From 1964 to 1992, the oil giant Texaco extracted billions of barrels of oil from the Amazonian rainforests of Ecuador. During that time, the company dumped more than 16 billion gallons of toxic, carcinogenic wastewater into the waterways that local Indigenous tribes used for drinking and bathing. The widespread contamination caused an epidemic of cancer, miscarriages, and other severe health problems.
Rebecca Adamson (right) with members of the Goba people of the Lower Zambezi in Zambia.
Beginning in 1993, Texaco became embroiled in a seemingly endless battle with local Indigenous tribes seeking reparations. Ownership of Texaco passed to Chevron in 2001, and in 2011, Chevron was ordered by a provincial Ecuadorian judge to pay US$19 billion to the Indigenous communities affected by Texaco’s operations. Chevron has so far refused to pay the settlement.
The Ecuadorian tribes have responded by filing lawsuits to seize Chevron assets in Ecuador, Brazil, Canada, and Argentina until the $19 billion is paid. As a result, in October 2012, an Ecuadorian court froze US$200 million worth of Chevron Corporation’s assets in the country. And in November, an Argentine court froze up to US$19 billion of Chevron’s assets in Argentina.
Chevron’s stock price has plummeted since the October ruling, falling well below its fellow oil and gas conglomerates. A letter signed by investors holding US$580 billion worth of Chevron stock states that the Ecuador case has led them “to question whether the company’s leadership can properly manage the array of environmental and human rights challenges and risks that it faces.”
In the letter, the shareholders acknowledge that Chevron’s reputation with the public has been significantly damaged by the Amazon case, and request a meeting “to discuss how the company will protect its reputation and shareholder value moving forward.”
With both court and public opinion worldwide shifting in favor of Indigenous rights and associated environmental issues, companies are facing critical damage to their reputations and bottom lines if they do not bring their policies in line with the interests of Indigenous Peoples.
As in the case of Chevron, the pressure to change is coming increasingly from organized shareholder activists. By using your shareholder power, in partnership with the Indigenous rights movement, you can help reshape the business model of entire industries to respect, to cooperate with, and ultimately to benefit Indigenous Peoples—and the social and environmental justice they fight for.
The Risks of Ignoring Indigenous Rights
Chevron is not the first company to ignore the rights of local Indigenous communities when operating on their lands. Of the 28 major oil, gas, and mining companies operating in Indigenous territory around the world, only five have policies that explicitly commit to acquiring the “Free, Prior, and Informed Consent” (FPIC) of local communities before planning any operations on their lands, according to a study by Oxfam America.
But, like Chevron, those companies that do not adhere to FPIC guidelines are beginning to pay the price.
In 2012, for example, Talisman Energy became the fifth oil company to withdraw operations from Block 64 of the Peruvian Amazon because of resistance from the Achuar and other communities affected by its operations.
“We are the owners and the original people of this land,” Peas Peas Ayui, the president of the National Achuar Federation of Peru, told Amazon Watch. “No outside person or company may enter our territory by force, without consultation and without asking us.”
Through a growing number of court cases at both the national and international levels, Indigenous communities are successfully obstructing the progress and completion of massive projects. A federal judge in Brazil recently ruled that local Indigenous communities had not been properly consulted in the construction of Norte Energia’s Bel Monte dam.
The ruling resulted in the temporary halting of construction on the dam and may threaten the completion of the US$18.5 billion project.
Failure to acquire FPIC at the very beginning of a drilling or mining project not only threatens operations, it can result in crippling reputational damage and loss of investor confidence.
During a recent FPIC panel convened by Oxfam, Dr. Chris Anderson, the Americas director for Communities & Social Performance at the Rio Tinto Limited mining company, answered plainly the question of why investors are demanding that FPIC be integrated into project planning: “When you don’t adequately consult with a community and they don’t want an aspect of your project, you just simply don’t have a project, and therefore you may not have a business,” he said.
Shareholders for Indigenous Rights
As a shareholder, you are uniquely positioned to bring about big changes in the global market by investing in the right companies and influencing those companies to adopt policies that respect Indigenous rights.
