Research Paper Number

75/2014

View the research paper on SSRN here.

Document Type

Article

Publication Date

2014

Keywords

Indígena; Principios del Ecuador; Consentimiento previo; libre e informado; Consulta; Canadá; Instituciones financieras; Bancos; Indigenous; Equator Principles; free; prior; informed consent; consultation; Canada; financial institutions; banks

Abstract

The government agency that supervises financial institutions in Peru announced in December 2013 that it would promulgate rules on assessing risks associated with social conflicts surrounding mining. The wisdom of this approach was confirmed by the findings of a Harvard University report on the high costs of social conflicts associated with mining, released in May 2014. In the article below, we describe how the International Financial Corporation of the World Bank, and the 77 global financial institutions who have signed on to the Equator Principles, have come to the conclusion that social conflict with indigenous communities needs to be resolved through the application of free, prior, informed, consent. While the requirement to obtain consent of an indigenous community would appear to make it more difficult for extractive industry projects to proceed, theories of dispute resolution developed by the Harvard Negotiation Project suggest that where consent is obtained, it is more likely that conflicts will be reduced. This article concludes with the observation that the banks have concluded that the benefits that would result from reduced social conflict in cases where consent was obtained, outweighed the disadvantages of the possibility that some projects would not be able to go ahead for lack of consent.

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