Cover Photos (top to bottom) - Environmental Law Institute · Cover Photos (top to bottom): Alfredo Rengifo Navarrete, mayor of the municipality of Tambogrande in Peru, casts his

Cover Photos (top to bottom):

Alfredo Rengifo Navarrete, mayor of the municipality of Tambogrande in Peru, casts hisvote to determine the future of mining activities in the region. The turnout for the vote wasapproximately 74 percent, and an overwhelming 98 percent voted against the mine.Tambogrande, June 2, 2002. Credit: Edgardo Castañeda for GUARANGO Film & Video,courtesy of Oxfam America.

One of the ballots used for the municipal vote in Tambogrande. The ballot asked voters ifthey agreed with the development of mining activities in urban areas, areas of urban expan-sion, agricultural areas or areas of agricultural expansion in the Tambogrande MunicipalDistrict. Tambogrande, June 2, 2002. Photo by Edgardo Castañeda for GUARANGO Film& Video, courtesy of Oxfam America.

Whitehorse Copper mine and mill near Whitehorse, Yukon Territory; the mine producedcopper from a skarn deposit from 1967 to 1982. Photo by Dave Sinclair, courtesy of Na-tional Resources Canada.

People gather in Tambogrande to participate in the municipal vote. Although the vote wasn�tmandatory (official votes are mandatory for Peruvians from 18 to 60 years old), many peas-ants came from the country-side, where the majority of population lives, because they wantedto participate. Tambogrande, June 2, 2002. Credit: Edgardo Castañeda for GUARANGOFilm & Video, courtesy of Oxfam America.

Sociedad Peruana

de Derecho Ambiental

PRIOR INFORMED CONSENT AND MININGPromoting the Sustainable Development of Local Communities

Environmental Law Institute®

Copyright©2004

Prior Informed Consent and Mining: Promoting the Sustainable Development of Local Communities

Copyright©2003 Environmental Law Institute®

Washington D.C. All rights reserved.

ISBN# 1-58576-076-5, ELI project code 010901

An electronic retrievable copy (PDF file) of this report may be obtained for no cost from theEnvironmental Law Institute website <www.elistore.org>.

[Note: ELI Terms of Use will apply and are available on site.]

(Environmental Law Institute®, The Environmental Forum®, and ELR® � The Environmental LawReporter® are registered trademarks of the Environmental Law Institute.)

ACKNOWLEDGMENTS

T his report was authored by ELI Senior Attorney Susan Bass, ELIStaff Attorney Pooja Seth Parikh, and ELI Law Fellows RomanCzebiniak and Meg Filbey. ELI Publications Manager Wendy

Sandoz assisted in the production of this report.

ELI would like to thank its project partners for their contributions tothis report: Martin Scurrah, Javier Aroca, Walter Chamochumbi Chavez,and Keith Slack at Oxfam America and Adriana Aurazo and Manuel Pulgar-Vidal at Sociedad Peruana de Derecho Ambiental. ELI would also like tothank external reviewers Hernan Blanco at Proyecto CIPMA-FMAM(Chile), Benjamin Cashore at the Yale School of Forestry and Environ-ment, Anna Cederstav and Astrid Puentes at Earthjustice, and RachelKyte at the International Finance Corporation for their helpful commentson draft sections of the report.

Financial support for this research project was provided by the FordFoundation.

This report is also available in Spanish.

PRIOR INFORMED CONSENTIV

VINTRODUCTION

TABLE OF CONTENTS

Executive Summary .......................................................................................................................................................... vii

Introduction ........................................................................................................................................................................ 1The �Mining and Communities Project� ....................................................................................................... 1

Mining and Communities ..................................................................................................................... 2Growing Relevance of Prior Informed Consent ............................................................................. 2Defining the Community�s Right to Prior Informed Consent ....................................................... 3

Case Studies ........................................................................................................................................................................ 5Policymaking Processes .................................................................................................................................... 5

World Commission on Dams .............................................................................................................. 5The Aboriginal Land Rights (Northern Territory) Act of 1976 (Australia) ................................ 7

Mining Projects .................................................................................................................................................. 9Whitehorse Mining Initiative (Canada) .............................................................................................. 9Diavik Mine (Canada) ........................................................................................................................... 11Voisey�s Bay Mining Project (Canada) ................................................................................................ 13Ekati Mine (Canada) .............................................................................................................................. 16Camisea Oil Project (Peru) .................................................................................................................. 18Tambogrande Mining Project (Peru) .................................................................................................. 21Stillwater Mine (United States) ............................................................................................................ 25

Analysis ................................................................................................................................................................................. 28Authority for Prior Informed Consent .......................................................................................................... 28Threshold Definitions ....................................................................................................................................... 30Procedural Aspects of the Prior Informed Consent Process .................................................................... 33Long-term Implementation of the Process .................................................................................................. 38

Conclusion ........................................................................................................................................................................... 41

PRIOR INFORMED CONSENTVI

W hile national governments and multinationalcorporations profit from mining explorationand operations around the world, local com-

munities often bear the brunt of the negative environ-mental, social and economic impacts of these activities.In response, there is a growing effort among communi-ties to control the impacts of mining on lands that theyoccupy or use. Mining communities have begun to as-sert their right to exercise some form of prior informedconsent to mining exploration and operations, therebysetting their own priorities for development that has animpact on their lives, livelihoods, and culture.

This report examines the emerging concept andpractice of �prior informed consent� in the context ofcommunities affected by mining. For the purpose ofthis report, the term �prior informed consent� refersto the right of a local community to be informed aboutmining operations on a full and timely basis and to ap-prove a mining operation prior to the commencementof operation. This includes participation in setting theterms and conditions addressing the economic, social,and environmental impacts of all phases of mining andpost-mining operations.

However, as revealed in the report, this right is notoften manifested in full, but rather in a range of de-grees and variations�from the right of communitiesto be informed regarding mining development, to theright to dictate the terms and conditions of mining de-velopment, to the right to veto mining development oncommunity lands. The report draws upon analyses ofnine case studies where the right of prior informed con-sent was a significant issue. The report explores thesevarious manifestations, recognizing that the right of af-fected communities to exercise prior informed consentis critical to promoting long-term sustainable develop-ment, democratic processes, and respect for basic hu-man rights.

The case studies reveal that on the national and lo-cal level recognition of mining communities as key part-

ners in decision-making is growing. Governments areincreasingly acknowledging the importance and legiti-macy of various components of the right to prior in-formed consent, particularly the rights of indigenouspeople to control development of their lands. This rec-ognition is evident in expanding requirements for min-ing companies to provide information to and consultwith local communities, and in a limited number of cases,obtain their consent to mining projects. Mining compa-nies are also increasingly consulting with communitiesto obtain a �social license to operate,� even in the ab-sence of legal requirements, in order to avoid incurringcosts due to community resistance and risks to theircorporate reputations.

In addition to efforts asserted and exercised at thenational level, the right to prior informed consent isgaining prominence in the international arena. Interna-tional instruments, including both legally-binding trea-ties and non-binding guidelines and declarations, haverecognized the right of affected communities�particu-larly indigenous communities�to participate in min-ing-related decision- making. Growing consensus in in-ternational processes as to the definition of prior in-formed consent may contribute to eventual recognitionof this right as customary law. However, individual statepractice is not sufficiently consistent or widespread soas to confirm such a right as customary law today.

The right to prior informed consent is effective onlyif it is defined and applied in a manner that guaranteesthe sustainable development of local communities.Through analysis of numerous case studies involvingvariations of the right of prior informed consent, thisreport identifies the key elements of an effective rightto prior informed consent. These elements include theneed to legally establish this right, the need to broadlydefine the community to be consulted, the right to vetomining development, and the right to participate inmonitoring and enforcement.

EXECUTIVE SUMMARY

VIIEXECUTIVE SUMMARY

PRIOR INFORMED CONSENT

INTRODUCTION

THE �MINING AND COMMUNITIES PROJECT�

Around the world, local communities often bearthe worst of the environmental, social, andeconomic impacts of mining operations. Com-

munities may be forced off their lands as a result ofconcessions granted to mining companies, and have toforego traditional means of earning a living. Their drink-ing water, rivers, and lakes may be polluted as a resultof improperly designed or badly conducted miningoperations. Smelters can release toxic air pollutants withserious health and environmental consequences. Theintroduction of outside practices and lifestyles may in-terfere with local social and cultural traditions, and in-troduce devastating diseases and problems, such asHIV/AIDS and alcoholism to remote villages.

Although laws protecting the rights and interestsof mining communities have been advancing in somecountries, thus far they are extremely limited. Enforce-ment of these measures is rare, due to lack of politicalwill and limited financial resources of many nationalgovernments. Although citizens in many countries nowhave the right to file complaints and bring their ownenforcement actions, the lack of information, resources,and capacity often hinders their ability to take maxi-mum advantage of sophisticated legal mechanisms, suchas citizen suits. Citizens also often have little or no voiceat the outset in the development of standards to regu-late the environmental, social, and economic impactsof mining.

To assist mining communities in addressing thesechallenges, in 2001 the Environmental Law Institute(ELI), Oxfam America, and the Sociedad Peruana DeDerecho Ambiental launched the �Mining and Com-munities Project� with the support of the Ford Foun-dation. This initiative sought to help communities inthe Andean region explore and develop their own envi-ronmental, social, and economic agenda for the devel-opment of local mining operations, and to identify andevaluate a range of strategies and mechanisms, includ-ing certification systems, for promoting this agenda.

One of the first steps in the project was to identifythe legal rights of communities with respect to miningoperations. In determining these rights, project team

members became aware of the urgent need to clarify afundamental set of issues: Are mining companies re-quired to seek the prior informed consent of local com-munities? And if they are, �What terms and conditionsare communities entitled to impose on mining opera-tions in connection with giving their prior informedconsent?�

The answers to these questions are of great impor-tance and consequence, not only to the communitiesinvolved in the Mining and Communities Project, butalso to other communities affected or potentially af-fected by mining operations, advocacy groups workingon behalf of these communities, governmentpolicymakers and regulators, and mining companiesthemselves. The existence of a right to prior informedconsent would strengthen the position of communitiesin formal proceedings and informal negotiations withgovernments and mining companies. In the absence ofsuch a clear-cut right or during its development andimplementation, communities may need to rely on dif-ferent or complementary tools, such as a certificationsystem, boycotts, or advocacy campaigns. In addition,knowing the scope and detail of the terms and condi-tions that communities are entitled to impose on min-ing operations would help frame the scope of a com-munity- based agenda.

The purpose of this report is to describe and ana-lyze the current status of the legal and conceptual frame-work and the actual practice of prior informed consentin the context of communities affected by mining. Thereport adopts as the working definition of prior in-formed consent the right of the local community to beinformed about potential mining operations on a com-plete and timely basis and to approve the operation priorto the commencement of the operation. This includesfull participation in setting the terms and conditionsaddressing the economic, social and environmental im-pacts of all phases of mining and post-mining opera-tions. This definition of prior informed consent is con-sistent with and critical to promoting long-term sus-tainable development, democratic governance processes,and respect for basic human rights.

Specifically, the report sets out to identify and un-derstand:

� What are the legal and extra-legal authorities forthe right of prior informed consent?

INTRODUCTION

INTRODUCTION 1


� How have the key concepts involved in the exer-cise of this right (community, consent, decision-making processes) been defined?

� How have the procedural aspects of this right beenstructured ?

� What are the mechanisms for guaranteeing long-term implementation of this right?

To conduct research on these issues for the report,ELI staff, in consultation with the project partners, iden-tified and selected for examination and analysis nine casestudies where the right of prior informed consent wasa significant issue. In the first three case studies, thetopic of prior informed consent is explored in the con-text of a policymaking or legislative initiative. In thenext six case studies, prior informed consent is reviewedin the context of a specific mining operation. The rightof prior informed consent involved in many of thesecase studies was of narrower scope than the workingdefinition of the right that is used in this paper. How-ever, since many key elements of the broader right wereat issue in these cases, an analysis of the policy basisand practice of these key elements is of great relevanceto an understanding of the broader right.

