FPP letter to the UK Director of the IDB


27 September 2005

Stewart Mills
Executive Director
Inter-American Development Bank
1300 New York Avenue, N W
Washington DC 20577,
USA

Dear Mr. Mills,

Substantive and procedural concerns regarding the IDB’s Draft Operational Policy on Indigenous Peoples

The Forest Peoples Programme (FPP) is writing to inform you of its serious concerns regarding the contents of the IDB’s above draft policy. We also wish to alert you to the IDB’s current flawed plans for finalising and adopting this new operational policy without dealing with legitimate complaints raised by indigenous peoples’ organisations and leaders throughout the Americas. The purpose of this letter is to urge you as representative of the UK government on the IDB Board to take action to ensure indigenous calls for a prolonged consultation process are acted upon by the Bank in the interests of good faith consultation and good public policy making.

In the first part of this letter we outline what we consider are the some of the strengths and weaknesses of the current draft policy. The second part notes some serious misgivings with the public consultation process to date. The final part sets out a series of concrete recommendations, which we call on your office to support in the Bank’s deliberations on this draft policy.

I. Strengths and weakness of the June 2005 Draft Policy

Overall, the FPP considers that there are several elements that are potentially useful in the draft policy that should be retained and strengthened where necessary. At the same time, we are disappointed that the draft policy contains many loopholes and has failed to address most of the gaps identified by the FPP in our earlier comments sent to the IDB in September 2004.

Some potential strengths:

·        Affirms that the IDB seeks to give priority to the cultural and territorial integrity of indigenous peoples and to safeguarding their individual and collective rights [Preamble]

·        Includes a clear-cut safeguard standard that the IDB will “...not finance projects with potential adverse impacts” on uncontacted peoples, including indigenous peoples in voluntary isolation [IV.B.4.4(g)]

·        Includes language that goes some way to recognising indigenous peoples’ collective and customary rights to their lands, territories and natural resources [IV.B.4.4(b)(i)]

Key weaknesses:

·        Inclusion of potentially discriminatory language on the definition of indigenous peoples that confines such identity to those who “retain some or all of their own social, economic, cultural, and political institutions and practices” [I.1.1(ii)]

·        Failure to recognise the decisions and recommendations of the Inter-American Court of Human Rights and Inter-American Commission on Human Rights as a source of international norms and obligations.[1]

·        Perverse requirement that the Borrower identify and document who are the legitimate representatives of indigenous peoples [IV.B.4.4(a)(i)]

·        No inclusion of the safeguard standard of free, prior and informed consent (FPIC)

·        No explicit safeguard stipulating that the Bank will not support projects affecting indigenous peoples without their prior consent: the Bank only commits to “taking into account” the views of affected indigenous peoples, and then only where “...appropriate to the circumstances” or “whenever possible” [IV.B.4.2(a) and V.5.3(a)]

·        Derogations that undermine the proposed safeguard to protect indigenous peoples’ land and territorial rights: provisions on lands are restricted to those “under rights or claims that are legally recognised”, thereby risking exclusion of indigenous lands and territories that are not recognised by the State [B.4.4(b), Footnote 8]

·        Narrow standards on prior agreement (beyond those on traditional knowledge) that:

-   are confined only to projects deemed by the Bank to have “particularly significant potential adverse impacts”, and then only if the Bank judges unilaterally that prior agreement is necessary [B.4.4(a)(iii) and V.5.3(c)]

-         are weakened by derogations in part V. of the policy in footnotes 11 and 12 (that permit a borrower to proceed with a project even where the affected indigenous peoples decide not to participate in a public consultation on the project proposal (fn 11) and/or to only undertake consultation once a project has already started (fn 12)

-         Lack any requirement for third party verification of the process of prior consultation and good faith negotiation and resulting agreements between the Borrower and affected indigenous peoples

-         Fail to link the prior agreement standard to safeguards for lands and territories [NO direct links to provisions under IV. B.4.4(b)]

·        Lack of clear criteria and mandatory procedures for safeguarding indigenous peoples in voluntary isolation and peoples in the initial stages of contact

·        Little clarity on the minimum requirements for “consultation and good faith negotiation”: there are no clear criteria specifying when this standard is required or what procedures and activities it must involve [V.5.3.(a)]

·        Restriction of explicit requirements for “prior consultation” to extractive industry and protected area projects [V.5.3.(b)(ii)(1)]

·        Only requires “participation in project benefits” by affected indigenous peoples “whenever feasible” [V.5.3.(b)(ii)(3)]

·        No explicit requirement for informed participation of indigenous people throughout the project cycle, including during the pre-approval stage

·        Only requires participation mechanisms for indigenous peoples in project monitoring and evaluation [V.5.3(d)]

·        Use of ambiguous and vague language and inclusion of multiple derogations throughout.

The above defects in the draft policy are serious. FPP’s analysis of the draft reveals that the current proposed standards are inconsistent with existing norms of international law on indigenous peoples’ rights in the Americas. As such, the June 2005 draft actually contradicts the stated objective of the same proposed policy (II.2.1(b)). This is especially the case in relation to land and territorial rights and the right to free, prior and informed consent.

As you may well be aware, the gaps and loopholes in the draft policy have caused several indigenous peoples’ organisations in Latin America to reject the proposed safeguard (see, for example, enclosed statement made by the Kuna General Congress and other indigenous peoples’ organisations in September 2005).

II. Process Problems

While the initial stages of the formulation of this policy in 2004 involved some degree of public consultation in several Borrower countries, the latter stages of the IDB consultation on the proposed provisions draft policy (June 2005) have been rushed and have not involved widespread face-to-face consultations with indigenous peoples’ organisations. It is clear from various declarations made by indigenous peoples who attended the meetings in 2004 that these initial meetings were not considered informed consultations on the proposed contents of the IDB policy. Rather, these meetings were recognised only as information sharing events hosted by the IDB. [2]

In our view, the creation of an Indigenous Advisory Committee in December 2004 was an innovative initiative, which had the potential to establish a new inclusive approach to standard-setting at the IDB, and may have served as a model for other IFIs. Unfortunately, the potential for a new approach to public policy making was not fulfilled in practice. We understand that many of the key recommendations of the indigenous members of the Advisory Committee and their proposed minimum safeguard standards were not incorporated in the June 2005 draft.

In short, the IDB has so far failed to ensure ample, effective and good faith face-to-face public consultations on the substance of the proposed safeguard instrument that was only released for electronic consultations at the end of June 2005.

III. Recommendations

Given the serious problems with the latter stages of the public consultation, we recommend that the IDB suspend the finalisation of it proposed safeguard policy until a further process of informed public consultation is agreed with indigenous people’ organisations throughout the region.

The FPP recommends that the IDB team make major amendments to the current draft in order to fill substantive gaps and problems noted above.

In the meantime, we call on the IDB to refrain from adopting a defective operational policy in order to ensure that the contents of this important new IDB safeguard are acceptable to indigenous peoples and are fully consistent with the obligations of the Bank and its borrowers under international law.

We look forward to learning about how the IDB plans to deal with the concerns we have raised in this letter.

The FPP would also greatly appreciate a meeting with you to discuss this matter and related issues in greater depth the next time you are in the UK.

Yours sincerely,

Tom Griffiths
Policy Advisor

Enc.