Purpose of this policy
IFC’s Sustainability Framework integrates environmental and social sustainability into its risk management strategy. It provides guidance for clients to identify and mitigate risks, enhance opportunities, and engage stakeholders effectively. Performance Standard 7 (PS7) focuses on Indigenous Peoples, aiming to protect their rights and foster sustainable development aligned with their cultural identity and resource-based livelihoods.
Introduction
Indigenous Peoples often face significant marginalisation and vulnerability due to their distinct identities and close ties to land, resources, and culture. PS7 recognises these challenges and emphasises protecting their rights to avoid loss of identity, cultural degradation, and economic marginalisation. Conversely, it highlights the opportunities for Indigenous Peoples to benefit from private-sector projects when appropriately managed, ensuring participation and cultural respect.
Objectives
The objectives of PS7 include:
- Respecting the rights, dignity, and culture of Indigenous Peoples.
- Avoiding or minimising adverse project impacts.
- Promoting culturally appropriate, sustainable benefits.
- Establishing ongoing relationships through Informed Consultation and Participation (ICP).
- Securing Free, Prior, and Informed Consent (FPIC) for significant impacts.
- Preserving Indigenous cultures, knowledge, and practices.
Scope of application
PS7 applies to distinct cultural groups identified by self-recognition, collective attachment to territories, unique social structures, and linguistic diversity. It addresses both communities maintaining or forcibly severed from ancestral ties due to historical or contemporary events.
Requirements
Avoidance of adverse impacts
Clients must identify Indigenous Peoples in project areas and assess potential economic, social, and cultural impacts. Adverse effects should be avoided where possible or minimised with culturally sensitive mitigation plans, such as an Indigenous Peoples Plan (IPP).
Participation and consent
The engagement process requires culturally appropriate consultation, involving Indigenous representative bodies and community members. FPIC is mandatory in specific circumstances, such as land relocation, significant cultural heritage impacts, or commercial resource use. FPIC is achieved through documented negotiation but does not require unanimity.
Mitigation and development benefits
Mitigation efforts must align with PS7’s hierarchy and include collective or individual compensation mechanisms. Development benefits should respect community customs and improve standards of living sustainably.
Critical cultural heritage
Priority is given to avoiding significant impacts on cultural heritage essential to Indigenous identities. If unavoidable, FPIC must be obtained, and benefits shared equitably when commercialising Indigenous cultural knowledge or practices.
Relocation of Indigenous Peoples
Relocation from traditional lands is only permissible as a last resort, requiring FPIC and compliance with Performance Standard 5. Affected groups must have the opportunity to return when circumstances allow.
Private sector responsibilities
When governments manage Indigenous Peoples’ issues, clients should collaborate to achieve PS7 objectives. Where governmental capacity is limited, clients should actively participate in planning, implementing, and monitoring activities. A comprehensive plan should outline responsibilities, gaps, and compliance measures.
By adhering to PS7, private sector projects can achieve sustainable development while protecting Indigenous Peoples’ rights and enhancing their long-term well-being.