We recognize the importance of the issues and concerns that have been raised as a result of Citi's financing of the Dakota Access Pipeline (DAPL). The project has led to extensive internal evaluation of our Environmental and Social Risk Management (ESRM) Policy and, as our CEO Michael Corbat said at our annual shareholder meeting in April, Citi is committed to improving our approach to evaluating human rights issues, with a specific focus on Indigenous Peoples.
A key takeaway for Citi stemming from our involvement in DAPL and the related
independent report by Foley
Hoag LLP, a law firm with human rights expertise, is the need to address the gaps between U.S. laws and international industry good practice for engaging with Indigenous Peoples. As noted in the Foley Hoag report, reliance solely on national law in developed countries does not always protect the rights of Indigenous Peoples in line with inter
national human rights norms. Addressing this gap is a core component of our work to update our policies.
A core issue is "free, prior and informed consent" (FPIC) for projects with direct negative impacts to Indigenous Peoples. There is a debate over the precise expectations for governments and companies on implementing FPIC in different situations, so we are working with external experts to advise us on how to strengthen and implement our ESRM Policy in a way that is globally consistent and fulfills our responsibility to respect human rights in line with the United Nations Guiding Principles on Business and Human Rights. In addition to engaging with external experts, we are engaging with our peers to gain their insights as well given they are confronted with the same challenge
s.
While the updated ESRM Policy will not be finalized until completion of this comprehensive review process, beginning immediately, for projects anywhere in the world, we will require enhanced due diligence on our clients' activities in the following areas:
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Stakeholder Engagement Policy clarifying their approach to Indigenous Peoples' rights
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Project budget allocation to ensure appropriate staffing and expertise for stakeholder mapping and Indigenous Peoples' consultation throughout the project lifecycle, including post-construction monitoring
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Early and sustained good faith efforts to engage in a culturally appropriate manner with potentially affected communities of Indigenous Peoples
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Plans by the relevant public sector actors, and where appropriate, project sponsors, to provide effective remedies for any potential human rights impacts to project-affected Indigenous Communities
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Operational protocols that align with the Voluntary Principles on Security and Human Rights
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Functioning operational level grievance mechanisms consistent with the United Nations Guiding Principles for Business and Human Rights, implemented from the initiation of the project planning stages, including incident reports and resolution records
As we move forward with this area of work, we look forward to engaging with a wide range of stakeholders to ensure that we follow through on our commitments and to help us drive positive outcomes on the ground, all over the world.
