Indigenous involvement in the renewables transition: the case of critical minerals

 

Make use of time, let not advantage slip.

Venus and Adonis, 129.

 

On 4 October 2023, Professor Ciaran O’Faircheallaigh (link here) gave an insightful and well-argued seminar at the Centre for Aboriginal Economic Policy Research (CAEPR) at the ANU on the implications of the transition to renewables and net zero on demand for critical minerals, and the concomitant implications for Indigenous peoples globally and in Australia.

Information on the seminar is available on the CAEPR website (link here) and a recording of the seminar may be available shortly.

O’Faircheallaigh’s core argument can be boiled down to a series of propositions:

• the transition to renewable energy/ net zero will involve an extraordinary increase in production of critical and energy transition minerals (including lithium, cobalt, copper, nickel and rare earths) in order to produce the technology required to avert a climate catastrophe;

 

• The world’s resources of transition minerals are heavily concentrated on or near Indigenous territories.

 

• The history of mineral extraction on or near Indigenous lands has had significant adverse impacts on Indigenous peoples and thus been fundamentally unjust.

 

• Increasingly, in circumstances where Indigenous landowners have not been engaged and their social, cultural and economic rights have not been respected, Indigenous peoples have found ways to successfully delay or stop resource developments on their lands using a range of tactics from protests and direct action to litigation.

 

• These conflicts impose commercial costs on mineral developers, and will increasingly pose a threat to the global transition to renewable development.

 

• Governments are increasingly allocating substantial financial incentives to corporations aimed at encouraging the acceleration of investments necessary for the transition to a renewable future.

 

• However, invariably, there is no support in these strategies for Indigenous interests who are key stakeholders in the lands that are directly affected by mining and other elements of the transition. O’Faircheallaigh cited the Australian Critical Minerals Strategy (link here) which provides over $3bn in financial incentives to developers, but zero to Indigenous landowners affected by developments.

O’Faircheallaigh characterized the likely outcome of the current global transition pathway as lose/lose: Indigenous interests would seek to inject themselves into the development processes for new mines and other developments, and likely achieve sub-optimal outcomes (both financially and in terms of their other objectives); but so too will the global climate (that is, you, me, and the global population) lose as the critical investments in land based resources necessary for the transition will be slowed and perhaps diverted elsewhere as a result of the Indigenous objections and lawfare.

The solution according to O’Faircheallaigh is to ensure that Indigenous landowners have a legal right to exercise free, prior and informed consent (FPIC) over developments on their land. In Australia in the context of land rights legislation, this is often also known as a veto. Such a right would ensure Indigenous interests are engaged in the development process, and have the capacity to negotiate the terms of any mining or resource development.

Commentary

I found O’Faircheallaigh’s argument broadly persuasive, and agree that the introduction of FPIC rights for Indigenous interests would ensure faster and more certain outcomes in relation to proposed resource developments, including critical minerals.

O’Faircheallaigh largely justified his position on ethical grounds, without specifying the precise set of arguments he uses to justify that approach. I too agree that such ethical grounds exist and should be more widely recognised. I would base my arguments on the injustice involved in dispossession by settler states, the concomitant absence of comprehensive compensation, and the intergenerational costs imposed by the violence used to dispossess Indigenous landowners. Yet such arguments are far from widely accepted in Australia and elsewhere, and gain very little electoral traction.

There are however also a set of economic efficiency arguments that also point to the benefits of more explicit specification of property rights as an enabler of economic development and a facilitator of more efficient negotiations over particular developments. While a focus on working towards ‘just outcomes’ based on the existence of UNDRIP or other human rights instruments is intuitively appealing, it is rarely sufficient to persuade policymakers (and electorates) to shift direction. I have a sense that arguing the case on economic efficiency grounds would have a better chance of success as it engages with policymakers in the language they use themselves.

Even so, I am skeptical that policymakers in Australia (or elsewhere ) are about to shift direction and grant Indigenous landowners FPIC rights. In Australia, there has been no jurisdiction prepared to grant Indigenous interests FPIC in land related legislation since the enactment of the 1976 NT Land Rights Act. Under the Commonwealth’s 1993 Native Title Act, there are only procedural rights available to native title owners and claimants. Governments have not even been prepared to provide core funding to all Prescribed Bodies Corporate notwithstanding their statutory basis and their role in dealing with third party applications to access native title land.

The reason for this policy conservatism boils down to the fact that public policy outcomes in Australia are ultimately not a matter of what is most effective, or efficient, or what is in the public interest, but is determined by a complex interplay of implicit interest group negotiations seeking to influence government decisions. In those implicit negotiations, the onus is on those proposing change to overcome the significant inertial power of those interests benefiting from the status quo. Moreover, the very structures of government have been shaped and influenced over time by the most powerful interest groups which ensure that policy decision processes are weighted against those interests seeking to shift the status quo.  

I had one caveat regarding O’Faircheallaigh’s argument. I too have noted that Indigenous interests both globally and in Australia appear to have gained greater traction in slowing or preventing resource developments that they consider culturally threatening. In Australia, this is largely a result of the procedural rights embedded within the Native Title Act, environmental legislation,  and cultural heritage legislation. Yet while media reports of Indigenous successes are relatively common, I have yet to see any comprehensive data that either supports or refutes this proposition. Intuitively, one element in support of the O’Faircheallaigh proposition is the rise of ESG (link here) as a driver of corporate policies, a shift that is largely being driven from outside of the Indigenous policy domain. This suggests to me that there is an implicit potential for stronger alliances between Indigenous and environmental interests. Yet there is a long (and ongoing ) structural tension between these two sets of interests.

Given this context, the introduction of FPIC for Indigenous landowners in the near future might be characterised as a ‘first best’ solution, but one that is unlikely to eventuate anytime soon. The challenge then for Indigenous interests, academic commentators, and even policymakers (given the fact that lose/lose outcomes are a distinct possibility) is to find ‘second best’ solutions while keeping open the possibility of eventually moving to the ‘first best’ solution.

I don’t have a developed view on what the optimal second best solution matrix looks like, but it does strike me that an ongoing focus on achieving ‘just outcomes’, while important, needs to be supplemented by a stronger dose of pragmatically seeking merely better solutions. If Professor O’Faircheallaigh is correct, and we are looking down the barrel of lose/lose outcomes in the nation’s access to critical minerals and where Indigenous interests who seek to protect their cultural and socio-economic interests will be blamed for delaying the transition to renewables and net zero, there are even stronger grounds for Indigenous interests to proactively position themselves as pragmatic and constructive interlocutors.

My own approach to a ‘second best’ policy matrix would place a stronger focus on:  

• building the capability and intellectual capital (link here) of key Indigenous advocacy organisations so as to both protect existing rights and expand their institutional influence over future public policy decisons;

 

• building the independence of key Indigenous advocacy groups by exploring opportunities for reducing their reliance and use of funding and other mechanisms used by governments to leverage and shape Indigenous policy advocacy;

 

• building alliances and partnerships with like-minded interests (such as environmental interests, public interest advocacy interests, and philanthropies); and

 

• committing to supporting transparency reforms generally so as to place greater pressure on the existing interests who shape and protect the status quo.

Of course, the shape and detail of any second best strategy aimed at greater influence over the coming scale up in resource development is for Indigenous interests to determine and implement. As climate change worsens, the determination of governments to respond will ramp up, and this will inevitably shift the balance of power towards those interests arguing for removing ostensible impediments to rapid mining development. The time for Indigenous interests to devise their own strategic responses to the coming changes is now.

 08 October 2023

 

 Addendum: Here is the link to Professor O'Faircheallaigh's seminar (link here).

12 October 2023