New research looks at the advantages of building renewable energy projects that respect Indigenous Peoples’ rights and transformative new business models.

As several renewable energy projects come under scrutiny for failing to respect the rights of Indigenous Peoples, new research published today (15 October 2024) demonstrates viable alternatives to business models that cause harm and continue to plague the sector.

Co-authored by the Business & Human Rights Resource Centre (BHRRC) and Indigenous Peoples’ Rights International (IPRI), this new report explores the case for an energy transition that centres Indigenous Peoples’ rights, priorities and prosperity, as determined by them, with a particular focus on fair and equitable benefit sharing and co-ownership models. It highlights the potential benefits of these shared prosperity models, as well as the challenges and risks related to them.

While benefit-sharing can include a wide range of arrangements, this report focuses on Indigenous Peoples' equity co-ownership, i.e. models where Indigenous Peoples have an equity stake in a renewable energy project.

Drawing on over 40 interviews with Indigenous Peoples, investors and renewable energy companies, key takeaways from the research included:

• Fair and equitable benefit-sharing models provide direct and mutually agreed benefits to Indigenous Peoples, negotiated and set out in binding contracts. These are distinct from Corporate Social Responsibility (CSR) initiatives that are based on voluntary economic and social in-kind contributions.
• Benefit-sharing does not replace the need for independent impact assessments, free, prior and informed consent (FPIC), compensation and redress, or other rights. Companies and states must ensure the right to FPIC is respected throughout the life cycle of renewable energy projects, including those that include co-ownership, as well as customary land rights and Indigenous Peoples ‘no-go zones’. Any benefit-sharing agreement is premised on the collective consent of affected Indigenous Peoples.
• Examples of co-ownership models in which Indigenous Peoples take equity stakes in renewable energy projects are on the rise globally, driven by the interest of some Indigenous Peoples, the scale of renewable energy ambitions by governments, companies’ and investors’ interest in stable investment environments, and an increasingly common requirement of Indigenous Peoples participation in public utility tenders for renewable energy developers.
• In any benefit-sharing negotiation and/or project implementation, Indigenous Peoples must have: the ability to fully assess social and financial risks of the transaction; robust governance and decision-making processes; and financial capacity, and there must pre-conditions for rights-respecting processes and outcomes.
• Establishing effective co-ownership models requires significant up-front time investment from the private sector, as well as staff capacitation. Company policies and practices must reflect flexibility and commitment to achieving fair and equitable outcomes with Indigenous Peoples partners.
• Investors in renewable energy projects must also ensure respect for Indigenous Peoples’ rights, including requiring evidence of FPIC from their investee companies, and if FPIC is granted, fair and equitable benefit-sharing.

While there is no one-size-fits-all model of benefit sharing with Indigenous Peoples, the private sector and states must commit to three key Just Energy Transition Principles: shared prosperity, corporate human rights due diligence and fair negotiations. This requires ensuring there are conditions for Indigenous Peoples to be equals in negotiation, design and project implementation – beginning from respect for their rights.

Joan Carling, Executive Director, Indigenous Peoples Rights International-IPRI, said: “The global energy transition poses both opportunities and risks for Indigenous Peoples, as our lands and resources are key targets for this shift. Respecting and protecting our rights is non-negotiable. Indigenous Peoples are leading the fight against the climate crisis and must be recognised as invaluable and equal partners in the transition to renewable energy, with our rights and perspectives fully respected”.

“To date, investment in our territories has been largely predatory, harmful and extractive.  Examples included in this report demonstrate that there is another way, through true commitment by the private sector to benefit sharing, premised on the right of Indigenous Peoples to free, prior and informed consent and our self-determined development goals.”

Ana Zbona, Co-Head of Civic Freedoms & Human Rights Defenders Programme, Business & Human Rights Resource Centre, said: “Co-ownership business models can present a better alternative to currently prevailing extractive business models, even as they come with their own risks. Developing renewable energy projects that contribute to shared prosperity at scale will require some rethinking of traditional, transactional approaches of the private sector. But it is not only possible to do so, as demonstrated by this report, under some conditions, has the potential to come with multiple advantages to Indigenous Peoples, companies, their investors – and to climate change mitigation and the future of the just energy transition.”

//ENDS

Note to editors:

• The Business & Human Rights Resource Centre is an international NGO that tracks the human rights impacts (positive and negative) of more than 10,000 companies across nearly 200 countries.
• Indigenous Peoples Rights International (IPRI) is a global Indigenous Peoples organization that works to protect Indigenous Peoples’ Rights, and unite and amplify the call for justice to victims of criminalization and impunity.
• Shared prosperity models & Indigenous Peoples’ leadership for a just transition: News and resources exploring the significant opportunity of Indigenous co-ownership of renewable energy projects, for an energy transition that is fast, just and equitable.
• Declaration of Indigenous Peoples’ Participants in the Conference on Indigenous Peoples and the Just Transition: In April 2024, 87 Indigenous Peoples representatives published a declaration highlighting the central importance of the global shift towards renewable energy – but calling out the catastrophic failure to respect the rights of Indigenous Peoples thus far and the damage this is causing to people and the planet.

Media contacts:

Kate Bermingham, Media Officer, Business & Human Rights Resource Centre, [email protected]

Adazahira Chavez Perez, Communications Coordinator, Indigenous Peoples Rights International (IPRI), [email protected]