This is an English summary of the report “Forholdet mellom konsultasjoner og interessentdialog” (“The relationship between consultations and stakeholder dialogue”), from the Norwegian Human Rights Institution (NIM).
The full report is available in Norwegian here.
States must ensure the right of indigenous peoples to cultural practice, for example to be able to engage in reindeer herding. This is the material protection. In order to ensure the implementation of this right to cultural practice, states must also ensure good and thorough communication (consultations) prior to and during any interventions. That is the procedural protection.
1.Introduction
1.1 Issues
Questions concerning use and exploitation of nature and the impact on indigenous traditional areas have long been central to the relationship between indigenous peoples and states. Many indigenous peoples’ ways of life are characterized by their close connection to nature and the use of natural resources, which therefore is a particularly important precondition for indigenous peoples to be able to practice and further develop their traditional trades and cultures.1ILO Convention 169 on the Rights of Indigenous Peoples refers to indigenous peoples in Art. 1.1 b): “peoples in independent countries who are regarded as indigenous on account of their descent from the populations which inhabited the country, or a geographical region to which the country belongs, at the time of conquest or colonisation or the establishment of present State boundaries and who, irrespective of their legal status, retain some or all of their own social, economic, cultural and political institutions”. Indigenous peoples’ traditional lands are often among the last untouched areas in the world and are increasingly threatened by various types of exploitations of nature such as mining, dam construction, deforestation, the use of pesticides, agricultural expansion and other industrial activities. The international society, through i.a. the UN and ILO has therefore developed special international rules for the protection of indigenous peoples’ rights.
Interference in traditional Sami areas of use challenges the material protection of indigenous peoples’ right to safeguard and further develop their cultural and economic pursuits according to human rights law. In order to ensure practical implementation of this protection, the obligation to consult indigenous peoples, is a key procedural safeguard.
States therefore have an obligation to consult with indigenous peoples in cases of interference in their traditional areas, as well as in development cases, already at the planning stage of such interventions, in order to safeguard indigenous peoples’ right to protection of their culture and livelihoods and to self-determination. The obligation to consult is intended to ensure the practical implementation of the protection of human rights, and it therefore also follows from human rights obligations.2UNGP implementing the United Nations “Protect, Respect and Remedy” Framework, 2011, see https://www.ohchr.org/sites/default/files/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf and OECD guidelines for multinational enterprises on responsible business conduct, revised 2023.
States must therefore ensure the right of indigenous peoples to cultural practice, for example to be able to engage in reindeer herding, which forms the material basis for the culture. In order to ensure the implementation of this right to cultural practice, states must also ensure good and thorough communication (consultations) prior to and during any interventions. That is the procedural protection.
In principle, it is states, and not companies, that have the obligation to consult, as it is states and not companies that have obligations under international law and human rights. Therefore, in recent decades, a number of actors, including the UN and the OECD, have tried to “build bridges” over this “gap” by issuing various guidelines and recommendations on how companies can avoid contributing to human rights violations, among other things.3Ibid. Such guidelines are not legally binding, but many companies adhere to them.
The Norwegian Transparency Act of 2022 and the EU Due Diligence Directive (hereinafter the EU Directive) of 2024 go one step further and make parts of these recommendations into legal obligations for companies.4Directive on corporate sustainability due diligence etc. (CSDDD) 2024/1760. Through these instruments, companies have been given a legal obligation to conduct due diligence assessments with a view to preventing human rights violations in their operations. Such due diligence assessments require that the companies have good knowledge of potential human rights challenges, which in turn requires communication with affected groups, such as indigenous groups. Such communication can take various forms.
For states, communication takes the form of consultations, which must have a specific content and follow specific procedures. For companies, communication with affected groups is often referred to as stakeholder dialogue, and this form of communication can have looser frameworks.
In this report, we discuss the relationship between consultations and stakeholder dialogue, and the extent to which the Transparency Act and the EU Directive impose human rights obligations on companies to communicate with indigenous peoples in encroachment and development cases.
1.2 Further presentation
This report takes a closer look at the two key concepts of consultations and stakeholder dialogue. In practice, these terms are often used interchangeably, and it is not always clear what the difference between them is. In this report, we try to clarify this.
To consult is a verb that recurs in the discussion of the duties of both states and companies. Here we use the term consultations in the sense of indigenous peoples’ law. This is a concrete process that states are obliged to carry out in good faith with a view to reaching agreement on issues that affect indigenous peoples. Stakeholder dialogue refers to the companies’ dialogue with stakeholders in connection with its due diligence assessments. This may include consultations but may also have a narrower or broader content than consultations.
The report first discusses (in section 2) consultations in light of relevant human rights, international and national rules. The discussion also includes a review of the concept of free prior and informed consent (FPIC), which is used as both a legal and non-legal concept in connection with consultations and due diligence.
Furthermore, the concept of stakeholder dialogue is discussed (in section 3) in light of the Transparency Act and the guidelines for companies (from the UN and OECD) to which the Transparency Act refers. The concept is also discussed in light of the rules on due diligence in the EU Directive.
Section 4 is an analysis of the companies’ legal obligations in accordance with the rules that have been reviewed. One question is to what extent a legal obligation under the Transparency Act can be derived for companies to consult in development and intervention cases. The discussion concludes that the Transparency Act, through its obligation to carry out due diligence assessments, implicitly imposes a legal obligation on companies to conduct stakeholder dialogue. However, such an obligation is not equivalent to the authorities’ obligation to consult. The question of who the subjects of obligation and rights are according to the rules on consultations and stakeholder dialogue is part of this issue.
