Investors urged to focus attention on rights of indigenous peoples
Friday, June 19th, 2009
Global responsible investment research specialist EIRIS, Centre for Australian Ethical Research (CAER)
and Survival International are supporting a United Nations Principles
for Responsible Investment (UN PRI) programme to facilitate engagement
between investors and their investee companies to promote and respect
the rights of indigenous peoples around the world.
The UN PRI collaborative engagement draws on latest research from EIRIS which explores
the challenges and opportunities faced by major companies operating in
parts of the world where the rights of indigenous peoples are
threatened.1
According
to the United Nations there are 370 million indigenous people in the
world and 5,000 distinct indigenous cultural identities in more than 70
countries. There are believed to be more than 100 uncontacted groups in the world. Although indigenous people only account for 5% of the world’s population, they account for over 15% of the world’s poor.
Companies
engaging in activities that may infringe the rights of indigenous
peoples, as enshrined within the UN Declaration on the Rights of
Indigenous Peoples, face increasing reputational risks potentially
leading to issues with access to capital, damage to brand, licence to
operate, and operational risks such as the threat of litigation and
increased regulation.
The EIRIS report Indigenous rights: risks and opportunities for investors
highlights the rights of indigenous peoples as a key human rights issue
that companies and their investors should take into account. It covers
companies operating in sectors (mining, oil & gas, agricultural
producers and forestry paper) and countries considered to be high risk
for indigenous peoples. The research also highlights key risks areas
which investors should consider when engaging with companies on
indigenous rights issues such as access to investment capital;
increased regulation; litigation and reputational risk.
Key findings:
- Big companies at risk: 250 companies (with a total market value of GBP 1.7 trillion)
have been identified as having an exposure to indigenous rights. 17% of
companies have a high risk exposure to indigenous rights issues.
- Few companies report on indigenous rights issues: The
quality of reporting is generally poor: whilst most companies provide a
response to allegations of breaches of indigenous rights few report
voluntarily on areas of non-compliance.
- Fewer than 20% of companies have adopted a policy supporting free prior informed consent2 for indigenous peoples:19%
of these companies have a corporate-wide indigenous rights policy. Only
15% of companies have a corporate-wide policy supporting free prior
informed consultation.
- Only a fifth of companies disclose employment data on indigenous people:19% of companies disclose employment data on indigenous peoples.
- Fewer than 10% of companies have a policy for involuntary resettlement: Just over 6% of companies have a policy covering involuntary resettlement.
Given
the level of NGO and media attention to the issue of indigenous
peoples’ rights and the introduction of laws and regulation in many
countries, companies with strong commitments and effective engagement
processes will undoubtedly benefit in an environment where access to
land and resources is becoming increasingly restricted.
Stephanie
Maier, Head of Research at EIRIS said ‘Indigenous rights is a complex
issue that companies and their investors need to address and is
especially important for extractive companies as they seek to expand
and gain access to land. Our research explores the challenges and
opportunities faced by major companies operating in parts of the world
where the rights of indigenous peoples are threatened. We are very
pleased to be working with the UN PRI and Survival International on
this important area of engagement.’
Stephen Corry, Director at Survival International said ‘Investors
must use their considerable power to persuade companies to respect and
protect the rights of indigenous peoples, otherwise they risk being
charged with complicity in abuses they bankroll. As EIRIS has shown,
this vital issue is chronically under-reported by companies. The United
Nations Declaration on the Rights of Indigenous Peoples and ILO
convention 169 should be used as benchmarks for the development of
company policies on indigenous rights. Companies that fail to gain the
free, prior informed consent of indigenous communities affected by
their projects are in flagrant breach of international law.’
Bob Walker VP Sustainability at the Ethical Funds of Canada said ‘The risks from
indigenous Peoples’ opposition to specific projects is real and
material for investors. But corporations also have an enormous
opportunity to contribute to both economic and community development in
the regions where they operate. This new research from EIRIS is a
useful addition to our toolkit for encouraging greater corporate
transparency that will undoubtedly benefit companies in an environment
where access to land and resources is coming under increasing pressure
globally.’
Click here (http://www.eiris.org/files/
Press contact: mark.robertson@eiris.org +44 (0)20 7840 5741, +44 (0)7950 931313
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