MINING AND COMMUNITIES

Recent decades have seen dramatic growth in themining sector worldwide. A combination of factors,including growing global demand for minerals, techno-logical changes that have in-creased the accessibility ofminerals, and relaxed regula-tory environments in hostcountries, have contributed tothis growth.1 Much of thegrowth has occurred on ornear indigenous lands. It isestimated that in 20 years,about half of all gold and copper mined will come fromterritories used or claimed by indigenous people.2

Mining presents communities with opportunities foreconomic and social development, as well as risks ofnegative environmental and social impacts. Potentiallypositive impacts can include increased access to jobs,health care, education, and sanitation. However, min-ing can also result in devastating impacts on humanhealth, local ecosystems, social structures, productionsystems, and cultural traditions; physical displacement;

demographic shifts due to influx of workers; and a rapidshift from subsistence farming and hunting to depen-dence on a cash-based economy.3

GROWING RELEVANCEOF PRIOR INFORMED CONSENT

The growth of the mining sector, particularly oncommunity and indigenous lands, has heightened theimportance of prior informed consent. The expansionof mining activity into new territory, compounded withglobal population growth, means that more communi-ties are facing the prospects of hosting mining opera-tions. This has led to an increasing number of clashesbetween community groups and the mining industry.4

Indigenous and community groups worldwide increas-ingly have asserted their right to benefit from the devel-opment of minerals on their land, and to minimize thedestructive potential of mining on their social fabricand environment.

Unlike the traditional mining model, in which min-ing companies typically negotiated agreements withgovernments that focused on the needs of the com-pany, the principle of prior informed consent focuseson the needs of the community. It promotes partner-ship and dialogue, and allows communities to shape, orin some cases to reject, the development of the miningactivity. Thus, prior informed consent is intended topromote a more sustainable form of development, in

which the short-term mininginterests do not compromisethe community�s longertermneeds for survival.

Although mining compa-nies may not recognize acommunity�s �right� to priorinformed consent, some

companies are voluntarily seeking community consentfor proposed mining projects. Such consent can pro-vide mining companies with a �social license� to oper-ate, allowing the company to improve its relationshipwith the community and thereby lessen its risk of in-curring costs due to conflict and delay. Moreover, min-ing companies are increasingly concerned about avoid-ing risks to their corporate reputation, as local protestscan easily turn into global protests and consumer boy-cotts due to advances in global communication tech-nology. Therefore, obtaining a community�s informedconsent prior to engaging in mining activity can in fact

1 See Amy Rosenfeld Sweeting and Andrea P. Clark, Lightening the Lode: A Guideto Responsible Large-scale Mining, Conservation International Policy Paper, 2000,at 8.

2 Id. at 7.

Consent can provide mining companieswith a �social license� to operate,allowing the company to improve itsrelationship with the community andthereby lessen its risk of incurring costsdue to conflict and delay.

3 Id. at 47.4 Id. at 7.

2

enhance a firm�s competitiveness. These economic jus-tifications likely play a significant role in a miningcompany�s decision to incorporate some degree of com-munity consent into its policies or practices.

DEFINING THE COMMUNITY�S RIGHTTO PRIOR INFORMED CONSENT

The right to prior informed consent is gaining in-ternational attention. In a recent report, the World Bank�sExtractive Industries Review endorsed prior informedconsent as consistent with their goal of alleviating pov-erty through sustainable development. The report statesthat �To help ensure that local communities receivebenefits from extractive industry projects, the WBGshould: require companies to engage in consent pro-cesses with communities and groups directly affectedby projects in order to obtain their free prior and in-formed consent��5 In spite of the growing importanceand relevance of the right to prior informed consent,there is no clear consensus on what this right involves.As reflected in the case studies, the right to prior in-formed consent has manifested itself in many differentforms, ranging from the right of communities to beinformed regarding mining developments, to the rightof communities to dictate the terms and conditions ofmining developments, to the right of communities toactually veto mining development on community lands.

The lack of consensus on a community�s right toprior informed consent can be attributed to several fac-tors. First, from a legal perspective, the right to priorinformed consent has been based on a number of dif-ferent types of legal authority. For example, the rightmay be based on a country�s constitution, statutes, orregulations, as well as treaties the country has enteredinto. Various extra-legal authorities�such as miningguidelines, company social and environmental respon-sibility codes, voluntary contractual agreements withcommunities, and community votes and political refer-endums�are also increasingly being used, and areviewed as legitimizing a community�s right to consent.The various authorities for prior informed consent lendthemselves to varying definitions of this right.

Second, the definition of the right to prior informedconsent may vary depending on the affected commu-nity. In particular, indigenous peoples are increasinglyrecognized as a separate group under international law,

and may thereby derive distinct rights to prior informedconsent. For example, Article 27 of the InternationalCovenant of Civil and Political Rights protects the cul-tural, linguistic and religious rights of minorities andprovides a broad umbrella for recognizing indigenouspeoples� rights.6 Also, as discussed in the World Com-mission on Dams case study, International Labor Or-ganization Convention 169 requires governments toconsult with indigenous and tribal peoples within theircountries regarding development projects and otheractivities affecting them, and lays down criteria for theseconsultations.7 Similarly, Article 30 of the United Na-tions Draft Declaration on the Rights of IndigenousPeoples explicitly recognizes the right of indigenouspeoples to �require that States obtain their free and in-formed consent prior to the approval of any projectaffecting their lands, territories and other resources��8

Due to the evolving body of international law specifi-cally directed at protecting indigenous peoples� rights,the right to prior informed consent may be more stronglydeveloped with respect to indigenous than non-indig-enous communities.

Finally, the right to prior informed consent is diffi-cult to define because it raises key issues about the bal-ance between community rights and the national inter-est. In other words, how do we recognize the right ofcommunities to dictate the terms of mining develop-ment, but still ensure that sufficient development takesplace to serve the national interest? Does it make senseto give a community veto power over mining develop-ment that may be in the national interest? On the otherhand, how do we determine that a project is in the na-tional interest, notwithstanding local impacts? Similarly,how do we ensure that the local community receivesbenefits proportionate to the burdens it faces with min-ing operations? It is essential to strike an appropriatebalance between the community�s right to consent andthe national interest in mining operations. This projectis intended to shed light on the definition of thecommunity�s right to prior informed consent. What doesprior informed consent mean? Does the right to priorinformed consent include the right to veto a mining

5 Extractive Industries Review Final Report: Striking a Better Balance (2003),available at http://www.eireview.org/EIR/eirhome.nsf/(DocLibrary)/0CE5D11BE6EDFF7C85256DF00 0269C9D/$FILE/Exec%20Summary%2026%20Nov.pdf

6 International Covenant on Civil and Political Rights, Dec. 16, 1966, art. 27, avail-able at http://www.unhchr.ch/html/menu3/b/a_ccpr.htm (last visited Sept. 18,2003).

7 International Labour Organization Convention No. 169, Concerning Indigenous andTribal Peoples in Independent Countries, adopted Jun. 27, 1989, reprinted in 28I.L.M. 1382. Convention No. 169 has been ratified by 13 countries: Bolivia,Colombia, Costa Rica, Denmark, Ecuador, Fiji, Guatemala, Honduras, Mexico,Norway, Netherlands, Paraguay and Peru. http://www.ilo.org/public/english/stan-dards/norm/whatare/standards/ind_tech.htm (last visited Sept. 18, 2003).

8 United Nations Draft Declaration on the Rights of Indigenous Peoples, E/CN.4/SUB.2/1994/2/Add.1 (1994), available at http://www.usask.ca/nativelaw/ddir.html(last visited Feb. 1, 2003).

INTRODUCTION 3


project entirely, or is it limited to the right to specify theterms and conditions for mining? How do we definethe community? What percentage of the communityneeds to grant consent? How does a community deter-mine and express its consent? How will communitiesbe educated about mining issues in order to provideinformed consent? Does the community have readyaccess to information concerning the project and itspotential impacts? What enforcement and monitoringmechanisms can be used to ensure implementation ofthe terms and conditions of a community�s prior in-formed consent? These issues, and many others, areexplored in the context of each case study.

The case studies in this report collectively revealthe potential scope of the right to prior informed con-sent. They are intended to illustrate the range of possi-bilities for defining this right, as well as some of thepotential advantages and shortcomings of each option.They provide novel and innovative examples of howsuch a right can be designed and manifested, whatmechanisms can be used to obtain or adopt such a right,and what approaches can be used to make this rightmost effective. The case studies can therefore be in-structive for community groups, policymakers, miningcompanies, and other stakeholders who are trying toassert, create, or enhance a community�s right to priorinformed consent.

4

T his section examines and analyzes how the keyelements of the right to express prior informedconsent have been defined and practiced in

policymaking processes and projects at the international,national and local level. The first three examples focuson the treatment of prior informed consent in thepolicymaking context. The next set of examples explorethe definition and practice of this right in the contextof specific resource development projects.

POLICYMAKING PROCESSES

WORLD COMMISSION ON DAMS

In its report Dams and Development: A New Frame-work for Decision-Making, The World Commission onDams recognized the importance of obtaining �prior,informed consent of indigenous and tribal peoples [for]developments that may affect them.�9 Although the stra-tegic priorities and guidelines set forth in the report stemfrom the Commission�s findings related to developmentof water and energy resources, they can be extrapo-lated to offer valuable lessons for the mining context.Since this report provides a policy framework, ratherthan a specific case study, many of its terms are vague,allowing them to be tailored for use in a specific case.

Authority for Prior Informed Consent Process

The report offers international and national legalauthorities, as well as social justice and legitimacy rea-sons, as justifications for the exercise of prior informedconsent. In Australia, Canada, India, New Zealand, thePhilippines, and many Latin American countries, forinstance, the rights of indigenous people are legally rec-ognized.10 However, because a number of other coun-tries do not have similar legal authorities, the report seeksto affirm that there are other legitimate bases for priorinformed consent.

The report points to several international legal in-struments that provide legal authority for indigenouspeoples to exercise the right of free, prior informed

consent with respect to development projects affectingtheir lands and resources. For example, Articles 6 and 7of International Labour Organization Convention 169stipulate that governments must consult with indigenousand tribal peoples within their countries regarding de-velopment projects and other activities affecting them,and lay down criteria for these consultations.11 In addi-tion, Article 30 of the United Nations Draft Declara-tion on the Rights of Indigenous Peoples explicitly rec-ognizes the right of indigenous peoples to �require thatStates obtain their free and informed consent prior tothe approval of any project affecting their lands, terri-tories and other resources��12

Regardless of the legal authority that may exist forprior informed consent, the �Commission believes thatall countries should be guided by the concept of free,prior and informed consent, regardless of whether ithas already been enacted into law.�13 The guidelines re-fer to the need for governments to act in a fair, equi-table, and socially legitimate manner and to recognizethe rights of all interested and affected groups, whetherthe laws require such actions or not.14 The customs ofindigenous peoples should serve as a guide for the priorinformed consent process.15 Thus, the guidelines indi-cate that even where legal authority is lacking, countriesshould recognize an extra-legal authority for prior in-formed consent.

Threshold Definitions

As to defining the affected community, the Com-mission states that the right to express prior informedconsent should apply to all groups that have descendedfrom pre-colonial societies; have been subjugated, ex-cluded, or discriminated against; are vulnerable to dis-advantages during the development process; have closeties to the ancestral lands and natural resources in thearea; and identify themselves as separate from the domi-nant group in society.16 The guidelines also state thatstakeholders should negotiate agreements on energy andwater resources development through recognized stake-holder bodies.17 Thus, the guidelines implicitly acknowl-

CASE STUDIES

9 World Commission on Dams, Dams and Development: A New Framework forDecision- Making (2000) at 215.The report identified seven strategic prioritiesfor decision-making (Chapter 8), as well as 26 specific guidelines for applyingthese priorities to the planning and project cycles (Chapter 9). Prior informedconsent is mentioned in the context of a strategic priority (Strategic priority 1:gaining public acceptance) and is listed as one of the 26 guidelines necessary foreffective implementation of the strategic priorities (Guideline 3).

10 Id. at 256, note 1.

11 International Labour Organization, Convention No. 169, supra note 7.12 Draft Declaration on the Rights of Indigenous Peoples, supra note 8.13 World Commission on Dams, supra note 9 at 219.14 Id. at 215-220.15 Id. at 219.16 Id.17 Id. at 217.

CASE STUDIES 5


edge that the consent of every individual in the affectedcommunity is not required�and that the consent of arepresentative group of stakeholders in the communitycan be sufficient. In addition, the guidelines acknowl-edge the importance of involving other vulnerablegroups, specifically women, in the decision-making pro-cess.18

The Commission recognized the importance ofestablishing the method by which the community willdetermine its views, but did not set specific parametersor guidelines for doing so. Instead, the guidelines statethat: �[t]he customary laws and practices of the indig-enous and tribal peoples, national laws and internationalinstruments will guide the manner of expressing con-sent.�19 The guidelines also state that indigenous peoplesmust indicate at the beginning of the process the man-ner by which they will express their consent, and that afinal decision on how to express consent must be re-solved before the negotiations commence.20

Framework of Prior Informed Consent Process

The guidelines recognize that in order for womenand other vulnerable groups to participate fully and ac-tively in negotiations, �they need access to adequate re-sources, including legal and other professional sup-port.�21 The guidelines also state that all stakeholders,especially indigenous and tribal peoples, women, andother vulnerable groups, deserve open access to infor-mation, legal and other support to secure their informedinvolvement in the decision-making process.22 Theguidelines recognize that capacity building must be on-going.23 However, while they state that the planning pro-cess should be sensitive to social and economic dispari-ties and devise mechanisms to address the issue, theguidelines do not specifically address how capacity build-ing in affected communities is to occur.24 Additionally,the guidelines do not indicate how communities are tobe given access to adequate resources, or how the term�adequate resources� is defined.

