Issues here are quite similar to the Pre-Permitting phase.
In the case of a prospective expansion or timeline extension, environmental, cultural, and social impacts must be assessed – including on a cumulative basis, along with agreements for mitigation and compensation. The parties may wish to extend or revisit shared benefit agreements.
As in the Pre-Permitting phase, it is important for communities to receive information from the company about the possibilities and what information is still uncertain or needed to better understand the possibilities, in order to reach an informed decision about whether to consent to these changes. Earlier agreements may have outlined processes for navigating the particular scenario at hand; if not, it may be helpful to revisit many of the discussions from the Pre-Permitting phase, including:
- What are the possible paths forward (e.g., expansion, closure)?
- What is known about options relating to these possibilities (e.g., feasibility considerations, timeline, new opportunities, etc.)? Is more information needed to have the full picture?
- How will likely impacts – including cumulative impacts – be assessed (e.g., through a formal Environmental, Social and Health Impact Assessment)? Once impacts are understood, what mitigation or compensation will take place?
- What issues or processes does the community want to be informed about and/or weigh in on?
- How can any specialized, technical information be provided in an accessible manner (e.g., in relevant languages, and/or for community members who may not have legal or engineering backgrounds)? Is external expertise needed? How are experts or consultants to be selected, and paid for?
- Once information is received from the company, what processes need to take place within the community to support inclusive deliberation and decision making? What kind of timeline will allow for the community to digest information in order to identify important questions, seek advice where needed, and support eventual decision-making?
- Are adjustments needed to existing agreements regarding impacts/mitigation/compensation, shared benefits, or ongoing communication and decision-making protocols?
- If new partners are being considered, what is their track record? What will the current company do to ensure a smooth transition for the community, including transfer of commitments?
Company staff may transition in these periods, and care should be taken to ensure that their knowledge does not depart with them.
The result of these discussions should likely be a new set of agreements – either in addendum to or replacing prior agreements – encompassing new mitigation/compensation commitments, shared benefit expectations, and adjustments to protocols for communications and decision-making.
As in the Pre-Permitting phase, companies can earn or lose trust depending on whether relevant information is shared in a timely fashion, with the right people, and whether rights-holders have the opportunity to inform and prioritize discussions about design, mitigation, and compensation – so that communities can ultimately make an informed decision about the future.
Company staff may transition in these periods, and care should be taken to ensure that their knowledge does not depart with them. Communities find it very frustrating when ‘companies’ forget information that has been shared with them, or promises they have made.
While being honest about any uncertainty, it is important to give communities early opportunities to weigh in on considerations about major changes to a project. Expansions or extensions bring additional social, environmental, and cultural impacts, including cumulative impacts, and the community must be able to advise on the relative priority, acceptable mitigation measures, and appropriate compensation associated with these. Communities may have ideas for how to maximize potential opportunities associated with these changes, and should have the opportunity to contribute these before design proceeds too far. Nearly all of the guidance outlined in the Pre-Permitting phase again applies here.
Before Major Change Resources
Agreements
By setting out the respective roles and responsibilities of companies and communities, agreements are a central part of FPIC implementation. Agreements can set out a mutually agreed basis for realistic expectations, and processes for communication and project modifications.
Because large projects change over time, and are complex in scope, several agreements may be appropriate over time. For example, in the pre-feasibility phase of a project, impacts and profitability will be unknown, so a short-term land access and communication protocol would make sense. Detailed plans for closure may not be concluded until a project is mature. When a project affects several communities, multiple agreements may be required. And parties may prefer to have “layered agreements” so that some elements (e.g., communications processes) can be adjusted easily without renegotiating other parts of the agreement. Every project and every community is unique; at the same time, good agreements should cover the following considerations:
Agreements between companies and communities should set out implementation and management plans, timelines, contingencies/ accountability mechanisms for addressing unmet obligations, and protocols for managing conflicts and grievances.
