The new Performance Standard 7 of the IFC Performance Standards for Environmental and Social Sustainability, used in environmental and social risk management by Financial Institutions through the Equator Principles Framework, requires the application of the "Free, Prior and Informed Consent" concept to certain projects affecting Indigenous Peoples. In the book IFC Performance Standards for Environmental and Social Sustainability: A Guidebook, lawyer Pierre Christian Labeau discusses the meaning of "prior" in the context of FPIC.
Consultation with Indigenous Peoples can be challenging since Clients and Indigenous Peoples often operate on very different timelines than businesses. Companies tend to make relatively quick decisions, while indigenous communities may require more time to process information and conduct internal dialogue.
Some mining companies have stated that “prior” in applying the FPIC concept means the achievement of FPIC before substantial or significant activities, which could mean before the project is developed, but not necessarily before exploration begins. At this stage the scope and lifespan of a project often remains unknown.
Defined in the State context, a meeting of UN agencies proposed that prior consent should be “sought sufficiently in advance of commencement or authorization of activities, taking into account indigenous peoples’ own decision-making processes, in the phases of assessment, planning, implementation, monitoring, evaluation and closure of a project.”
“Prior” as it applies to governments may mean prior in time before a permit or authorization has been granted to a proponent of a certain project. As these examples suggest, the meaning of “prior” is difficult to define since its practical implementation may vary according to the nature and scope of the project and whether a project is managed by the State or a private party.
At a minimum however, Pierre-Christian posits that FPIC in the context of the IFC Performance Standards likely requires that consent should be obtained before the development of projects. Consistent with the stakeholder engagement requirements of the IFC Performance Standards, engagement with local communities (including Indigenous Peoples where FPIC is the standard), should occur as early in the process as possible.
Ultimately, to meet the “prior” requirement, consultations should: (a) allow sufficient time for project information to be interpreted and comments and recommendations formulated and discussed; (b) allow for the consultation to have a meaningful influence on the broad project design options (e.g., location, routing, sequencing, and scheduling); and (c) allow for the consultation to have a meaningful influence on the choice and design of mitigation measures, the sharing of development benefits and opportunities, and project implementation. That being so, the proper application of the FPIC concept in the context of the IFC Performance Standards is something that can only be determined on a case-by-case basis with proper advice.