{"id":74129,"date":"2022-11-17T13:40:58","date_gmt":"2022-11-17T18:40:58","guid":{"rendered":"https:\/\/www.riacanada.ca\/?p=74129"},"modified":"2023-10-02T09:16:21","modified_gmt":"2023-10-02T13:16:21","slug":"indigenous-rights-and-reconciliation-are-material-how-can-investors-support-due-diligence","status":"publish","type":"post","link":"https:\/\/www.riacanada.ca\/wordpress\/magazine\/indigenous-rights-and-reconciliation-are-material-how-can-investors-support-due-diligence\/","title":{"rendered":"Indigenous Rights and Reconciliation are Material: How Can Investors Support Due Diligence?"},"content":{"rendered":"\n

Investors across the country recognize the importance of ensuring Canada\u2019s transition to a net-zero economy distributes the benefits and challenges fairly among Canadians\u2014often referred to as a Just Transition. At the center of the discussion are Canada\u2019s Indigenous peoples, who have historically been excluded from the benefits of Canada\u2019s economic successes, while also bearing the brunt of its environmental and social fallout. For investors today, this translates to Indigenous rights and reconciliation risks and opportunities related to their investments. 
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With Canada\u2019s mining sector expected to grow to meet demand<\/a> for the minerals and metals to green the world\u2019s infrastructure, investors have to evaluate how companies are considering Indigenous reconciliation and rights issues in the near term. For example, as recently as October 2022<\/a>, an Australian company walked away from two mining projects in Quebec due to opposition from the Kebaowek First Nation. There are various ways that these are material to investors, making improvements to related disclosures from issuers essential.
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Why Corporate Disclosures on Indigenous Rights and Reconciliation Are Material
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The moral case for ensuring Indigenous communities and their lands are treated appropriately is clear and self-evident for investors of all types; the Truth and Reconciliation Commission<\/a> provides a historical account of past and ongoing atrocities committed against Indigenous peoples. The \u201cbusiness case\u201d for investors is also substantial. It includes several key considerations:
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  1. Delays<\/strong> – delays on large mining projects from failing to account for the impact of development on and near indigenous lands can cause major financial losses. Perhaps one of the most famous examples is the Dakota Access Pipeline<\/a> (DAPL), originally estimated to cost $3.8 billion USD, which ended up costing the Energy Transfer Partners (ETP) closer to $7.5 billion. In its own court filings from the period, ETP estimated a year\u2019s delay on the project would cost $1.4 billion, and even a temporary delay at $430 million, with demobilization costs alone $200 million. <\/li>\n\n\n\n
  2. Public perception and partnerships <\/strong>– during the DAPL case, over $5 billion<\/a> was divested from banks which funded the pipeline. Individual account holders, Indigenous tribes, and cities such as Seattle divested from Wells Fargo and other banks over concerns about the lack of responsiveness to Indigenous claims. <\/li>\n\n\n\n
  3. Share prices <\/strong>– when it became clear via a lawsuit from the B.C. Court of Appeal that Minera San Rafael, a subsidiary of Pan American Silver operating in Guatemala, was not disclosing opposition from the local Indigenous Xinca communities, share prices fell<\/a> from $27 to $5.<\/li>\n\n\n\n
  4. Lawsuits<\/strong> – A string of lawsuits<\/a> resulted from the above case, along with the suspension of the mining activities by the Guatemalan court. Legal disputes continue beyond Canada\u2019s borders<\/a>, with ongoing attention to international<\/a> subsidiaries headquartered in Canada. <\/li>\n<\/ol>\n\n\n\n

    Many investors may still require guidance on how to ensure these issues are reflected in a company\u2019s disclosures and in their investment decisions.
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    Approaches to Improving Indigenous Rights and Reconciliation Disclosures
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    A key step for many investors to consider is company Reconciliation Action Plans. These plans lay out clearly and publicly an organization\u2019s goals and roadmap for how they will engage and collaborate with Indigenous communities, often in the context of key frameworks, including:
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