The guidelines state that a community�s prior in-formed consent is required at all stages of the miningprocess. Specifically, they state that stakeholders mustparticipate fully in �all negotiated agreements through-out the process, from options assessment to final imple-mentation, operation and monitoring.�25

The guidelines recognize that indigenous and tribalcommunities have both �the power to consent toprojects and to negotiate the conditions under whichthey proceed.� 26 While the guidelines do not explicitlyprovide communities with the right to completely vetoa project, they do make clear that communities musthave the opportunity to meaningfully participate in theoptions assessment process before the decision is madeto proceed with the project.27

The guidelines do not mention where the negotia-tions should occur�in the local community or in thecapital city. The guidelines do, however, emphasize timeas an important factor of the negotiations, since com-munities require plenty of time to examine proposalsand deliberate.28 While the guidelines do not place aspecific time on the length of the negotiations, theyacknowledge that the negotiations can be a lengthy pro-cess and that the parties involved should recognize theneed for an extended timeframe.

The guidelines do not mention the involvement ofthe government or third parties in the negotiations, ex-cept for third parties in dispute resolution, as discussedbelow.

The guidelines state that �negotiations should re-sult in demonstrable public acceptance of binding for-mal agreements among the interested parties.�29 Theguidelines emphasize the importance of using suchagreements. Thus, the guidelines recognize that the fi-nal product from these negotiations should be an en-forceable document.

In order to resolve disputes, the guidelines recom-mend the use of an independent dispute resolution bodythat is created with the participation and agreement ofstakeholders.30 It is suggested that stakeholders refer anydisagreements they have in negotiations to this bodyand allow it to examine the issue and provide assistance.31

Implementation of the Process

The guidelines recognize that the negotiationsshould �result in binding and formal agreements.�32 Thecommunities should be able to ensure that the negotia-tion results are being followed. The agreement shouldhave �implementable institutional arrangements formonitoring compliance and redressing grievances.�33

18 Id. at 216.19 Id. at 219-220.20 Id. at 220.21 Id. at 217.22 Id. at 215.23 Id. at 216-217.24 Id. at 216.25 Id.

26 Id. at 219.27 Id. at 221-222.28 Id. at 217.29 Id.30 Id. at 218.31 Id.32 Id.33 Id. at 217.

6

The agreement must also include �mechanisms for hear-ing and settling subsequent grievances.�34

THE ABORIGINAL LAND RIGHTS (NORTHERN TERRITORY)ACT OF 1976 (AUSTRALIA)


Australia�s Aboriginal Land Rights (Northern Ter-ritory) Act of 1976 provides traditional Aboriginal35

owners with the right to consent to explorations on theirland, which includes the right to veto any such explora-tions, as well as the right to negotiate agreements andtimeframes for such exploration.36 The Land Rights Actrequires mining companies to obtain permission fromthe Northern Territory government to negotiate withthe traditional owners prior to conducting explorationson lands held by Aboriginal traditional owners.37 Oncepermission is obtained, the company is compelled tonegotiate with the traditional Aboriginal land ownerswho have the authority to exercise their veto powersover any exploration of their land.38

Although the governor canoverride a community�s explorationveto in cases of national interest,this override provision has neverbeen used.39

Aboriginal communities havefrequently exercised their authority under this Act toveto exploration by mining companies. Over the past20 years, Aboriginal communities have vetoed at least122 exploration license applications.40

The Act also expanded Aboriginal ownership oftraditional lands in the Northern Territory. When theAct was passed, former government �reserves� became

Aboriginal land.41 The Act also established a claims pro-cess for vacant crown (or government) land, some ofwhich has since been converted to Aboriginal land. Landgranted under the Act is held as inalienable freeholdtitle for the benefit of Aboriginal traditional owners.This means that the land is communally owned and can-not be bought, acquired, or mortgaged. It can, how-ever, be leased, and the leases can be mortgaged.42 Com-munal title is formally vested in Aboriginal Land Trustscomposed of Aboriginal people who hold the title forthe benefit of all Aborigines with a traditional interestin the land.43 The operation of the Act has resulted inalmost 50 percent of the land in the Northern Terri-tory being transferred to Aboriginal groups.44


The Act created four Land Councils to identify andrepresent the interests of the communities in claimingand managing their traditional lands. The Land Coun-cils are composed of community members directly

elected by Aborigines. Some specifi-cally require representation bywomen. The Northern Land Coun-cil, for example, has five positionsspecifically set aside for women.45

The Councils consult with the Ab-origines, negotiate on their behalf,and manage the prior informed

consent process.46

The communities exercise their right to prior in-formed consent through the Land Councils. Part VI ofthe Land Act specifies the process through which thedecision- making occurs:

� First, in order to gain authorization to explore onAboriginal land, a mining company must apply tothe Northern Territory Department of Mines andEnergy for an exploration license and consent tonegotiate with traditional owners.47

� The mining company must then submit its applica-tion for consent, including exploration proposal, tothe Land Council within three months. The explo-

34 Id. at 218.35 In this paper the term «Aboriginal» shall be capitalized when referring to the

traditional Australian indigenous peoples, but not capitalized when referring toindigenous peoples in other nations.

36 The Office of Aboriginal and Torres Strait Islander Affairs of the Department ofImmigration and Multicultural and Indigenous Affairs, Submission to the House ofRepresentatives Standing Committee on Industry and Resources Inquiry Into Re-source Exploration Impediments (June 2002), available at http://www.aph.gov.au/house/committee/ isr/resexp/sub66.pdf (last visited Feb. 1, 2003) (hereinafter«OATSIA: Resource Exploration Impediments»).The Northern Territory Aborigi-nal Sacred Sites Act provides additional protection for sacred or traditionally sig-nificant properties not held by Aboriginal land trusts from actions that may nega-tively affect such lands, including mining. The Aboriginal Areas Protection Au-thority, charged with enforcing the Act, has established a registry of sacred sites.TheAct thus extends some of the protections of the Land Rights Act to lands notpossessed by Aboriginal people, but deemed important to them. See NorthernTerritory Aboriginal Sacred Sites Act (1989) (Ca.), available at http://notes.nt.gov.au/dcm/legislat/legislat.nsf/0/5a6151aa4abdc04069256c8d000bcc40?OpenDocument (last visited Sept. 22, 2003).

37 OATSIA: Resource Exploration Impediments, supra note 36.38 Id.39 Id.40 Id.

41 Northern Land Council, Land Rights Act: How the Act Works, available at http://www.nlc.org.au/nlcweb/land_a�d_rights_at_how_the_act_works.html (last vis-ited Jan. 30, 2003).

42 Id.43 Id.44 OATSIA: Resource Exploration Impediments, supra note 36.45 Northern Land Council, Inside the NLC: Councils, available at http://www.nlc.org.

au/html/abt_inside_counc.html (last visited Mar. 10, 2003).46 Northern Land Council, About the NLC, available at http://www.nlc.org.au/html/

abt_menu.html (last visited Mar. 10, 2003).47 Gary Scott and Mark Wakeham, Uranium Exploration in West Arnhem Land (Nov.

2001), at 11, available at http://www.ecnt.org/pdf/uranium_report2.pdf. (last vis-ited Jan. 30, 2003).

Aboriginal communities havefrequently exercised theirauthority under the NorthernTerritory Act to veto explorationby mining companies.

CASE STUDIES 7


ration proposal must describe all aspects of theexploration activity, including possible social or en-vironmental impacts.48

� If the Land Council determines that the proposalprovides sufficient information for traditional land-owners to make a decision, it convenes a meetingof traditional owners and affected groups within30 days. At this meeting, the applicant presents itsproposal, and traditional owners have the right toinstruct the Land Council to refuse consent or tonegotiate an agreement with the company.49

� If the traditional landowners instruct the LandCouncil to refuse consent, the applicant may notreapply for another five years.50

� If the traditional owners instruct the Land Councilto negotiate an agreement, this negotiation mustbe concluded within 12 months. A liaison commit-tee of traditional landowners can be involved in thenegotiations. The negotiated agreement is then pre-sented at a meeting of traditional landowners fortheir consideration.51

� If the traditional landowners instruct the LandCouncil to enter into the agreement, their decisionmust be considered by the full Land Council to en-sure that it meets the requirements of due process.

� The full Land Council can reject the agreement if itis considered unreasonable. If the full Land Coun-cil accepts the agreement as reasonable, it must thenseek the approval of the Minister for Aboriginaland Torres Strait Islander Affairs to enter into theagreement. Once the agreement is executed by theparties, the Land Council notifies the NorthernTerritory government, which subsequently issuesthe exploration license for a period of six years,with an ability to extend for a further four years.52


The local communities are educated about the min-ing process through a meeting convened by the LandCouncil, where the applicant presents his proposal andthe communities exert their right to veto or negotiatean agreement. It is the responsibility of the Land Councilto make sure the landowners� decision is informed.However, informational requirements for the explora-tion proposals seem to be fairly minimal. Companiesare not even required to specify what mineral they arelooking for, although they generally do.53

The scope of the community�s rights under this Actis expansive�the community has the right to completelyveto a project, not simply the right to be consulted orto set conditions for development. However, under theAct, the community�s prior informed consent is onlyrequired at the exploration stage, not at the mining stage.

Therefore, once a community has consented to theexploration stage, it is also deemed to have consentedto the subsequent mining if it occurs.54 This was notalways the case. Prior to 1987, the Act allowed Aborigi-nal people to have a veto at both the exploration andmining stages. However, amendments to the Act in 1987removed the �dual veto,� restricting the veto to the ex-ploration stage alone.55 An Australian Supreme Courtdecision in 1992 further weakened the Aboriginal vetopower by finding that a Land Council could not requirefurther consent at the mining stage, even when the min-ing company itself agreed with this provision.56

While this change has provided companies with anincentive to invest in exploration, the lack of veto powerat the mining stage has made it difficult for traditionalowners to make arrangements with mining companiesthat effectively safeguard their rights, as communitiesare forced to negotiate a deal on mining at a stage whenthe viability and worth of the mine is uncertain.57 Nev-ertheless, terms and conditions relating to future min-ing actions are generally attached to the exploration li-cense as contractual provisions.58

The community determines its demands and con-ditions through the Land Councils�through its electedrepresentatives on the Councils and/or through directparticipation in Land Council meetings involving thewider community. A liaison committee of communitymembers can be involved in the Land Council�s nego-tiation of the conditions to consent with the miningcompany.

Negotiations occur at Land Council meetings. Thereare currently four locations for Land Councils in theNorthern Territory.59 Negotiations are supposed to be

48 Id.49 Id.50 Id.51 Id.52 Id.

53 See Id. See also Northern Land Council, Mining and Exploration Under the LandRights Act, 9, available at http://www.nlc.org.au/html/busi_mining_act.html (lastvisited Mar. 10, 2003) (hereinafter «Northern Land Council, Mining and Explora-tion»).

54 Scott and Wakeham, supra note 46; Northern Land Council, Mining and Explo-ration, supra note 53.

55 OATSIA: Resource Exploration Impediments, supra note 36.56 Scott and Wakeham, supra note 46; Northern Land Council, Mining and Explo-

ration, supra note 53.57 Peter Boyle, Behind the Mining Companies� Hysteria on Mabo, available at http://

www.greenleft.org.au/back/1993/111/111p3.htm (last visited Jan. 31, 2003).58 Scott and Wakeham, supra note 47.59 There are currently four land councils in the Northern Territory established un-

der the Act:The Northern Land Council, Central Land Council,Tiwi Land Coun-cil, and Anindilyakwa Land Council.

8

completed within 12 months.60 However, the timeframefor negotiations can be extended by the CommonwealthMinister, and is a practice that has regularly occurred.61

The government has some involvement in the ne-gotiations process. First, the Commonwealth Ministerhas discretionary authority to extend the negotiationtimeframes (without limitation to the length or numberof extensions).62 Also, the Governor General is autho-rized to override a community�s exploratory veto in thenational interest, although this has not yet occurred.63

In addition, the government provides funding for theLand Councils. It pays into the Aboriginals Benefit Ac-count an amount equivalent to the statutory royaltiesreceived by it and the Northern Territory governmentfrom mining companies operating on Aboriginal landin the Northern Territory64 The Aboriginal Benefit Ac-count then distributes 30 percent of the royalties to theAboriginal people affected by the mining and 40 per-cent to the Northern Territory land councils, with the30 percent remaining for the administration of the Ac-count and for distribution to the Aboriginal peoplethroughout the Northern Territory.65

The Act does not specifically include third partiesin the consultation process.


