F21: A societal license to operate: HSE and community development Sustainability Commitment: environment, social, economy, education, governance

Indigenous peoples and the oil and gas industry: context, issues and emerging good practice

A review by IPIECA

Karl Fennessey, ConocoPhillips, USAAnupama Mohan, Statoil, Norway

Jordon Kuschminder, Shell, The NetherlandsHugh Attwater, BG Group, United Kingdom

Estella Nucci, IPIECA, United KingdomRoper Cleland, IPIECA, United Kingdom

IPIECA Indigenous Peoples Task Force

The search for new oil and gas resources has resulted in increased exploration and development in lands that Indigenous Peoples traditionally occupy or customarily use.

The present paper is based on this IPIECA review of Indigenous Peoples issues relevant for Oil and Gas industry.

The paper provides an introduction to Indigenous Peoples’ rights and outlines some of the reasons why these warrant special consideration by oil and gas companies. It includes: an overview of Indigenous Peoples and the policy and regulatory context relevant to the sector’s interaction; a summary of some of the specific issues for oil and gas companies to consider when operating in areas where Indigenous Peoples; and a summary of emerging good practice in oil and gas companies’ interactions with Indigenous Peoples.

Social Responsibility requirements for financing energy projects

Indigenous peoples and the oil and gas industry: context, issues and emerging good practice – a review by IPIECA

Indigenous Peoples and the oil and gas industry

Context, issues, impacts, opportunities, and emerging good practice:

• Introduction• Policy and regulatory context• Key Issues• Engagement• Management of impact and issues• Managing opportunities and benefits• Summary of emerging good practice

The oil and gas industry and Indigenous Peoples have been increasingly coming into contact with each other over the past few decades as the search for new oil and gas resources has engendered more exploration and development in lands that Indigenous Peoples traditionally occupy or customarily use.

The Indigenous Peoples Issues Review seeks to address some of the potential issues, impacts and opportunities that companies may need to consider when interacting in areas used or occupied by Indigenous Peoples.

Introduction

Key frameworksInternational regulation and policy• The ILO Convention on Indigenous

and Tribal Peoples (No. 169) (1989). • The United Nations Declaration on

the Rights of Indigenous Peoples (2007).

International finance institutions• The IFC Performance Standard 7 on

Indigenous Peoples.

Policy and Regulatory Context (1)

National legislation• Many countries have legally recognized indigenous rights in national legislation.

The recognized rights are varied and evolving both within and across different national contexts.

Company policies and approaches• Oil and gas companies follow a range of approaches to managing relations with

Indigenous Peoples. Some do this through implementation of broader human rights and community relations, some have chosen explicitly to follow external standards viz. IFC PS7, others have adopted their own specific policies and standards.

Other extractives sector initiatives• ICMM Position Statement on Mining and Indigenous Peoples (2008).• ICMM’ The Good Practice Guide: Indigenous Peoples and Mining (2011)• While this review makes reference to mining industry examples and the work of

ICMM, there remain important features that distinguish the interactions of the industries: for example, financial flows, physical footprint and employment generation are different.

Policy and Regulatory Context (2)

1. Engagement2. Impacts management3. Benefits and opportunities

Key Issues

Examples of company policies and approaches

• REPSOL: Indigenous Community Relations

• ConocoPhillips: Indigenous Communities

• BG: Indigenous Communities and Vulnerable People

• Total: Guidelines and Principles regarding Indigenous and Tribal Peoples

• ExxonMobil: Community Rights Management

• Woodside: Indigenous Communities Policy

• Talisman: Global Community Relations Policy

Engagement Stakeholder engagement and good

practice:o The importance of effective engagement

through open, transparent, and meaningful consultation processes, adequate information disclosure and listening to Indigenous Peoples in order to achieve inclusive and informed decisions and agreements.

Key considerations:o Socio-economic contexto Culturally appropriate engagemento Inclusiono Good faitho Culturally appropriate grievance

mechanismso Long term mutually beneficial relationships

Management of Impacts and Issues (1)An overview of some key issues.

Land tenure and access: o Land is often of particular cultural, spiritual, historical and economic

importance.o Land right claims may be collective.o The legal context, traditional land governance, and livelihoods should be

considered. Resettlement:

o Given the sensitivities of land rights issues, the resettlement of Indigenous Peoples can be controversial.

o Resettlement should only be an exceptional measure and should only take place with free, prior and informed consent (ILO Convention 169 and the UN Declaration).

o When ‘unavoidable’, resettlement should be carried out in ‘good faith negotiation’ (IFC).

