Vasily Zakharov, Head of Nornickel’s Regional Programs, talked about FPIC, its origin and application. He also explained why it is important to Nornickel shareholders, partners and customers.
The company’s ESG strategy entails applying the FPIC process in making decisions on matters affecting indigenous peoples. Vasily Zakharov, Head of Nornickel’s Regional Programs, explained what FPIC is, its origin and application. He also explained why it was important to Nornickel shareholders, partners and customers.
What are Nornickel’s current priorities for working with indigenous peoples? How do they shape and shift under the influence of external factors?
The priorities and format of the company’s engagement with indigenous peoples are indeed advancing. Cooperation began during the Soviet time when it was based on corporate assistance to the settlements and villages inhabited by the indigenous peoples of Taimyr. Jobs were being created in the area of traditional subsoil use economics.
The priorities and format of the company’s engagement with indigenous peoples are indeed advancing. Cooperation began during the Soviet time when it was based on corporate assistance to the settlements and villages inhabited by the indigenous peoples of Taimyr. Jobs were being created in the area of traditional subsoil use economics.
FPIC stands for free, prior, and informed consent. The UN requires obtaining such consent before implementing any projects that affect indigenous peoples. The FPIC procedure ensures equitable participation of local communities in the discussion. This approach facilitates balanced decisions that consider the interests of all stakeholders.
Fundamental principles of FPIC:
- Free decision-making — there is no manipulation or coercion;
- Prior consultations — local residents have sufficient time to consider all relevant information;
- Awareness — people receive complete and accurate information about their rights, the project, and its alternatives;
- Inclusion — all population groups, including the most vulnerable populations, are involved in the process.
Nornickel once had a division providing employment for indigenous peoples in their traditional occupations: hunting, fishing, leather crafting, souvenir production, etc. This approach is no longer relevant.
We have gone from corporate assistance and government-regulated small-scale businesses to recognizing the vulnerability of indigenous peoples to climate change and loss of biodiversity, understanding the need to preserve languages and cultures, and respecting their right to determine their own development priorities under the free prior informed consent (FPIC) principle.
These important aspects will be embedded in the new Policy on Engagement with Indigenous Peoples, which is currently under discussion. We monitor the discussions in the UN Permanent Forum on Indigenous Issues and collaborate with the UN to maximize compliance of our practices with international standards.
We have gone from corporate assistance and government-regulated small-scale businesses to recognizing the vulnerability of indigenous peoples to climate change and loss of biodiversity, understanding the need to preserve languages and cultures, and respecting their right to determine their own development priorities under the free prior informed consent (FPIC) principle.
These important aspects will be embedded in the new Policy on Engagement with Indigenous Peoples, which is currently under discussion. We monitor the discussions in the UN Permanent Forum on Indigenous Issues and collaborate with the UN to maximize compliance of our practices with international standards.
Can you elaborate on the FPIC procedure?
We recognize the right of indigenous peoples to free prior informed consent. FPIC can be regarded both as a process and philosophy for a company governing its interaction with indigenous peoples and as an outcome. It is indigenous peoples’ consent to industrial projects on terms that they determine under an internationally recognized legitimate procedure.
As a process, FPIC is a complex and documented system of negotiation that allows indigenous peoples to make a decision that is:
FPIC is used in two situations: the indigenous peoples are physically or economically displaced by the company’s development projects in their territories.
The physical relocation of the village of Tukhard is a useful example. This settlement of indigenous people, the Nenets, is located in the company’s buffer zone. Hence, the area is not suitable for living, or building new housing. Yet, relocating people without their consent would be deemed forced.
We recognize the right of indigenous peoples to free prior informed consent. FPIC can be regarded both as a process and philosophy for a company governing its interaction with indigenous peoples and as an outcome. It is indigenous peoples’ consent to industrial projects on terms that they determine under an internationally recognized legitimate procedure.
As a process, FPIC is a complex and documented system of negotiation that allows indigenous peoples to make a decision that is:
- free, i.e. unpressured;
- prior, i.e. information on target operations projects is communicated in advance. And indigenous peoples have enough time to evaluate and understand this information;
- informed, meaning that indigenous peoples understand what they negotiate with the company and the company provides the necessary resources, where required (for example, engages experts to provide advice to indigenous peoples).
FPIC is used in two situations: the indigenous peoples are physically or economically displaced by the company’s development projects in their territories.
The physical relocation of the village of Tukhard is a useful example. This settlement of indigenous people, the Nenets, is located in the company’s buffer zone. Hence, the area is not suitable for living, or building new housing. Yet, relocating people without their consent would be deemed forced.
Economic displacement occurs when a project involves the use of lands, such as pastures and hunting grounds, traditionally used by indigenous peoples for their economic activities. Nornickel has such a project, too. The Kolmozero lithium deposit is located on the land owned by a reindeer farm. Nornickel initiated the process of seeking the FPIC of the indigenous people and started due diligence procedures.
