FIRST PEOPLES WORLDWIDE
CORPORATE MONITOR
AUGUST 2013
Prioritizing People in the Arctic
In August 2013, the Inuit Circumpolar Council (ICC) convened to discuss the many issues
pertaining to the Inuit and other Arctic Indigenous Peoples. Among the topics of discussion was
ICC’s relationship with Greenpeace and other environmental activist campaigners. Greenpeace
recently hosted its own conference of Arctic Indigenous Peoples, where a declaration was
produced calling for a moratorium on Arctic oil development. According to ICC’s recent
newsletter, “their declaration does not represent the views of prominent Inuit organizations.
Inuit have legitimate concerns about Arctic resource development, but we need to approach these
concerns from our own perspective, not someone else’s…Inuit are resource owners. We fought
hard to secure our rights to these resources and obtain the right to govern ourselves. I don’t think
we want to give it all away to others…moratoriums and sanctuaries that would lock up our
homeland goes against what we have been striving to obtain for our people.”
Free, Prior, and Informed Consent (FPIC) is equally applicable to companies and NGOs. If
companies properly engage with Indigenous Peoples and secure their consent for Arctic oil
development, they will be far better protected from the operational and reputational risks
associated with environmental activist campaigners.
Sources: Alaska Dispatch, Alaska Dispatch, The Guardian
The Cost of Ignoring FPIC
In August 2013, Kutia and Dongria Kongh communities overwhelmingly rejected Vedanta
Resource’s (LSE:VED) proposed bauxite mine in the Niyamgiri Hills of Orissa, India. It is
highly possible that this will permanently shelve the $6.5 billion project. In April 2013, India’s
Supreme Court ruled that the mine cannot move forward without the communities’ approval.
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Community relations at Vedanta’s Orissa operations have aroused significant concerns from
investors. The Norwegian Government Pension Fund and the Church of England divested from
the company over these concerns in 2007 and 2010 respectively. Other investors engaged in
dialogue with the company, prompting it to strengthen its systems for monitoring compliance
with its social and environmental policies. Had Vedanta pursued FPIC from the communities on
its own accord, rather than being forced by the Indian government to do so, it would have had a
better chance of obtaining their approval for the project.
Sources: Indigenous Peoples Issues and Resources, EIRIS, Financial Times
Heeding Risk in the Supply Chain
In July 2013, a Canadian court ruled that Hudbay Minerals (TSE:HBM) can be tried for overseas
human rights violations in Canada. Security personnel working for the company’s whollyowned subsidiary in Guatemala allegedly murdered a community leader, raped eleven women,
and shot another man in a Mayan village. The court dismissed Hudbay’s argument that it is not
liable for the actions of its overseas subsidiaries, and concluded that “transnational corporations
can owe a duty of care to those who may be harmed by the activities of subsidiaries, particularly
where the business is operating in conflict-affected or high-risk areas.” According to Human
Rights Watch, 99 percent of violent crime goes unpunished in Guatemala due to corruption and
witness intimidation.
While the US Supreme Court’s recent decision in Kiobel vs. Royal Dutch Shell established a
vague legal precedent for US companies operating overseas, this ruling clarifies that Canadian
companies can be tried domestically for overseas human rights violations. With this
jurisdictional question resolved, the case is expected proceed to trial in Canada.
Sources: Foley Hoag, Globe and Mail, Globe and Mail
Traditional Knowledge in the Beaufort Sea
Traditional knowledge could be the solution to challenges faced by Chevron Corporation
(NYSE:CVX) in Canada’s Beaufort Sea. The company’s oil exploration activities in the remote
northern region are encountering difficulties due to the unpredictability of ice and weather
patterns. The company uses weather reports dating back to 1996 to predict the occurrence of iceFirst Peoples Worldwide | 857 Leeland Rd Fredericksburg, VA 22405 | (540) 899-6545
free conditions, which are needed to conduct 3D seismic testing. But according to a company
manager, “when it comes right down to it, you really can’t forecast very accurately which way
ice is going to move or what it’s going to do.” The region’s Inuvialuit communities are likely to
have a wealth of traditional knowledge about ice and weather patterns that could help Chevron
address these challenges in the future.
