(Reuters) — Reinsurer Axis Capital said it would refuse to underwrite energy, mining and other projects that did not have the support of local indigenous peoples, in a move welcomed by activists as setting a new industry standard.
The decision follows years of protests by communities, particularly in the developing world, who claim their voice is often ignored when banks, insurance companies and investors push projects that could negatively affect their lives.
The need to ensure the free, prior and informed consent of affected communities was recognized by the United Nations in 2007, yet high-profile arguments between indigenous peoples and large multinational corporations and financial services companies continue.
The non-governmental organization Rainforest Action Network told Reuters that Axis was the first North American insurer to adopt such a policy and believed it set a new standard for best practice.
Two insurers in Europe – Swiss Re and Allianz – mention FPIC in their human rights frameworks, but AXIS now refers in detail to the UN Declaration on the Rights of Indigenous Peoples, RAN said.
“We expect insureds to respect and observe the right to Free, Prior and Informed Consent (FPIC) in accordance with the United Nations Declaration on the Rights of Indigenous Peoples, and it is our policy not to provide insurance cover for projects undertaken on Indigenous territories. but FPIC,” Axis said in its updated human rights policy, which was shared with Reuters.
FPIC ensures the right of indigenous peoples to give or refuse consent to a project that may affect them or their territories.
Without such explicit support for FPIC, insurers and the projects they support continue to face protests. In Canada, they have faced pressure for years to release coverage for the government̵7;s Trans Mountain oil pipeline, which is opposed by environmentalists and some indigenous groups.
In the US, the Dakota Access oil pipeline has been the subject of a long-running court battle between tribes seeking to shut it down and the Dallas-based company Energy Transfer EN, while local communities in Peru continue to protest the planned expansion of the Las Bambas copper mine by MMG Ltd.