1 April 2021
What you need to know
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The Senate Committee's Interim Report into the Juukan Gorge incident has catapulted the concept of free, prior and informed consent (FPIC) from Indigenous people as a project precondition, onto centre stage.
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Despite the increasing recognition of the need for FPIC in an international context, it is not yet part of Australia's domestic law.
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While many Native Title Act 1993 (Cth) and Indigenous heritage process are structured to achieve FPIC from Traditional Owners, that is not always the case.
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As highlighted by the Senate Committee's Interim Report, a failure by project developers to invest in early, appropriate and considered FPIC processes can create significant commercial and operational risks once operations commence and impacts occur.
What you need to do
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Project developers operating in Australia should consider whether to adopt an FPIC standard in respect of project development, even where not required by domestic law.
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Watch out for legislative change in the Indigenous land law space. Although Government may not impose full FPIC, a greater role for Traditional Owners in decision making about their land will undoubtedly be reflected in changes to our laws as governments attempt to bridge the gap with community expectation.
FPIC at a glance
In recent years, the concept of FPIC has often been characterised as a best practice process for safeguarding the rights of Indigenous peoples against the backdrop of projects within or near Indigenous territories. More recently, FPIC has come to prominence in Australia through the Interim Report of the Joint Standing Committee on Northern Australia in Never Again: Inquiry into the destruction of 46,000 year old caves at the Juukan Gorge in the Pilbara region of Western Australia (Juukan Gorge Report). It was a constant theme.
What is FPIC?
Essentially, FPIC refers to a right of Indigenous peoples to consent, on a free and informed basis, to developments that affect them and the lands on which they live. The consent must be given voluntarily without coercion, intimidation or manipulation. Importantly, consent should be sought sufficiently in advance of any authorisation or commencement of activities and respect should be shown to time requirements of any Indigenous consultation or consensus processes. Ensuring the consent is "informed" requires that the information provided covers the full range of issues including nature and scope of the project, purpose, duration, locality, impacts and risks.
Finally, a collective decision must be made by the rights holders and reached through a customary decision-making process of the relevant communities. FPIC does not necessarily require unanimity and may be achieved when individuals or groups within the community disagree however, FPIC requires actual agreement to be reached and not mere consultation.
What are the legal origins of FPIC?
The wider Indigenous rights movement sparked the birth of the FPIC concept and the subsequent international legal and policy framework provides for specific rights for indigenous peoples.
The Indigenous and Tribal Populations Convention, 1957 (No. 107) (Convention 107), adopted by the International Labour Organisation (ILO) in 1957 was the first acknowledgement of FPIC in an international law context. In 1989, Convention 107 was replaced by the Indigenous and Tribal Peoples Convention, 1989 (No. 169) (Convention 169). Convention 169 builds on the rights recognised in Convention 107, with Article 16 stating that where “relocation of Indigenous peoples is considered necessary as an exceptional measure, such relocation shall take place only with their free and informed consent”.
Article 7(1) of Convention 169 provides that Indigenous people “shall have the right to decide their own priorities for the process of development as it affects their lives … and the lands they occupy or otherwise use … and to exercise control, to the extent possible, over their own economic, social and cultural development”. Contemporary descriptions of FPIC seem to have developed from this principle.
Perhaps the most important and comprehensive document setting out an international standard in relation to FPIC is the 2007 United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), adopted in 2007. UNDRIP expresses the position that governments must obtain the FPIC of Indigenous peoples prior to approving any resource project affecting their lands. Although UNDRIP is a declaration and therefore not formally binding, its importance should not be underestimated. It is being increasingly referred to by human rights organisations and has been endorsed by some 148 nations.
Adoption of FPIC in corporate contexts
ICF Performance Standards
One of the earliest mentions of FPIC in a corporate context was in the early 2000s by the International Finance Corporation (IFC), an extension of the World Bank which lends money predominately for development projects. The IFC released its Performance Standards on Environmental and Social Sustainability, supplemented by Guidance Note 7 – Indigenous Peoples (Performance Standards) which contains an endorsement of FPIC in Performance Standard 7. The IFC Performance Standards set out an engagement process with relevant Indigenous groups that includes, amongst others, disclosure of information, consultation and participation in a culturally appropriate manner and that provides sufficient time for the decision-making processes of Indigenous peoples with a focus on reaching agreement.
