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
[email protected]