The negotiated agreement between the Land Coun-cil and the mining company is a legally-enforceable leaseagreement.

MINING PROJECTS

WHITEHORSE MINING INITIATIVE (CANADA)

In September 1992, the Canadian mining industrylaunched a multi-stakeholder consultation processamong governments, aboriginal representatives, envi-ronmental groups, and labor unions over the future ofmining development in Canada. This national effortbecame known as the Whitehorse Mining Initiative(WMI). The goal of WMI was to establish a frameworkfor dealing with mining issues in Canada in a coopera-tive and collaborative manner.66 The participation of

aboriginal representatives in the WMI represents a formof �community consultation� in a national planningprocess for mining development.

After 18 months of negotiations and consultations,the Whitehorse Mining Initiative Accord (�Accord�) wasreached in September 1994. The Accord contains manyprinciples and goals, several of which recognize theimportance of aboriginal community participation inmining decisions. For example, the Accord�s principleon aboriginal involvement in the mining industry rec-ognizes that �aboriginal people are entitled to opportu-nities to participate fully in mineral development at allstages of mining and associated industries and at allemployment levels.�67 The goals of this principle fur-ther specify the need to �ensure regular and open com-munications between exploration companies and minedevelopers, and aboriginal communities, and to ensurethat the aboriginal communities are involved in deci-sion-making processes that concern exploration, infra-structure development, mine development and recla-mation.�68 The Accord also contains a principle on opendecision-making processes, which seeks to expand op-portunities for meaningful and responsible participa-tion by aboriginal peoples in decision-making processesthat affect the public interest. This is meant to ensurethat stakeholders have access to necessary informationand resources that enable them to participate, and toensure that stakeholder viewpoints are fairly heard andconsidered.69

Therefore, both the consultative process itself andthe resulting Accord are important in terms of recog-nizing the legitimacy of community consultation in na-tional mining policy and decisions.


The WMI was spearheaded as a voluntary initiativeby the Mining Association of Canada, and was not basedon any legal authority.

The Accord reached through the WMI was not alegally-binding agreement.70 Therefore, provisions in theAccord that call for aboriginal participation in miningdecisions do not constitute legal authority for prior in-formed consent. They do, however, constitute persua-sive justification for recognizing the right to prior in-

60 Scott and Wakeham, supra note 47.61 OATSIA: Resource Exploration Impediments, supra note 36.62 Id.63 Northern Land Council, Land Rights Act: How the Act Works, supra note 41.64 Id.65 Northern Land Council, Mining and Exploration, supra note 53.66 WMI Leadership Council Accord Final Report (1994), cover page, available at

http://www.nrcan.gc.ca/mms/pdf/accord.pdf (last visited Feb. 1, 2003) (herein-after �Accord Final Report�).

67 Id.68 Id.69 Id.70 United Nations, Initiative: Whitehorse (Canada) Mining Initiative, available at http:/

/www.un.org/esa/sustdev/viaprofiles/Canada_Mining.html (last visited Dec. 24,2002). See also Accord Final Report, supra note 66, cover page (�The Accord isnot intended to create legal obligations between the signatories, the organiza-tions they represent and/or third parties.�)

CASE STUDIES 9


formed consent, having been negotiated and adoptedthrough a national, well-recognized, multi-stakeholderinitiative. The Mining Association of Canada has pub-licly expressed its commitment to the principles andspirit of WMI.71


The aboriginal community was one of five stake-holder groups that participated in the WMI. The otherstakeholder groups consisted of the environmental com-munity, industry, labor, and the government. However,the aboriginal representatives who participated in theconsultative process may not in fact have been repre-sentative of the larger aboriginal community. WMI pub-lications do not indicate how aboriginal representativeswere selected to participate, or whether any efforts weremade to reach out to diverse aboriginal communities toensure that all elements were consulted. Natural Re-sources Canada recognized this problem in stating thatthe reports of the WMI Issue Groups �stand as thework of individuals who could not always speak for thebreadth and scope of their constituencies.�72

The operating structure for consultation and deci-sion- making included a Leadership Council, a WorkingGroup, and four Issue Groups. The Leadership Coun-cil consisted of 40 members, including aboriginal rep-resentatives, who would ultimately decide on adoptionof the Accord.73 The Working Group supported theLeadership Council, and also included key representa-tives of aboriginal communities.74 Each Issue Groupconsisted of 20-30 stakeholders addressing one of thefour topics of interest: Environment; Finance and Taxa-tion; Land Use; and Workplace and Workforce issues.75

Aboriginal issues were to be considered within each ofthese four issue groups, rather than as a stand-alonetopic.76 Each Issue Group produced a set of principlesand objectives and an extended list of more than 150very specific recommendations.77 Representatives of themajor stakeholder groups, including aboriginal peoples,were represented in each of the Issue Groups.


The WMI did not include specific mechanisms toeducate the stakeholders about the mining issues. It did,however, provide approximately $454,000 to supportstakeholder expenses, such as preparation for meetings,staffing needs, and expenses for traveling to sessions.78

The WMI�s multi-stakeholder consultation processwas particularly progressive in that it elicited the viewsof community members in the planning process fornational mining policy generally�not in the context ofan actual mining project. Moreover, the Accord specifi-cally provided that consultation with aboriginal com-munities should occur �at all stages� in the mining pro-cess,79 adding further support for including communitymembers in planning processes from the outset of aproject.

Issue group negotiations and consultations tookplace across Canada to give the process a �national�character.80 The process was to take no longer than 12-15 months, concluding no later than the Annual Meet-ing of Mines Ministers in the fall of 1994.81 Full scalediscussions began in February 1993, and 18 months laterculminated in the Accord.82

The government was extensively involved in thenegotiations, as one of the five key stakeholders in theprocess. The provincial and territorial mines ministersalso served as co-sponsors and trustees of the WMI.83

The government played an important role in fundingthe consultation process. The federal government as-sumed onethird of the costs, the 10 provincial and twoterritorial governments assumed another third (splitaccording to the ratio of their mineral production), leav-ing the remaining third to be assumed by the MiningAssociation of Canada.84

As discussed above, the WMI included third par-ties �such as trade associations and environmentalgroups�as stakeholders in the consultation process.

The agreement of the various stakeholders was for-malized in the Accord. As discussed above, this is anonbinding voluntary commitment adopted by the con-sensus of the Leadership Council.

The Whitehorse Mining Initiative did not includespecific provisions for conflict and dispute resolution.

71 See Gisele Jacob, Mining Association of Canada, A Presentation to the House ofCommons Standing Committee on Natural Resources and Government Operations(Nov. 5, 1998), available at http://www.mining.ca.previewmysite.com/english/publications/wmi.html (last visited Sept. 19, 2003).

72 Natural Resources Canada, Whitehorse Mining Initiative, available at http://www.nrcan. gc.ca/mms/poli/wmi_e.htm (last visited Jan. 31, 2003).

73 See Mary Louise McAllister and Cynthia Jaqueline Alexander, The WhitehorseMining Initiative, 6, July 31, 1999, available at http://www.idrc.ca/mpri/930415.doc(last visited 2/1/2003); Accord Final Report, supra note 66 at 3.

74 Accord Final Report, supra note 66 at 3.75 See McAllister and Alexander, supra note 73.76 See Id.77 Accord Final Report, supra note 66 at 3.

78 See McAllister and Alexander, supra note 73.79 Accord Final Report, supra note 66 at 27.80 See McAllister and Alexander, supra note 73.81 See Id.82 Natural Resources Canada, Whitehorse Mining Initiative, available at http://

www.nrcan. gc.ca/mms/poli/wmi_e.htm (last visited Jan. 31, 2003).83 See Id.84 See McAllister and Alexander, supra note 73.

10


The Accord produced several principles and goalsrelating to aboriginal community participation in min-ing decisions. However, the Accord did not provideguidelines for implementation of these goals. It simplystated that implementation will occur through �build-ing broader support within constituencies based on themomentum achieved and encouraging stakeholder sup-port for principles and goals.�

A follow-up meeting was convened to monitorimplementation of the Accord. In November 1995, eachof the stakeholder groups from the Whitehorse MiningInitiative attended a participant meeting to discuss thestatus of implementation of the principles and goals. Aprogress report released in January 1996 summarizedthe results of these discussions.85 Implementation ofthe commitments in the Accord has been limited. Thelack of an agreed form for the outcome or a well-de-fined plan about what to do with the results contributeto problems involved in maintaining momentum afterthe signing of the Accord.86

DIAVIK MINE (CANADA)

The Diavik diamond mine project, located in theNorthwest Territories in Canada, is scheduled to beginproduction in 2003. The Diavik mine lies within terri-tory traditionally used by four groups of First Nationspeoples.87 The developer of the mine, Diavik DiamondMines, Inc. (DDMI), has engaged in an extensive con-sultative process with the surrounding communities inplanning the development of the mining project. DDMIinitially consulted with the public during the course ofconducting a �Comprehensive Study� of the project�sexpected environmental and socio-economic impacts.The Comprehensive Study was required by the govern-ment, but DDMI�s public consultations were voluntar-ily undertaken. DDMI later consulted extensively withthe public in negotiating and entering into an Environ-mental Agreement, a Socio-Economic MonitoringAgreement, and separate Participation Agreements forthe affected communities. While there was no specificlegal requirement that obligated DDMI to enter intothese other agreements, it was heavily influenced by thegovernment to do so.

The Environmental Agreement sets out a consul-tative and cooperative approach to the environmentalmanagement of the project.88 The parties to the Envi-ronmental Agreement are DDMI, the Government ofCanada, the Government of the Northwest Territories,the Dogrib Treaty 11 Council, the Lutsel K�e Dene Band,the Yellowknives Dene First Nation, the North SlaveMetis Alliance, and the Kitikmeot Inuit Association.89

The Socio-Economic Agreement formalizes socio-eco-nomic commitments and recommendations made byDDMI.90 The parties to the Socio-Economic Monitor-ing Agreement are DDMI and the Government of theNorthwest Territories.91 The Participation Agreementsare cooperative agreements between the company andaboriginal groups that address business and employmentopportunities for each group.92 DDMI entered into sepa-rate Participation Agreements with the YellowknivesDene First Nation, the Dogrib Treaty 11 Council, andthe North Slave Metis Alliance.93

Authority for the Prior Informed Consent Process

DDMI was not required by law to engage in exten-sive community consultation in conducting its Com-prehensive Study of the environmental and socioeco-nomic impacts of the mine. Although the CanadianEnvironmental Assessment Act (CEAA) requires par-ties to undertake the Comprehensive Study,94 it doesnot require public hearings.95 While DDMI�s extensivepublic consultation went beyond the CEAA�s require-ments for the Comprehensive Study, its decision mayhave stemmed from the fact that, under the CEAA, theEnvironment Minister can require parties to engage ina formal Panel Review process if he finds the Compre-hensive Study to be insufficient. The Panel Review wouldrequire independent public hearings focused on a de-tailed Environmental Impact Statement prepared by the

85 Natural Resources Canada, Whitehorse Mining Initiative, supra note 72.Theprogress report is available on this website.

86 See McAllister and Alexander, supra note 73.87 Archibald R.M. Ritter, Canada: From Fly-In Fly-Out to Mining Metropolis in Large

Mines and the Community, Ch. 6, available at http://www.idrc.ca/books/focus/949_mining/ 949/f949c062canada.htm (last visited Jan. 31, 2003).

88 Indian and Northern Affairs, Canada, Environmental Agreement Signed Off, March8, 2000, available at http://www.ainc-inac.gc.ca/nr/prs/j-a2000/2-00113_e.html(last visited Jan. 31, 2003).

89 Press Release Library, Diavik Project Approved, December 19, 2000 at http://www.aber.ca/investor/info/Dec1900.htm (last visited Jan. 31, 2003).

90 Canadian Environmental Assessment Agency, News Release, Minister of the En-vironment Sends Diavik Diamonds Project to Regulatory Phase, November 3, 1999,available at wysiwyg://53/http://www.ceaa.gc.ca/0009/0003/0025/rel1991103_3.htm (last visited Jan. 31, 2003).

91 Id.92 Id.93 Id. As of July 2001, Participation Agreements with the Lutsel K�e Dene Band and

the Kitikmeot Inuit Association were still under negotiation. Diavik Diamond Mines,Inc.: Catalogue of Social Practices in the Canadian Minerals and Metals Industry,available at http://www.nrcan.gc.ca/mms/sociprac/diavik_e.htm. (last visited Dec.12, 2002).

