Growing importance of free, prior and informed consent within carbon markets

FPIC and Human Rights

FPIC is a fundamental principle in human rights that ensures Indigenous Peoples have the right to make decisions about activities affecting their lands and resources. The concept of FPIC stems from the inherent right of Indigenous peoples to self-determination and is recognised in various United Nations (UN) instruments. In 2007, the UN General Assembly adopted the UN Declaration on the Rights of Indigenous People (UNDRIP), which states under Article 32:

1. Indigenous peoples have the right to determine and develop priorities and strategies for the development or use of their lands or territories and other resources.
2. States shall consult and cooperate in good faith with the indigenous peoples concerned through their own representative institutions in order to obtain their free, prior and informed consent prior to the approval of any project affecting their lands or territories and other resources, particularly in connection with the development, utilization or exploitation of mineral, water or other resources.

There is no universally agreed definition of “Indigenous Peoples”, however it is estimated that there are more than 370 million Indigenous people spread across 70 countries worldwide each practicing their own unique traditions.¹  This reflects the rich diversity of Indigenous communities worldwide. The UN Permanent Forum on Indigenous Issues does however suggest that the term can be understood through a range of factors including “self-identification as indigenous people”, “historical continuity with pre-colonial and/or pre-settler societies”, “strong links to territories and surrounding natural resources” and “distinct language, culture and beliefs”.²

What is FPIC?

FPIC is both an outcome and a process. The outcome is the right to say ‘yes’ or ‘no’ (for example, to a carbon project), and the process is the decision-making steps that must be followed to ensure Indigenous Peoples are appropriately consulted and have control over decisions that may affect their rights and interests.

It is important when considering FPIC to understand each of its components. Below is an overview of each part:³

1. Free means the decision made is given voluntarily, without force, coercion, intimidation or manipulation.
2. Prior means that no decision is expected before sufficient time has been had for consideration, and that consent is sought in advance of the project starting.
3. Informed means communities are fully informed about the costs, benefits and risks of the project, are provided with accurate and accessible information, and have the opportunity to seek their own independent legal and technical advice.
4. Consent means the right to say ‘yes’ or ‘no’, and that decision is made through collective decision making after the above elements are met.

At the national law level, the scale and degree to which FPIC is mandated by legislation varies between jurisdictions and industries. For its part, Australia has endorsed the UNDRIP and, relevantly to carbon projects, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) recently published guidance on best practices when engaging with First Nations communities in a manner which reflects the principles of FPIC.⁴ The Indigenous Carbon Industry Network has also published a useful Indigenous Carbon Projects Guide⁵ which includes a chapter on FPIC.

Recent FPIC-related litigation

The relevance of FPIC to carbon markets has come to the forefront in recent years. This is likely owing to an increase in demand for carbon credits (which has led to more projects being developed on the territories of Indigenous Peoples) and a renewed focus on the integrity of those credits. This has appropriately triggered renewed efforts within carbon markets to ensure appropriate benefit sharing and respect for the interests of local communities affected by projects.

In this section, we consider three high-profile international cases which centred on FPIC issues arising in relation to carbon projects. These provide useful insights on common issues which may arise in this area and the continued development of FPIC best practices.

Colombia – Pirá Paraná Indigenous Council and Association of Indigenous Traditional Authorities of River Pirá Paraná “ACAIPI” v Ministry of Environment and Sustainable Development & ors

In June 2024, Colombia’s Constitutional Court ruled in favour of the Pirá Paraná Indigenous Council and Association of Indigenous Traditional Authorities (the claimants) who filed a legal action against several entities involved in the REDD+ carbon project known as “Baka Rokarire”. The defendants included project developers, the standard Cercarbono and the Ministry of Environment of Colombia.⁶

The claimants argued that their rights, including to self-determination, cultural integrity, governance and territorial sovereignty, had been violated. The court agreed, finding that the defendants had failed to:

1. Incorporate domestic and international human rights standards.
2. Ensure free, prior and informed consent.
3. Adequately monitor harms from the project.
4. Integrate ethnic and Indigenous perspectives into the project.

In relation to FPIC, the Court recognised it arises if a project involves the displacement or transfer of communities, the storage or dumping of waste on their territories and/or a significant social, cultural and environmental impact which puts a community’s existence at risk.

he judgment also provided that FPIC must be applied in a way that considers the specific impacts of that proposed project (i.e. it cannot be applied in a one-size-fits-all approach across the voluntary carbon market).

Kenya – Osman & 164 Others v Northern Rangelands Trust & 8 Others

On 24 January 2025, Kenya’s Environment and Land Court ruled in favour of residents of the Chari and Cherab Wards in Isiolo, who had challenged the establishment of conservancies aimed at supporting wildlife conservation and carbon offset projects.⁷

The claimants had argued that these initiatives were implemented without their consent or meaningful participation, violating constitutional rights to cultural heritage, property, and a clean and healthy environment. The court agreed, finding that public participation had been insufficient and noting that evidence of community engagement only emerged after legal proceedings had begun, failing to demonstrate prior consultation.