Section 5 is a brief summary of the conclusions, as well as recommendations for companies.
Section 2–4 are only available in Norwegian. Section 5 is available in english below.
5. Summary and recommendations
5.1 Summary of the conclusions
The Transparency Act and the EU Due Diligence Directive contain legal obligations for companies to carry out due diligence assessments. Such due diligence assessments are based on instruments that are not legally binding, namely the UNGP and the OECD’s various guidelines. The standards that companies must use as a basis for their due diligence assessments, human rights, are binding, but only for the states. Neither the Transparency Act nor the EU Directive establish legal obligations for companies to comply with substantive human rights.
The human rights obligation of states to consult with indigenous peoples is a procedural obligation. The purpose of this obligation is to ensure the material protection of indigenous peoples. Companies do not have a similar/corresponding human rights law obligation as the states have. However, companies have a legal obligation to carry out due diligence assessments, which is also a procedural obligation. The question of the extent to which companies’ obligation to carry out due diligence also entails an obligation to ensure compliance with human rights is unclear. Neither the Transparency Act nor the EU Directive explicitly impose such an obligation on companies.
When Section 4 of the Transparency Act imposes an obligation to carry out due diligence assessments, it implicitly follows an obligation to conduct stakeholder dialogues where necessary to obtain sufficient information to be able to assess the risk of human rights violations. There is, however, no explicit requirement for stakeholder dialogue in the Transparency Act, while the EU Directive has such an explicit requirement.
It cannot be inferred from the obligation of stakeholder dialogue that the Transparency Act or the EU Directive constitute an obligation to consult (according to indigenous peoples’ law) for the companies. If companies follow the OECD’s guidelines on stakeholder dialogue with indigenous peoples in interference cases, the difference between stakeholder dialogue and consultations will probably still be small in practice.
5.2 Companies should follow the guidelines
While the difference between legal obligations on the one hand and recommendations on the other may be unclear, companies should follow the guidelines discussed above. As required by the Transparency Act, due diligence assessments must be carried out in accordance with the OECD Guidelines. The preparatory works for the Act also refer to the OECD’s Due Diligence Guide from 2018, which provides detailed recommendations on how companies should proceed. In addition, the OECD has published sector-specific guides, which are even more detailed in providing advice on how stakeholder dialogues should be conducted. In this paper, we have, among other things, highlighted the OECD’s Guide for Meaningful Stakeholder Dialogue in the Extractive Industries, which has detailed recommendations, particularly for local personnel and management of the extraction operations, on, among other things, stakeholder dialogue with indigenous peoples.
The OECD Guidelines have incorporated the UN Guiding Principles on Business and Human Rights (UNGP). The UNGP has its own reporting framework, published in 2015, which is intended to help companies clarify the potential impact of their own activities on human rights.5UN guiding principles reporting framework, see https://www.ungpreporting.org/ In addition to a system for identifying possible human rights challenges in the individual company’s operations, the tool contains a table where the list of fundamental human rights and labour rights is made available.
Companies should follow the above-mentioned guidelines and recommendations that form the basis for the Transparency Act’s due diligence obligation, and in this way, avoid possible complicity in violations of the rights of indigenous peoples. Due diligence assessments can also avert any reputational damage or demanding legal processes.
5.3 Companies can help strengthen indigenous peoples’ capacity for stakeholder dialogue and consultations
Companies should be aware of the often-vast gap in available resources in a stakeholder dialogue between a company and an indigenous group. For many indigenous groups invited to dialogue or consultations, such processes are very demanding in terms of both time and money. In many cases, it will be necessary to familiarize oneself with complicated case law that often necessitates discussions concerning legal rules (both in property law and human rights) and the use of lawyers. Although it is the state authorities that ultimately have the human rights obligation to ensure that consultations are real and effective, companies can also make a significant contribution to this to a large extent, through targeted use of resources to strengthen such processes.
5.4 Actual violations cannot be mitigated through consultations and stakeholder dialogue
Regardless of whether consultations or stakeholder dialogue have taken place in accordance with laws and/or recommendations, it will be necessary to assess whether there are material violations of the rights of indigenous peoples. Although it will often be more obvious to establish a violation where stakeholder dialogue or consultations have not been satisfactorily conducted, consultations alone are not sufficient to prevent violation. In the Fosen case, the Supreme Court pointed out that whether and to what extent the minority has been consulted cannot be decisive, if the intervention is of such a nature that it leads to significant negative consequences for the opportunity to practice culture.
Both the right of consultation and the right to cultural practice are independent rights of indigenous peoples. Consultations and stakeholder dialogue are procedural tools in the effort to avoid human rights violations. Companies should therefore familiarize themselves with the substantive law of indigenous peoples, both the international instruments themselves, and how they are interpreted and applied by international bodies and by the Supreme Court of Norway.6See also the report Human Rights Protection against Interference in Traditional Sami Areas – NIM.
“If the consequences of the interference are sufficiently serious, consultation does not prevent violation. On the other hand, it is not an absolute requirement under the Convention that the minority’s participation has contributed to the decision, although that, too, may be essential in the overall assessment”.
Para 121 in the Supreme Court’s Judgment in the Fosen case.