Corporate social responsibility local people and multilevel governance
Corporate social responsibility, local people and multilevel governance of natural resources in the Russian North Minna Pappila, LL. D. University of Turku, Faculty of Law 2017
� Learning diary about all lectures � http: //www. helsinki. fi/asia/Appendix/learning_diary. pdf � summarize, analyze and comment � It’s the student’s own analysis and insights that count � Home exam (given at the last lecture by Tysiachniouk) � Teachers: � Minna Pappila, LL. D. postdoctoral researcher, environmental law, University of Turku � Katya Bricyna, doctoral student, faculty of law, University of Lapland � Maria Tysiachniouk, Ph. D, researcher, CISR, St. Petersburg & Wageningen University, Netherlands
Coming in this part… �(Generally about Russian env. Governance) �CSR & soft law instruments �Russian legislation on indigenous peoples & natural resources (OIL) �Forest law & certification
CSR, local people & multilevel governance of natural resources in the Russian North
The many faces of corporate social responsibility �Includes social & environmental responsibility � Part of sustainable development �Voluntary vs. law-based responsibilities �Including…? � Obeying laws, paying taxes, taking care of employees… � Philanthropy � Participatory rights � Responsibility for the whole chain of production subcontractors, origin of raw materials…
CSR defined by the EUropean commission �The Commission defines corporate social responsibility as “the responsibility of enterprises for their impacts on society”. �To fully meet their social responsibility, enterprises “should have in place a process to integrate social, environmental, ethical human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders”.
Why should a company behave responsibly? �What is pushing enterprises? Law? Ethics? Money? Reputation? Greenwashing? �Is obeying laws enough? �What is CRS? http: //www. youtube. com/watch? v=E 0 Nk. Gt. NU_9 w � ”It’s about how you earn the money, not how you spend it…”
Enterprises and international law � Business enterprises do not have general obligations under international HR law � National law: some countries have implemented certain international criminal law offences into national legislation (e. g. Belgium, Canada, Netherlands, UK) � Shell in a Dutch court: a test for holding multinational companies responsible for alleged offences at foreign subsidiaries � http: //www. bbc. com/news/world-africa-21258653 � The court backed Shell's argument that the spills were caused by sabotage and not poor maintenance of its facilities, as had been argued by the Nigerians
Companies & soft law �First attempts to regulate: � OECD Guidelines for MNEs 1977 (partly against nationalizations of foreign enterprises) � ILO Tripartiate Declaration of Principles Concerning MNEs 1978 � Draft UN Code of Conduct on Transnational Corporations 1983 Did not lead to binding rules �In 1980’s and 1990’s the emphasis was on facilitating capital movements and investments � E. g. NAFTA, MAI, WTO…
Towards self-regulation �Developed countries and MNEs opposed global regulation of MNEs �A new rise of CSR + a new concept: self-regulation => voluntary codes of conduct � Company codes � Trade association codes � Multi-stakeholder codes � Model codes � Intergovernmental codes �Usually no independent monitoring �No dispute settlement mechanism
CSR soft law in the 2000 s �UN Global Compact (2000); �OECD 2000 Guidelines for Multinational Enteprises (updated in 2000) (national contact points); �EITI (Extractive Industries Transparency Initiative) � Russia not a member � Not disclosing information about the wealth from e. g. oil production can increase the risk of distrust, weak governance and conflict. � Openness about how a country manages its natural resources is necessary to ensure that the resources benefit all citizens.
Initiatives within UN � Norms on the Responsibility of Transnational Corporations and Other Business Enterprises with regard to the Human Rights, 2003 � NOT ACCEPTED! � Developed by UN Sub-Commission on the Promotion and Protection of Human Rights � Would have created binding human rights obligations to enterprises � UN Guiding Principles for Business and Human Rights (2011) � Non-binding, concerns all enterprises 1. State duty to protect HR 2. Companies duty to respect HR 3. Access to remedies � In 2014 UN Human Rights Council established establish an intergovernmental working group on transnational corporations and other business enterprises with respect to human rights, � mandate to elaborate an international legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises � NOT SUPPORTED BY DEVELOPED COUNTRIES
OIL & indigenous peoples in Russia
Russia & oil & gas �Russia is the 2 nd- largest gas producer and 3 rd-largest oil producer in the world. �Oil and gas revenues account for more than ½ of the federal budget revenues. �Oil and gas sales accounted for 68 % of Russia’s total export revenues in 2013 http: //www. eia. gov/todayinenergy/detail. cfm? id=17231
Environmental & social costs � Oil spills on land & water ways, pipelines, gas flaring… � Poisoning water, fish and game, cutting migatory routes of reindeer & wild animals � ” According to the Komi Prosecutor’s Office, as many as 89 spills have been registered in the region between 2011 and 2013. Some of these spills have had irreparable consequences on nature” � http: //barentsobserver. com/en/nature/2013/06/spilled-oilcovers-tundra-rivers-14 -06 � GP & oil spills: http: //www. greenpeace. org/international/en/campaigns/clima te-change/arctic-impacts/The-dangers-of-Arctic-oil/Black-ice-Russian-oil-spill-disaster/
Should these problems concern us? ? ?
