According to BHP Billiton, the principle of FPIC is complicated by the ‘overlay of the sovereign
state and that in most jurisdictions, the state is the legal owner of the resources ‘and that ‘the
challenge for us ... is the right of governments to decide whether they want a project to proceed
or not’.
Addressing the issue of national sovereignty the Rio Tinto representative explained that ‘an early
sticking point in all of the discussions about sovereignty … [was] that governments have a right
to say how they are going to develop the resources that they control, and … we’re trying to say
that communities need to be the primary basis of consent and hopefully governments will see
that as sensible and therefore the project can proceed harmoniously’.
The BHP Billiton representative suggested that in a context where a government regards the
exploitation of an ore body as potentially ‘transformative for the economy in that region…you
could perhaps envisage [it] saying well actually we don’t want a tier one company delaying
development while they achieve FPIC; we are happy with a third tier company that will just push
these people out of the way and get the project up and running’. In light of this it suggested that
‘the way it [is] probably is going to wind up working in practice in the future is you go through a
process where you will either get consent or not; the government will then ultimately make the
judgement where they have a legal right to do so; ... and then the company is going to have to
say … here’s our values, here’s our public positioning on this issue, do we want to go ahead or
are we going to say no there’s not enough community support? Either we come back again in
five years’ time or drop it and go somewhere else’.
The Xstrata representative commented on the fact that ‘some of the difficulties around ... consent,
is that there is not enough ... emphasis on the role and the rights of sovereign states to make
decisions on the development of natural resources and the key role that they must play as well
to establish common understandings and expectations about the outcomes’. They suggested
that ‘where the State is not very present, or clear, on its own intensions and its own rights, the
company then often ends up being in the middle of a process that is ... enshrined in national
legislation but the community has a completely different set of expectations about its own rights,
and what we object to is the company being seen as the sole arbitrator ... to resolve those
issues’. In such contexts the Xstrata representative held that it is forgotten ‘that companies
sit in the middle of the State and the community, and often community groups just look at the
relationship with the community in isolation’. They argued that this was ‘the wrong way to look
at things because we have to manage the relationships on both sides, both with the community
and with the state’. In this regard they held that ‘the biggest challenge is maybe in the absence
of good State governance or a clear process from the State, and unclear land rights, or who is
leading communities to steer the course and have a good FPIC process’.
The Anglo American representative held that ‘the grey area for us is when [FPIC] is not in
national law, and there is no legal need to formally demonstrate it’. They regarded this scenario
as potentially leading to a perverse incentive not to respect indigenous rights as ‘what you don’t
want, and what nobody would want really, is a situation where those companies which do their
best to try and secure consent then walk away from a project if they can’t secure FPIC, but then
because there is no permitting or legal barrier to that project subsequently being developed
by somebody else, you get somebody with less regard for indigenous rights coming in and
developing the project anyway.’
The De Beers representative held that in the Canadian context where indigenous communities
‘do not have the right of veto [the company has] to be aware of that and get shouted at every
now and then by the government for saying that we will effectively give the communities the right
of veto by effectively asking for their consent for development. And [the company] just responds,
well tough, you will have to live with it.’
b) Tensions with Human Rights
This potential issue, which was raised by the Anglo American and the BHP Billiton representatives,
is closely related to a concern expressed by the ICMM representative ‘that traditional processes
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Making Free, Prior and Informed Consent a Reality