As a result, the developers were required to cease all conservancy operations and the court issued permanent injunctions prohibiting the respondents from entering or conducting any activities on the unregistered community land.⁸ Additionally, the court ordered the revocation of any licenses or authorities previously granted for the establishment and management of the conservancies and directed government agencies to facilitate the proper registration of the community land in accordance with Kenya’s Community Land Act 2016.⁹

Brazil – legal action by Ka’apor people

Most recently, in May 2025, the Federal Court of Maranhao in Brazil ordered the suspension of a potential REDD+ carbon project on 531 hectares of Indigenous territory in the Brazilian Amazon. This followed a lawsuit by the Ka’apor people against Wildlife Works Brazil (WWB), the national government and the National Foundation for Indigenous Peoples.¹⁰

The claimants argued that there was no prior consultation and that the project, which aimed to generate and sell carbon credits, breached Brazil’s constitution and International Labour Organisation Convention 169 which protects the FPIC rights of Indigenous and tribal peoples.

WWB argued that it had engaged with several of the territory’s communities and had intended to follow FPIC procedures. However, the court found it could not conclude that FPIC was conducted in a legitimate manner that ensured the meaningful participation of all affected Indigenous communities.

In reaching its decision to suspend the project, the court placed a strong emphasis on the claimants’ submissions that a significant group of the Ka’apor people had voiced opposition to the project and were excluded from the consultation process. This exclusion undermined the integrity of the consent process and highlighted systemic shortcomings in how Indigenous voices were represented.

The above decisions underscore the critical importance of genuinely engaging and involving all affected communities in the conversation from the very start of a proposed carbon project, as well as during every stage of its lifespan. They also demonstrate that courts take seriously a developer’s FPIC responsibilities, signalling to all carbon market stakeholders that the actions of carbon project actors need to be aligned with the provisions and ethos of the UNDRIP.

FPIC and the ACCU Scheme

Since the Juukan Gorge incident in 2020 when Rio Tinto destroyed culturally significant sites in the Pilbara, Western Australia without the knowledge or prior consent of the Puutu Kunti Kurrama traditional owners, FPIC has become a more prominent concern in Australia. This is now driving changes to Australia’s domestic carbon credit scheme.

Under the CFI Act, currently project proponents are only required to obtain consent from parties with an eligible interest in the land – including Native Title holders – before the end of the first reporting period (which can be a maximum period of five years for carbon sequestration projects).¹¹  This means that a carbon project can be conditionally registered pending the consent of all those with an eligible interest. Native Title holders have a right of veto, which means that they have the right to say yes or no to the carbon project, and if they say no, consent will not be obtained, and the project cannot receive ACCUs. This is why FPIC is crucial.

The 2022 Chubb Review (Review), which we previously discussed here, made 16 recommendations to improve the ACCU Scheme and ensure that it remains fit for purpose. One of these recommendations was Recommendation 11¹² which was to:

a) Amend the CFI Act to require project proponents to have applied best practice principles to seek FPIC from Native Title holders and claimants over land prior to the registration of an area-based project on that land.

b) When implementing the recommendations to support Native Title Representative Bodies and other relevant bodies in the application of FPIC, extend this support to include Native Title claimants, and consider supporting other service providers to advice people seeking and giving consent to ACCUS Scheme projects.

The Australian Government accepted the Review’s recommendations; in particular Recommendation 11 was agreed in principle and identified as a priority.¹³  In August 2023, the DCCEEW released a discussion paper inviting public input on its implementation of the Review recommendations (Discussion Paper).¹⁴

The Discussion Paper proposed an approach akin to the (then) Nature Repair Market Bill 2023 whereby a registered Native Title body corporate must provide written agreement, unconditional or conditional, before a project can be registered.¹⁵  The Discussion Paper also considered other approaches such as permitting conditional registration if the project proponent makes regular payments to relevant Native Title holders, or only allowing projects to be registered if they have full consent.

The most recent update in relation to the implementation of Recommendation 11 is that the government has committed $11.8 million in the 2024-25 Budget to support First Nations people over the next four years to increase access to technical support and legal expertise needed to engage in consent processes for ACCU projects on Native Title lands.¹⁶  However, it is not yet known when the legal reforms required to implement Recommendation 11 will be progressed.

Conclusion

As FPIC protections and standards evolve internationally and within Australia, alongside growing legislation, credibility and public trust in climate action will depend not only on emissions targets, but on the integrity of the systems behind them. That means, building carbon markets that are not only effective and transparent, but also grounded on genuine consent and principles of FPIC. The stark reality is that if carbon project developers do not keep up to date with best practice and fail to implement principles of FPIC, this will likely pose significant legal, financial, reputational, social and operational risks for their project activities. By integrating FPIC from the very beginning, projects will be grounded on trust and respect, which amongst other things will ensure their long term social and environmental success.

Norton Rose Fulbright has extensive experience of advising clients in compliance and voluntary carbon market schemes, including acting for a number of Indigenous parties across different methodologies, and advising in relation to stakeholder consent and benefit-sharing agreements. Please reach out if you have any questions or would like assistance with a legal matter relating to the carbon market nationally or globally.