94 Archibald, supra note 86.The CEAA requires a Comprehensive Study for listedtypes of projects that are likely to have significant environmental effects. PollutionPrevention in Mining in the Americas: Research Guide for National Case Studies at 6.

95 Pollution Prevention in Mining in the Americas: Research Guide for National CaseStudies at 6. Public hearings are only required for the most rigorous type of envi-ronmental assessment � the panel review, and not for comprehensive studies.

CASE STUDIES 11


project proponent.96 Therefore, DDMI may have optedto voluntarily engage in extensive public consultation atthe Comprehensive Study stage in order to avoid thepotential delay of having to conduct the additional PanelReview. Ultimately, the Minister decided that the PanelReview was not necessary, and seemed to have beeninfluenced by the extensive public participation that tookplace during the Comprehensive Study stage.97

DDMI was also not legally required to enter intothe Environmental Agreement, Socio-Economic Moni-toring Agreement, or Participation Agreements. How-ever, DDMI�s decision to enter into these agreementswas likely influenced by several factors. First, the Cana-dian Ministry of Environment made it clear that it wouldrequire DDMI to implement the mitigation measuresidentified in the Comprehensive Study.98 These mitiga-tion measures could be implemented either throughregulatory instruments or through explicit agreements.99

DDMI opted to enter into explicit Environmental,Socio-Economic, and Participation Agreements toimplement its proposed mitigation measures. Second,after producing the Comprehensive Study, DDMI stillneeded to obtain the requisite licenses for developmentof the mine. The Canadian regulatory agencies may haveused their authority to sign on these licenses as leverageto get DDMI to enter into these agreements with thesurrounding communities.100


The procedures on how Diavik identified the com-munity to be consulted, or the means through which thesecommunities expressed their consent or conditions, werenot discussed in the material available for review.

Framework for Prior Informed Consent Process

The community�s consent was formalized throughthe Environmental, Socio-Economic, and ParticipationAgreements. The agreements themselves constitute pri-vate contracts and are legally binding on the parties.

The Environmental Agreement was developed withthe active involvement of affected aboriginal groups,the company, and the governments of the NorthwestTerritories, Nunavut and Canada.101

The Participation Agreements were negotiated in-dividually with each indigenous organization or com-munity.102 The fact that the communities lacked neces-sary information (geological, technical, commercial, or-ganizational) posed a significant obstacle to the con-struction of fair agreements.103

The government played a role in the consultationsover the Comprehensive Study report process. After theCanadian Environmental Assessment Agency receivedthe report from DDMI, it spent 18 months reviewingit, and engaged in over 300 public meetings104 and con-sultations with aboriginal associations, the territorialgovernment, and the federal agencies responsible forthe project.105 The Comprehensive Study Report waspresented to the public in June 1999.106


In the Environmental Agreement, the parties es-tablished an advisory board to oversee the environmentalmanagement of the project, to design and implementscientific and traditional knowledge studies, and to makerecommendations on the participation of aboriginalcommunity members in training and monitoring pro-grams. Diavik agreed to fund the advisory board andthe Canadian and Northwest Territory governmentsagreed to provide supplemental funding for the first twoyears. Diavik also agreed to establish monitoring pro-grams for the project and to annually produce a reporton the results of environmental monitoring programs.Disputes arising out of the Environmental Agreementare subject to arbitration.107 The Environmental Agree-ment also specifies that adequate security measures mustbe in place at all times during the life of the mine torehabilitate the mine site.108 DDMI proposed creationof a $46 million fund over time for the management ofenvironmental problems and the long-term stewardshipof the mine site, although it is not clear whether thisever materialized.109

The Socio-Economic Agreement created a com-munity advisory board with representatives from eachof the affected aboriginal communities, the companyand the government. It meets on a regular basis to help

96 Id. at 5.97 Canadian Environmental Assessment Agency, News Release, supra note 90.98 Id.99 Id.100 See Indian and Northern Affairs, Canada, Environmental Agreement Signed Off,

supra note 88 (stating,�Now that the Environmental Agreement is in effect,DIAND will issue a land use permit to allow Diavik Diamond Mines Inc. to beginpreliminary site activities�).

101 Id.

102 Archibald, supra note 87.103 Id.104 Canadian Environmental Assessment Agency, News Release, supra note 90.105 Archibald, supra note 87.106 Id.107 Northwest Territories Resources, Wildlife and Economic Development,

Backgrounder: Diavik Environmental Agreement, available at http://www.gov.nt.ca/RWED/ newsreleases/diavik.htm (last visited Dec. 12, 2002).

108 Indian and Northern Affairs Canada, Environmental Agreement Signed Off, supranote 88.

109 See Archibald, supra note 87 (citing Globe and Mail, 6 January 2000).

12

DDMI achieve its socio-economic commitments in thesurrounding communities.110

Each Participation Agreement calls for the creationof a joint implementation committee to outline responsi-bilities, tasks, and timelines for reaching project-relatedemployment and business development targets. Eachaboriginal group agreed to employ a representative toliaise with DDMI on these and other social develop-ment issues.111

VOISEY�S BAY MINING PROJECT (CANADA)

In this project, the Voisey�s Bay Nickel Company(VBNC), a subsidiary of Inco Inc., proposed to minenickel, copper, and cobalt in northern Labrador. Twoaboriginal communities reside in the area: the LabradorInuit Association (LIA) and the Innu Nation. Both theLIA and Innu Nation asserted that their consent wasrequired before project authorization, and both haveland claims that overlap with the project area.112

The LIA and Innu Nation sought to exercise somecontrol over the environmental assessment process toensure that it was adequate tomanage the potential envi-ronmental impacts of miningon their lands.113 On January31, 1997, the LIA, Innu Na-tion, and the governments ofCanada and Newfoundlandand Labrador signed aMemorandum of Under-standing (MOU) establishinghow the environmental ef-fects of the proposed projectwould be reviewed.114 The MOU was entered into un-der the Canadian Environmental Assessment Act(CEAA). It was established to harmonize the environ-mental assessment processes of the federal and provin-

cial governments, and to recognize the two aboriginalgroups that have overlapping land claims in the area.115

The MOU established a five-person Environmen-tal Assessment Panel charged with preparing a reportwith recommendations on VBNC�s proposal.116 Basedon the Panel�s recommendation for environmental co-management, the LIA and Innu Nation entered into anEnvironmental Management Agreement (EMA) withthe governments of Canada and Newfoundland andLabrador. The EMA established an environmental ad-visory board composed of two representatives fromeach of the four groups, plus an independent chairper-son. The board will advise the ministers.117

After extensive public hearings, the EnvironmentalAssessment Panel recommended that the project moveahead to permitting, but only after the conclusion ofland rights negotiations (or interim arrangements thatwould leave the Inuit and Innu Nation no worse offthan if land claims agreements were in place), and afterImpact Benefit Agreements (IBAs) were entered intowith both LIA and the Innu Nation.118 The IBAs arelegally-binding contractual agreements between VBNC

and the appropriate aborigi-nal community. They provideeconomic opportunities forthe communities and miti-gate against negative impactsof the development.119

With leverage from thePanel�s recommendations,120

both the Innu Nation andLIA negotiated and enteredinto interim land claims ar-

rangements with the governments of Canada and New-foundland and Labrador. These interim arrangementsallowed the Voisey�s Bay development to proceed whilethe land claims are under negotiation.121

The LIA and Innu Nation were also able to negoti-ate individual IBAs with VBNC concerning the Voisey�sBay project. Under the terms of the agreements, the

The Canadian Supreme Court affirmedthe constitutional protection of aboriginalland title, noting that where aboriginalpeople have title to their traditionallands, governments must ensure thatthey participate in resource development,be properly consulted, and receive faircompensation.

110 Rio Tinto, Long Term Commitment in Community Relations: Global Business, LocalNeighbour, available at http://www.riotinto.com/library/reports_PDFs/corpPub_GloBus_part4.pdf (last visited Mar. 10, 2003).

111 Diavik Diamond Mines, Inc.: Catalogue of Social Practices in the Canadian Mineralsand Metals Industry, available at http://www.nrcan.gc.ca/mms/sociprac/diavik_e.htm (last visited Dec. 12, 2002).

112 Government of Newfoundland and Labrador, Aboriginal Involvement in Voisey�sBay, available at http://www.gov.nf.ca/voiseys/news/backgrounder9.htm (last vis-ited Dec. 18, 2002); Canadian Environmental Assessment Agency, Voisey�s BayMine and Mill Environmental Assessment Panel Report, at Section 4.1, available athttp://www.ceaaacee. gc.ca/0009/0001/0001/0011/0002/contents_e.htm (lastvisited Mar. 10, 2003) (hereinafter �CEAA Voisey�s Bay EAP Report�).

113 The Innu Nation and Inco�s Voisey�s Bay Nickel Mine/Mill, available at http://www.miningwatch. ca/aboriginal%20gathering/Case_Studies/html#anchor62391 (last visited Jan. 31, 2003).

114 Canadian Environmental Assessment Agency, Summary: Voisey�s Bay Mine andMill Environmental Assessment Panel Report, available at http://www.ceaa-acee.gc.ca/0009 /0001/0001/0011/0002/summary_e.htm (last visited 12/17/2002) (hereinafter �CEAA Voisey�s Bay EAP Report Summary�).

115 CEAA Voisey�s Bay EAP Report, supra note 112.116 CEAA Voisey�s Bay EAP Report Summary, supra note 114.117 Government of Newfoundland and Labrador, Aboriginal Involvement in Voisey�s

Bay, supra note 112.118 See The Innu Nation and Inco�s Voisey�s Bay Nickel Mine/Mill, supra note 112;

CEAA Voisey�s Bay EAP Report Summary, supra note 113.119 Government of Newfoundland and Labrador, Aboriginal Involvement in Voisey�s

Bay, supra note 112.120 The Panel recommended that before the project goes ahead, the federal and

provincial governments finalize land agreements in principle with LIA and theInnu Nation, and put enforceable interim measures in place until final agreementsare signed. See CEAA Voisey�s Bay EAP Report Summary, supra note 114.

121 Government of Newfoundland and Labrador, Aboriginal Involvement in Voisey�sBay, supra note 112.

CASE STUDIES 13


two aboriginal communities will receive an estimated$300 million over the next 30 years, and guarantee mini-mum levels of aboriginal participation in various jobsand business opportunities generated by the project.


The prior informed consent process in this casestudy consisted mostly of consultations and negotia-tions between the aboriginal communities and the fed-eral and provincial governments. These consultationsand negotiations resulted in the MOU, the Panel report,the interim land claims arrangement, the EMA, and theIBA.

In the Delgamuukw case,122 the Canadian SupremeCourt affirmed the constitutional protection of aborigi-nal land title, noting that where aboriginal people havetitle to their traditional lands, governments must ensurethat aboriginal people participate in resource develop-ment, be properly consulted, and receive fair compen-sation.123 The fact that these aboriginal communities herehad unsettled land claims in these areas added leverageto their claimed right to consultation. Since the LIAand the Innu Nation had potential title to the land atissue, they could more persuasively and forcefully exerta right to consultation and participation. Land title wouldnot, however, allow them to assert the right to full con-sent. Even if they held to the land, the Delgamuukwcase establishes that only participation and consultation,but not full consent, is required for a mining project toproceed on aboriginal land.124

VBNC was required to prepare an environmentalimpact assessment (EIA) under the Canadian Envi-ronmental Assessment Act. The responsible govern-ment agency must notify the public of the report�sissuance, how copies may be obtained, and the dead-line for comments. The CEAA requires the respon-sible government agency to consider all public com-ments when reaching a decision as to whether a projectwill continue or not and whether the EIA should besubmitted to an Environmental Assessment Panel forreview. If the project is referred to a panel, the panelhas the option of allowing the public to participate inits review process. However, all panel hearings andrelevant documentation must be made public, includ-ing the panel�s final report. Citizens also have the op-tion to appeal the report or the minister�s decision to afederal court for judicial review.

Community negotiations and ultimate entry into anIBA with VBNC provides another example of priorinformed consent. IBAs typically contain provisions thatrequire the company to minimize the project�s environ-mental, social, and cultural impacts, and to ensure thatcertain project benefits will remain in the local commu-nities. The laws and policies for IBAs vary greatlythroughout Canada; however, where a land claims agree-ment is already in place, IBAs are non-discretionary anda project cannot proceed without them.125


The two communities involved in this case studywere the Labrador Inuit and Innu aboriginal communi-ties.

