Corporate Social Responsibility and Indigenous Peoples

Corporate Social Responsibility (CSR) is a concept meant for corporate organizations to take responsibility for the impact of their activities on the environment and community in which they operate, a responsibility that now stretches further than simply following the national law. Since the adoption of the United Nations Declaration on Rights of Indigenous Peoples (UNDRIP) in 2007,the need for the establishment of an inter-nationally acceptable minimum standard applicable to corporations operating in indigenous territories has become an imperative.

According to the United Nations, indigenous peoples bear the burden of most resource-intensive projects disproportionately, with attendant serious human rights impacts, including loss of traditional territories and land, eviction, migration and resettlement, depletion of resources necessary for physical and cultural survival, destruction and pollution of the traditional environment, social and community disorganization, long-term negative health and nutritional impacts a swell as, in some cases, harassment and violence.[1]

There are currently no specific, concrete international instruments in the form of a treaty or declaration concerning the responsibilities of corporations towards the indigenous populations. This is because most international human rights legal frameworks only address state responsibilities. Notwithstanding, there are a number of international standards, guidelines and policies which corporations must now consider. These include the United Nations Global Compact, World Bank Operational Policy on Indigenous people (OP 4.10), International Financial Corporation (IFC) Performance standard PS-7, Convention on Biological Diversity Akwé: Kon Guidelines (2004), and the general normative prescriptions under the UNDRIP and the International Labour Organization Convention No.169.

These documents have now imposed on corporations an expectation of due diligence and the duty to respect indigenous rights. These responsibilities require corporations, prior to commencement of their operations in any indigenous community, to ensure adequate observance and respect not only for the domestic law governing that jurisdiction, but also for all international indigenous rights standards that are binding on the states. 

Corporate due diligence responsibility and duty to respect indigenous rights include:

• Recognition of Indigenous Peoples and their rights – Corporations are required to identify and recognize the existence of indigenous peoples in their area of operations, and should observe the basic internationally prescribed indigenous rights standards, even where such rights are not applied by the host state.

• Observe duty to consult – Ensure that prior to the commencement of project indigenous communities in the area are consulted, informed about, and comprehend the full range implications of the social, economic, cultural, spiritual and environmental impacts that can result from the project.

• Impact Mitigation and Compensation – Corporations have a duty to seek every feasible and possible means to limit or mitigate adverse impacts of their activities on indigenous territory. But where due to some indispensable reasons the adverse effect is unavoidable, the indigenous people should be entitled to a just and fair compensation or redress.

• Share in Benefit arising from Corporate Activities taking place in Indigenous Territory – Due diligence duty requires the corporations to establish a benefit- sharing mechanism with the indigenous community in accordance with international standards. The benefit-sharing mechanism should be exclusive of just and fair compensation, and must be created in manner that follows indigenous priorities.

These corporate responsibilities are now deemed a constituent part of the broad corporate duty to respect and comply fully with international human rights. For instance, many international financial institutions will seize project funding where corporations fail to obtain free prior and informed consultation with affected indigenous peoples. In addition, under the “duty of state to protect” principle of the Inter-American and European Human Rights systems, a state must ensure the peoples human  rights are respected by corpor-ations, otherwise the state will be held responsible for failing to prevent violations perpe-trated by corporate entities.