- Communications and Decision Making Processes. Companies and communities will be able to interact more effectively when both identify and understand their respective decision-making processes, authorities, and governance structures. It is important for all parties to have details such as the process, frequency, or triggers for ongoing information sharing; decision making protocols, roles, and timelines – including any election or review of representation; the process for flagging, discussing, and addressing conflicts; the potential milestones or issues for which FPIC will be sought; and the process and frequency for re-evaluating and/or revising any of these protocols. Separating the agreement on relationship management from discussions about impacts and benefits provides a stable framework for addressing unforeseen circumstances, project modifications, shifts within company, shifts in the community, or context.
- Impacts & Compensation. Communities and companies should reach a shared understanding of the environmental, social, and cultural impacts of a project and how impacts will be managed. This part of the agreement should be informed by baseline environmental, cultural, and social assessments, as well as the formal ESHIA. It should account for changes in community access to lands and other natural resources over the course of the project. It should also describe how impacts will monitored and re-assessed over time to account for cumulative impacts and evolving social and cultural realities, values, and capacities. This is also where company commitments to the community can be recorded in terms of how the company will avoid, mitigate, monitor, manage, and compensate for those impacts. The process for assigning value and distributing compensation for impacts should be discussed (e.g., the value of grassland to a company is different than to a pastoralist; and value is not always monetary for communities). From the standpoint of accountability and flexibility, it is important that agreements specify what happens if companies do not meet these commitments.
- Shared Benefits. Community benefits are different from impact compensation, and it can be useful to distinguish between company compensation for negative impacts, and agreed benefits the company will deliver to the community. When the level of benefits may be contingent on commercial factors like commodity price, this can be included in the agreement. These discussions offer an opportunity for the company and community to develop a common vision and realistic expectations for impacts, future development, and benefits. Agreements may also look at the role of “trust funds” and how they can be governed to reflect diverse needs within the community and to avoid political manipulation.
The process for developing agreements is just as important as finalizing them. Ensuring that communities have sufficient time and resources (including possible external counsel) to fully consider and deliberate about conditions within a prospective agreement is essential to securing free, prior, and informed consent.
Agreements between companies and communities should set out implementation and management plans, timelines, contingencies/accountability mechanisms for addressing unmet obligations, and protocols for managing conflicts and grievances. Allocation of adequate company resources is important for implementation success. In addition to operational and capital budgets that correspond to mitigation, compensation, and community benefits, it can also be important to allocate resources for legal counsel, independent monitors or advisors, or funding/capacity for community members to play identified roles.
The process for developing agreements is just as important as finalizing them. Ensuring that communities have sufficient time and resources (including possible external counsel) to fully consider and deliberate about conditions within a prospective agreement is essential to securing free, prior, and informed consent. Please see the Inclusivity and Gender in FPIC resource for additional guidance on the importance of thoughtful, inclusive engagement leading toward agreements. The Agreements and Community Outcomes resource also outlines several considerations for ensuring that agreements lead to positive outcomes for the community.
Further Resources:
Gender and Inclusivity
Agreements and Community Outcomes
Why Agreements Matter, 2016. Ali, S., Brereton, D., Cornish, G., Harvey, B., Kemp, D., Everingham, J. and Parmenter, J. This document contains a “How to guide” outlining key elements of agreements, good practices for inclusive engagement in agreement-making, and practical guidance for planning for successful implementation and monitoring.
Agreements and Community Outcomes
What constitutes a “good” agreement for Indigenous peoples dealing with extractive industries? Why are some agreements so much better than others? And how can outcomes be improved for Indigenous peoples in negotiated agreements?
Dr. Ciaran O’Faircheallaigh has conducted research analyzing over forty agreements between extractives companies and Aboriginal communities in Australia to identify the processes and content that most contribute to successful outcomes for communities. Additional detail on the methodology and scale can be found in the Research Methodology sidebar.
Dr. O’Faircheallaigh’s findings included the following:
- The relative strength of agreements is not dependent on company policy, industry sector, or company size. Strong and weak agreements were found within the same company and within the same sector, and some of the strongest agreements are with medium-sized companies.
- Some agreements can leave Indigenous peoples worse off than having no agreement. For example, while the national law recognizes the legal right of citizens to participate in an environmental legislation process, one Australian agreement prohibits the community from lodging any objections, claims, or appeals to any government authority under any kind of legislation, including environmental legislation – essentially removing their rights as citizens.