In Russia, due diligence is equivalent to an ethnological expert examination. These procedures aim to determine which indigenous communities will be affected by the industrial project, and to what extent, and how the impact can be minimized.
How do you engage with indigenous peoples? Who is involved in the process?
Over the years, we have built a system of communication with indigenous peoples, which includes joint councils, work groups, and extensive public consultations.
Nornickel’s Polar Division partners with the Association of Indigenous Peoples, which includes 58 of the largest active communities in the Taimyr (Dolgano-Nenets) municipal district. Also, we have set up a work group of indigenous and reindeer-herding peoples of the Murmansk region to discuss the development of the Kolmozero lithium deposit, which includes: the Association of Kola Saami, the Saami Public Organization of the Murmansk Region, the Council of Indigenous Peoples under the Government of the Murmansk Region, and representatives of the largest reindeer farms. We expect that representatives of the Kola Peninsula communities will join, too.
In addition to this we conduct due diligence. In Russia, due diligence equals an ethnological expert examination. These procedures aim to determine which indigenous communities will be affected by the industrial project and to what extent, and how the impact can be minimized.
Ethnological, sociological, and environmental expert examinations, as well as studies of the impact on traditional economic activities and public consultations lay the groundwork for an indigenous relations plan. Any document includes three priorities:
Today, many companies choose not to disclose their financial statements. Nornickel, however, continues to make full disclosures. Why is it important to you to keep your operations transparent, including your relations with indigenous peoples?
It matters to our partners, customers, and shareholders that Nornickel respects the rights of indigenous peoples. We do our best to maintain an equitable dialogue and refrain from imposing our decisions, even those that could improve their lives. By doing so, we obtain a social license, i.e. informal permission of the local community to operate in the region.
On the other hand, openness is an opportunity for indigenous peoples to be heard. Here is an example: the chair of the Council of Representatives of Tukhard, elected under the FPIC procedure, can participate in UN events and speak at the UN Permanent Forum on Indigenous Peoples.
Nornickel, too, is open to dialogue with indigenous peoples. During the preliminary discussion of the forthcoming Policy on Engaging with Indigenous Peoples, we visited almost all villages in the Taimyr and Murmansk regions, where indigenous peoples live, in order to understand their needs regarding communication with our company. Furthermore, we initiated extensive consultations in the Murmansk region, in the villages where the Saami, Komi-Izhemtsy, and Nenets live, to discuss the prospective development of the Kolmozero lithium deposit, six months prior to obtaining the deposit development license.
What proposals did representatives of the indigenous population put forward regarding the Tukhard project? When is the master plan likely to be finalized?
In Tukhard, the FPIC process took five months. Over this time, we conducted three rounds of consultations and three meetings, as a result of which the residents of Tukhard first gave their consent to the procedure and then to the relocation and redevelopment of their new settlement on their terms.
The residents, all by themselves, prepared a technical assignment for the development of a master plan for their future village. They chose the location and determined what social and amenity infrastructure should be built: a boat dock, a boat storage building, garages near the houses, a bakery, a swimming pool, playgrounds, a venison processing unit, and a gas station.
One of the reindeer breeding centers on the Taimyr Peninsula, Tukhard has special requirements. A third of the registered residents of the village are tundra dwellers who can’t be relocated. For the displacement process to comply with the World Bank and the International Finance Corporation’s standards, we conducted a census.
The first and second stages of the census have already been completed, the third stage will be over on September 16. The census will reveal the exact number of people to be relocated to the new village, and the number of people who have chosen to move to Dudinka (this option is also available). Based on this data, the architectural bureau “Wowhaus” will finalize the master plan for the new village.
In Russia, due diligence is equivalent to an ethnological expert examination. These procedures aim to determine which indigenous communities will be affected by the industrial project, and to what extent, and how the impact can be minimized.
How do you engage with indigenous peoples? Who is involved in the process?
Over the years, we have built a system of communication with indigenous peoples, which includes joint councils, work groups, and extensive public consultations.
Nornickel’s Polar Division partners with the Association of Indigenous Peoples, which includes 58 of the largest active communities in the Taimyr (Dolgano-Nenets) municipal district. Also, we have set up a work group of indigenous and reindeer-herding peoples of the Murmansk region to discuss the development of the Kolmozero lithium deposit, which includes: the Association of Kola Saami, the Saami Public Organization of the Murmansk Region, the Council of Indigenous Peoples under the Government of the Murmansk Region, and representatives of the largest reindeer farms. We expect that representatives of the Kola Peninsula communities will join, too.
In addition to this we conduct due diligence. In Russia, due diligence equals an ethnological expert examination. These procedures aim to determine which indigenous communities will be affected by the industrial project and to what extent, and how the impact can be minimized.
