Working towards responsible business practices in the oil and gas sector Rose Kimotho Programme Manager (East Africa) Institute for Human Rights and Business

Overview What is the Nairobi Process? Aims and Objectives Background and Rationale How oil and gas companies can integrate human rights in their operations Addressing human rights challenges in the oil and gas sector: Focusing on security Conclusion

What is the Nairobi Process? An initiative developed by IHRB, in collaboration with KNCHR, which seeks to embed human rights due diligence in Kenya’s emerging oil and gas sector via UN Guiding Principles.

Government Advocacy (human rights input in legislation under review) Business to Business Learning (industry grouping of ‘majors’ and ‘juniors’) Civil Society engagement (capacity building with NHRIs around the UN GPs…) Three strands of intervention

Background Tullow’s Oil Discovery in Kenya in early 2012 Proliferation of oil and gas exploration in the East African region Socio-economic baseline in Kenya (education levels, poverty rates, access to basic services) linked to high level of expectations Kenyan Constitution of 2010 (Bill of Rights) UN Guiding Principles (2011)

Aims and Objectives Creation of industry grouping Ongoing engagement with group of companies Creation of confidential ‘dilemmas forum’ Development of Sector Wide Impact Assessments

Stakeholders Government of Kenya (GoK) Host communities License holders, ie Oil and Gas Companies (‘majors’ and ‘juniors’) Civil Society Organisations (Kenya and East Africa) National Human Rights Institutions (East Africa) Industry Associations

Business and Human Rights Why should oil and gas companies care about human rights?  Because the law requires it.  Because the state is sometimes unable to protect rights.  Because the state is sometimes unwilling to protect rights.  Because it helps companies anticipate and mitigate human rights risks.  Because it helps manage reputation.  Because it can help companies get local approval – “social licence to operate”.  Because external stakeholders ask for it – investors, civil society, prospective employees.  Because internal stakeholders want it – unions, current employees.  Because it is the right thing to do.

International Standards and Guidelines United Nations Guiding Principles on Business and Human Rights (2011) IPIECA Guidelines on Human Rights Due Diligence EU Guidance on Integrating Human Rights Due Diligence in the Oil and Gas Sector Voluntary Principles on Security and Human Rights

Integrating Human Rights respect human rights in projects or operations; seek to prevent or mitigate potential human rights issues that may be caused directly by the company’s projects or operations, or by project partners and suppliers; have policies and processes to manage potential human rights issues; express commitment to respect human rights through a policy statement conduct assessments to identify potential human rights issues in projects or operations, and have processes in place to manage these issues and track responses; communicate with stakeholders about how issues are being addressed; and grievance mechanisms to address issues raised by the community.

Human Rights Due Diligence Assessing actual and potential human rights impacts. Integrating and acting upon the findings. Tracking responses. Communicating how impacts are being addressed.

Human Rights Challenges Public security forces Managing expectations and public awareness-raising Dealing with grievances Land acquisition and use Inter and Intra-communal conflict Community engagement: consultation, dialogue or consent Minorities and Marginalized groups: women and youth Oil and Gas Legal framework Capacity gaps - information on Oil and Gas issues, applying human rights frameworks in Oil and Gas Revenue-sharing and management: national versus local government and communities Lack of social investment Loss of livelihoods (with reference to fisher folk in coastal areas) Water management and use

Addressing Security Stakeholder consultations: Oil and Gas Companies, VP Signatory Governments and Civil Society Identification of security as a major human rights challenge by O+G companies Capacity building around Voluntary Principles on Security and Human Rights Joint Risk Assessments – Companies, VP signatory governments, Police Services & civil society

Conclusion The corporate responsibility to respect human rights means that companies must act with due diligence to avoid infringing on the rights of others. In addition to complying with national laws, the corporate responsibility to respect human rights is the baseline expectation for all companies in all situations. Companies may take on additional responsibilities voluntarily, and in some situations, such as when they perform certain public functions, more may be required of them. Changing corporate culture Aligning policies Undertaking due diligence  Context matters. Impacts matter. Relationships matter. Establishing corrective mechanisms Incentives and disincentives for particular conduct