Benefit sharing
Many jurisdictions view natural resources and subsurface minerals as belonging to the State.
However, the indigenous representatives interviewed held that for indigenous peoples, these
resources belong to them. Government and companies should understand the true value of the
investment being put in by the communities in terms of the land and minerals that they contribute to
the mining project.
If the community gives its consent, the people should receive a fair and reasonable share of the
benefits from the mining operation commensurate to their contribution. The basis for computing
the indigenous community’s share should be a valuation of what they stand to lose from the mining
operation, e.g. land, soil fertility, water resources, forests, animals, plants, food, culture, etc. It
should also factor in community claims over subsoil resources in their territories, as well as the
potential risks they and future generations face as a result of these activities. The terms of benefit
sharing should be negotiated and specified in the memorandum of agreement resulting from the
FPIC process. Some indigenous representatives emphasized that negotiations must be conducted
in their own language.
“Sharing of benefits from
mining projects has to be
fair and just. The basis for
computing the share of the
community should be a valuation
of everything lost, e.g. loss of
culture, loss of fertility of the
land, animals, plants, food,
etc. The impact of the project
is already the cost, which is the
basis for computation of the
investment of the indigenous
peoples. ”
Quote from Rukka Sombolinggi,
Toraja, Indonesia
There are various models of benefit sharing, and it is the right of
the people to choose what form this will take. Benefit sharing as
a component of a partnership with indigenous peoples must go
beyond compensation for damages. Elements of it could include
employment, education or infrastructure provision. Guaranteeing
royalties to the community is a step in the right direction, but
equity shares in the company or the mining project were regarded
as constituting more constructive relationships.
Mining companies as a matter of course implement community
projects as part of their corporate social responsibility. The
community should decide what kind of social projects will
be implemented and prioritized. These projects should be
separate from the community’s share in the benefits of mining
operation. Indigenous representatives expressed concern that
the implementation of these projects prior to obtaining consent
serves to distort FPIC processes.
Agreements and grievance mechanisms
Indigenous representatives interviewed saw the need to ensure that respect for their customary
rituals are made part of the legal requirements of the FPIC process. Rituals need to be performed
and respected because they serve a deeper purpose in the people’s
culture and spirituality. Performing a ritual is a sign of good faith on
“FPIC has to be made
the part of the community. Violating these rituals could be a basis for
mandatory and this can only
voiding or nullifying the agreement.
be done if guidelines … are
The signing of an agreement, be it in the form of a Memorandum of
developed to regulate its
Agreement or an Impact Benefit Agreement, between the company
operationalization. This will
and the community signifies the commitment of both parties to abide
mean that the industry enters
by the obligations they negotiated and agreed upon in the process
into binding agreements with
of FPIC. Agreements should be formal legal contracts with the force
local communities and any
of law. This means that any breach of the agreement would require
breach of that agreement
punitive action.
will be tantamount to a
All agreements should specify the grievance procedures and
punitive action.”
mechanisms of redress for any violation committed. It is the choice of
Quote from Reinford
the community what grievance mechanisms they want to put in place,
Mwangonde of
and to identify the recognized authority that will monitor and enforce
Malawi, Africa
the agreement. What is important is that the people have confidence
in the system. It should be run by independent persons whom the
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Making Free, Prior and Informed Consent a Reality