Shareholders challenge Origin consent under UN principles

Shareholders challenge Origin consent under UN principles

MEDIA RELEASE

19 September 2018

 

The Australasian Centre for Corporate Responsibility (ACCR) has lodged a shareholder resolution with Origin Energy, calling on the Origin Board to commission a full review into whether FPIC has been established in the Northern Territory.

See ASX notice here.

The resolution, and other resolutions to Origin, are also available on ACCR’s website here.

Brynn O’Brien, Executive Director ACCR said:  “The Jumbunna report demonstrates exactly why this resolution is necessary. Investors in companies planning to frack the NT cannot ignore the obvious deficiencies with the way consent is obtained on the ground, or the immense power imbalances between corporations and Aboriginal Traditional owners.

“The potential for irreparable harm to communities’ culture, livelihoods, and land and water systems should weigh heavy on the shoulders of investors.

“Origin’s response says that the company “believes that it follows the principles of FPIC for its exploration project in the Northern Territory,” however no detailed information has been made available to investors. This goes to the core of investors’ responsibility to conduct due diligence on planned projects, which requires more than simply taking a company at their word.  We are confident that, in light of the concerns raised in the Jumbunna report,  responsible investors will support this resolution, which simply calls on Origin to disclose more information.

 

Resolution 2 – Ordinary resolution on Free, Prior and Informed Consent
Shareholders request that:

  1. the Board commission a comprehensive review of whether Free, Prior and Informed Consent (FPIC) of Aboriginal Traditional Owners and communities who may be affected by our company’s intended operations has been established in relation to any petroleum exploration permits our company has obtained in the Northern Territory (FPIC Review); and 

  2. the Board prepare (at reasonable cost and omitting confidential information) a report describing the completed FPIC Review, to be made available to shareholders on the company website prior to any further exploration activity taking place.

 

Resolution 2 – Supporting statement

 The principle of free, prior and informed consent (FPIC) is recognised in international law, and “represents the highest standard possible for the involvement of Indigenous Peoples in decision-making processes about large extractive projects.”[1] Respect for FPIC is recognised as central to discharging the corporate responsibility to respect human rights under the UN Guiding Principles on Business and Human Rights (UNGPs), where companies interact with Indigenous Peoples. Under principle 13(a) of the UNGPs, companies must “avoid causing or contributing to adverse human rights impacts in their own activities.” This responsibility “exists over and above compliance with national laws and regulations protecting human rights” – that is, where local laws are inadequate, it is incumbent upon companies to look to international standards.[2]

We commend our company’s statement that “our activities will be guided by” the UNGPs as well as the UN Declaration on the Rights of Indigenous Peoples (UNDRIP).[3] Our company has also committed to “more thoughtfully and meaningfully work with Aboriginal and Torres Strait Islander peoples”[4] through its Reconciliation Action Plan.

The Australasian Centre for Corporate Responsibility (ACCR) favours policies and practices that protect the long term value of our investments. Where companies in which we invest interact with Indigenous Peoples, obtaining genuine FPIC is an important measure in protecting shareholder value. In support of this position, we note the following:

  • Globally speaking, “[i]n the last decade, the time taken to bring oil projects online has doubled, with 73% of delays due to non-technical problems – including resistance from Indigenous stakeholders.”[5]
  • Denouncements by Indigenous peoples of corporate non-compliance with UNDRIP before enacting projects on their land have increased in recent times[6]. According to Hermes Investment Management,[7] “[s]uch tumult has prompted investors to engage with companies about FPIC.”
  • Our company frequently states its commitment to consent, which is commendable, however, we emphasise that a commitment to consent does not necessarily deliver consent, and that “[d]espite good intentions, good laws and progressive human rights instruments, there [may still remain] a gap between words and actions.”[8]
  • A review of publicly available information about consent processes in place in the NT[9], including the findings of the Hawke[10] and Pepper[11] inquiries, raises the concerning prospect that some if not all petroleum exploration permits in the NT have been issued in the absence of FPIC. This poses significant risks to our company.
  • Concerns in relation to FPIC centre around the immense power imbalance between companies such as ours and Aboriginal Traditional Owners, and the lack of appropriate information provided to Aboriginal Traditional Owners in language. Furthermore, the Pepper Review has occasioned a mass leap forward in understandings about fracking – which suggests that new information must be provided to communities for informed consent to be said to have occurred.
  • This is an emerging issue and preliminary discussions with civil society organisations have revealed that community attention on fracking in the NT will increase.[12] If it becomes clear that FPIC is not present, our company can expect escalating community concern, which may translate into significant campaigning and protest action. Given our company’s consumer profile it is important to protect its brand against potential risks of this kind.
  • Hermes Investment Management recommends that, “Until FPIC has been obtained, a project should not commence. Even during a project’s life-cycle consent can be withdrawn and amended. It is therefore vital that projects not only deliver on what has been agreed but that dialogue and consultation continues between the [I]ndigenous peoples affected by any project and the project developers and owners.”[13]

