Extractive Industries and Local Communities: What’s at Stake?
By admin August 21, 2015


Inequality and essential services are two elements, which, more often than not, exist in an uncomfortable tandem. Nowhere else is this made more salient than in the relationship between local communities and mining companies.

Often times, there is tension within this relationship when companies require the natural resources upon which local communities require for their daily sustenance. This anomaly has been made ever-more salient in the consolidation of community rights and mining companies in a very recent report launched by OXFAM.

The report is based primarily on the concept of free, prior, and informed consent (FPIC). FPIC exists as the prime standard when it comes to extractive industry/company engagement with local communities and indigenous people. FPIC is based on the tenet that local communities and indigenous people need to be well informed and hold a durable rapport on matters that will affect both parties. Essentially, indigenous people and local communities need to be informed well ahead of time in terms of business projects that will affect them. Oxfam emphasizes that local communities should be “free of coercion and manipulation, and should be given the opportunity to approve or reject a project prior to the commencement of all activities.”

The report is essentially a compendium of views of extractive companies stationed in almost all continents worldwide and seeks to gather their progress made in terms of the consolidation of FPIC in their community engagements. It was found that “Oil and gas companies lag far behind their mining company peers in terms of public commitments to FPIC”. OXFAM states that in “2012 Canadian oil company Talisman Energy stood out among the crowd with a strong policy commitment to FPIC, but with its recent acquisition by Repsol, it remains to be seen whether and how its FPIC commitment will be incorporated”.

FPIC is beneficial in a two-fold manner. Companies that operate under the consent of the local communities, while expanding their business and human-rights principles avoid expensive conflicts that would otherwise lead to falls in profits and project unsustainability. Countries that have not yet consolidated FPIC in their policies may have much to lose in the long-term. FPIC can be better integrated or effected if there is an explicit and unambiguous” policy commitment to FPIC; while the commitments made need or should include all communities that will be affected by the project. As a crux, FPIC also needs to be critically monitored and evaluated.

In the end, we should not forget that communities have rights. It is only by involving the least privileged in society that we respect engagement and operate under conditions of reciprocity. Much will be at stake if these conditions are not met.

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Thanks for sharing !

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