Neste Oil says: “The best fuel comes from nearby” About 80 % of oil used in Finland comes from Russia
Indigenous people � It is estimated that there are more than 370 million indigenous people spread across 70 countries worldwide. � indigenous people make up 5% of the world’s population, and � from 10% (according to the World Bank) to 30% (says the UN) of the world’s poorest people. � There is no formal definition of the term ”indigenous people” � Practicing unique traditions, they retain social, cultural, economic and political characteristics that are distinct from those of the dominant societies in which they live � About the rights of IPs by UN: https: //www. youtube. com/watch? v=g 6 FYyum. RYw. I � SHOULD THE RIGHTS OF INDIGENOUS PEOPLES BE PROTECTED? WHY?
Indigenous peoples of the Russian North �Minority indigenous groups account for 400 000 people (less than 0, 3 % of the Russian population) �http: //www. youtube. com/watch? v=q. BNv 3 Ks 7 ovs (Yuri Vella’s world) �They are typically among the poorest and most short- lived citizens of the Russian Federation. �Territory where they traditionally live covers about 60 % of the Russian Federation. �Most of the oil and gas deposits are found in those northern areas where the indigenous peoples of Russia live.
� From: http: //econ. la. psu. edu/~bickes/russoil. pdf
About the regulation of indigenous peoples rights & natural resources 1. International conventions � Ratified by Russia / not ratified by Russia 2. Russian legislation (e. g. environmental legislation, legislation natural resources, on indigenous people) 3. International state soft law, e. g. 4. � UN Declarations � OECD recommendations International non-state soft law /private law, e. g. � Requirements of International Financial Institutions, e. g. ERBD, World Bank � https: //www. youtube. com/watch? v=Llqb. GZGk 4 NU (see at. 6: 00 min) � Certification systems: FSC, Equitable Origin 5. Codes of conduct and CSR policies of oil enterprises
Two types of rights related to environmental rights & indigenous peoples rights �Substantive rights � Rights-based approach � E. g. (individual) right to life, right to a healthy environment, (collective) right to resources / land �Procedural rights � E. g. Aarhus Convention (1998): 1. Access to information 2. Public participation /projects 3. Access to justice => credibility, effectiveness and legitimacy
International protection of the rights of indigenous peoples � E. g. The ILO Convention No 169: Convention concerning Indigenous and Tribal Peoples in Independent Countries (Entry into force: 05 Sep 1991) � Russia (and Finland) have not ratified � Art. 14: The rights of ownership and possession of the peoples concerned over the lands which they traditionally occupy shall be recognized. (…) � Art. 16. 2: Where the relocation of these peoples is considered necessary as an exceptional measure, such relocation shall take place only with their free and informed consent. Where their consent cannot be obtained, such relocation shall take place only following appropriate procedures established by national laws and regulations, including public inquiries where appropriate, which provide the opportunity for effective representation of the peoples concerned.
