According to recent estimates by the Inter-American Development Bank (IADB), Latin America suffers from an infrastructure gap of around 2.5 percent of GDP, or around $150 billion per year. A situation that, despite the progress made in recent years in terms of infrastructure development, makes the region still far from reaching the UN Development Goals in 2030 in terms of infrastructure development as underlined by the United Nations Economic Commission for Latin America and the Caribbean (CEPAL).
Therefore, the governments in the region are constantly searching to implement new infrastructure development, for transportation and highway development, power generation and electric network expansion, water and waste management and other projects, through tenders, private and public partnerships, or even private investments alone. Among the diverse challenges that governments and private companies have to addressing the region to develop new infrastructure, managing relationships with local communities, in particular with indigenous local communities, has become a main topic to deal with.
A Trade-off Between Economic Development and Indigenous/Local Communities’ Rights?
In Latin America, the problem of infrastructure development affecting indigenous peoples’ lands and ancestral rights has always been an important issue, woefully managed incorrectly in the past by authoritarian governments and lacking in respect for human rights. Nonetheless, in the late eighties, the International Labor Organization created the “Indigenous and Tribal Peoples Convention” (169 Convention), that established the obligation for governments to promote the participation of tribal and indigenous communities in making decisions that could affect their development. It was meant as a tool for governments to avoid further confrontations with local communities, attempting to find channels of dialogue for the development of new projects that could affect the communities directly. Even so, it has not been accurately implemented by governments and has been misinterpreted by others as the faculty of the communities to veto projects, and instead of getting developers and communities to dialogue about the best way to develop these projects, it has been misused to put a hold on their development.
Case study 1: Extension of Tucururí transmission line to Roraima, Brazil
In the beginning of 2019, the government of Brazil announced that it was going to revise the expansion of its electrical transmission lines in order to connect a particularly isolated state to the principal energy grid. The main purpose was to become independent from the energy imported from Venezuela (because of power cuts, political issues, and considering that supply was mainly combustion-generated), which represented around 70% of this state’s energy demand, and instead supply the energy with the national power grid and national resources (in this case existing renewable generation). The expansion had been planned since 2011, and it would go alongside an existing highway, yet the project found great resistance as it had to pass through 125 kilometers (200 electrical power towers) of an indigenous community. The Waimiri Atroari resistance was based, among other allegations, mainly on the lack of community consultation under the ILO 169 Convention, arguing that the project would have “irreversible impacts on the culture and livelihood of the indigenous”, and demanded that the government engage in consultation prior to commencing construction. This created a delay in execution of the project, to the point that almost 10 years later the project has not been concluded and the company in charge of its execution is alleging over-costs (for almost the double the initial investment).
Case study 2: Programa especial para el Aprovechamiento de Energías renovables, Mexico
In an attempt to modify the country’s energy supply, overcoming the use of fossil fuels for power generation and switching to greener and cleaner technologies, the government of Mexico decided to implement, in the southern region of the country, wind power generation and solar PV farms (considering that the region has the best conditions for these kinds of technologies). Several tenders were formulated and permits to private companies were given to develop the infrastructure. However, almost all the approved projects have (particularly in the states of Yucatan and Oaxaca) encountered local communities asking to be consulted under the ILO 169 treaty, arguing that they should have been consulted not only before the project started but when the government decided to implement this new energy generation strategy. As the government seeks to progress with cleaner energy supply, this inadequate attention to these communities and the misinterpretation of the convention has caused severe delays in project implementation and with high over-costs that would be transmitted to consumers or would result in the dismissal of the projects.
This are only two examples, but like these there are so many other cases in the region, sometimes to the point of total suspension of existing and functioning projects. For example, in Guatemala a developed hydroelectric power plant was suspended after an allegation that the consultation according to the ILO 169 treaty was not carried out and there were demands to close the already functioning power plant, whose operation was suspended in 2015, appointing the government to carry out consultation.
No matter what kind of issues are affecting projects, misinterpretation of the use of the Convention, intended as veto by the communities, and the existence of external groups that take advantage of the situation, extorting companies by manipulating the situation and misinforming the communities in order to obtain money and not benefit the communities directly, have made it difficult to implement its content. Also, other challenges remain, such as finding the correct representation (who to talk to) identifying legitimate concerns (and not just the “not in my backyard” mentality), getting adequate follow up from governments, and determining correctways to make the dialogue’s conclusions enforceable (for companies and communities).
Firstly, developers need to study every project beyond its technical characteristics; they need to pay attention to the sustainability of the project by also studying the type of communities in the proximity and the resulting impacts or effects on them, including studying the communities to understand their history and analyzing the application of the ILO 169 Convention, as well as the type of properties on which the projects should be situated. The feasibility study needs to include the “social factor” that can determine, in a preventive manner, where and when resistance can be found, and the measures that need to be taken to obtain the licencia social (intended as the acknowledgment and understanding of the project and its consequences by the community affected, and foreseeing the adequate indemnities to pay or measurements to take to offset negative effects) prior not to execution of the project but in order to determinate its feasibility, allowing companies and governments to establish schedules that allow enough time for the communities to participate, and including in the project budgets the corrective actions that need to be carried out.
Neglecting to carry out this type of study, can lead to future indigenous communities’ resistance, that can include not only protests, but physical actions such as blocking roads, closing work sites, even violent attacks on private property and company workers, or, as seen before, the misuse of legal actions that take several years to be resolved. All of this leads to a waste of time and money, the two main pillars of any infrastructure development.
It is important to remember that for some time, lack of regulation and standard corruption created an environment of mistrust and nowadays the perception is that projects are developed through “non-existent and inadequate informative and consultative process, non-serious and incomplete environmental studies, irregularities in land rental contracts, criminalization of protest, etc...”. Consequently misinformation, deficiency in approaching affected communities in good faith and the probable use of wrong channels to address these issues, contributes to generating resistance to projects, even in those cases when they do not have external negative effects on communities or represent great benefits for the country.
Secondly, developers need to find new channels of communication, delivering clear and transparent information about the projects and their inevitable consequences, addressing negative impacts with clear solutions for the population affected. Lack of attention to corrective activities has been a main factor for conflict, as showed in a study conducted by the International Development Bank“The absence of community benefits led to the emergence of conflicts in 80% of the cases. The communities were concerned that they would have to bear the negative impacts of the project without receiving adequate benefits as compensation”.
The ILO 169 Convention directly addresses governments, but there are some principles that can and should be followed to obtain better results, such as the United Nation’s Guiding Principles on Business and Human Rights, and the OECD Guidelines for Multinational Enterprises.
Lastly, governments in the region need to establish adequate implementation of the Convention, involving local communities in understanding and legitimizing projects, regulating correct practices for environmental studies, clarifying private and communal property rights and having clear policies in the use of natural resources.
The main challenge remains finding an equilibrium between local indigenous communities and infrastructure development in Latin America, that is, how to find the perfect match between public interest and local and indigenous interest (that can include preservation of traditions, lands, or environments). There must be clear studies of the project’s impacts and benefits to the population overall, because in the end national interests will always prevail over particular interests, but managed and presented correctly can have totally different results.
 For example in the south of México, “(…) 70% of the lands are considered social property under two regulatory schemes: community lands (historical territories of communities) and ejidos (lands that the governments of the 1910 revolution granted to peasants). Wind farms in this region have been built on this kind of lands.”