Recommended approach

  • The NT is a complex environment for obtaining FPIC and our company should exercise caution.
  • This resolution is urgent given the lifting of the moratorium on fracking in the NT in April of this year, and the subsequent announcement by our company of its intention to “resume work as soon as practical”, and its “plans to drill and fracture stimulate a further five wells to complete existing exploration permit commitments put in place prior to the moratorium being introduced in September 2016.”[14]
  • If the FPIC Review requested concludes that FPIC has not been clearly established, our company should take active steps to ensure that Aboriginal Traditional Owners and communities are afforded FPIC, by engaging in new consultation processes that comply with FPIC before any further exploration or production activity takes place.

 

ACCR urges shareholders to vote for this proposal.

 

END

 

CONTACT

Dan Gocher | ACCR | +61 410 550 337

Brami Jegan | Global Strategic Communications Council | + 61 448 276 945

 

[1] See https://www.oxfam.org.au/what-we-do/mining/free-prior-and-informed-consent/

[2] UNGPs, commentary to principle 11

[3] Origin Energy Human Rights Policy https://www.originenergy.com.au/content/dam/origin/about/investors-media/human-rights-policy.pdf

[4] https://www.originenergy.com.au/content/dam/origin/about/community/docs/reconciliation-action-plan.pdf

[5] Tim Goodman, Hermes investment management, 29 January 2018, available at https://www.hermes-investment.com/au/blog/perspective/companies- indigenous-peoples-collide/ citing Investors and indigenous people: Bridging cultures and reducing risk,” published by First People Worldwide as at November 2015

[6] Free Prior and Informed Consent: An indigenous peoples’ right and a good practice for local communities,” published by the Food and Agriculture Organisation of the United Nations as at December 2016

[7] Tim Goodman, Hermes investment management, 29 January 2018, available at https://www.hermes-investment.com/au/blog/perspective/companies- indigenous-peoples-collide/

[8] Statement by the Chair of the UN Permanent Forum on Indigenous Issue (UNPFII) on the 10th Anniversary of the UNDRIP,” published by the UN as at September 2017

[9] This review has included the findings of the Hawke Inquiry, the Pepper Inquiry, submissions to those inquiries, and credible media reporting

[10] Report of the Independent Inquiry into Hydraulic Fracturing in the Northern Territory, 2014 see https://frackinginquiry.nt.gov.au/__data/assets/pdf_file/0008/387764/report-inquiry-into-hydraulic-fracturing-nt.pdf

[11] Scientific Inquiry into Hydraulic Fracturing of Onshore Unconventional Reservoirs in the Northern Territory, 2018, see https://frackinginquiry.nt.gov.au/

[12] See, for example https://www.theguardian.com/environment/2018/jun/18/not-safe-not-wanted-is-the-end-of-nt-fracking-ban-a-taste-of-things-to-come

[13] Tim Goodman, Hermes investment management, 29 January 2018, available at https://www.hermes-investment.com/au/blog/perspective/companies- indigenous-peoples-collide/

[14] https://www.originenergy.com.au/about/investors-media/media-centre/origin-to-resume-beetaloo-exploration-in-nt.html


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