Russian legislation on environmental protection & the use of natural resources
Russian legislation on environmental protection & the use of natural resources � Constitution of The Russian Federation (December 12, 1993) stipulates that � “Land natural resources are utilized and protected in the Russian Federation as the basis of life and activity of the peoples living on corresponding territories”. (art. 9. 1) � “Everyone shall have the right to favorable environment, reliable information about its state and for a restitution of damage inflicted on his health and property by ecological transgressions. ” (art. 42) � “The Russian Federation shall guarantee the rights of the indigenous small-numbered peoples according to the universally recognized principles and norms of international law and international treaties and agreements of the Russian Federation” (art. 69). � Land Code (No. 136–FZ, 2001) � Act on Subsoil (No. 2395 -1, 1992)
Legislation on environmental protection & the use of natural resources �Act on Environmental Protection (No. 7 -FZ, 2002) �Act on Ecological Expertise (no. 174 -FZ, 1995, hereinafter EE Act) � Decree on the Procedures for Assessment of the Impact of a Proposed Commercial or Other Activity on the Environment (Prikaz Goskomekologii No. 372, 2000, = EIA Decree) �Water Code (No. 74 -FZ, 2006) �Forest Code (No. 200 -FZ, 2006) �Act on Fauna (No. 52 -FZ, 1995)
Act on Subsoil �Subsoil is owned by the state � may not be sold, but may be leased etc. �Act on Subsoil regulates both � 1) the exploration & extraction of subsoil resources and � 2) building underground facilities �Exploitation of subsoil may be restricted or prohibited for the reasons of national security or environmental protection � Near dwellings or cities or industrial areas may be restricted if threatens life or health of people � On nature protection areas only according to the status of area � 1) Right to use subsoil 2) license
Right to use subsoil � Based on a competition or auction � The exploration and production licenses are issued by the Federal Agency for Subsoil Use, Rosnedra or its regional office (16 §). � And regional authorities issue for subsoil resources of local importance � Right to use subsoil may be issued for a certain period or for an unlimited time (10 §) � Max 1 year for short-time exploitation of mineral resources (e. g. sand) � Max 5 or 10 years for exploration � Max 25 years for the use of ground water � For the time period needed for rational use of mineral resources (e. g. oil) � For unlimited time for building underground facilities (not related to mineral resources)
Subsoil licences �First “federal expert review” (29 §) �Licenses include e. g. obligations to meet certain annual production targets and to keep pollution within specified limits. �The main Russian supervisory authority in the field of environmental protection, Rosprirodnadzor, is acting as a supervisory authority of subsoil licenses.
Act on Subsoil & participation �The Act on Subsoil does not include any procedures for public hearings or other forms of participation � E. g. no beforehand information to local people about oil and gas exploration work �Act on Subsoil does not grant special rights to local or indigenous peoples. � Minorities are mentioned in section 4 paragraph 10, where the law defines the jurisdiction of regional authorities: protecting the interests of minorities, the rights of users of mineral resources and the interests of the citizens, and the resolution of disputes on subsoil use falls under regional jurisdiction.
Legislation concerning indigenous peoples’ rights related to use of natural resources
Two main Russian laws on the rights of the indigenous peoples �Act on the Guarantees of the Rights of Indigenous Small-numbered Peoples of the Russian Federation(No. 82 -FZ, 1999) � hereinafter Act on Guarantees �Act “On the territories of traditional use of natural resources of the small-numbered indigenous people of the North, Siberia and the Far East of the Russian Federation” (No. 49 -FZ, 2001) � hereinafter Act on Territories
The Act on the Guarantees of the Rights of Indigenous Small-numbered Peoples of the Russian Federation(No. 82 -FZ, 1999) �The Act on Guarantees includes the definitions of a small-numbered indigenous people, traditional livelihoods and a territory of indigenous people. � Indigenous people are those � a) living in the areas of traditional settlement of their ancestors, � b) preserving their traditional way of life, livelihoods and crafts, � c) consisting of less than 50, 000 people, and � d) considering themselves separate ethnic communities
The Act on Guarantees… �Declares the right of indigenous people to govern and use their traditional territories free of charge. �Proclaims certain participatory rights and the right to compensation when indigenous people have to move away from their traditional territories. �These rights remain, however, mainly declaratory, because the Russian legislation � either lacks the enforcement decrees or � in some cases other federal laws even contradict the rights declared in the Act of Guarantees.
E. g. Land Code vs. Act on Guarantees � Land Code: e. g. about ownership, selling, restrictions, land categories � According to article 7. 3 of the Land Code it is possible to establish a special land use regime at the places of traditional residence and livelihoods. � “At the places of traditional residence and economic activity of small-numbered indigenous peoples of the Russian Federation and ethnic communities in the cases stipulated by federal laws, laws and other regulatory legal acts of Russian regions, regulatory legal acts of local government bodies a special legal regime may be established for the use of land of the said categories. ”
About the Land Code �However, the Land Code no longer includes a specific stipulation about a right to acquire such a plot of land free of charge. The right to free and non-competitive access to land was abolished from the Land Code in 2004. � Section 97 of the Land Code states that the use of the natural resources of such a territory must be regulated by a federal act, but such an act has not been adopted, and the situation remains unclear. �(Except for the Act on Territories, but it is not enough)
Right to pursue traditional livelihoods, e. g. fishing � There are special laws concerning the use of certain natural resources such as game and fish. Since amendments to the Act on Fauna (No. 52 -FZ, 1995) were made in 2008, access to fishing grounds has been severely restricted. � The indigenous peoples used to have priority access to fishing waters. � Since the removal of this priority provision, fishing rights have been allocated in auctions. � As indigenous communities and individuals do not have � enough money to win auctions and � often do not even get the information about auctions, the commercial bidders hunt down the best fishing areas.