The Innu community established a task force toformulate its position on mining development. Whenfaced with the prospect of mining development on theirland, the Innu leadership first sought a mandate fromthe communities to confront the mining and explora-tion companies. It established a task force to serve as aforum for the community to discuss the issues of min-ing on Innu lands, the potential for economic develop-ment opportunities, probable environmental degrada-tion, and the absence of a land rights agreement. Thetask force led to production of a report126 that provideda clear mandate to the leaders. The report indicated thatthe Innu people would not consent to mining develop-ment without an IBA, environmental assessment, and aland claim agreement.127

Community representatives also served on variousorganizations created through the community consul-tation process. As parties to the MOU, the LIA andInnu Nation were able to appoint two members each tothe Environmental Assessment Panel created by thatagreement.128 This provided the aboriginal communi-ties with a greater voice in the panel�s final report andits non-binding recommendations to the various gov-ernmental bodies.

The 2000 LIA members and approximately 600Innu members were allowed to vote on the two IBAs.Both IBAs were formalized after 82 percent of the LIAvoters and 68 percent of the Innu voters approved therespective agreements. The agreements will pay the twoaboriginal communities an estimated $300 million over

122 Delgamuukw v. British Columbia, [1997] 3 S.C.R. 1010.123 CEAA Voisey�s Bay EAP Report Summary, supra note 114.124 CEAA Voisey�s Bay EAP Report, supra note 112, at Section 4.2.1.

125 Id. at Section 4.2.3.126 Between a Rock and a Hard Place: Aboriginal Communities and Mining, available at

http://www.miningwatch.ca/issues/aboriginal_gathering/workshop_summary.html(last visited Sept. 22, 2003).

127 The Innu Nation and Inco�s Voisey�s Bay Nickel Mine/Mill, supra note 113.128 Id.

14

the next 30 years and guarantee minimum levels of ab-original participation in various jobs and business op-portunities generated by the project. They also containprovisions that will help ensure the protection of theenvironment.


As discussed above the Supreme Court ruling inDelgamuukw held that even if the communities in factpossessed fully recognized title to the land, they wouldonly have the right to participate in development andthe right to be consulted, not the right to veto the min-ing project.

Both the federal and provincial governmentsplayed a central role in the community consultationprocess in this case study. These governments enteredinto the MOU, the EMA, and the interim land claimsarrangements with the communities. The governmentsalso provided additional leverage for the negotiationof the IBAs. Third parties were not significantly in-volved in the negotiations and consultations with thecommunities.

The VBNC proposal is one of the few miningprojects, out of hundreds, that actually has gone throughthe panel review process under the Canadian Environ-mental Assessment Act. The signing of the MOU so-lidified the establishment of a five-person Environmen-tal Assessment Panel.129 The Innu Nation and LIA, asparties to the MOU, were able to appoint members tothe panel charged with reviewing and preparing a re-port on VBNC�s proposal.130 The Environmental As-sessment Panel�s public hearings took place in 10 La-brador communities over 32 days.131

The Environmental Assessment Panel�s final reportincluded findings and conclusions as well as non-bind-ing recommendations to the provincial ministers, fed-eral ministers, and the presidents of LIA and the InnuNation. The report also presented the concerns thatwere expressed to the panel throughout the process.Ultimately, the Environmental Assessment Panel rec-ommended that the project be allowed to proceed, sub-ject to 107 recommendations.132

The LIA and Innu Nation entered into an Envi-ronmental Management Agreement (EMA) with thegovernments of Canada and Newfoundland and La-brador based on the Environmental Assessment Panel�s

recommendation for environmental co-management.The parties to the agreement negotiated for over threeyears before signing the EMA.133 The provincial andfederal governments have agreed to finance the first fiveyears of the EMA and to provide the environmentaladvisory board created by the agreement with an an-nual budget of $450,000.134

The Innu Nation and LIA were able to appointtwo representatives each to the environmental advi-sory board, which also includes two governmentalmembers, two business members, and an independentchair.135 The board was established in recognition ofthe need to directly involve all relevant parties in theenvironmental management of the project, and willserve in an advisory capacity to the ministers.136

Through the board, the community representativeswere able to review and advise the government on thecompany�s actions in fulfilling its obligations through-out the environmental assessment process. As mem-bers of the board, the representatives were able to over-see and obtain valuable information on the company�sactions, operations, and environmental performance,as well as its fulfillment of its environmental and socio-economic obligations.

Negotiation of the IBAs took several years, but theywere finally entered into in June 2002. Because the ab-original communities had potential claims to the landand had entered into interim land claims arrangementswith the federal and provincial governments, they werebetter able to exert pressure on VBNC to enter into theIBAs. The agreements do not rely on any specific legalauthority, and the VBNC has consistently maintainedthat the IBAs were entered into on a purely discretion-ary basis.137 The IBAs will thus act as legally-bindingcontractual agreements between VBNC and the appro-priate aboriginal community.

Both the LIA and the Innu nations had representa-tives who negotiated the IBAs, but both groups pre-sented the final IBA to a larger portion of the commu-nity to legitimize its final approval. In the end, 1,640 ofthe 2,000 voting LIA members and about 408 of the600 voting Innu members approved their respectiveagreements.

129 CEAA Voisey�s Bay EAP Report Summary, supra note 114.130 The Innu Nation and Inco�s Voisey�s Bay Nickel Mine/Mill, supra note 113.131 CEAA Voisey�s Bay EAP Report Summary, supra note 114.132 CEAA Voisey�s Bay EAP Report, supra note 112.

133 Government of Newfoundland and Labrador, Voisey�s Bay Environmental Man-agement Board Announced, Oct. 11, 2002, at www.gov.nf.ca/releases/2002/env/1011n01.htm (last visited Dec. 18, 2002).

134 Id.135 Government of Newfoundland and Labrador, Aboriginal Involvement in Voisey�s

Bay, supra note 112.136 Id.137 CEAA Voisey�s Bay EAP Report, supra note 112, at Sections 4.1, 4.2.3.

CASE STUDIES 15



The formal environmental impact assessment pro-cess and the Environmental Assessment Panel wereimplemented in accordance with the Canadian Envi-ronmental Assessment Act and the Memorandum ofUnderstanding. The EIA process was essentially com-pleted once the Panel issued its final report and recom-mendations. Prior to issuing its final report, the Envi-ronmental Assessment Panel held two rounds of pub-lic consultations, with scoping sessions in the spring of1997 and public hearings in November 1998.138 Thescoping sessions were held to allow individuals to presenttheir issues to the panel. Public scoping and informa-tion sessions were held in 10 communities and publichearings in 11 communities, all over a span of twomonths.139

The Environmental Management Board, establishedunder the Environmental Management Agreement, pro-vides the national and provincial governments with ameans of consulting with the aboriginal communitiesprior to government decision-making.140 The board�sfunction is to advise the governments on all permit ap-plications, leases, construction and operation plans, aswell as rehabilitation and closure plans.141 In the eventof changes or additions to such plans, the board willadvise the governments with respect to the necessityfor any further environmental assessment.142 The boardalso reviews and advises the minister on the fulfillmentof the Voisey Bay Undertaking Order, which set theterms for releasing the VBNC project from the envi-ronmental assessment process.143 This function will re-quire the board to oversee the Voisey Bay environmen-tal performance and protection plans and the fulfillmentof its socio-economic obligations.144 Therefore, theEnvironmental Management Board will help ensure thatthe company follows through with its commitments andfulfills its obligations under the EMA.

The IBAs are independent contractual agreementsbetween VBNC and the LIA and Innu Nation and canthus be legally enforced in court.

EKATI MINE (CANADA)

In 1994, Broken Hill Proprietary Company Lim-ited (BHP) proposed to develop the Ekati mine�

Canada�s first diamond mine�in the far reaches of theNorthwest Territories.145 This proposal was met withgreat concern on the part of local First Nations, whohave several outstanding and overlapping land claims inthe region.146 The First Nations were concerned abouthow their interests would be addressed during projectapproval and operation, and about the environmentalimpacts of the mine on their traditional hunting, trap-ping, and fishing grounds.147

The approval process for the Ekati mine included anumber of innovative instruments aimed at addressingthese concerns and including aboriginal communitiesin the decision-making process. The Minister of thefederal Department of Indian Affairs and NorthernDevelopment (DIAND) made project approval contin-gent on the negotiation of several legally-binding agree-ments, some of which required the consent of aborigi-nal groups.

First, DIAND required the negotiation of an envi-ronmental agreement among the federal government,the territorial government, and BHP. Affected aborigi-nal groups were invited by DIAND to participate inthe process and were actively involved in negotiations,although they were not signatories to the agreement.148

The 1997 BHP Environmental Agreement (�Environ-mental Agreement�) imposes obligations on the com-pany that surpass existing legal provisions, includingrequirements that BHP develop environmental manage-ment plans and monitoring programs and report com-pliance with the Agreement.149

DIAND also required BHP to negotiate ImpactBenefit Agreements (IBAs) with four aboriginal groupsaffected by the Ekati mine. The purpose of the IBAswas to minimize adverse impacts of mining on localcommunities and ensure that these communities ben-efited from mineral development.150 Finally, BHP wasrequired to negotiate a socio-economic agreement withthe territorial government.151

Commercial production in the Ekati mine began in1998.152

138 CEAA Voisey�s Bay EAP Report Summary, supra note 114.139 CEAA Voisey�s Bay EAP Report Summary, supra note 114.140 Government of Newfoundland and Labrador, Voisey�s Bay Environmental Man-

agement Board Announced, supra note 133.141 Id.142 Id.143 Id.144 Id.

145 Karyn Keenan, Jose de Echave, and Ken Traynor, Mining and Communities: Pov-erty Amidst Wealth, November 2002, available at http://www.umass.edu/peri/pdfs/CDP3.pdf (last visited Jan. 31, 2003).

146 Kevin O�Reilly, The BHP Independent Environmental Monitoring Agency as a Man-agement Tool, Oct. 1998, at www.carc.org/rndtable/vbpanels.html (last visitedDec. 18, 2002); Keenan et al., supra note 145.

147 Keenan et al., supra note 145.148 Kevin O�Reilly, supra note 146.149 Keenan et al., supra note 145.150 Id.151 Kevin O�Reilly, supra note 146.152 Keenan et al., supra note 145.

16


The DIAND Minister used his authority to approvethe required water license as leverage to force the nego-tiation of the Environmental Agreement, Socio-Eco-nomic Agreement, and IBAs.153

However, the DIAND Minister�s decision to requirethe negotiation of an Environmental Agreement andcreation of an Independent Environmental Monitor-ing Agency was purely discretionary. There is no legalrequirement in Canada that mandates the adoption ofsuch instruments.154 There is also no legal authority thatrequires the negotiation of IBAs for non-titled landsand those not under land claim agreements.155

The First Nations have several outstanding andoverlapping land claims in the project area.156 As dis-cussed in the Voisey�s Bay Nickel Company case study,title to the land would have provided legal authority forthe community�s right to participation and consultationin resource development, and receive fair compensa-tion, as well as required the company to enter into IBAsas a prerequisite to project development.


Community consultation inthis case occurred through variousprocesses and decision-makingstructures. Aboriginal communityrepresentatives participated in theNorthwest Territories water boardhearings for the issuance of a wa-ter license, as well as the publichearings by the four member environmental panel es-tablished by DIAND to review the proposed miningproject.157 Aboriginal organizations also participated ina September 1996 workshop convened by DIAND todiscuss and negotiate the Environmental Agreement.DIAND invited aboriginal organizations to participatein the workshop, but did not allow them to becomesignatories to the agreement.158

Aboriginal representatives were also included in afunded working group to oversee the establishment ofthe Independent Environmental Monitoring Agency.159


During the negotiations period, several of the ab-original organizations had legal counsel,160 which mayhave enabled them to protect their rights and exertgreater bargaining power. The creation of the Indepen-dent Environmental Monitoring Agency enhanced theeducation of the affected communities on mining is-sues. The Agency created a web site and a newsletter,and has begun to hold its meetings in the surroundingcommunities. It also compiled an issues paper to trackcommunity concerns raised during the environmentalpanel review and water board hearings.161 Finally, BHPmade some efforts to educate Agency staff by provid-ing voluminous amounts of material for the Agency�sreview, as well as organizing workshops and meetings.162

In this case, the community was consulted prior tothe development stage of the mining operation. A lim-ited form of community consultation is also expectedto occur at the construction and operations phasesthrough review of BHP�s environmental managementplans.163

These negotiation and consultative processes didnot present the aboriginal communities with the right

to veto the project, but rather al-lowed them to set conditions onits implementation through thenegotiated agreements.