Investors have three main ways of supporting the rights of Indigenous Peoples:
1) Screen your stocks. Ask your investment manager whether your investments take into account the rights of Indigenous Peoples. Don’t forget to ask about your 401(k) or other retirement fund. You can provide your investment manager with First Peoples Worldwide’s Indigenous Peoples Investment Guidelines [PDF], as well as this article, which s/he can use to assess how companies deal with Indigenous Peoples. An advisor specializing in socially responsible investing (SRI) has access to research data that can help you invest in companies with best practices.
For example, the Ethical Investment Research Service, a research provider that focuses on SRI, has identified 250 large-cap companies that have high to medium risk exposure to Indigenous Peoples. EIRIS offers this list to investment managers as a tool to serve their clients, so if your manager isn’t using this product already, suggest that s/he do so.
2) Be a shareholder activist. As a shareholder, you have a great deal of influence in helping lagging companies develop better practices.
In 2009, shareholders successfully steered the policies of one of the world’s largest gold producers toward improved Indigenous rights policies. Newmont Mining shareholders initially filed a resolution calling for an independent “global review and evaluation of the company’s policies and practices relating to existing and potential opposition from local communities to our company’s operations, and the steps taken to reduce such opposition.” But through ongoing dialogue with company leadership, the shareholders advocating for the review convinced the company to support it, and Newmont itself ultimately asked shareholders to support the resolution. That year, 92 percent of Newmont Mining’s shareholders voted for the resolution, and the company’s Community Relations Review is now a critical part of Newmont’s operations planning worldwide.
As an individual stockholder, you have the opportunity to vote via your annual proxy ballot to support all resolutions calling for better Indigenous Peoples policies. The Interfaith Center for Corporate Responsibility maintains a list of all the resolutions affecting Indigenous Peoples that are filed each year.
Keep in mind that if you own mutual funds, fund managers vote your proxies for you. Ask your mutual fund managers how they vote on Indigenous rights—if you don’t like their answers, it may be time to look for another mutual fund, preferably an SRI fund.
Perhaps more important than voting proxies is to engage with the companies you invest in. Ask your investment managers how they handle corporate engagement, and encourage them to represent your concerns when interacting with companies. You can also write a letter to the CEO or board and ask questions about how the company maintains transparency and addresses shareholders’ concerns about Indigenous rights. Most companies can be contacted through their investor relations websites.
3) Invest in Indigenous communities. According to the United Nations Educational, Scientific and Cultural Organization (UNESCO), the territories of Indigenous Peoples comprise up to 24 percent of the Earth’s land surface, yet these areas harbor 80 percent of the world’s remaining healthy ecosystems. This is not a coincidence. Indigenous practices have been protecting and preserving the natural environment since long before the advent of the modern economy. Indigenous economies are based on taking only what is needed from the land and sharing it equally, ensuring a strong, sustainable and equitable society in which everyone has enough not only to live, but to thrive. There are dozens of community development financial institutions (CDFIs) that work directly with Indigenous communities to create local entrepreneurs, homeowners, and tribal businesses, as well as to develop the infrastructure and knowledge that lead to solid and culturally appropriate governance, legal systems, commercial practices, and community-focused financial management.
The Lakota Funds (lakotafunds.org), for example, are considered one of the grandmothers of the community investment industry. Since their inception in 1986, these community development loan funds have loaned over $6 million, resulting in the creation of 1,235 jobs and nearly 450 businesses on or near the Pine Ridge Indian Reservation in South Dakota. According to a recent study, the Funds have raised the real per capita income of Shannon County residents consistently and significantly throughout a 20-year study period. From their basis in traditional Native values, the Funds have served as the model for connecting capital markets to low-income areas.
By buying shares in Native CDFIs like the Lakota Funds, you are investing in the growth of Indigenous economies and strengthening the capacity of Indigenous communities for self-governance.
If Indigenous Peoples can secure their rights to FPIC, a new precedent will be set for all communities fighting for the right to sovereignty. The shifts that are taking place in the business models of global corporations, and the way they see their social responsibilities, will have lasting impacts on the world’s major industries.
With dedication from shareholders, communities, NGOs, and companies alike, the future global economy will be more equitable, more sustainable, and ultimately more profitable.