Free, Prior and Informed Consent (FPIC): Mark Podlasly in Conversation
Clio Straram, Head, Indigenous Banking at BMO, sat down with Mark Podlasly, Chief Sustainability Officer, First Nations Major Project Coalition, to discuss Free, Prior, and Informed Consent (FPIC).
In this episode:
What is FPIC, and what are the new standards?
How can First Nations, Federal Government, and Industries work together to operate profitability?
How does Canada fare compared to other countries?
What’s next for FPIC, and where do we go from here?
... 140 First Nations across this country are wanting development in their territories as long as it's on the terms of the nation's values and economic direction. It is self-determination that these nations are after. These nations want to see projects that benefit them as much as they benefit industry and government.
Welcome to Sustainability Leaders. I'm Michael Torrance, chief Sustainability Officer with BMO Financial Group. On this show, we will talk with leading sustainability practitioners from the corporate, investor, academic, and NGO communities to explore how this rapidly evolving field of sustainability is impacting global investment, business practices, and our world.
The views expressed here are those of the participants and not those of Bank of Montreal, its affiliates, or subsidiaries.
Mark Podlasly, Chief Sustainability Officer, First Nations Major Project Coalition, board member Hydro One in Ontario, Chair First Nations Limited partnership, and member of Nlaka'pamux Nation in BC. Mark has over 25 years of experience in the development of capital projects connected to energy, natural resources, and community infrastructure around the world. In addition, Mark informs and indigenous governments on the establishment of sovereign wealth funds and trusts to capture and invest revenue from resource extraction industry. He currently manages a 78 million investment fund shared by eight First Nations in BC, and Mark holds a master's degree from Harvard University and is a co-host of next year's First Nations Major Projects Coalitions' indigenous and industry conference in Toronto on April 22nd and 23rd. Welcome, Mark. So happy to have you here today. Thank you for joining us.
Thank you, Clio. I'm very happy to be here.
So Mark, can you start by giving our listeners a little more background on the First Nations Major Project Coalition and really your operating principles?
The First Nations Major Projects Coalition is an organization of 141st Nations from coast to coast to coast who have come together to ensure that projects proposed and built in their traditional territories have indigenous, environmental and economic values included from the start to ensure that these projects respect indigenous rights and provide economic benefits to the nations. The organization is a nonprofit organization. We support those first nations who voluntarily have joined, and what we do is help level the playing field between indigenous people, industry and government so that everybody can be at the same table at the same time talking about issues that are of mutual benefit.
The coalition has a skill set in environmental science, economic negotiations, equity questions. We bring those to the table so First Nations can be active participants in the projects. The coalition started about 10 years ago with 11 First Nations who had an opportunity to become co-investors in a natural gas pipeline, but found that we could not raise the money or the capital at an affordable cost because of the structures that we find ourselves. The Indian Act, for example, precludes us using our lands as a resource to secure capital. We can't use it as collateral. So questions like that are issues that all First Nations face in this country, and we help First Nations get past that if they want to participate in these projects.
Absolutely, thank you for that. So let's actually move to Free, Prior, and Informed Consent or FPIC, and can you just help our listeners understand the history around FPIC what is it, where did it come from, why is it important?
Free, Prior, and Informed Consent is found in the United Nations declaration on the rights of indigenous people. That is a document that was adopted by the United Nation is now in effect around the world in a number of countries, Canada included. Free, Prior, and Informed Consent refers to the concept that no development or impact on indigenous people's lands or rights can happen without their free prior and informed consent. This has become important because governments issue permits for the development, either resource extraction or infrastructure that cross or are on indigenous lands. So it's important right now for government to seek free prior and informed consent for those approval of projects. It's important for industry because industry needs those permits and in order to get that, they have to demonstrate to the government that they have also achieved that consent from indigenous people. So what you get now is a situation where indigenous people who in the past have been an afterthought to most development now are critical to seeing those projects come to pass.
