Oil and mining companies are increasing their stated commitments to human rights, including in some cases adopting policies in favor of securing community approval prior to projects moving forward, according to a report released by Oxfam America.
But while the report assesses stated policies, it notably does not attempt to measure observance of corporate policies.
“Too often, communities have no say in the decision of whether to extract resources from their backyards and receive little information about these projects,” said Raymond C. Offenheiser, president of Oxfam America. “With more than half of the world’s poorest people living in countries rich in natural resources, the increasing trend of companies incorporating human rights in their policies is encouraging.”
The report reviews the public policies of 28 oil and mining companies.
Five of the companies surveyed – Inmet, Newmont, Talisman Energy, Rio Tinto and Xstrata – have made explicit public commitments to Free Prior Informed Consent (FPIC), a number which has more than doubled since a 2009 Oxfam America report.
Another eight companies – including Anglo American, BP, Repsol, and others – have made somewhat qualified or indirect commitments to FPIC.
FPIC is considered the gold standard of policies since it requires communities to be adequately informed about oil, gas and mining projects in a timely manner and given the opportunity to approve — or reject — a project prior to the commencement of operations.
FPIC is a right for indigenous peoples according to international law, and Oxfam America believes that it is also a best practice for sustainable development of any oil, gas, or mining project.
The report also finds that approximately two-thirds of the companies surveyed now have incorporated the concept of community consent or less strong concepts such as community support or social license in their policies regarding development activities, either directly or indirectly through their commitments to other standards.
Some companies that only referenced consultation or community engagement in 2009 now have policies more aligned with community support or social license principles, including ExxonMobil, Total, Shell, and Barrick Gold.
“With intensified conflicts over land, water and mineral rights, business as usual is simply not going to cut it,” said Offenheiser. “Companies need to work with communities to ensure they have a meaningful voice in the decision-making process and that projects are designed in ways that respect human rights.”
The change within companies in the last three years is likely due in large part to the intensification of controversies and conflicts surrounding oil, gas and mining projects coupled with new international lending standards set by the World Bank’s private sector lending arm – the International Finance Corporation.
Total World Bank Group’s commitment to the extractive industries sector has averaged $910 million per year over the last five fiscal years.
“In order for oil and mining companies to survive in the coming decades, they need to transform themselves from primarily resource extractors to development partners,” said Offenheiser. “Companies that fail to implement the policies will be at a competitive disadvantage.”