�According to the law, indigenous people would still have the right to fish there if they are able to show that they belong to an indigenous minority. �E. g. in Sakhalin indigenous peoples have a right to fish 10 kg of salmon annually � Not enough to earn your living in an remote area
The Act on Territories (2001) �This law aimed at implementing the Act on Guarantees is the Act on Territories. �By way of enacting the federal Act on Territories the Russian legislator sought to further substantiate the rights of indigenous people by regulating the ability to establish territories of traditional use of natural resources. �Established by the federal government (federal level territories) or regional or municipal authorities � Federal / regional / local level territories � Defines boundaries & the ‘legal regime’ = the rules
The Status of Territories of trad. use �The land may be taken for federal/municipal purposes replaced with another similar area (12 §) �The use of natural resources in the territory is allowed also for others, if it is not in conflict with the legal regime of the territory (13 §) �There are no rules about negotiations, FPIC etc. ! the Act on Territories also remains mainly declarative, and implementation has been deficient. �Intentional (land use policy) or unintended (messy law-making)?
Lack of Implementation �The government of The Russian Federation has not established any such territories of federal level � there have been several initiatives made by indigenous peoples’ associations and individuals. �The Ministry of Economic Development has always responded that it is not possible to establish such territories since the relevant enforcement decrees have not been passed. . . �Appeals to courts have been made several times, but the indigenous peoples have never won
Implementation on regional level � Several regions have enacted laws or government decrees concerning territories of traditional use of natural resources. � Very few regions have actually established such territories. � There are some regional-level territories of traditional use of natural resources: � in the Nenets Autonomous Okrug (region) (NAO), Khanti- Mansiyski Autonomous Okrug (KMAO) and the Taimyr autonomic region. � The main reason for the limited number of regional-level territories might be that their status is vague � because their relationship with other legislation is unclear. � Region may own the land, but the federal state owns e. g. subsoil resources � The same concerns local level territories, on which only one regional decree has been enacted, namely in the Republic of Saha (Yakutia)
Implementation on regional level � Regional legislation in Khanti-Mansi AO, Yamal-Nenets AO and Nenets AO about obligation to negotiate agreements btw enterprises and indigenous communities (mainly compensations) � Not always fair negotiations � There are many licenses for industrial extraction of natural resources on the regional level territories of traditional use � Indigenous peoples are in a very different position in different regions depending on, for example: � regional legislation, � role of regional authorities, � good-will of enterprises, � involvement of foreign banks, � activities of their own representatives
Indigenous rights - summary Positive Negative �Federal legislation on � Federal legislation on ind. p. is often not implemented – indigenous peoples already more than 10 years �Regional legislation on passed ind. peoples � Other legislation has diminished their rights: �Some regional areas of leasing out trad. lands and traditional use of natural fishing/hunting rights resources established � Use of traditional land for �Indigenous issues are on industrial purposes is federal agenda increasing
Other aspects of the Russian policy towards indigenous peoples
Raipon & federal politics on natural resources � RAIPON – Russian Association of the Indigenous Peoples of the North � An umbrella organization which organizes 35 regional and ethnic organizations of indigenous peoples in the regions where they live � participates in the Arctic Council as a permanent participant & the United Nations Economic and Social Council with a special consultative status � The activities of RAIPON were halted on November 1, 2012, by Resolution Number 2332 -r of the Russian Ministry of Justice. http: //www. iwgia. org/news/search-news? news_id=710 In March 2013 Ministry of Justice gave a permit to continue its activities In April 2013 election of new RAIPON president & struggle for land use rights � http: //barentsobserver. com/en/politics/2013/04/moscow-stagedraipon-election-thriller-03 -04
�Problems in international cooperation �E. g. in participating in UN World Conference on Indigenous Peoples http: //www. iwgia. org/news/search-news? news_id=1082 �http: //vimeo. com/48790657 � Foreing agents? http: //www. iwgia. org/news/searchnews? news_id=1139 �… we have received orders. In each subject of Russia, foreign agents must be identified and registered. We invite you to register purely voluntarily. . . Because you are the only ones who somehow pass off as agents. . .