And you're seeing much more of this, I would say, across Canada and getting more involved for sure. So can you break down the three parties and the impact on each? So I think it's government, you've mentioned industry and First Nations. Just kind of break them down and tell us about the impact on each.
Well, to start with government, government in Canada, the federal government has adopted. UNDRIP is an operating principle. It's in legislation. One province has as well, that's the province of British Columbia, which is my home province. So what's interesting for government now is that they're trying to harmonize existing laws with the principles of the United Nations declaration. That is going to take some time because it's taken 150, 200 years to build up court cases and legislation. All of that will have to be harmonized with the declaration. What that means for Canada is it honors the history of court decisions and the Constitution, particularly section 35, which points out that indigenous rights will be honored and respected. So that's in process, government is moving towards that. For industry, it becomes very important because industry wants to see projects happen, and in order to get projects happening, they must have a government permit.
And in order to get the government permit, they must demonstrate that the indigenous people's consent has been sought and achieved. So for industry, particularly investors who are looking to put money into projects, the last thing an investor's going to want is a legal court case that drags out for decades. They want to know that these projects are actually going to deliver a return, are built on time and operating profitably. And for First Nations it's a game changer because as I mentioned earlier, for decades, if not longer, First Nations have been an afterthought to projects in our territories. So now First Nations have an opportunity to ensure that their values are incorporated in the design, operation and construction of these projects, but also that the economic benefits, which in the past have never really flown to First Nations, they've gone off to government or industry are also directed towards First Nations.
How that comes to pass though is all still being worked out. The coalition has come about because a lot of nations are asking questions about how do they get involved, how do they ensure that their values and economic interests are included in projects. The coalition is a support organization, a capacity support organization to First Nations to be at the table, to ask the questions that are relevant to those two topics.
And there you have talked again about the importance of incorporating First Nations values and your focal areas of environment and also just that equity component and making sure that equity component is flowing into the First Nation. So Mark, can you speak to some of the new standards and what they could mean for FPIC?
The new standards to which you're referring have come from the ISSB, the International Sustainable Standards Board, and they have recently come out with a new framework. The framework is meant to consolidate the hundreds of existing frameworks that have developed over the decades into one unified, easy to understand, easy to apply standard that will be in effect across the world. At the coalition, about two years ago, we did a look into the standards, which were then common and they fall under the environmental, social and governments or ESG framework.
And what was interesting at that time is that we found that there's no standard approach to indigenous rights anywhere. They are a mess of standards that were developed starting in 2006 forward. So we'll see what the new standards do to include indigenous values and indigenous interests in evaluating new investments. But we'll see what happens. Those standards are going to be rolled out over the next two years. What's interesting about those standards is that the ISSB has an office in Montreal, so we'll see how that goes forward in terms of a Canadian approach to where the world will be going with these new standards.
So these new standards that were just started or just being rolled out recently, what do you think about Canada's involvement in this? And I'm curious how that compares to say New Zealand or Australia or other countries around the world.
What's interesting about the ISSB standards as they're being applied in other countries, particularly New Zealand, is that New Zealand has taken the approach that there has to be a New Zealand secondary filter on the ISSB standards for capital coming into that country. What the New Zealand government has done is that they have appointed indigenous people to lead the development of that secondary framework because New Zealand has taken the approach that indigenous values are national New Zealand values, which we found as an organization absolutely fascinating. Canada is working towards a Canadian interpretation of what those standards should be in a application to Canadian projects, but that's still in development and we'll see if they go as far as New Zealand has in including indigenous people in that secondary filter.
Yeah, very interesting. So what's next for FPIC? Like where do we go from here?
