Consent versus Consultation & the IFC

Souce: PinkMoose

Free, prior and informed consent has a sister acronym: one that up until now, surfaced more regularly in documents produced by industry (and governments) – free, prior, and informed consultation. By and large, if you are looking at enforceable standards (as opposed to soft standards, such as UN Declarations) consultation is the focus of FPIC, rather than consent.

This distinction has long been the ‘thorn in the side’ of this right in the view of Indigenous Peoples and their advocates. However, this trend is changing, with the International Finance Corporation (the lending arm of the World Bank) releasing its new Performance Standards, which will come into effect in January 2012.

The updated Performance Standards were a result of an 18 month consultation with affected stakeholders. As a result, free, prior and informed consent is now enshrined in Performance Standard 7.

Updated Performance Standard 7 – IFC

At the moment, where and how FPIC will be operationalised under the IFC standards is the burning question. The accompanying Guidance Notes are yet to be published – although they were due for publication at the end of October 2011*.

For more commentary, see: Foaley Hoag

* Anyone been able to track them down?


Linked literature: financial returns of stakeholder engagement

It used to be the case that the value of a gold mine was based on three variables: the amount of gold in the ground, the cost of extraction, and the world price of gold. Today, I can show you two mines identical on these three variables that differ in their valuation by an order of magnitude.

Why? Because one has local support and the other doesn‘t.

In this article, the authors take a valuation approach to ascertaining the impact of stakeholder engagement on the value of mining companies. The authors posit that stakeholder engagement (and lack thereof) can be empirically related to company value. For those of us for whom algebra is a long forgotten art, some of the methodology may be a little esoteric; however, this emphasis also provides strength to the CSR business case, which has often been criticised for focusing on qualitative rather than quantitative data.

Check out: Spinning Gold: The Financial Returns to External Stakeholder Engagement

H/T to Peter Bruce

Image credit: Uncle Kick-Kick

CSR – examples of corporations doing brave and awesome things

Credit: Linnikin

Corporate social responsibility (CSR) is often criticised for being a ‘greenwash’ publicity stunt that is all about corporate image and less about social responsibility. However, there certainly are examples of companies taking on issues that are not ‘image safe’ but are socially important. Richard Branson’s advocacy over the last year is a brilliant case in point. Branson has recently come out as a champion for employing ex-offenders. Better yet, he is not only advocating for other companies to do so, Virgin has been employing ex-offenders for the last two years. Branson argues that ‘everyone deserves a second chance,’ noting in a Guardian interview that:

‘For people coming out of prison it’s a vicious circle. If they can’t get a job, the only thing they can do is reoffend. From society’s point of view that can be very painful.’

This comes after Branson joined the board of the Global Commission on Drug Policy, which earlier this year released a report that recommended drug decriminalisation, declaring that:

“the global war on drugs has failed, with devastating consequences for individuals and societies around the world.”

Branson’s copped flack for both causes, but he may be paving the way for a new wave of CSR – one that takes on the tough issues. Regardless of whether or not you agree with the causes, Branson certainly appears to and is championing them without regard to their ability to produce another CSR ‘glossy’.

Do you think that Branson’s advocacy is a different take on CSR or more of the same?

Quickpost: Peru implements right to prior consultation into statutory framework

In September, Peru finally implemented the right to free prior and informed consultation into its legal framework, making the country compliant with its 1993 ratification of ILO 169. The move has been widely applauded by international human rights advocates, and should come as no surprise to political commentators. Indeed, consultation and mining benefit redistribution were key campaign platforms of the country’s new socialist President Humala.

Despite the victory, Peruvian indigenous rights groups remain skeptical about its enactment. One needs only to look at ongoing issues in Bolivia, which has similar laws, to see that enshrining FPIC in law is only a first step. Further, the law does not seem to imply a right to veto, with the government having the final say in project development. The framework supporting the law will be developed by the existing National Institute for Development of Andean, Amazonian and Afro-Peruvians.

Little has been heard from the extractive and investment industries at this stage, which is a little surprising given the previous governments’ refusal to enact the law, fearing it would scare off investment. While it is too soon to tell, it looks not too dissimilar to Australia’s Native Title framework, which has arguably not prevented foreign investment in mining, despite initial predictions.

For more info, check out:


Wealth disparity and ineffective mining wealth distribution – national issues affecting mining-community conflicts in Peru

In a country with considerable mineral wealth, mining-community conflicts have become a part of the socio-political landscape in Peru. For example, the government’s latest report on social conflict noted 214 conflicts across the country, which are mapped below (Defensoria del Pueblo del Peru 2011, 1). Importantly, those areas identified in red below as having 11 or more registered conflicts, are all associated with mining activity.

