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Industries Suffer If They Do Not Respect Indigenous Rights, Report Says

Rick Kearns
1/9/15

The disrespect of indigenous rights by companies and governments is both unjust and bad for business according to a special report issued by indigenous scholars at First Peoples Worldwide (FPW).

At an investment conference in Colorado in November, the FPW released “The Indigenous Rights Risk Report: How Violating Indigenous Peoples' Rights Increases Industry Risks,” the result of two years of study and consultations involving Indigenous Peoples, investment analysts and other business professionals.

The report analyzed risks associated with 52 U.S. oil, gas and mining companies that are doing business on or near indigenous territories around the world and affect 150 indigenous communities including several in Latin America and the U.S. The report highlights how many indigenous territories contain high amounts of different resources but are still impoverished and contaminated by pollution.

“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 percent of all projects operating in high-risk countries were rated as high risks themselves,” according to an FPW press statement.

Investor and businessman Seth Goldman, who wrote the Forward for the report, noted that it is “…one of the first tools to comprehensively rate the social risks a company faces when it is operating on Indigenous lands without the community's consent. This report not only begins the process of quantifying social costs, it reminds us that whole communities and their ways of life  are at risk.”

Business watchers have started to pay attention to these risks. In 2014 Ernst and Young, one of the top business analysis firms in the world, noted that "the frequency and number of projects being delayed or stopped due to community and environmental activists continues to rise.”

According to the FPW report that even though Indigenous Peoples have made progress in securing recognition of their rights implementation and enforcement of those rights have lagged, especially in regards to resource extractions such as mining, oil drilling, etc.

However, "Using market forces to financially incentivize business practices that respect Indigenous Peoples' rights – including free, prior, and informed consent – presents opportunities for communities to exert powerful leverage over companies operating on or near their lands," the report states.

The report also points out one of the problems of relying on laws on the books can be seen in how the U.S. Securities and Exchange Commission (SEC), a major regulating agency, does not require companies to report on community relations or human rights. Other frameworks set up to provide some guidance on these issues, such as The Global Reporting Initiative, still do not provide a clear picture of the entire situation according to FPW.

FPW Founder and President Rebecca Adamson asserted that the lack of a clear picture applies to Native American communities, too.

In her essay, Land Rich and Dirt Poor: The Story of Indian Assets, Adamson describes how Native American reservations contain "5 percent of the U.S. oil and 10 percent of the gas reserves, 30 percent of the low sulfur coal reserves and 40 percent of the privately held uranium deposits. For most people anywhere in today's world economy, such assets or major property holdings equal wealth and money. Not so for the American Indian and Alaska Native. Defying economic canon that assets and wealth are two sides of the same economic coin, today’s Native Americans have the highest poverty rate and the highest unemployment rate in the nation...Simply stated, U.S. government policy toward Native Americans on the whole reflects one theme: gain control of tribal assets."

Along with information about company projects in the U.S., the report also notes the significant lack of civil rights facing indigenous communities in Latin American countries such as Chile, Colombia, Ecuador and Mexico.

For instance, in the Country Risk Appendix at the end of the report, analysts note that in Mexico, "Indigenous Peoples and activists continued to be threatened or murdered for defending their rights. Furthermore, Indigenous Peoples are often the victims of police brutality and other armed groups."

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