Making the Business Case for Community ... - Institute of the Americas

consultation be prior, free, informed, and in good faith. ... Several Latin American countries have ratified the ..... the “offshore-inland” model, based on the same.
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Making the Business Case for Community Engagement in Latin America


the most attention. But in reality, the direct (and indirect) impact of large-scale projects covers the spectrum of extractive industries and associated infrastructure. Throughout the Americas, issues have arisen in cases of pipelines, wind farms, LNG terminals, as well as upstream oil and gas activities.

ommunities across Latin America have become increasingly engaged and empowered to make decisions that seek a balance between economic development, environmental conservation, and upholding cultural traditions and ways of life.

As a plethora of institutions, regulations, and mechanisms have emerged to deal with these complex relationships, the question remains how much progress has been made in Latin America’s energy sector. Moreover, how far does Latin America still have to go?

At the same time, the public and private sectors are realizing the importance of community engagement. For companies, good community relations have a ect outcomes. For governments, there are a multitude of reasons to shore up community support, from the desire for private investment and

This report examines the evolving rights and responsibilities of governments, corporations, and civil society through the lens of four key markets: Mexico, Colombia, Peru, and Chile.

populations in the vicinity of energy projects and beyond.

Consulta Previa

rise, early and constant community engagement is becoming more urgent. This is particularly evident in the energy sector, where large-scale and longterm investment is at stake.

Of the numerous local and global responses that have emerged to navigate the relationship between governments and communities, the right of indigenous peoples to free, prior, and informed consultation is the most well-known.

National governments will always play a critical and antecedent role. Invariably, the State should be the

The process of prior consultation — or consulta previa — stems from the International Labour Organization’s (ILO) Convention 169 on indigenous and tribal peoples. The Convention requires consultation be prior, free, informed, and in good faith. An in-depth analysis of the advantages and drawbacks of Convention 169, as well as the ample jurisprudence developed in national courts and the Inter-American Court of Human Rights is beyond the scope of this report. Still it bears noting that the tool has become a particularly powerful one in reshaping the relationship between the State and indigenous communities, as well as an important means for recourse when communities

operators become involved. Frequently this relationship is outlined in national and international law, as in the case of prior consultation with indigenous communities. Still, most energy projects outlast the electoral cycle. A strong regulatory framework needs to be in place to ensure certainty and stability over the long term, one that will have a life beyond the administration that implements it. This needs to guide government, company, and community roles and responsibilities. Early studies on community social responsibility have focused on the mining sector. The highly visible and often damaging nature of mineral extraction has meant that these cases have received 1

Making the Business Case for Community Engagement in Latin America Several Latin American countries have ratified the agreement and enshrined the ILO’s principles in domestic legislation. Colombia passed Law 21 in 1991; Peru passed its prior consultation law in 2011. Chile is still working towards an adequate community engagement mechanism. While Mexico is in the enviable position of being able to learn from early adopters’ mistakes as it develops its own approach to social conflict under a national energy reform.


As for when it should be applied, ind