 National social conflict map – July 2011

(Defensoria del Pueblo del Peru 2011, 4). (Activo=active, latente=latent, socioambiental=socio-environmental)

While there are always specific localised motivators to conflict, it is undeniable that there are underlying pre-existing issues that contribute to these conflicts. The rise of extractive conflicts nationally is generally related to:

  • wealth disparity
  • the neo-liberal reforms that reduced taxes and royalties coupled with local municipal inability to effectively distribute mining related revenues(Arellano-Yanguas 2011, 619).

Mining in Peru over the last decade has typically occurred in remote regions that are typified by their extreme poverty and lack of services. Indeed, despite steady decreases in poverty levels in the coastal populations over the last decade, the rural Andean region’s poverty levels have increased, culminating in a shocking 69% in 2008 (Arellano-Yanguas 2010, 60). Further, these disparities between rural and urban poverty levels are the most severe in Peru, even when compared to its poorer Andean neighbours (Arellano-Yanguas 2010, 61).

Put simply, mining ventures often bring incredible wealth and services to areas that are marked by their lack of these resources. Consequentially, mining companies end up becoming quasi-governmental service providers, and issues arise when companies are not able to effectively take on their new-found role. Further, the companies direct injection of wealth into the communities surrounding it are finite: employment and contracting opportunities generated by mines are limited, and those whom are lucky enough to be recipients become an elevated class; leaving behind those that are not able (or wish) to participate (Environmentally and Socially Sustainable Development Department – Latin America and Caribbean Region 2006, 105–106). Indeed, Arellano-Yanguas argues that the desire of communities to enjoy a greater share of the economic or financial benefits of mining is a strong motivator of conflicts in Peru; where disruptive conflict is seen by communities as the only viable and effective bargaining tool (2010, 111).

The level and distribution of mining related governmental revenue is another feature of these conflicts. President Alberto Fujimoro undertook an aggressive neo-liberalisation project in the 1990s in order to attract foreign investment in the country’s ailing economy. As part of this project, mining taxes and royalties were reduced to be some of the lowest in the world, resulting in many communities voicing concerns (Vasquez 2011, 24). In response, the government undertook activities to increase the amount of mining revenue flowing back into affected communities through the Mining Canon (Canon Minero). However, local governments are often ill-equipped to effectively invest the funds in ways that adequately and sustainably addresses the array of social issues affecting remote communities, resulting in the problem persisting (Vasquez 2011, 24; Environmentally and Socially Sustainable Development Department – Latin America and Caribbean Region 2006, 109).

Arellano-Yanguas. 2011. “Aggravating the resource curse: Decentralisation, mining and conflict in Peru.” Journal of Development Studies 47 (4): 617-638. doi:10.1080/00220381003706478.

Arellano-Yanguas, Javier. 2010. Local politics, conflict, and development in Peruvian mining regions. PhD, England: University of Sussex.

Defensoria del Pueblo del Peru. 2011. Reporte de Conflictos Sociales. Peru: Defensoria del Pueblo del Peru, July.

Elizalde, Bernarda, Christina Sabater, and Melissa Whellams. 2009. Appendix 1: Narrative Reports – 1E Minera Yanacocha, Peru. In Community Relationships Review – Global Summary Report, Newmont, ed. Gare Smith and Daniel Feldman. Foley Hoag.

Environmentally and Socially Sustainable Development Department – Latin America and Caribbean Region. 2006. Republic of Peru – Wealth and Sustainability: The Environmentaland Social Dimensions of the Mining Sector in Peru. The World Bank.

Vasquez, Maria. 2011. The role of employee capacity building in reducing mining company-community conflicts in Peru. Masters, Vancouver: University of British Columbia.

Identifying indigeneity and mining projects: a contentious and complex task

For mining projects, identifying indigeneity has become increasingly important due to the system of frameworks that require specific procedures to be undertaken by companies and governments when impacting indigenous communities. This short article discusses the complexity of identifying indigeneity itself, with a focus on Peru.

Campesinos by

Identifying indigenous communities is widely recognised as a difficult and indeed contentious task (Kuper 2003). This is perhaps even more so in Peru due to a variety of historical and cultural factors. Peru has widely been noted academically as ‘un país sin indígenas’ (a country without indigenous peoples). This statement is intended whimsically, in response to the absence of an indigenous movement in a demographically indigenous country (45%), which is in striking contrast to its Ecuadorian and Bolivian counterparts (Morrissey 2009, 496; Greene 2006, 333).

