Tool 11 – Good Faith Negotiation

Good faith negotiation requires all parties to respect each other’s decision-making processes, appreciate their constraints and be willing to:

  • Engage in negotiation and meet at reasonable times and frequency
  • Provide information needed for informed negotiation and explore key issues
  • Agree mutually acceptable procedures for negotiation, which include sufficient time for decision making
  • Compromise in pursuit of reaching a formal and documented agreement

Good faith negotiation strategies are a prerequisite to gaining FPIC and sustaining it through the project cycle.

Step Guide


From the outset, agree on negotiation processes and procedures through a memorandum of understanding, including agreeing on the style of negotiation


Provide training in culturally appropriate negotiation techniques and relationship building to company personnel and representatives


Undertake detailed consultation with all potentially affected indigenous communities so as to make the negotiation process inclusive


Ensure technical and legal document summaries are presented in plain language, using the preferred language(s) of indigenous groups


Provide sufficient time for negotiation processes – allow indigenous groups time to make decisions


Use interim agreements to help demonstrate that both company and indigenous group are committed to reaching a final agreement

In cases where indigenous groups have little or no experience of mining and may lack the resources to support extended negotiation processes, companies should be prepared to provide support to help build community capacity for good faith negotiation. However, groups are under no obligation to accept this support and it should be offered on a “no-strings attached” basis. Types of support include:

  • Providing funding to indigenous groups to cover employing independent advice, travel and meeting costs
  • Funding legal and negotiations training
  • Underwriting the cost of hiring a lead facilitator

All parties must avoid conduct that is oppressive or coercive, however:

Any party can act in its commercial interests or make use of its legal rights and remedies – provided it acts with full disclosure in the negotiation, to maintain trust

  • Companies must have regard to other obligations, including laws regarding the avoidance of corrupt practices
  • A party is not required to continue negotiations where it believes an agreement will not be possible on reasonable terms or period

Top Tips:

  • Demonstrating good faith negotiation in practice:

    • Initiate and respond to communications in good time
    • Making reasonable proposals, and consider and respond to counterproposals
    • Allow groups to use their own decision-making processes
    • Send appropriate negotiators on behalf of the organisation or group
    • Not adopting a rigid, non-negotiable position
    • Not engaging in one-sided conduct that harms the negotiating process eg issuing inappropriate press releases or public declarations
    • Act consistently and see through commitments