Over the last few decades the Arctic, due to its abundant natural resources, has gained increasing attention from the international community as one of the last resource frontiers. In Russia hopes for the economic prospects of the region are high. The Russian ambitions are stated in the 2010 Arctic Development Strategy and include among other things an exploration and an exploitation of hydrocarbon and other natural resources and a growth of cargo transportation volumes through the Northern Sea Route.

However, at the same time the Arctic is also a home for indigenous communities whose rights to self-determination, to lands and natural resources, to preserve and develop their culture are recognized under international and national law. It is widely accepted now that indigenous peoples have special connection with the land not only as a basis for the traditional way of life but also on a spiritual level (United Nations Declaration on the Rights of Indigenous Peoples, Article 25). But often subsoil of those lands hide natural resources demanded by the growing world economy: hydrocarbons, gold, silver, rare earths, platinum, diamonds and etc.

According to ethnological studies, commercial activities in the Russian sector of the Arctic have significant social and environmental impacts on indigenous communities, including relocations from their ancestral lands, environmental pollution and social conflicts between oil companies and indigenous communities.

The recent developments of commercial activities in the Arctic might put in danger the fulfilment of the rights of indigenous peoples. Thus, in order to develop the Arctic zone sustainably, it is necessary to find a balance between the grand plans of the state and extractive industries and the interests of indigenous communities.

In regard to indigenous peoples the 1989 ILO Indigenous and Tribal Peoples Convention No 169 establishes requirements of their participation in the benefits derived from the exploration or exploitation of natural resources pertaining to their lands, and fair compensation for any damages which they may sustain as a result of such activities (Article 15(2)). Even though the ILO Convention N 169 is non-binding for Russia, its provisions significantly influenced the development of Russian legislation on the rights of indigenous peoples.

International law and practice developed specific instruments to safeguard indigenous peoples’ rights in conditions of commercial exploitation on the territories they have traditionally occupied: impact assessment, free prior and informed consent and benefit-sharing. The most controversial one among these mechanisms is benefit-sharing. While its concept was substantially developed in the context of the Convention on Biological Diversity and Nagoya Protocol as the fair and equitable sharing of the benefits arising out of the utilization of genetic resources it addresses wide range of issues in the context of natural resources in general and environmental protection.