Stockholm (NordSIP) – Most responsible investors in the Nordics recognise the challenging balance between the simultaneous needs to accelerate the green transition and uphold human rights. The associated tensions are, however, considered primarily a problem for remote emerging markets. It is, perhaps, time to acknowledge that the conflict between the dual imperatives exists closer to home, too.
Consider the situation of the Sámi. For thousands of years, Europe’s largest indigenous group has lived in the far north borderless Sápmi region, sustaining a traditional lifestyle of reindeer herding, fishing, farming, and hunting. Yet the expansion of wind farms and mines, crucial for driving the green transition, is adding to the pressure of forestry and infrastructure that is disrupting the delicate ecosystem of Sámpi. New developments, such as the recent discovery of Europe’s largest deposit of rare earth elements near Kiruna, pose further threats to the Sámi’s traditional livelihood.
To gain some insights into the underlying inequalities that allow for the Sámi’s interests to be side-lined in the rush toward a greener future, NordSIP reached out to Elle Merete Omma, Head of the Saami Council EU Unit. A passionate advocate of the Sámi’s cause, she has previously served as Executive Secretary of the Arctic Council Indigenous Peoples Secretariat and a Senior Advisor on Sámi Affairs at the Norwegian Ministry of Local Government and Modernisation. Omma’s current mission is to ensure that the voice of her community is heard in Brussels’s corridors of power and that it is properly represented in the EU’s decision-making processes.
A David and Goliath story
“You need to understand that there is a profound power imbalance at play,” explains Omma. “The political and economic influence that governments and corporations wield is enormous and far outweighs the limited resources of our community. Increasingly, we find ourselves entangled in bureaucratic battles that we are often ill-equipped to fight.”
According to Omma, state legislation is not rigged in the Sámi’s favour. Although the Nordic countries have ratified the United Nations International Convention on the Elimination of All Forms of Racial Discrimination, they have been repeatedly criticised over the years by the Council of Europe and the United Nations Committee on the Elimination of Racial Discrimination (CERD) for not putting it sufficiently into practice. And, the fact remains that both Sweden and Finland are yet to approve the International Labour Organization Convention on Indigenous and Tribal Peoples, so-called ILO 169, which sets the international standards in this area.
The existing gaps in state regulation have led the Sámi to explore alternative governance strategies, from lobbying, court action, and public protests to directly negotiating agreements with developers of projects that aim to exploit land and natural resources. According to Omma, these approaches are not only stretching the limited resources of the communities involved but also yielding limited results.
She points to the findings of an academic paper on the subject published recently. “The harmful outcomes generally outweigh the limited gains [for the analysed agreements between Sámi reindeer herding communities and commercial developers],” conclude the researchers. “This was especially evident in the high-risk agreements for wind power, containing a combination of open consent, gag clauses, and confidentiality. Arguably, it is noteworthy that the renewable energy projects, promoted as part of the green transition, were those with some of the worst outcomes for herding communities.”
Rallying investors with PRI
The question is what responsible investors could do to support the Sámi’s ongoing struggle for a just green transition. To explore the subject, recently, the Nordic chapter of the UN-convened Principles for Responsible Investment (PRI) invited its signatories to a webinar organised in cooperation with the Saami Council.
“We wanted to start a discussion between investors and Sámi on what respecting local indigenous rights looks like on the ground,” explains Magnus Odén, Head of UNPRI in the Nordics, CEE & CIS. “What prompted us to initiate this dialogue now is that indigenous rights will be a key theme during this year’s PRI-in-Person conference in Toronto. The rights of indigenous peoples are often tricky to understand for the investment community,” he adds, referring to the right to self-determination, the right to own, control, and use their lands, territories, and resources, and, in turn, the right to Free and Prior Informed Consent (FPIC).
According to Oden, investors mindful of their delivery on climate and environment commitments might find that taking indigenous rights into account will help mitigate material investment risks such as cost overruns, delays, and project cancellation as the Sápmi area is a focal point in the current investment agenda. “Failure to observe FPIC is one of the reasons why conflicts between corporations and Sámi villages often end up in legal disputes, which result in additional costs to corporations, investors, and Sámi people,” he says.
Omma, too, is of the opinion that there is an apparent need for increased dialogue between investors and the Sámi. “Getting involved in the early stages of projects would be particularly beneficial to mitigating risks for all stakeholders,” she points out. “Institutional investors could play a crucial role in rectifying the current power imbalance, helping us analyse the legal and technical aspects of the projects and their implications.”
“Where government legislation fails, the UN Guiding Principles of Business and Human Rights (UNGP) guides to better outcomes,” reminds Oden. “We urge investors to explore what such ‘better’ outcomes really look like.”
