First Peoples' Indigenous Rights Risk Report analyzes extractive companies operating on Indigenous land
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Washington, DC - October 29, 2013 (www.investorideas.com newswire) First Peoples Worldwide: On Tuesday, First Peoples Worldwide will release its Indigenous Rights Risk Report at the The SRI Conference on Sustainable, Responsible, Impact Investing. First Peoples analyzed 52 U.S.-based extractive companies listed on the Russell 1000® Index and assessed 370 oil, gas and mining sites across six risk factors related to Indigenous Peoples – Land, Indigenous Peoples Policy, Reputation, Country, Community, and Legal. The results are eye-opening. Click here to receive a copy of the report.
In the report, First Peoples assessed Southwestern Energy, which on October 6, 2013, a stock analysts said “looks like a great long-term investment” and “it is a low political risk company.” Less than two weeks later (on October 17th), the Royal Canadian Mounted Police (RCMP) arrested about 40 Elsipogtog and Mi’kmaq First Nations tribal members and activists, using rubber bullets and pepper spray. The protestors had been blockading the road to SWN Resources Canada, a subsidiary of Southwestern Energy, since June. Southwestern Energy had requested "a permanent injunction to prevent protests against its bid to explore for gas,” claiming the blockade was costing them $60,000 a day. However, the injunction was denied on October 22nd. There is no timetable for when the blockade and Southwestern Energy's losses will end.
Given this rosy stock forecast in the face of these troubling events, are traditional approaches to assessing the risk of oil, gas, and mining operations located on or near Indigenous Peoples land relevant anymore? First Peoples does not think so and has proposed a new risk assessment tool in its new Indigenous Rights Risk Report.
In the report, First Peoples analyzed the Southwestern Energy site currently being blockaded and rated it a "High" risk. "Traditional financial analysis is no longer enough to predict the risk of an oil, gas or mineral site that is on or near Indigenous land," says Nick Pelosi, First Peoples' Corporate Engagement Associate. "The risk of not respecting Indigenous Peoples' rights must be considered for an accurate risk assessment."
Southwestern Energy is not alone. 52 extractives companies based in the United States are operating 370 oil, gas and mining sites on or near Indigenous Peoples land around the world. First Peoples reports that 92% of those sites posed a medium to high risk to the company and its investors and shareholders. Take into consideration that only 5 of those companies have an Indigenous Peoples policy, the vast majority of companies are flying blind when it comes to operating on Indigenous land, thus exposing their investors and shareholders to incredible risk. In the case of Southwestern Energy, the New Brunswick site was their first Canadian investment and in addition to not having an Indigenous Peoples policy, they appeared to be completely unfamiliar with Canadian First Nations and the protections they have under Canadian law.
The risk of not respecting Indigenous Peoples' rights is only going to increase. First Peoples president and co-founder Rebecca Adamson forecasts a confluence of events that will make the extraction of oil, gas and minerals from Indigenous land riskier in the future. She says, "First, Indigenous Peoples have more rights enshrined at the international and national level, and are exercising them more effectively than ever before. Second, as extractive industries search the globe for oil, gas and minerals, they are finding them increasingly on or near Indigenous land. And third, digital media is allowing Indigenous Peoples and their allies to access and share information more easily, giving them the ability to tell their story and conduct advocacy campaigns on a global scale that can directly impact the profitability and value of a company."
The bottom line is that investors and shareholders need to demand that the extractive companies they invest in are aware of and appropriately managing Indigenous Rights risk, otherwise their investments are greatly at risk. First Peoples' hopes the Indigenous Rights Risk Report is a tool investors can use to assess this new, but important risk.
Published at the Investorideas.com Newswire - Big ideas for Global Investors
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