FPIC, the Special Rapporteur on the Rights of Indigenous Peoples highlights that ‘the revised policy
should be consistent with rights of indigenous peoples affirmed in the UN Declaration’ which should
‘apply to all the Bank’s financial and technical assistance, and not just its investment lending’.188
This recognition by investment institutions of the FPIC standard as necessary for project impacting
on indigenous peoples’ culture and lands and resources gives rise to a range of operational
challenges which these institutions have yet to fully comprehend and subsequently respond to. At a
fundamental level it entails an understanding that FPIC is a mechanism through which indigenous
peoples’ operationalize their self-governance rights vis-à-vis external actors. It is therefore not
a process which financial institutions can define or set the parameters for, as this is something
which the impacted peoples themselves must do. Operationalization of FPIC therefore requires
moving beyond the standard audit tick-box type approach towards addressing client compliance
with safeguards, and instead requires context specific understanding of the extent to which the
particular governance and decision-making processes of each impacted indigenous peoples have
been respected.
In order to develop an effective mechanism for oversight of corporate engagement with indigenous
peoples in the context of FPIC, the investment community will require guidance from indigenous
peoples and their authorities in relation both to the content of FPIC and the culturally appropriate
and context specific means through which respect for it can be guaranteed. Such dialogues should
occur within the framework established by the UN Declaration. This is necessary not only to ensure
that the operationalization of FPIC is grounded on respect for the rights it aims to safeguard but also
to overcome distrust which many indigenous peoples have of international financial institutions as a
result of their role in past encroachments into their territories. These dialogues may lead to a range of
possible outcomes, including requests by indigenous peoples for financial and technical assistance
for their capacity building activities in relation to strengthening and developing their representative
structures, formulating their own guidance and procedures in relation to FPIC processes, and
ensuring effective and independent oversight and grievance mechanism.
The incorporation of FPIC into the safeguard policies of financial institutions implies a commitment
to ensuring that all projects that are funded proceed in a manner consistent with the respect of
indigenous peoples’ rights. This would represent a major, but necessary, undertaking by the financial
sector to remedy practices which condone and facilitate the imposition of rights denying projects on
indigenous peoples. Implemented correctly FPIC has the potential to play a transformative role in
client engagement with indigenous peoples, and by extension the relationship which these peoples
have with the financial industry funding those engagements.
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Making Free, Prior and Informed Consent a Reality