Both the federal and territo-rial governments played a centralrole in these negotiations. TheDIAND minister, Ron Irwin, used

his authority to approve water licenses as leverage toforce BHP to enter into negotiations and agreementswith the local communities.164 Both DIAND and theterritorial governments are parties to the Environmen-tal Agreement.165 DIAND also exerted pressure on BHPto negotiate and enter into IBAs with four aboriginalgroups affected by the mine.166 Third parties were notsignificantly involved in the negotiations and consulta-tions with the communities.

The agreement was formalized through a contract.The Environmental Agreement is a legally binding con-tract among the federal and territorial governments andBHP, and includes enforcement provisions (discussed

The creation of the IndependentEnvironmental MonitoringAgency enhanced the educationof the affected communities onmining issues.

153 Kevin O�Reilly, supra note 146.154 Keenan et al., supra note 145.155 CEAA Voisey�s Bay EAP Report, supra note 112, at Section 4.2.3.156 Kevin O�Reilly, supra note 146.157 See Id.158 Id.159 Id.

160 Id.161 Id.162 Id.163 See Id.164 Id.165 Id.166 Keenan et al., supra note 145.

CASE STUDIES 17


below).167 The IBAs are binding contracts between BHPand the individual communities.168 The EnvironmentalAgreement only covers the term of operation of themine, and does not extend after the mine is closed.169


The Environmental Agreement requires the estab-lishment of the Independent Environmental Monitor-ing Agency, a non-profit organization that acts as a publicwatchdog over the implementation of the Environmen-tal Agreement. This Agency has seven directors whoare appointed by the government, BHP, and First Na-tions, but act independently.

The Environmental Monitoring Agency reviews andadvises on the company�s environmental managementand monitoring activities, as well as government regula-tory activity, and facilitates aboriginal involvement inthe regulatory process.170 The Agency is to report an-nually. The government and BHP are required to pro-vide a written response as to their reasons for not imple-menting any of the Agency recommendations.171

The Agency will receive $450,000 each year for thefirst two years to fund its operations. BHP will provide$350,000, and responsibility for the remaining amountwill be split between the two governments. Subsequentfunding is to be provided by BHP in consultation withthe Agency. Where no agreement can be reached, thematter can be referred to binding arbitration.172

BHP is also subject to reporting requirements un-der the Environmental Agreement. BHP is required toreport annually on its environmental compliance, moni-toring programs, research, operations and future activi-ties, and remedial or mitigative action.173 Environmen-tal management plans, including detailed monitoringprograms, are required for the construction phase andoperations phase. These plans are subject to review bygovernment, aboriginal organizations, and the Agency.174

BHP must also post security for the progressive rec-lamation of the land-related disturbances created by theproject. These funds may also be drawn upon if BHPdoes not comply with requirements in the Agreement,including non-compliance with reporting requirementsor failure to rectify faulty management plans.175

There is no mechanism created for review, moni-toring or communication of results of compliance withrespect to the socio-economic agreement.176

The IBAs, as private contracts between the parties,are legally enforceable in a court of law.

CAMISEA OIL PROJECT (PERU)

In early 1996, Shell signed a contract with the Peru-vian government for exploration of the Camisea oilfields in Peru. This exploration phase was intended toprovide a better estimate of gas and condensate reservesin the fields, which would serve as the basis for Shell�sfinal investment decision.

During its exploration campaign in Camisea from1996-1998, Shell engaged in extensive consultations withthe affected communities through the environmentalimpact assessment (EIA) process.177 It first produced ascoping report to identify the issues and focus the pro-cess. The scoping report was made available to externalstakeholders for information and input.178 In late 1995,Shell conducted an initial EIA, which included a socialimpact assessment.179 Shell held a public hearing on theEIA in 1996.180 Ultimately, Shell conducted three addi-tional EIAs, one for each subsequent segment of theproject (upstream, transportation, and distribution), andeight public hearings (three for upstream, four for trans-portation, and one for distribution).181

In 1998, however, Shell decided not to continue withthe project, after having invested over $250 million.182

Shell cited various economic and financial factors forits decision,183 although a few observers have suggestedthat the environmental and social controversy surround-ing the proposed project may have played a role in Shell�sdecision.184 Since then, the Peruvian government hasawarded contracts to several new consortia for comple-

167 Kevin O�Reilly, supra note 146.168 Keenan et al., supra note 145.169 Kevin O�Reilly, supra note 146.170 Keenan et al., supra note 145.171 Kevin O�Reilly, supra note 146.172 Id.173 Id.174 Id.175 Id.

176 Id.177 Aaron Goldzimer, Prior Informed Consent of Project Affected Indigenous Peoples,

available at http://www.ksg.harvard.edu/ksr/article_AG.htm (last visited Jan. 30,2003).

178 IPIECA/E&P, The Oil Industry: Operating in Sensitive Environments, Case Study:Shell in Camisea, Peru, available at http://www.ipieca.org/publications/biodiversity.html (last visited Mar. 10, 2003) (hereinafter �IPIECA Shell CaseStudy�).

179 Id.180 Id.181 Camisea: Environment and Communities, available at http://www.camisea.com.pe

/environ.asp. (last visited Jan. 30, 2003).182 Red List Risk Profile: Amazon Financial Information Service, Camisea Gas and Field

Pipeline Project, January 25, 2001 (hereinafter �Red List Risk Profile: Camisea�).183 Id. (citing cost overruns and an inability to work out a vertical integration agree-

ment with the Peruvian government). See also Amazon Alliance, Amazon Up-date, August 1998, available at http://www.amazonalliance.org/update/1998/upd_aug98_en.htm (last visited Jan. 30, 2003) (citing limited domestic marketand natural gas pricing disagreement with Peruvian government).

184 Red List Risk Profile: Camisea, supra note 182.

18

tion of the project.185 The construction phase of theproject is expected to be completed by August 2004.186


Shell was legally required to consult with the com-munity in order to gain authorization for its project.Peru�s Environmental and Natural Resources Code187

requires the submission of an Environmental ImpactAssessment (EIA) to gain authorization for develop-ment activities. The EIA must be made publicly avail-able. In July 1996, the Ministry of Energy and Minesstrengthened the public participation criteria for theEIA, requiring a public hearing at the local level andprior notification in a national newspaper for actions inthe energy and mining sector.188

The International Labor Organization (ILO) Con-vention No. 169 was ratified by the Peruvian govern-ment in 1993 and provides additional authority for acommunity�s right to prior informed consent. This in-ternational treaty established criteria providing nativepeoples with the right to consultation prior to the imple-mentation of projects that exploit natural resources intheir territories, as well as the right to participate indecisionmaking processes involving such projects.189


In order to identify the community for consulta-tion, Shell conducted a stakeholder identification studyin 1995.190 Shell identified and contacted about 200 or-ganizations representing stakeholders in areas that theproject would affect.191

Shell engaged the community at several differentlevels. First, Shell worked closely with the indigenousfederations. The federations are legally constituted torepresent groups of native communities and to advance

their common interests with respect to territorial rights,education, public health, resource management and eco-nomic development. Nearly all of the communities inthe affected region belong to one of the three federa-tions. Decisionmaking in these federations closely re-flects traditional decision-making in native communi-ties. Most decisions are made by the community at theannual or semi-annual community-wide congresses,rather than by federation officers.

Shell made initial contact with the communities inmeetings during federation congresses, held meetingswith federation officers, and invited federation leadersto national and international seminars on the Camiseaproject, often donating funds for their expenses. How-ever, the federation officials� expense-paid travel cre-ated resentment and tension, as the native communitiesfelt that they had not gained any tangible results fromthe travel and that the officials� had failed to adequatelydisseminate information. To improve the communica-tion gap between federation officials and native com-munities, Shell staff took meeting notes for officials todisseminate to the communities, provided portable com-puters and printers to speed dissemination, provided atwo-way radio to improve communication, and fur-nished boat fuel to enable federation officials to travelto local communities. To avoid further travelrelatedproblems, Shell held meetings within the region, andmade meeting attendance as open as possible.192

In addition, Shell engaged in direct consultation withthe local communities and their individual associations.Shell�s Community Liaison Officers (CLOs) took partin hundreds of community and association meetings.193

In negotiating contracts, Shell initially sought theagreement of the local leaders whom it believed legiti-mately represented the community.194 However, theensuing tensions and divisions among community mem-bers soon led to the realization that a broader participa-tory approach was necessary to provide legal supportto company operations on community lands.195 Thus,Shell determined that community members should beinvolved in the agreements through their communal as-semblies.196 At the same time, because of the transac-tion costs involved with such a participatory approach,Shell sought to build the capacity of representative lo-cal community organizations and indigenous federationsthat could confront specific problems as they arose.197

185 Id.186 Camisea Project: Public Participation and Consultation Process: Summary and State

of the Project, August 2002, available at www.camisea.com.pe/docs_mAmbiente/Camisea_summary. pdf (last visited Feb. 1, 2003).

187 Legislative Decree No. 613 (1991) (Peru).188 Ministry Resolution No. 335-96-EM/SE, July 1996 (Peru). See Peter May, Cor-

porate Roles and Rewards in Promoting Sustainable Development: Lessons Learnedfrom Camisea, 11, fn. 11.These regulations were substantially modified in De-cember 2002.The new rules require public consultations prior to the publichearings, increased access to environmental impact studies, and the increasedparticipation of regional authorities and the public. See Mary Powers, Peru seeksmore environment info from Manhattan Minerals, Reuters News Service 1/10/2002, available at http://www.planetark.org/avantgo/dailynewsstory.cfm?newsid=19353 (last visited Jan. 30, 2003).

189 However, some observers have noted that implementation of this Conventionis limited in Peru, where social mores typically discourage individuals from iden-tifying themselves as indigenous. Email communication with Rachel Kyte (Inter-national Finance Corporation) and Martin Scurrah (Oxfam America) (on file withauthor)

190 IPIECA Shell Case Study, supra note 178.191 May, supra note 188 at 11.

192 Id. at 18-19.193 Id. at 19.194 Id. at 38.195 Id.196 Id.197 Id. at 38-39.

CASE STUDIES 19



Shell used a variety of techniques to educate localcommunities about the issues. First, it disseminated rel-evant written materials to stakeholders. This informa-tion included 13 bilingual briefing papers, issued aboutevery three months, which contained summaries of tech-nical reports and project updates.198 Shell also providedwritten information through its Camisea website, whichit regularly updated.199 Second, Shell exchanged infor-mation with stakeholders througha series of six participatory work-shops at different levels (regional,indigenous federations, national,and international).200 These work-shops were intended to facilitatedialogue and avert misunderstand-ings.201 Finally, Shell directly com-municated information to communities through itsCLOs.

Direct engagement by CLOs became the center-piece of Shell�s consultation effort.202 Shell�s CLOs dis-tilled information into simpler form and presented it tothe communities.203 They used a range of techniques tocommunicate complex project plans to native commu-nities, including: briefing notes (simplified project brief-ing papers translated into Machiguenga); posters; vid-eos; picture packages (showing various project compo-nents, construction methodology, and mitigation mea-sures); and scale models of project components.204

However, the effectiveness of this information dissemi-nation effort was limited by the CLOs� lack of trainingin cross-cultural communication.205

Shell engaged in public participation from the ini-tial exploration and appraisal stage of its project. Dur-ing the core of the consultation process for full fielddevelopment, Shell consulted with over 30 native com-munities in six meetings.206 Shell sought to identify is-sues with the community prior to or during the designphase, rather than after the start of operations.207

Although Shell engaged in extensive consultationswith the community in determining the scope of theproject, it is not entirely clear that Shell would have with-

drawn from the project if community support was notforthcoming.208 Accordingly, prior informed consent inthis case really consisted of the power to impose con-ditions upon�rather than the power to veto�the pro-posed project. Shell formalized these conditions throughcontracts with the communities.209

The consultations included government leaders andthird parties, such as national and international NGOs,and scientific institutions.210 The third parties played an

important role in providing insightinto Peru�s social and environmen-tal situations, as well as valuabletechnical and scientific expertise.211

Shell invited a number of NGOsto work in partnership with thecompany in activities related to lo-cal communities. For instance, it

signed a contract with a network of national environ-mental organizations (consisting of 38 NGOs) to con-duct an independent assessment of the project and tomonitor the project�s socio-environmental proceduresand impacts.212

Third parties were also instrumental in the plan-ning process that focused on helping local communi-ties manage their future. Third parties carried outbaseline studies or diagnostics, on which the planningwas based. After the field study, a draft report with find-ings and recommendations was taken back to the com-munities for discussion in the workshops to validate thefacts and establish community priorities. The resultswere then reviewed again by regional and national gov-ernments to gain their commitment to implementation.