Chevron notes that strong relationships with the Inuvialuit are important to the success of its
exploration activities in the Beaufort Sea. The company consulted with the Inuvialuit Regional
Corporation and the Inuvialuit Game Council, and employed six community members as Marine
Environmental Observers. Pursuing traditional knowledge partnerships could further strengthen
Chevron’s relationships with the Inuvialuit.
Sources: Pipeline News
The Importance of Culture
In August 2013, an Australian court fined OM Manganese $150,000 for desecrating a site of
cultural and spiritual significance to the Kunapa Peoples. It was the first company to be
successfully prosecuted for this reason in Australia. According to CEO Peter Toth, “OM
Manganese never intended to harm, damage, or disrespect the sacred site. We sincerely regret
the damage and the hurt caused and I unreservedly apologize to the site’s custodians and
traditional owners.” OM Manganese is a wholly owned subsidiary of OM Holdings Limited
(ASE:OMH).
The company’s explosive blasting caused a collapse of part of a sacred rock formation known as
Two Women Sitting Down. A standard social and environmental impact assessment might
overlook the cultural and spiritual significance of the formation, leaving company management
with inadequate information about the business environment they are working in. Companies
should comprehensively assess and understand the cultural impacts of their operations, and
regard them as equally important to the social and environmental impacts.
Sources: BBC
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World Bank Investigates Impacts on Indigenous Peoples
In July 2013, the World Bank will investigate whether its $1.4 billion investment in Ethiopia’s
Promoting Basic Services Project (PBS) is resulting in the “villagization” (forced relocation) of
Indigenous Peoples. According to the Ethiopian government, the project is a voluntary process
aiming to “increase access to basic services, improve food security, and bring socioeconomic and
cultural transformation.” Anuak communities are alleging that the project is resulting in forced
population transfers and human rights violations, and that they are being removed from their
fertile, ancestral lands to make way for foreign investment. This violates Bank policies which
require “free, prior, and informed consultation leading to broad community support” from
Indigenous Peoples relocated by Bank-funded projects.
Also in July 2013, the International Finance Corporation (IFC) will audit its $18.2 million
investment in Eco Oro Minerals (TSE:GSL) for a gold mine in the high altitude wetlands of
Colombia, to ensure compliance with its Performance Standards. Indigenous communities are
claiming that the mine will rupture fragile ecosystems and pose security risks to the region.
Sources: Inclusive Development, MiningWatch
Government Officials Resign over Camisea
At least three government officials from Peru’s Ministry of Culture have resigned over what is
speculated to be controversies surrounding Pluspetrol’s (Private: Argentina) Camisea Gas
Project. The project is located in Block 88, a region that is rich in biodiversity and home to at
least two Indigenous communities living in voluntary isolation. Peru’s Ministry of Culture
posted a review of Pluspetrol’s Environmental Impact Assessment (EIA) for the project on its
website. The review was removed hours later, and at least three government officials from the
ministry have since resigned. The resignations are speculated to be in protest of pressures from
other government sectors to produce a more favorable review of the EIA.
Sources: Revenue Watch Institute
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Operating in Challenging Business Environments
Burmese communities along the route of the Schwe Pipeline, which transports oil and gas
through Burma to western China, are having difficulty expressing their concerns about the
pipeline’s potential negative impacts. The pipeline is owned by a joint venture of six companies
from four different countries, but information about these companies and their investors is
unavailable to the communities. They have no means of seeking redress in the event of a spill,
nor do they have any avenues to negotiate benefits-sharing agreements. Additionally, the
Burmese government’s repression of civil liberties limits the villagers’ ability to voice their
concerns to the media.
Companies and investors should take especial caution when doing business in countries that
gravely violate Indigenous Peoples’ rights, and human rights in general. As of July 2013, US
companies with investments of $500,000 or more in Burma are required to disclose information
pertaining to human rights, environment, land acquisitions, and other social indicators.
Sources: EIRIS
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