capital to voice their opposition to those directly
responsible for the proposal. When government policies are detrimental to Indigenous Peoples’
concerns, companies are provided with the opportunity to address these concerns in a more direct
manner.
Sources: Vale, Survival International
Ecuador Ruling Gains International Recognition
On November 9, an Argentine court froze all of Chevron Corporation’s (NYSE:CVX) assets in
the country (estimated at US$2 billion).
The decision indicates growing international
recognition of a 2011 ruling by an Ecuadorian court ordering Chevron to pay US$19.04 billion in
reparations for environmental damages to Indigenous communities in the Ecuadorian Amazon.
First Peoples Worldwide | 857 Leeland Rd Fredericksburg, VA 22405 | (540) 899-6545
In order to recoup the full amount owed by the company, the communities filed actions in
Argentina, Brazil and China, seeking recognition of the court’s verdict and the freezing of
Chevron’s assets in those countries. Argentina is the first country outside Ecuador to do so.
Because the freeze applies to the full US$19.04 billion of the Ecuador judgment, any further
investment in Argentina by Chevron risks seizure as well.
The decision is based on the Inter-American Convention on the Execution of Preventative
Measures, a treaty ratified by most South American countries. The treaty states a defendant's
assets will automatically be frozen if it fails to pay a final judgment by a foreign court.
Sources: New York Times, Upstream Online, Amazon Defense Coalition
Investment Cautioned in Asia Pulp and Paper
Over sixty Indonesian and international civil society organizations signed a letter to financial
institutions, cautioning investment in companies associated with the Indonesian conglomerate
Sinar Mas Group, specifically its subsidiary Asia Pulp and Paper (APP), because of the
company's clear-cutting practices and disregard for Indigenous Peoples' FPIC rights in Indonesia.
According to the letter, Indonesia's Ministry of the Environment is investigating three APP wood
suppliers as possible targets for environmental lawsuits. An additional four suppliers were
implicated in courts for bribery of public officials.
The letter mentions APP's loss of several high-profile customers in recent years – including
Disney, Hasbro, Mattel, Unilever, Nestle, Danone, Xerox, and Mondi – due to the increased
reputational risk associated with using them as a supplier.
Sources: European Environmental Paper Network
Biofuels Sets Best Practices
In June 2012, Raizen Fuels, a division of Cosan Limited (NYSE:CZZ) and Royal Dutch Shell
(LSE:RDSA), stopped sourcing sugarcane from Guarani lands, setting a good example for
companies to follow. Although the Guarani Indigenous Peoples have entered agreements with
First Peoples Worldwide | 857 Leeland Rd Fredericksburg, VA 22405 | (540) 899-6545
the Brazilian government to map their lands, the process remains at a standstill, leaving
companies with a vague legal framework when operating on Guarani territory.
Currently, the Guarani are campaigning for Bunge Limited (NYSE:BG) to stop sourcing
sugarcane from farmers that overtook their land without obtaining FPIC. The Guarani claim that
the farmers used violence and threats to force them off their lands, and that pesticides and
improperly discarded machinery and crop residue is poisoning their water supply. Bunge told
Survival International that it will continue to source sugarcane from the land until it is officially
demarcated by Brazilian authorities as belonging to Indigenous Peoples.
Sources: Survival International, BBC
First African Land Forum in Cameroon
Foreign land investment in developing nations is heavily concentrated in Africa. According to a
2011 report by the International Land Coalition, 948 publicly reported land acquisitions totaling
134 million hectares have taken place in Africa (compared to 43 million hectares in Asia and 19
million hectares in Latin America). African governments frequently lease land belonging to
Indigenous Peoples without giving them a say in the matter and residents are often forcibly
removed from their homes with little or no compensation. The leases contribute little to public
expenditures; because African land markets are ill-developed and governments weak, rents are as
low as $2 per hectare per year.
On November 7, land rights experts from 22 countries attended the first African Land Forum in
Cameroon, for the purpose of discussing and promoting land policies that are responsive to the
needs of Indigenous Peoples and other marginalized communities in Africa. The participants
unanimously approved the Yaoundé Declaration, which contained recommendations to African
governments and multinational corporations on land policy reform.
The recommendations included protection and recognition of Indigenous Peoples’ land claims
(including communal lands), distribution of benefits of land development to affected
communities, and the obtainment of FPIC from Indigenous Peoples in large-scale land
investment decisions. Investors interested in African land must consult the Yaoundé Declaration
First Peoples Worldwide | 857 Leeland Rd Fredericksburg, VA 22405 | (540) 899-6545
and other independent guidelines, to ensure their activities do not infringe on Indigenous
Peoples’ rights.
Sources: The Economist, International Land Coalition
Damaging Reputation
The Murum Dam in the Malaysian state of Sarawak, initially advertised by the government as a
model of best practice for socially responsible development, has been halted since September 26,
by Indigenous Peoples blocking access roads to the dam's construction site. The blockade was in
response to government plans to resettle 1,500 Penan and Kenyah villagers to make way for the
flooding of the dam's reservoir. The Murum Dam is the first of twelve dams being constructed
by the Malaysian government as part of the Sarawak Corridor of Renewable Energy Initiative.
Government officials have declared that the dam adheres to an expansive list of international
standards, including UNDRIP, the Equator Principles, and the Sustainability Guidelines of the
International Hydropower Association (IHA). The resettlement of Indigenous Peoples without
consultation or consent would violate these standards.
The reputational damage caused by the protests could have major implications for the future of
international development in Malaysia. The IHA's May 2013 global conference, attended by
investors and industry executives from around the world, is scheduled to take place in Kuching,
the capital city of Sarawak. The IHA intended to feature the dam to exemplify the success of its
Sustainability Guidelines, and the protests may prevent them from doing so. The dam is also the
first international project of China's state-owned Three Gorges Corporation (which created
controversy by relocating over 1.2 million Chinese for the Three Gorges Dam in 2012), whose
economic support is crucial for the remaining eleven dams.
Sources: International Rivers, The Guardian
First Peoples Worldwide | 857 Leeland Rd Fredericksburg, VA 22405 | (540) 899-6545