Well, FPIC right now in Canada is the standard that's being put in place. But UNDRIP, the United Nations declaration the rights of indigenous people, which includes FPIC, is a worldwide document. We're not the only nation following it. So each nation will define what does that mean within their own jurisdiction. But capital is looking for lower risk. Lower risk will come if there's consent by indigenous people on the projects. So what we should see is an inclusion of indigenous values across the board in national projects, in projects that involve capital across this country. I'd just like to point out that there is a discussion at times in the political realm that says, "Oh, FPIC is a veto by indigenous people on development." And that goes back and forth. Is it a veto? Is it not a veto? At the coalition, we take the position, "Well whether it's a veto or not, do you and your investors have 25 years to wait for a project to wind its way through the court system trying to figure out that question?"
No. Capital's not going to wait. So our perspective is like, "Why don't you just bypass all of that, involve indigenous people as equity partners. And then consent is proven by the fact that the indigenous people become proponents, thus the project proceeds." I'd like to point out one thing for your listeners. The coalition is the does not see equity as a giveaway a grant. This is indigenous people investing in the projects. So we would become an investor like any other mutual fund, capital fund, investment group in the project. So the proponent then has indigenous people as not only a co-investor but as a co proponent. Thus consent has been reached and off goes the project.
So is there anything else that you want to add to the conversation or make sure that you get a chance to mention?
Yes, I'd like to point out that the Coalition 140 First Nations across this country are wanting development in their territories as long as it's on the terms of the nation's values and economic direction. It is self-determination that these nations are after. These nations want to see projects that benefit them as much as they benefit industry and government. We are a unique organization on the continent in the fact that these are indigenous people leading the discussions around investment standards, environmental practices, and economic inclusion. Last year we focused very much on net-zero. Net-zero has the possibility of being an incredible benefit to the Canadian economy in the trillions of dollars as critical minerals and clean energy is required across not just North America, but around the world. Canada has all of that.
We have the critical minerals, we have the clean energy sources, and now we have an organization of 140 First Nations who want to participate. We are a solution to many of these questions that are facing us on a national economic scale. So the coalition, we invite industry to take a look at our website, fnmpca.ca to see the work that we put out and we put out material that is directed towards our nations but are of national importance. Access to capital markets, lower capital cost, environmental regulation, streamlining access to world markets in terms of everything I just mentioned in terms of electric vehicle batteries to the supply chain questions, we focus on those for our members, but these are for the benefit of all Canada. So we really are encouraged by the response of industry and government to this message, but we want to see this go further.
Yes, absolutely. And I couldn't agree more, but I really appreciate, you pulling these pieces out. It goes back to making sure that their values are recognized, ensuring self-determination in indigenous communities, but at the end of the day, indigenous communities, we want to be a part of these projects. We want to see this going forward because it is the future and they are major projects that are contributing to our economy and our society as a whole. So I couldn't agree more. Well, thank you so much, Mark, for your time. It's been such a pleasure chatting with you. Absolute pleasure. And I just got to say, I'm really looking forward to the First Nations Major Projects Coalition's conference on April 22nd and 23rd, 2024 in Toronto. And I just encourage listeners to get more information, to learn more and to go to the First Nations Major Projects Coalition website at fnmpc.ca. All right, thank you so much. Bye now.
Thanks for listening to Sustainability Leaders. This podcast is presented by BMO Financial Group to access all the resources we discussed in today's episode and to see our other podcasts. Visit us at bmo.com/sustainabilityleaders. You can listen and subscribe free to our show on Apple Podcasts or your favorite podcast provider and we'll greatly appreciate a rating and review and any feedback that you might have. Our show and resources are produced with support from BMO's Marketing team and Puddle Creative. Until next time, I'm Michael Torrance. Have a great week.
The views expressed here are those of the participants and not those at Bank of Montreal, its affiliates, or subsidiaries. This is not intended to serve as a complete analysis of every material fact regarding any company industry strategy or security. This presentation may contain forward-looking statements. Investors are cautioned not the place undue reliance on such statements as actual results could vary. This presentation is for general information purposes only and does not constitute investment legal or tax advice and is not intended as an endorsement of any specific investment product or service. Individual investors should consult with an investment tax and or legal professional about their personal situation. Past performance is not indicative of future results.
Head, Indigenous Banking at BMO
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