What about soft law protecting the rights of local people? UN Guidelines, Codes of conduct, Certifications, …
UN soft law on Indigenous Peoples and Human Rights � The UN Declaration on Rights of Indigenous Peoples � Adopted by the General Assembly in 2007 � 4 votes against (Australia, Canada, New Zealand the United States) and 11 abstentions (e. g. Russia). � Free, prior and informed consent (FPIC) highlighted � Akwé: Kon Guidelines � Based on art. 8 j of the Convention on Biological Diversity � Voluntary Guidelines for the conduct of Cultural, Environmental and Social Impact Assessment regarding developments on indigenous … lands. � UN Guiding Principles on Business and Human Rights � Endorsed in 2011 by UN HR Council
”The Ruggie principles” � 2011 the United Nations Human Rights Council adopted the Guiding Principles for Business and Human Rights � the first global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity �not only states are responsible for protecting human rights � The guiding principles call for business enterprises to seek “to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts”. � http: //www. ohchr. org/Documents/Issues/Business/ A-HRC-17 -31_AEV. pdf
�Also, enterprises should have in place a human rights due-diligence process to identify, prevent, mitigate and account for how they address their impacts on human rights. http: //www. theguardian. com/sustainable- business/video/jo-confino-talks-to-john-ruggie-unhuman-rights-video �Critics towards the principles: not enough participation of civil society = affected communities and NGOs http: //web 2. law. buffalo. edu/faculty/meidinger/sch olarship/melish-meidinger. pdf
UN Guiding Principles on Business and Human Rights �GP is a ”global standard of expected conduct” � Concerns all internationally recognized HRs �GP: Enterprises have a duty to respect � To do no harm, but also � to be active: seek to prevent and mitigate HR abuses directly linked to their operations/products/services by their business relationships … even if they have not contributed to those impacts. � e. g. business partners, entities in their value chain
Due diligence �Due diligence exercises to identify legal, political, environmental or social risks related to e. g. projects or investments �HR due diligence � An ongoing management process Identification/assessment of actual & potential HR impacts at an earliest feasible stage 2. Appropriate action 3. Tracking and reporting 1. �Varies from case to case
Leverage �Leverage (influence, authority) �Does the enterprise have ability to effect change? �How crucial the relationship is to the enterprise? �Severity of the abuse? �Would terminating the relationship have adverse HR consequenses?
A voluntary certification standard - the Equitable Origin Standard � The EO 100 TM Standard was approved in 2011 http: //www. equitableorigin. com/home/ � the first oil and gas operation certified in Colombia with the EO 100 TM Standard in the end of 2013 � The Standard includes 6 principles each including several provisions 1. 2. 3. 4. 5. 6. Corporate governance, accountability and ethics, Human Rights, Social Impact & Community Development, Fair Labor & Working Conditions, Indigenous People’s Rights, Climate Change, Biodiversity and Environment , Project Life Cycle Management.
� Principle 4 includes the following provisions: � 4. 1 Free, Prior & Informed Consent (FPIC), � 4. 2 Engagement and Participation, � 4. 3 Cultural Impacts, � 4. 4 Voluntary Isolation, � 4. 5 Use of Traditional Natural Resources, � 4. 6 Culture-Based Intelligence, � 4. 7 Transparency and Disclosure. � Free, prior, informed consent: Operator shall obtain the FPIC of the affected communities of Indigenous Peoples when the proposed project is on or may affect lands … under the customary use of Indigenous Peoples. ” � The operator “shall undertake a process of fair representative and non-discriminatory engagement and consultation with potentially affected communities of Indigenous Peoples” � Not quite fulfilled in Russian legislation, but see: � Regional legislation? � http: //barentsobserver. com/en/node/22489 �
World bank and other international financial corporations � E. g. Equator Principles (updated in 2013) � = a set of principles and standards adopted by more than 70 public and private financial institutions to manage environmental and social risks in project financing � Protect procedural rights & impact assessments � Substantive Standards: � The EPs do not address many critical human rights issues, and address others in ways that do not meet international standards � Due Diligence Procedures: � The EPs do not provide an adequate procedural framework for conducting human rights due diligence � Although the EPs require a comprehensive environmental and social assessment for high-impact projects, they do not require explicit assessment of potential impacts on human rights
The International Finance Corporation Performance Standards on Social and Environmental Sustainability
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