Areas Where the Free, Prior & Informed Consent of Indigenous Peoples and Local Communities Have Not Been Obtained

On International Indigenous Peoples Day, new briefing paper calls on banks and financiers to protect the rights of Indigenous Peoples 

In recognition of World’s Indigenous Peoples Day, a new briefing paper calls on banks and financiers to prohibit harmful financing in areas where Free, Prior, and Informed Consent (FPIC) has not been obtained from Indigenous Peoples and local communities. 

Co-published by Friends of the Earth US, Cultural Survival, and Instituto Maíra, the paper, “Protecting biodiversity from harmful financing: Areas where the free, prior, informed consent (FPIC) of Indigenous and Local Communities have not been obtained,” demonstrates the vital role of Indigenous Peoples and local communities play in protecting biodiversity. It explains the nuances in how Free, Prior, Informed Consent is a unique right to Indigenous Peoples guaranteed under international law, whereas FPIC can be used as a best practice in engaging local communities.  

Although Indigenous Peoples make up just six percent of the world’s population, their lands hold 80% of the world’s biodiversity. In order to protect biodiversity, banks and financiers must protect the rights of Indigenous Peoples and local communities, as the two are inexorably linked. Indigenous and community lands and forests are associated with lower rates of deforestation, higher levels of carbon storage, reduced conflict, and overall better biodiversity conservation. Yet banks are driving biodiversity loss, climate change, and human rights abuses via their continued financial support to high-risk sectors, particularly fossil fuels, extractive industries, and industrial agriculture.  

The paper provides useful lessons and key takeaways on how the international banking sector can establish robust Indigenous Peoples policies.  

Key takeaways of this paper include: 

• Indigenous Peoples are the best guardians of world’s biodiversity, in which to protect Indigenous rights is to protect biodiversity. 
• FPIC is defined as consent that is given freely, by people fully informed of the consequences, prior to any decision being made, and according to their own decision-making processes.  
• FPIC is enshrined under international human rights law for Indigenous Peoples, and is a process for expressing the right of Indigenous Peoples to self-determination.  
• FPIC can be used as a best practice for meaningfully engaging with local communities.  
• Respecting Indigenous Peoples’ right to FPIC is critical in allowing and enabling them to exercise their right to self-determination, and their ability to determine their own economic, social, and cultural development paths.  

• Failing to implement FPIC correctly often leads to even more risks and challenges for both banks and their clients.  
• Banks and financiers must establish a robust Indigenous Peoples Policy which requires FPIC, if not already developed  
• Banks and financiers should ensure that Indigenous Peoples and biodiversity policies or frameworks are complementary and mutually reinforcing.  
• Banks and financiers should prohibit financing to sectors and companies which are well known drivers of human and environmental rights violations, such as the fossil fuel and industrial agribusiness sectors.  
• Banks and financiers should establish institutional accountability mechanisms, if not already developed. They should also require any project level grievance mechanism to be fair, accessible, and effective.  

• Banks, financiers, and clients should plan for a “no project” option at any stage of a financed activity in order to allow and facilitate proper implementation of FPIC as an iterative process.  
• Banks and financiers should consider the historical, documented patterns of past abuse against Indigenous Peoples in high-risk sectors, and account for how Indigenous communities have responded to previous or similar projects in nearby regions.  
• Where Indigenous Peoples have clearly and repeatedly spoken out against certain sectors and relevant projects in the past, banks should respect Indigenous Peoples’ choice not to engage in any further or future proposed activities or projects.  
• Banks and financiers should explicitly reference and comply with the UN Guiding Principles on Business and Human Rights, in addition to key international law standards on human rights, and Indigenous customary law and protocols.  
• Banks and financiers should publicly disclose lending, underwriting, shareholding, and investment in high-risk sectors, including information on ownership and shareholder interests in specific investments in oil palm and other agribusiness companies to ensure transparency, including interests in shadow companies registered in offshore jurisdictions.  

• Banks and financiers should establish meaningful incentives for staff and clients to instill and encourage a culture of careful due diligence and responsible decision making on human rights and environmental governance.  
• Banks and financiers should include non-compliance clauses in financing agreements, such as the right to interrupt or cancel financing where there is evidence of violation of land rights, FPIC, and/or serious unresolved community grievances (i.e. killings, violence, retaliation, threats, etc.) 

This paper is part of Friends of the Earth US’ new “Protecting Biodiversity from Harmful Financing” briefing paper series, which underscores why banks and financiers should exclude harmful, unsustainable financing to activities and projects which impact critical, at-risk ecosystems.  

Each briefing paper is dedicated to a key area as identified by the Banks and Biodiversity Initiative’s eight proposed No Go Areas. This paper is about areas where free, prior and informed consent has not been obtained by Indigenous Peoples and local communities, which is paper 07 of the series. 

Full briefing paper series includes: 

• No Go area 1: Internationally recognized areas 
• No Go area 2: Nationally recognized areas 
• No Go area 3: Key Biodiversity Areas and habitats with endangered and endemic species 
• No Go area 4: Primary and vulnerable secondary forests  

• No Go area 5: Free flowing rivers 
• No Go area 6: Protected or at-risk marine and coastland ecosystems   
• No Go area 7: Areas where Free, Prior and Informed Consent has not been obtained by Indigenous Peoples and local communities  
• No Go area 8: Iconic, transboundary ecosystems 

Friends of the Earth US is part of the Banks and Biodiversity Initiative, a civil society coalition which advocates that banks and financiers strengthen their biodiversity policies and practices in order to halt and reverse biodiversity loss. Learn more at banksandbiodiversity.org.