World Bank Land and Poverty Conference Mar 21, 2017 Mechanisms for Consultation and FPIC in the Negotiation of Investment Contracts Sam Szoke-Burke World Bank Land and Poverty Conference Mar 21, 2017

Introduction Natural resource investments  impacts on land and human rights International law and best practices require consultation and FPIC What should this look like at the investment contract negotiation stage?

How is land allocated for investment projects? Investor-state contracts (land access in exchange for rent / benefits) Community leaders / local authorities can demise communal lands in some contexts Community members and perspectives often not adequately considered

Why the contract negotiation stage? Investment contracts are commonly used Investment contracts should be adapted to human rights standards like FPIC while they are used Proviso #1: We do not endorse ISCs as the optimal means of regulating resource investments Proviso #2: Consultation and FPIC must take place prior to authorization, but also should be ongoing and iterative

Consultation and FPIC Ensuring the community has a say Meaningful consultation: Timely and accessible information; Opportunities to participate; ability to influence decision-making FPIC, at its essence, is about indigenous (and other) communities deciding for themselves how lands and resources are used Status quo: inadequate consultation and FPIC at contract negotiation stage

Will communities even want to be involved? Community benefits may be negotiated between investor and community directly, but investment contracts cover other issues pertinent to local communities Expectation setting: community will remain involved in decision-making Time and resources needed: capacity building, internal deliberations, technical support

Factors affecting increased community involvement in negotiations Political and economic context Investor motivations for social license Domestic legal framework

Options for community involvement Option #1: Periodic consultations during negotiations Option #2: Community participation in negotiations, as a non-party Option #3: Including the community as a party / Tripartite investment contracts

1. Periodic consultations during negotiations Negotiations in “rounds,” with consultations in between Use of online contract repositories to share draft agreements? Governments / companies may be receptive, given similarity to other consultation practices Reliant on governments / companies to report back to community and incorporate community perspectives

2. Community participation in negotiations, as a non-party Presence in the room entails increased access to information, and greater potential to influence negotiations Being a non-party, community’s perspective can be easily ignored Overall: an improved form of consultation; will struggle to meet FPIC standard

3. Including the community as a party Tripartite investment contracts Community is a party to negotiations, and to the contract Greater participation and ability to influence Enforceable contractual rights for community — not just for benefit sharing; also for env and human rights protections Similar challenges with regard to capacity, power imbalances, time

Conclusion Governments have binding international legal obligations to ensure meaningful consultation and, where relevant, FPIC Contract negotiations are one stage of the investment where these standards apply The focus should be on communities accessing information, participating, and influencing decision-making Existing examples may come from unique circumstances, but contribute to momentum and provide lessons Potential for improved relations, empowered communities, mechanisms to hold the government and company to account; and investments that are better adapted to local context

Thank you Sam Szoke-Burke s.burke@columbia.edu