Reinsurer AXIS Capital has adopted a new policy stating that the firm will not insure energy, mining among other projects sans the support of impacted communities, reported Reuters.     

The updated human rights policy stresses the need for clients to have obtained the right to Free, Prior and Informed Consent (FPIC) of concerned indigenous communities.

FPIC right, listed in the United Nations Declaration on the Rights of Indigenous Peoples, gives the people right to permit or withhold consent to a specific project, and also the power to negotiate the various terms of the project.

The company also specifies the types of transactions the policy applies to.

The latest announcement follows years of demonstrations by affected communities, indigenous rights organisations as well as environmental activists urging insurance firms to only underwrite clients who abide by human rights.

Reuters, quoting non-government organisation Rainforest Action Network (RAN), said AXIS “set a fresh standard for best practice” by becoming the first North American insurer to make such a move.

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By GlobalData

AXIS’ previous fossil fuel underwriting restrictions include its move to cut support for the tar sands oil sector in 2020.

Last year, the firm withdrew support for oil and gas drilling in the Arctic National Wildlife Refuge. AXIS has also vowed to phase out coal insurance.

In Europe, Swiss Re and Allianz have reference to FPIC in their human rights policies. While Swiss Re states that it does not support businesses that adversely impact the rights of specific groups of people, Allianz’s policy mentions that human rights-sensitive deals are monitored for FPIC.