In-migrationo Exposure to the threat of new diseases, cultural change, internal and

external conflict , or the loss of traditional lands and access to resources. o General good practice approaches are helpful; however, the analysis and

management plans should be carried out in consultation with affected Indigenous Peoples.

Traditional knowledgeo Recent trend in the international policy and regulatory context to develop

measures to protect traditional knowledge.o Companies can consider developing and implement cultural management

processes in participation with Indigenous Peoples. Natural resource use and environmental issues

o Emerging good practice considerations include: consulting widely about concerns; developing specific response measures; partnering with and involving Indigenous Peoples, monitoring and mitigating environmental impacts; and ensuring traditional knowledge is incorporated into impact assessments and management plans.

Management of Impacts and Issues (2)

The scale and nature will vary according to the size and scale of theproject, as well as the Aspirations and needs of the Indigenous Peoples.

Employment and procurement: o Opportunities may be either direct or indirect through procurement.

Financial benefits: o Arrangements vary according to the demands of indigenous groups, the

legal context, the company’s willingness to negotiate, and the scale of the project.

Sustainable development commitment/funds: o Development commitments can be made towards supporting a variety of

programmes (education, livelihood support, etc).o Good practice examples demonstrate the importance of consultation and

partnership with Indigenous Peoples in design and implementation.

Managing Opportunities and Benefits

Summary of Emerging Good Practice (1)General principles• Respect the rights of Indigenous Peoples, minimise

adverse impacts, and maximise the benefits.Socio-economic context• Understand the national and international legal and

historical context.• Carry out socio-economic baseline and impact

assessments in participation with Indigenous Peoples.• Source advice from experts.Engagement and consultation• Establish relationships at an early stage, carry out the

engagement in a culturally appropriate manner, aim to be inclusive, inform Indigenous Peoples of their rights as set out in national law, aim to reach agreements through good faith negotiation, include Indigenous Peoples in decision making , and develop a relationship through which respectful dialogue can occur.

Summary of Emerging Good Practice (2)Management of impacts and issues Generally: Work in consultation with affected Indigenous Peoples and develop

partnerships with relevant organizations. Land: Avoid culturally sensitive areas and minimize the size of land use,

understand rights, and offer fair compensation and due process. Resettlement: Avoid physical resettlement unless there is no feasible

alternative. Enter into good faith negotiations. In-migration: Assess and analyse impacts, develop and implement measures

to avoid, minimize or manage in-migration in consultation, and develop measures to strengthen resilience of indigenous groups.

Management of opportunities and benefits Employment and procurement: Preferential employment, skills development,

adaptation of working practices and cross-cultural training. Financial benefits and sustainable development: Develop in participation with

Indigenous Peoples and provide capacity building in relation to management of arrangements.

• Repsol: Policy on relationships with indigenous communities

• Talisman: Talisman report on free, prior and informed consent

• Total E&P Bolivie: Building trust with the Guarani Indigenous People

• BP: Village response teams in Arctic Alaska• Hunt Oil: Participatory environmental and

social monitoring in rural Andean communities• Nexen: Nexen Aboriginal Education Award

Program (AEAP), scholarships and bursaries• Woodside: Woodside’s Reconciliation Action

Plan

Case Studies

Karl D. Fennessey is a director, climate change and sustainable development, for ConocoPhillips located in Houston, Texas.

Fennessey began his industry career in 1989 with The Dow Chemical Company where he served in various refining, engineering, technology, and corporate strategy positions. Fennessey joined ConocoPhillips in 2008.

Fennessey is a member of the state appointed Texas Water Conservation Advisory Council. He has previously served on the Great Western Credit Union Board and as the Finance Chair on the Global Environmental Management Initiative Board.

Fennessey earned a bachelor of science degree in chemical engineering from the University of Texas in Austin in 1988. He is a registered Professional Engineer

Karl FennesseyConocoPhillips, USA

Director – Sustainable Development

IPIECAthe global oil and gas industry association

for environmental and social issueswww.ipieca.org

For more information or to talk with IPIECAplease visit us after the presentation at Booth 9127 in Hall 9