The terms Indian (indio) and indigenous (indígena) in Peru have specific cultural meanings, which put simply, are ethnic slurs. While it is not my purpose to fully consider the complexities of ethnic classification in Peru, it is important to note that the relationship between Indian and mixed (mestizo) is widely regarded as a fluid continuum that is not so much concerned with race as it is with ‘development’ (Jackson and Warren 2005, 561; García 2005, 8–9; Starn 1991, 70). In her study of Peruvian ethnic identities, De la Cadena notes that within Peruvian ethnic identity construction, individuals become ‘de-indianised’ through a process of literacy and urbanisation, aptly described in a traditional saying ‘a literate Indian is a lost Indian’ (De la Cadena 2010, 346; De la Cadena 2000, 310) . Ultimately, being mestizo does not necessarily mean erasing indigenous cultural identity (García 2005, 9).
The self-identification of communities as ‘campesinos’ (peasants) can point to indigeneity. The term campesino came to be applied legally to rural indigenous communities in 1969 under the Agrarian Reform Law. This law, and the reforms that followed it, were designed to redistribute the land to the communities who had worked the land under the hacienda system of governance (Coxshall 2010, 41; Cleary and Steigenga 2004, 52; Stocks 2005, 95; Kamphuis 2011, 5–6). Campesino communities are typified by their subsistence farming, culturally distinct cultural practices and institutions (such as rondas campesinas – peasant rounds), in addition to communal land holding practices. Thus, campesino communities are recognised under Peruvian law as having the same rights as indigenous peoples (International Labour Office, n.d; Fulmer 2010, 6).

The importance of the role of NGOs in the construction of indigeneity should be considered. While this subject is certainly contentious academically and has been disregarded by the company , it is impossible to ignore the fact the NGOs have consistently acted as key actors in the indigenous movement over the last twenty years. Lucero argues that NGOs such as Oxfam, “legitimising certain identities and de-legitimising other (Lucero 2011, 2). With the continued support of international NGOs, the demands of local actors have increasingly been articulated in terms of indigenous rights frameworks (Lucero 2011; Sandt 2010, 33; Coxshall 2010, 44). Regardless of whether or not the communities in question are considered ‘indigenous’ by the national government or the company, it appears that they are recognised as such on an international stage. As a result, it is likely that this motivator of the conflict will remain, based on continued support and interest by international NGOs.

That ‘indigeneity’ is a complex and ambiguously defined identity demonstrates the need for a solid ethnographic understanding of communities prior to undertaking extractive projects.

De la Cadena, Marisol. 2000. Indigenous Mestizos, De-Indianisation, and Discrimination. In Indigenous Mestizos: the politics of race and culture in Cusco Peru, 1919-1991, 307-330. London: Duke University Press.

———. 2010. “Indigenous Cosmopolitics in the Andes: Conceptual Reflections beyond ‘Politics’.” Cultural Anthropology 25 (2) (May 1): 334-370. doi:10.1111/j.1548-1360.2010.01061.x.

Cleary, Edward L., and Timothy J. Steigenga. 2004. New voice in religion and politics in Bolivia and Peru. In Resurgent voices in Latin America: indigenous peoples, political mobilization, and religious change, 43-65. Rutgers University Press.

Coxshall, Wendy. 2010. “When They Came to Take Our Resources: Mining Conflicts in Peru and Their Complexity.” Social Analysis 54 (1): 35-51. doi:10.3167/sa.2010.540103.

Fulmer, Amanda. 2010. Consultation and its Discontents: Mining, Indigenous Communities and Rights in Peru and Guatemala. In Toronto.

García, María Elena. 2005. Making indigenous citizens: identities, education, and multicultural development in Peru. Stanford University Press.

Greene, Shane. 2006. “Getting Over the Andes: The Geo-Eco-Politics of Indigenous Movements in Peru’s Twenty-First Century Inca Empire.” Journal of Latin American Studies 38 (02): 327-354. doi:10.1017/S0022216X06000733.

International Labour Office. Peru – Latin America – Activities by region.

Jackson, Jean E., and Kay B. Warren. 2005. “INDIGENOUS MOVEMENTS IN LATIN AMERICA, 1992–2004: Controversies, Ironies, New Directions.” Annual Review of Anthropology 34 (October): 549-573.

Kamphuis, Charis. 2011. “The Convergence of Public and Corporate Power: Yanacocha Mine, Campesino Dispossession, Privatized Coercion.” SSRN eLibrary.

Kuper, Adam. 2003. “The return of the native.” Current anthropology 44 (3): 389-402.

Lucero, Jose. 2011. Seeing Like a NGO: Encountering Development and Indigenous Politics in the Andes. In Tulane University, New Orleans, April.

Morrissey, Laura. 2009. “The Rise of Ethnic Politics: Indigenous movements in the Andean region.” Development 52 (4): 496-499.

Sandt, Joris J. 2010. Legal strategies dealing with negative consequences of extractive projects in Latin America. Cordaid.

Starn, Orin. 1991. “Missing the Revolution: Anthropologists and the War in Peru.” Cultural Anthropology 6 (1) (February 1): 63-91.

Stocks, Anthony. 2005. “TOO MUCH FOR TOO FEW: Problems of Indigenous Land Rights in Latin America.” Annual Review of Anthropology 34 (October): 85-104. doi:10.1146/annurev.anthro.33.070203.143844.