Ethnological, sociological, and environmental expert examinations, as well as studies of the impact on traditional economic activities and public consultations lay the groundwork for an indigenous relations plan. Any document includes three priorities:
- Mitigation means making amendments to the project if reindeer grazing areas, important hunting grounds, fishing spots, sacred or sacral sites are likely to be affected.
- Compensation includes not only monetary compensation, but also the allocation of additional pastures, research, and larger fishing quotas.
- Sustainable development activities aim to foster the development and increase the profitability of the traditional use of natural resources – processing units, product marketing.
Today, many companies choose not to disclose their financial statements. Nornickel, however, continues to make full disclosures. Why is it important to you to keep your operations transparent, including your relations with indigenous peoples?
It matters to our partners, customers, and shareholders that Nornickel respects the rights of indigenous peoples. We do our best to maintain an equitable dialogue and refrain from imposing our decisions, even those that could improve their lives. By doing so, we obtain a social license, i.e. informal permission of the local community to operate in the region.
On the other hand, openness is an opportunity for indigenous peoples to be heard. Here is an example: the chair of the Council of Representatives of Tukhard, elected under the FPIC procedure, can participate in UN events and speak at the UN Permanent Forum on Indigenous Peoples.
Nornickel, too, is open to dialogue with indigenous peoples. During the preliminary discussion of the forthcoming Policy on Engaging with Indigenous Peoples, we visited almost all villages in the Taimyr and Murmansk regions, where indigenous peoples live, in order to understand their needs regarding communication with our company. Furthermore, we initiated extensive consultations in the Murmansk region, in the villages where the Saami, Komi-Izhemtsy, and Nenets live, to discuss the prospective development of the Kolmozero lithium deposit, six months prior to obtaining the deposit development license.
What proposals did representatives of the indigenous population put forward regarding the Tukhard project? When is the master plan likely to be finalized?
In Tukhard, the FPIC process took five months. Over this time, we conducted three rounds of consultations and three meetings, as a result of which the residents of Tukhard first gave their consent to the procedure and then to the relocation and redevelopment of their new settlement on their terms.
The residents, all by themselves, prepared a technical assignment for the development of a master plan for their future village. They chose the location and determined what social and amenity infrastructure should be built: a boat dock, a boat storage building, garages near the houses, a bakery, a swimming pool, playgrounds, a venison processing unit, and a gas station.
One of the reindeer breeding centers on the Taimyr Peninsula, Tukhard has special requirements. A third of the registered residents of the village are tundra dwellers who can’t be relocated. For the displacement process to comply with the World Bank and the International Finance Corporation’s standards, we conducted a census.
The first and second stages of the census have already been completed, the third stage will be over on September 16. The census will reveal the exact number of people to be relocated to the new village, and the number of people who have chosen to move to Dudinka (this option is also available). Based on this data, the architectural bureau “Wowhaus” will finalize the master plan for the new village.
Supporting indigenous youth
Are there a lot of young people in Tukhard? Are you planning to build schools and kindergartens in the new village?
Yes, we intend to build a school, a kindergarten, and public spaces. The youth population is rather significant – it accounts for about 40% of the local population. Within the year, while the FPIC negotiations were underway, quite a few kids came of age, and some of them expressed the wish to move out of their parents’ houses. We account for these factors in our decisions.
What indigenous youth programs do you have?
The young generation wants to play a more significant role in public life. We engage with youth in various ways, primarily through educational programs. Every year, 20 indigenous students are admitted to the Polar State University. While they study, the company covers their accommodation and travel expenses.
We also provide funding for the Taimyr college. The college trains blue-collar workers, among others, who can join Nornikel’s facilities upon graduation.
The School of Public Diplomacy for Indigenous Peoples is a very important joint project of the company and MGIMO (Moscow State Institute for International Relations). Graduates of the School of Public Diplomacy are future leaders of their peoples who will be well-placed to efficiently engage with the state and business community, and represent indigenous peoples of Russia internationally. In order to boost the potential of indigenous peoples, we also provide funding for seminars on the rights of indigenous peoples, which are conducted by the interregional public organization “Association of Small-Numbered Indigenous Peoples “Union”.
Yes, we intend to build a school, a kindergarten, and public spaces. The youth population is rather significant – it accounts for about 40% of the local population. Within the year, while the FPIC negotiations were underway, quite a few kids came of age, and some of them expressed the wish to move out of their parents’ houses. We account for these factors in our decisions.
What indigenous youth programs do you have?
The young generation wants to play a more significant role in public life. We engage with youth in various ways, primarily through educational programs. Every year, 20 indigenous students are admitted to the Polar State University. While they study, the company covers their accommodation and travel expenses.
