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May 2020

In May 2020, the Hydropower Sustainability Assessment Council updated the Hydropower Sustainability Tools, which are used by independent assessors to assess a hydropower project’s performance in accordance with internationally recognised good and best practices.

The changes include the addition of Free, Prior and Informed Consent (FPIC) as a requirement of meeting good practice for hydropower projects that affect Indigenous Peoples.

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What is Free, Prior, Informed Consent (FPIC)?

FPIC is a principle enshrined in the United Nations Declaration on the Rights of Indigenous Peoples (UN DRIP), agreed and adopted by member governments on 13 September 2007. It establishes a ‘universal framework’ of minimum standards for the survival, dignity and well-being of the Indigenous Peoples of the world and it elaborates on existing human rights standards and fundamental freedoms as they apply to the specific situation of Indigenous Peoples.

What are the new requirements under the Hydropower Sustainability Tools?

To achieve good practice when seeking stakeholder support for a hydropower project, a project will need to show that FPIC has been achieved with respect to the Indigenous Peoples’ rights at risk following the principle of proportionality. To achieve best practice, in addition FPIC will need to be demonstrated for directly affected indigenous groups for the entire project.

A hydropower developer is expected to engage in good-faith consultation with Indigenous Peoples’ institutions of representation and decision-making, as determined by them. The engagement process shall be appropriately timed, culturally appropriate and two-way. In addition, ongoing processes need to be in place for Indigenous Peoples to raise issues and gain feedback, with a mutually-agreed disputes procedure.

The guidance on Indigenous Peoples has also been amended in relation to assessing the project-affected community, management and outcomes. See the guidance for full details.

How is FPIC defined in the Hydropower Sustainability Tools?

Free, Prior and Informed Consent is defined as both a process and an outcome. 

The process involves (i) good-faith consultation; (ii) mutual and cross- cultural understanding with dialogue that is ongoing and open, and gender and inter-generationally inclusive whenever possible (with gender and age disaggregated data and analysis); (iii) inclusive and participatory engagement, including during the assessment of issues and the identification of mitigation measures, with clarity on the level of participation of Indigenous Peoples throughout the consultation process; (iv) provision of adequate resources to ensure that the Indigenous Peoples representatives can participate in the FPIC process equitably, including the services of independent technical or legal consultants (such as Indigenous Peoples Organization); (v) mutual agreement on the process and desired outcome from the outset of the consultation; and (vi) documentation that is evaluated on an ongoing basis, is verifiable by a mutually agreed methodology, and made publicly available. 

The outcome is the agreement and the evidence thereof (including thorough documentation of how the agreement was achieved). Types of evidence include surveys, signatures on plans, records of meetings, video/ audio records, public hearing records, public statements, governmental license, court decisions, etc. Recollections of community elders cannot be accepted as evidence without supplementary forms acknowledged by and easily accessible to the counterparties to the agreements. FPIC does not require unanimity in the indigenous community and does not grant individuals or groups veto rights over a project. At the level of proven best practice, FPIC is to be achieved for the entire project, irrespective of the principle of proportionality.

How are Indigenous Peoples defined?

The term Indigenous Peoples refers to a distinct social and cultural group possessing the following characteristics in varying degrees: self-identification as members of a distinct indigenous cultural group and recognition of this identity by others; collective attachment to geographically distinct habitats or ancestral territories in the project area and to the natural resources in these habitats and territories; customary cultural, economic, social or political institutions that are separate from those of the dominant society or culture; an Indigenous language, often different from the official language of the country or part of the country within which they reside. In some countries, interactions with Indigenous Peoples may be required to be conducted through a specific government agency. 

What are Indigenous Peoples’ rights?

Indigenous Peoples’ rights are documented in places such as in the United Nations Declaration on the Rights of Indigenous Peoples (UN DRIP) and the International Labour Organisation Convention No. 169. They include right to self- determination, right to ownership and property, right to practise and revitalise cultural traditions and customs, right to manifest, practise, develop and teach their spiritual and religious traditions, customs and ceremonies, right to the conservation and protection of the environment and the productive capacity of their lands or territories and resources. Indigenous Peoples’ rights are considered at risk when project activities or impacts prevent Indigenous Peoples from exercising their rights.

What does ‘good-faith consultation’ mean?

Good-faith consultation involves (i) willingness to engage in a process and availability to meet at reasonable times and frequency on the part of all parties; (ii) sharing of information that is accessible and understandable to the Indigenous Peoples, disseminated in a culturally-appropriate manner and in the local language(s)/dialect(s); (ii) commitment that Indigenous Peoples have been fully informed of project impacts affecting their rights; (iv) use of mutually acceptable procedures for negotiation; (v) willingness to change initial positions and modify offers where possible; and (vi) provision of sufficient time for the Indigenous Peoples to consider information using their customary internal processes.

What is the ‘principle of proportionality’?

The new guidance applies a principle of proportionality which stipulates that the extent of consultation and consent required is proportional to the nature and scope of the Indigenous rights that are impacted by the project. Ordinarily, consent will not be required for impacts that are not significant to Indigenous Peoples. However, good-faith consultation is required for this determination. Two situations, in which a project must obtain the consent of an indigenous community, are stated in the UN DRIP as follows: (i) when the project will result in the community’s relocation from its traditional territories, and (ii) in cases involving the storage or disposal of toxic waste within Indigenous lands.

Who issued the new sustainability guidance?

The amended guidance on FPIC was issued by the Hydropower Sustainability Assessment Council, a multi-stakeholder group of social and environmental NGOs, industry, government and financial institutions whose role is to develop guidelines and assessment tools for the hydropower sector. The decision-making committee of the council currently includes representatives from the World Wide Fund for Nature (WWF), the International Union for Conservation of Nature (IUCN), the Norwegian Agency for Development Cooperation (Norad), the Swiss State Secretariat for Economic Affairs (SECO), Energias de Portugal (EDP), Voith Hydro, the New Development Bank, the World Bank,the Women for Water Partnership, Sarawak Energy Berhad, the Office of Investment Board of the Government of Nepal and Hohai University, China.

Why was the guidance changed?

The Hydropower Sustainability Assessment Council gave a mandate to its executive committee to establish a working group, named the Hydropower Sustainability Working Group on Free, Prior and Informed Consent (FPIC-WG), to review good practice around hydropower activities affecting Indigenous communities. The objective was to find stronger agreement on the language that defines good international industry practice on this topic, and how this practice should be assessed at the project level. 

How was the new language decided?

The  FPIC-WG reviewed the current language on Indigenous Peoples in the Hydropower Sustainability Tools to determine whether any substantive changes were needed. It based its review on previous assessment case studies, analysis of existing standards and international law. In parallel, the working group evaluated the scope, relevance and applicability of current FPIC language in existing standards, including the Hydropower Sustainability Tools, the World Bank Environmental and Social Standard 7 (ESS7) and the IFC Performance Standard 7 (PS7). 

The FPIC-WG sought guidance from a former UN Special Rapporteur on the Rights of Indigenous Peoples to conduct legal research and analysis of applicable international law as to the duty to consult Indigenous Peoples, i.e. when and under what circumstances FPIC is required by international law, and how compliance with such requirements should be measured. The legal report, along with the assessment cases studies and the analysis of existing standards, provided the basis for the working group’s deliberation.

Following the approval of the good practice language, the council’s management entity and secretariat, hosted by the International Hydropower Association’s sustainability division, updated the best practice language and assessment guidance through collaboration with experienced accredited assessors and council members.

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