This research is a toolkit for investors with respect to the rights of Indigenous Peoples and the protection of their cultural heritage. It was produced by the Responsible Investment Association Australasia as an initiative of its Human Rights and First Nations Peoples’ Rights Working Groups. The catalyst for this was the destruction of Indigenous cultural heritage at Juukan Gorge by Rio Tinto in May 2020. This event highlighted the importance of investors having the companies in which they invest, respect and protect Indigenous Peoples’ cultural heritage and holding them to account when they and relevant legislation fail to do so.

The purpose of the toolkit is to provide guidance to investors on how to do this, in particular, appropriate engagement with companies on how they manage their relationships with Indigenous stakeholders. While this guidance is primarily based on experience within the extractives sector, it is intended to be applicable to other sectors. It is expected that the toolkit will be updated as investors learn more about how to engage with companies on these issues.

The toolkit covers three distinct areas. The first area, investor context, explains the broad long-term financial risks associated with investing in companies that fail to respect Indigenous rights and protect cultural heritage, along with weak regulation of that issue. The toolkit refers to these risks as reputational, litigation and operational. It provides examples of how these risks lead to direct or indirect costs and impacts to companies.

The second area of the toolkit, “What to look for”, puts forward signals or potential “red flags” that help investors assess how well a company works with Indigenous communities. It provides examples of these red flags with respect to a company’s disclosure and engagement practices. The toolkit then asks what good disclosure in engagement practice would actually look like, recognising that Indigenous communities have different priorities and look for different things from their relationships with companies. In those circumstances, the toolkit outlines principles to be applied by investors in what to look for in a company with respect to its disclosure and engagement practices.

The third area of the toolkit, “Deeper Engagement”, identifies key factors that help investors assess a company’s approach to working with Indigenous communities. They are a company’s commitment to international standards, how a company is structured to engage with Indigenous partners, the robustness of its consultation with Indigenous Peoples in practice, how agreements with them are made by the company, a company’s understanding of what cultural heritage is and its willingness to advocate for that.  The toolkit sets out specific questions related to each of these topics.

Finally, the toolkit identifies challenges for investors themselves to appropriately obtain an informed stakeholder viewpoint in the case of Indigenous communities. It outlines how investors can work directly with Indigenous Peoples’ representative organisations to build capacity on that issue. The toolkit states that, although long overdue, the conversation between the investment sector and Indigenous Peoples’ representative organisations is just beginning.

1. Investors, as the owners of companies, have an important role to play in having them engage responsibly with Indigenous Peoples and respect and protect Indigenous Peoples’ cultural heritage. This is particularly so when legislation is unable to achieve those objectives.
2. Companies have many stakeholders, including Indigenous Peoples on whose land they may operate. How companies manage their relationships with those stakeholders is a harbinger of their long-term sustainability and success.
3. There are long-term financial risks for companies where relationships with Indigenous Peoples are managed poorly and cultural heritage management is weak. Those risks are reputational, litigation and operational, imposing direct or indirect costs and impacts on companies and arising from the social costs of cultural heritage destruction.
4. Due to the power imbalance between companies and Indigenous Peoples and inadequate legislative protections, corporate engagement does not take place to the required standard of “free, prior and informed consent” contained in the United Nations Declaration on the Rights of Indigenous Peoples (‘UNDRIP’).
5. To ensure accountability, it is critical that investors remain informed and regularly inquire with company management and its board about the company's relationships with Indigenous Peoples.
6. Given the diversity of Indigenous cultures, to ensure collective cultural rights are respected, consultation with Indigenous Peoples’ representative organisations and traditional owner groups is essential. For this, companies need transparent processes for identifying such bodies and for those cases where such bodies are not formally recognised or do not exist.
7. Concerns or red flags for investors with respect to the disclosure practices of a company as to its dealings with Indigenous Peoples include: lack of transparency in disclosure of the company's policies relating to Indigenous engagement or cultural and heritage protection; failure to recognise Indigenous Peoples as key stakeholders in the materiality section of a sustainability report or at all; lack of reference to significant sector incidents and potential regulatory attention.
   
8. Concerns or red flags for investors with respect to how a company engages with Indigenous Peoples include: the board is not in the habit of discussing the status of relationships with the company’s stakeholders; the board or management cannot identify the last time they met with Indigenous communities; lack of receptiveness to shareholder concerns such as special resolutions on Indigenous relations.
   
9. The toolkit discusses different standards relevant to the rights of Indigenous Peoples including: UNDRIP and its guidance on free, prior and informed consent; International Labour Organisation Indigenous and Tribal Peoples Convention 1989 (ILO 169); Indigenous Land Use Agreements; “Never Again”, Joint Standing Committee on Northern Australia Interim Report.
   
10. The toolkit contains appendices which provide the following useful information for investors: resources for further reading on business and Indigenous rights; explanatory notes on relevant legal standards; cross sector case studies; mining company scorecard on how to assess a mining company’s performance in relation to Indigenous Peoples.