The Performance Standards are widely regarded as industry best practice for the management of social and environmental risk, and have been used as a model for drafting the internal corporate policies and procedures of many large global companies.
Equator Principles
Similarly, FPIC has extended its reach to the private international project finance market through the Equator Principles (EP). The EPs are a voluntary and industry-governed initiative that adopts the Performance Standards as a risk management framework for large-scale projects in developing countries. Essentially, if adopted, financiers must ensure clients comply with the EPs as a condition of their lending arrangements. The EPs expressly adopt the procedural requirements necessary for borrowers to achieve FPIC as described in the Performance Standards. Currently, there are some 114 financial institutions across 37 countries that have formally adopted the EPs as a guide for determining and assessing environmental and social risk in projects.
Additionally, the International Council on Mining and Metals (ICMM), a mining industry association comprised of the world's largest mining and metals companies and associations, amended its Indigenous Peoples and Mining Position Statement in 2013 to include a commitment by its members to operationalise FPIC requirements. Consequently, all ICMM members are expected to have revised their internal policies to reflect this position.
The influence of the principle of FPIC has led the World Bank to recognise that it has outgrown its formal codification in law and stated that it is now "a necessary feature of successful decision making" in relation to projects near or on Indigenous land.
Status of FPIC in Australia
Law reform
Despite the increasing recognition of FPIC in an international context, it is not part of Australia's domestic law. As result, its application is somewhat constrained.
The Australian Law Reform Commission (ALRC) in its 2015 report "Connection to Country: Review of the Native Title Act 1993 (Cth)" (Report) observed that while UNDRIP did not have the status of a binding treaty, it was nevertheless a consideration in developing its recommendations.
The Report discussed Australia's historical support of UNDRIP and echoed the words of Former Aboriginal and Torres Strait Islander Social Justice Commissioner Mick Gooda who stressed that a key principle of UNDRIP was "participation in decision making, underpinned by free, prior and informed consent and good faith".
However, the ALRC terms of reference were limited to issues of traditional connection, authorisation by the native title groups and joinder to native title claims. The Report did not address the extent to which FPIC was reflected in the Native Title Act 1993 (Cth) more broadly. The most public discussion of occurred in the Juukan Gorge Report.
As discussed above, the Juukan Gorge Report characterised FPIC as a critical concept and urged mining companies to ensure that FPIC is provided and to benchmark agreements against international best practice in FPIC. The Juukan Gorge Report also recommended that:
"any new legislation must, as a minimum, ensure Aboriginal people have meaningful involvement in and control over heritage decision making, in line with the internationally recognised principles of free, prior and informed consent".
FPIC not fully reflected in native title law
As discussed above, FPIC has not been codified into the Native Title Act in the terms of UNDRIP, and there remain gaps worth noting.
For example, the Native Title Act sets out the "right to negotiate" process which mandates that companies proposing development which will affect native title must negotiate in good faith with the affected native title parties to reach agreement about the doing of the act. If agreement is not reached after six months, the National Native Title Tribunal can be asked to arbitrate. The Tribunal may determine that the development may proceed without the agreement of the native title party. This highlights the disconnect with the underlying principles of FPIC.
On the other hand, elements of FPIC can be seen within Australia's native title and Indigenous heritage protection regimes. Despite its limitations, the right to negotiate, and associated obligation to negotiate in good faith, means that proponents are sitting down to agree terms with the native title parties all over Australia every day. Further, in Victoria and Queensland, in particular, Traditional Owners are at the centre of heritage decision making. Other States have a way to go.
Where to next for FPIC?
It is evident that FPIC brings with it complexity at the domestic level in relation to its practical application. However despite these complexities, there is an increasing sentiment that FPIC will become part of project development in Australia.
The prevailing takeaway for companies moving forward is not whether FPIC should be a consideration, but instead how to grapple with the difficulties in implementing FPIC into corporate procedures in a meaningful way. Given the emphasis on FPIC in the Juukan Gorge Report, we consider it likely that FPIC principles will influence legislative changes in the heritage arena and quite possibly the Native Title Act.
For further information, please contact:
Clare Lawrence, Partner, Ashurst
clare.lawrence@ashurst.com
