An Actionable Due Diligence Toolkit for Institutional Investors

1. Introduction

Gas flare in the Ecuadorian Amazon. ©Union of People Affected by Texaco/Chevron (UDAPT)

1.1 Background

While the rights of Indigenous peoples are protected by a robust and growing network of international human rights instruments and jurisprudence, and to a growing degree by private sector standards, there is a significant implementation gap, as demonstrated by the experience of Indigenous peoples. The expansion of business activities into Indigenous lands without the Free, Prior, and Informed Consent (FPIC) of Indigenous peoples, is reflective of and drives increasing adverse impacts on the human rights of Indigenous peoples.1 According to the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises, under extant international human rights law, all businesses, including institutional investors, have a responsibility to respect human rights. Accordingly, institutional investors have a responsibility to use their leverage to prevent, mitigate, and enable remedy for actual or potential human rights impacts on Indigenous peoples.

Ensuring that Indigenous rights are respected is not only a human rights imperative, but also critical from a climate, biodiversity- and international environmental law perspective. As research has shown, the protection of Indigenous rights is central to the protection of global biodiversity and the climate.2 As investments on or near Indigenous lands increase, failing to ensure that Indigenous rights are respected means investors risk failing to deliver on their climate and environment commitments. They also risk increasingly being involved in human rights abuses through their investee companies or through the value chains of their investee companies. Investors’ failure to understand Indigenous peoples’ rights also ignores material business risks, which have already cost investors and companies billions in cost overruns, delays, and project cancellation, in addition to reputational damage.3

1.2 This Toolkit

This Toolkit provides actionable steps for institutional investors, including asset owners (such as pension funds and insurance companies) and asset managers, with respect to Indigenous rights due diligence. The Toolkit builds on international human rights and environmental law standards and jurisprudence; a wider framework on the business responsibility to respect human rights, including but not limited to the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises, the UN Declaration on the Rights of Indigenous peoples (UNDRIP), emerging international legal frameworks, jurisprudence; and an emerging body of Indigenous peoples’ own laws, protocols, and standards related to business conduct.

The Toolkit is not a standalone guide covering the full range of human rights; it is intended to supplement, and be used in tandem with, existing and emerging standards and guidance on the investor responsibility to respect human rights, such as the Investor Toolkit on Human Rights and the Stepping Up due diligence guidance.

While this Toolkit is focused on ensuring that investors and businesses meet their responsibility to respect the rights of Indigenous peoples and do no harm, we also consider it critical that businesses, in addition to governments, promote Indigenous peoples’ wellbeing and right to freely pursue their economic, social, and cultural priorities. Moreover, we recognize that existing standards, such as the UN Guiding Principles on Business and Human Rights and the OECD Guidelines, have limitations; 4 as such, the due diligence approach proposed in this Toolkit does not diminish the need of governments to ensure legal recognition of Indigenous peoples’ rights to their lands, territories, and resources, and to enact mandatory due diligence regulation for businesses and investors.

Respecting Indigenous Rights

FYI: This website uses cookies

Our website (like nearly all websites nowadays) makes use of browser cookies for some basic, essential tasks and to track visitor and site usage statistics. We value your privacy, and we do not collect or share your personal information via cookies or any other means. By using our site, you are consenting to this policy.

FYI: This website uses cookies

Our website (like nearly all websites nowadays) makes use of browser cookies for some basic, essential tasks and to track visitor and site usage statistics. We value your privacy, and we do not collect or share your personal information via cookies or any other means. By using our site, you are consenting to this policy.

Your cookie preferences have been saved.