We also provide funding for the Taimyr college. The college trains blue-collar workers, among others, who can join Nornikel’s facilities upon graduation.
The School of Public Diplomacy for Indigenous Peoples is a very important joint project of the company and MGIMO (Moscow State Institute for International Relations). Graduates of the School of Public Diplomacy are future leaders of their peoples who will be well-placed to efficiently engage with the state and business community, and represent indigenous peoples of Russia internationally. In order to boost the potential of indigenous peoples, we also provide funding for seminars on the rights of indigenous peoples, which are conducted by the interregional public organization “Association of Small-Numbered Indigenous Peoples “Union”.
Indigenous entrepreneurship
What are the main threats facing indigenous peoples?
Nornickel is not a major source of greenhouse gases. Nevertheless, climate change affects everyone. During consultations with indigenous peoples, we gather a lot of evidence about the significant impact of climate change on traditional businesses – it poses obstacles to reindeer hunting by altering the reindeer migration routes, and affects fishing, making fish migrate deeper. Just as alarming is the fact that in warm water, fish are more susceptible to parasitic infections.
Why is the company supporting local entrepreneurship?
We primarily provide support for indigenous communities and facilitate their integration into the economy. These are communities that engage in the traditional use of natural resources: hunting, fishing, reindeer herding, and hide tanning.
The company has adopted an indigenous development program and is implementing it in the Taimyr (Dolgan-Nenets) district. The program includes 40 events aimed at fostering economic development of the communities, improving the quality of life in indigenous villages, and supporting cultural and educational initiatives proposed by indigenous people.
What is Nornickel doing to make the indigenous communities more economically prosperous?
Two fish, reindeer, and wild herb processing units will soon be delivered to Taimyr. This is important because processed products are more profitable and enjoy a stable demand.
One unit has already been delivered and is likely to operate in Norilsk – it is a matter of convenience for the communities, since Norilsk is a major transportation center and a place where most consumers of indigenous products live. The second unit will be delivered to Tukhard.
We procure meat and fish for the needs of the company's facilities through a coordination council, and arrange helicopter flights to transport the products. Also, the company has launched a study of the tributary water bodies of the Pyasina River in order to establish fishing quotas and allocate them to indigenous peoples.
We are implementing an interesting but challenging project to revive reindeer breeding in the Avam tundra, where it was lost several decades ago. We have commissioned the Institute of Agriculture and Environment of the Arctic to study the deer grazing capacity of pastures and received a positive opinion. We see enthusiasm for the project; but it means that the residents of Ust-Avam will have to reclaim the required skills.
Tourism is growing. In Ust-Avam, the construction of the visitor center is nearing completion. It will house a micro hotel, a bath complex, a ceremonial space, and a lecture hall for exhibitions of leather, fur, and bone products.
Nornickel is not a major source of greenhouse gases. Nevertheless, climate change affects everyone. During consultations with indigenous peoples, we gather a lot of evidence about the significant impact of climate change on traditional businesses – it poses obstacles to reindeer hunting by altering the reindeer migration routes, and affects fishing, making fish migrate deeper. Just as alarming is the fact that in warm water, fish are more susceptible to parasitic infections.
Why is the company supporting local entrepreneurship?
We primarily provide support for indigenous communities and facilitate their integration into the economy. These are communities that engage in the traditional use of natural resources: hunting, fishing, reindeer herding, and hide tanning.
The company has adopted an indigenous development program and is implementing it in the Taimyr (Dolgan-Nenets) district. The program includes 40 events aimed at fostering economic development of the communities, improving the quality of life in indigenous villages, and supporting cultural and educational initiatives proposed by indigenous people.
What is Nornickel doing to make the indigenous communities more economically prosperous?
Two fish, reindeer, and wild herb processing units will soon be delivered to Taimyr. This is important because processed products are more profitable and enjoy a stable demand.
One unit has already been delivered and is likely to operate in Norilsk – it is a matter of convenience for the communities, since Norilsk is a major transportation center and a place where most consumers of indigenous products live. The second unit will be delivered to Tukhard.
We procure meat and fish for the needs of the company's facilities through a coordination council, and arrange helicopter flights to transport the products. Also, the company has launched a study of the tributary water bodies of the Pyasina River in order to establish fishing quotas and allocate them to indigenous peoples.
We are implementing an interesting but challenging project to revive reindeer breeding in the Avam tundra, where it was lost several decades ago. We have commissioned the Institute of Agriculture and Environment of the Arctic to study the deer grazing capacity of pastures and received a positive opinion. We see enthusiasm for the project; but it means that the residents of Ust-Avam will have to reclaim the required skills.
Tourism is growing. In Ust-Avam, the construction of the visitor center is nearing completion. It will house a micro hotel, a bath complex, a ceremonial space, and a lecture hall for exhibitions of leather, fur, and bone products.
November, 2023