- A common misperception is that strengths in some areas of an agreement are likely to reflect tradeoffs in other areas. However, agreements were generally found to be strong across the board of issue sets, or weak across the board. For example, if financial benefits were minimal, environmental provisions were also likely to be poor.
- Legal regime is important but not definitive. For example, under Australia’s Native Title Act (NTA), which governs the majority of Australia, if an agreement is not reached within 6 months, a decision about concession award is made by a government tribunal (which nearly always approve the concession), and the community will not receive any royalty. This de facto lack of a veto, paired with the likelihood of impacts without compensation, means that communities under the NTA face tremendous pressure to sign an agreement before the 6 month timeframe expires. While some strong agreements were still reached in NTA territories, there were also many weak agreements in those areas; in contrast, there were no weak agreements in the Northern Territory, where a community veto is possible under law.
- Community capacity matters; where strong agreements occurred despite unfavorable policy regimes, communities were able to access strong regional political networks with financial and technical resources to support negotiations, make ‘credible threats’ of direct political action, and build on regional legal strategies and precedents for strong agreements. (See graphic.)
- The strongest agreements deliver benefits for industry – highly rated agreements, where industry focuses on good process, capacity building, investments, and complying with cultural heritage legislation, can enhance relationships with and garner support from Aboriginal peoples, reduce environmental risks, and enable compliance with cultural heritage legislation.
- Land councils in Australia draw from deep-seated cultural foundations that have taken thousands of years to evolve. The Kimberley Land Council has a system of cultural and economic exchange that involves all groups in the Kimberley, has been in existence for millennia, and is used in transmission of cultural artifacts and organization of regional ceremonies. Through this platform, the Land Council is able to bring together a region and support local agreement-making through strong capacity building.
Although communities in Western Australia and Queensland fall under the Native Title Act, which essentially eliminates the possibility of a veto, strong agreements were still possible when communities had access to political networks who could offer legal and financial resources, strategies, and precedents to support negotiations.
Research Methodology
The analysis draws from nearly fifty agreements from Australia and Canada, reports on community consultation and negotiation processes, and Dr. O’Faircheallaigh’s direct experiences in leading consultations. A numeric scale of -1 to +6 was developed for each of the following elements of agreements:
- Cultural heritage protection;
- Participation in environmental management;
- Revenue sharing/royalties;
- Aboriginal employment and training;
- Business development opportunities;
- Land use, land access, and recognition of land rights; and
- Agreement implementation.
This scale is not cumulative. Agreements were ranked at the highest point of the scale on which they fall. For example, the area of environmental management was ranked as follows:
- (-1) Provisions that limit existing rights
- (0) No provisions
- (1) Mining company commits to Aboriginal parties to comply with environmental legislation
- (2) Company undertakes to consult with affected Aboriginal people
- (3) Aboriginal parties have a right to access, and independently evaluate, information on environmental systems and issues
- (4) Aboriginal parties may suggest ways of enhancing environmental management systems, and project operator must address their suggestions
- (5) Joint decision-making on some or all environmental management issues
- (6) Aboriginal parties have the capacity to act unilaterally to deal with environmental concerns or problems associated with a project
Dr. O’Faircheallaigh offers some recommendations for building more robust agreements with improved outcomes for communities. These included the following:
- Community controlled impact assessments can help to streamline the eventual negotiation process by building a platform for internal discussions by the community or communities. This process can reveal and begin to resolve tensions within and among communities.
- Although tensions may exist between regional and indigenous communities, strong regional networks can offer strategic capacity and access to expertise that benefits local communities. The development of robust local representative structures should also be prioritized.
- At a broader scale, there is a need to reform the laws, structures, and institutions that undermine indigenous negotiation positions and also tend to result in weak agreements.
Potential further resources include:
- Negotiations in the Indigenous World, 2015. Ciaran O’Faircheallaigh. Dr. O’Faircheallaigh’s research reviews agreement outcomes based on analysis of 45 negotiations between Aboriginal peoples and mining companies across Australia. It also includes detailed case studies of four negotiations in Australia and Canada.
Why Agreements Matter
This document contains a “How to guide” outlining key elements of agreements, good practices for inclusive engagement in agreement-making, and practical guidance for planning for successful implementation and monitoring.