Shell facilitated inspections by NGOs to ensure thatit was following through with its commitments. For in-stance, it developed an arrangement with the PeruvianEnvironmental Network (RAP) to undertake quarterlyindependent monitoring. During each visit, two RAPmembers visited the affected communities, in order tobetter gauge attitudes and concerns. RAP issued reportson each visit, which were made public. Shell agreed tomeet all expenses for these monitoring visits and paidRAP a small sum for internal use.213

Prior informed consent in theCamisea case consisted of thepower to impose conditions upon�rather than the power to veto.

198 Id. at 40; IPIECA Shell Case Study, supra note 178.199 May, supra note 188 at 11.200 Id. at 12.201 Id. at 13.202 IPIECA Shell Case Study, supra note 178.203 May, supra note 188 at 15.204 Id.205 Id. at 16.206 Id. at 11.207 Id. at 36.

208 Goldzimer, supra note 177.209 May, supra note 188 at 38.210 Id. at 12.211 Id. at 13.212 Id.213 IPIECA Shell Case Study, supra note 178.

20

TAMBOGRANDE MINING PROJECT (PERU)

Manhattan Minerals began exploration in theTambogrande Municipal District in the Piura Provinceof Peru in 1997, finding extensive deposits of copper,zinc, silver, and gold. From the onset, there has beenwidespread opposition to the Manhattan Mining project.

Many local residents have been concerned that themine would cause significant environmental pollution,create health problems, and hurt the local agriculturaleconomy.214 The current mine plans would displace al-most half of the town�s population (approximately 8,000residents) and result in the dismantling of one-third offamily homes, because a portion of the mine is locateddirectly underneath the community.215

Problems arose early on in the mining process, whenManhattan Mining was granted mining concessions byPeruvian government authorities without having con-sulted any local government bodies.216 The murder of aleading mine critic and reports that mining companieshave asked the Peruvian government to take a �toughhand� towards mining protests have further inflamedthe situation.217

Local opponents representing diverse interests haveorganized the Tambogrande Defence Front.218 Thisgroup consists largely of individuals who fear that themine would impair local agricultural production. Thegroup has the support of the local mayor, church lead-ers, and international advocacy groups.219

To quell the extensive opposition from local groups,Manhattan Minerals engaged in a number of commu-nity outreach and consultation efforts.220 In April 2001,the company announced that it would spend one year

improving community relations, and in May it signedan agreement to establish a forum for dialogue amongstakeholders.221 The company also held reconciliationmeetings with local groups after there were violent pro-tests against the mine.222 However, these efforts weregenerally unsuccessful because local community stake-holders felt that the company had not offered adequateinformation on the environmental and social conse-quences of the project.223

In response to these ineffective consultation efforts,the Tambogrande municipal government adopted amunicipal order and agreement on October 11, 2001that created the municipal consultation, or consultavecinal, for the Tambogrande district.224 The municipalconsultation aimed to provide the Tambogrande citi-zenry with information on the mining project, an op-portunity to participate in the mining decision-makingprocess, and an opportunity to express�through a com-munity vote� their position on the project.225

When the national government learned that themunicipality intended to hold a community vote as partof the consulta vecinal, it initiated its own consultativedialogue by inviting 18 community representatives tomeet with the Minister of Energy and Mines and theMinister of Agriculture. The process was meant to pro-vide support for the environmental impact assessmentprocess being carried out by the government and Man-hattan.226

Peru�s laws require companies to hire a third partyto prepare the EIA.227 Although it was suggested thatthe government provide funding to the local commu-nity to conduct an independent impact evaluation, thegovernment chose to only have an independent reviewof the EIA. The EIA had been prepared by a privateconsulting firm hired by Manhattan in accordance withstandard practice at the time.228

On January 8, 2002, the Tambogrande DefenceFront officially removed itself from the discussion, stat-ing that the ultimate goal of the dialogue was thecompletion of the EIA and the continuation of themining proposal, which ran counter to the Front�s ob-jectives.229 All other stakeholders remained in the dia-logue.230

214 Stephanie Rousseau and Francois Meloche, Gold and Land: Democratic Develop-ment at Stake � Report of the Observation Mission of the Tambogrande MunicipalConsultation Process in Peru (2002), available at http://www.ichrdd.ca/english/commdoc/publications/ demDev/tambograndeReportEng.html (last visited Dec.16, 2002); Red List Risk Profile, Amazon Financial Information Service, Peru:TamboGrande Mining Service, January 2002, available at http://www.redlisted.com/peru_tambogrande.html (last visited Mar. 10, 2003) (hereinafter �Red List RiskProfile: Peru�).There is long history of mining projects in Peru that have excludedlocal communities from the economic benefits while leaving them with the nega-tive consequences, such as displacement, pollution of vital resources, and healthproblems. See, e.g.,The Mining News, Communities March Against Mining In-dustry, June 22, 2002, available at http://www.theminingnews.org/theminingnews/case_tambogrande. html (last visited Mar. 11, 2003); Canadian Business, City ofGold, February 5, 2001, available at http://www.charlesmontgomery.ca/tambo.html (last visited Mar. 11, 2003).

215 The Mining News, Tambogrande Sign-on Letter, available at http://www.theminingnews. org/theminingnews/case_tambogrande.html; Red List RiskProfile: Peru, supra note 214.

216 Rousseau and Meloche, supra note 214.217 Red List Risk Profile: Peru, supra note 214.218 Id.219 Id.220 See Manhattan Minerals Corp. Community Relations � Building A Foundation for

Growth, available at http://www.manhattan-min.com/s/CommunityRelations.asp(detailing community consultation efforts) (last visited Jan. 30, 2003).

221 Red List Risk Profile: Peru, supra note 214.222 Id.223 Id.224 Rousseau and Meloche, supra note 214.225 Id.226 Id.227 Id.228 Id.229 Id.230 Id.

CASE STUDIES 21


Thereafter, the Peruvian government and theTambogrande municipal authorities went their separateways. The Peruvian government announced that the firmhired to evaluate the EIA process would be acceptableto Piura�s civil society and would explain its analysis atmeetings and workshops before the residents of Piuraand Tambogrande.231 The government stated that civilsociety representatives would act as observers of theEIA process.232 Additionally, public hearings would beheld to inform the public of the EIA findings, and themining company would have to sufficiently answer thecriticisms made during the hearings by citizens or gov-ernment authorities.233

The Tambogrande municipal authorities decided togo ahead with the municipal consultation and commu-nity vote to determine the future of mining activities inthe area.234 The municipality adopted a council agree-ment on April 20, 2002, which set June 2, 2002 as thedate for the municipal vote.235 The Peruvian govern-ment expressed its opposition to the community voteand stated that it would have no legal force as to themining conflict.236 Nonetheless, the municipal authori-ties went ahead with a community vote on June 2,2002.237 Although exact statistics for the event slightlyvary, the turnout was approximately 74 percent of theeligible voting population, and an overwhelming 98 per-cent voted against the mine.238 A debate was also heldbetween a biologist who opposed the mining projectand a representative from Manhattan Mining, althougha raucous crowd produced an atmosphere that was notideal for an exchange of view.239 The Tambograndemunicipal consultation was the first of its kind in Peru.240

The Peruvian government did not recognize the le-gitimacy of the community vote and allowed Manhat-tan Minerals to proceed with the environmental impactstudy of the mining project. Manhattan presented theenvironmental impact study in December 2002. In Janu-ary 2003, the Peruvian government asked ManhattanMinerals to submit additional information on its envi-

ronmental impact study. The 120-day period foreseenby the law for approving or rejecting the environmentalimpact study was frozen until Manhattan Minerals sub-mitted the information in April 2003.241 A series of 7-10 workshops on the EIA are expected to be held inthe Tambogrande communities, followed by a publiccomment period.242


Questions surrounding the legality and legitimacyof Manhattan�s mining concessions, particularly inTambogrande�s urban areas, have exacerbated the ten-sions surrounding the project. Manhattan Mineralsstated that community residents were consulted priorto its first explorations in 1997; however, some mem-bers of the Tambogrande municipal council dispute thelegitimacy of such actions. These council members claimthat the company�s explorations began before the ap-propriate consultations and agreements, and that theagreements reached between Manhattan and certainrural landowners were not legitimate because the coun-cil was not properly consulted.243

In May 1999, the Peruvian national government,through a supreme presidential decree, granted Man-hattan Minerals 10 mining concessions rights in theTambogrande region, including some in urban and ur-ban expansion areas.244 Law 27015 requires companiesto undertake a consultation with the provincial munici-pality and district municipality on the viability of explo-ration activities in urban and urban expansion areas priorto the granting of concessions.245 Manhattan did notconsult with the Tambogrande municipal authoritiesprior to the issuance of the presidential decree; how-ever, at the time, the authorities had not completed theadministrative procedures for the identification of ur-ban and urban expansion areas.246 Manhattan�s consul-tations with the municipal council to begin explorationsin the area began in May 1999. On November 18, 1999,the Tambogrande mayor authorized Manhattan�s explor-atory drilling in the urban area of Tambogrande throughDecree No. 010-99-MDT.247

In order to gain authorization for development ac-tivities, Peru�s laws require that a third party prepareand submit an Environmental Impact Assessment (EIA)

231 Id.232 Id.233 Id.234 Id.235 Id.236 Id.237 Id.; John Newcomb, Mine Prospect Looms Over Northern Peruvian Farmers, 29

May 2002, available at http://csf.coloado.edu/mail/elan/2002/msg00277.html (lastvisited Dec. 16, 2002).

238 The Mining News, Tambogrande Residents Vote �No� to Proposed Gold and SilverMine, available at http://www.theminingnews.org/theminingnews/case_tambogrande.html#No. But see, e.g. Keenan et al., supra note 145 (97%of voters against the mine); Scott Wilson, A Life Worth More Than Gold: PeruvianTown Tries to Turn Away Mining Company, Wash. Post, June 9, 2002 (nine in 10voters against the mine).

239 Rousseau and Meloche, supra note 214.240 Id.

241 Powers, supra note 188.242 Emily Russell, Tambogrande EIS Underway, Business News Americas, April 9,

2003, available at http://www.bnamericas.com.243 Rousseau and Meloche, supra note 214.244 Id.245 Id.246 Id.247 Id.

22

and make it publicly available.248 A public hearing andprior notification in a national newspaper is also requiredfor energy and mining projects.249 A division within theDepartment of Agriculture, Instituto Nacional deRecursos Naturales (INRENA), analyzes the EIA andpresents a non-binding recommendation to the Depart-ment of Energy and Mines (MEM) relating to the im-pact of the proposed action on natural resources.250

MEM then holds public hearings on the EIA, wherecitizens can express their views on the mining pro-posal.251 Citizens may also express their views in writingto MEM within two weeks of the public hearings.252

In December 2002, the Peruvian government an-nounced new procedures for public hearings on envi-ronmental impact studies for mining projects. These newrules require consultations with the local populationprior to the public hearings, better access to copies ofenvironmental impact studies, increased citizen partici-pation in the hearings, including language interpreta-tion, and more input from regional authorities.253 Al-though these rules were not in place when the company�sEIS was being developed, a transitional clause allowedthese procedures to be retroactively applied to the Man-hattan Mining project.

In addition to the laws above, Manhattan�s consul-tation and outreach processes have been guided by ex-tra-legal authority. Manhattan Minerals Corporation�ssocio-economic policy commits the company to par-ticipating �in the social, economic and institutional de-velopment of the communities surrounding the project�and ensuring �full community participation and involve-ment in the financing and implementation of commu-nity initiatives.�254

The consultation dialogue, initiated by the Peruviannational government (after learning of the municipality�sdecision to undertake a community vote), was estab-lished under the auspices of the Office of the Om-budsman.255 The dialogue was not established as a pro-cess for expressing the community�s prior informedconsent to the Manhattan mining project, but rather asa forum to discuss issues relating to the project. TheTambogrande Defence Front�s withdrawal from the dia-logue provides more credence to the argument that itwas, at best, a consultative process.

248 Legislative Decree No. 613 (1991) (Peru).249 Ministry Resolution No. 335-96-EM/SE, July 1996 (Peru). See May, supra note

188 at 11, fn. 11.250 Rousseau and Meloche, supra note 214.251 Id.252 Id.253 Powers, supra note 188.254 Rousseau and Meloche, supra note 214.255 Id.

Tambogrande municipal order number 012-2001-MDT-C and municipal council agreement no. 020-2001-MDT-CM of October 11, 2001 created the municipalconsulation (consulta vecinal ) as a tool to promote citizenparticipation in the district.256 The following legislationlegally recognizes municipal consultation:

� The municipal organic law (Ley or gánica demunicipalidades) gives the municipal authority respon-sibility in development planning (Articles 62 and64) and the capability determine the methods toincrease public participation in community devel-opment (Articles 10 and 79);257

� The Act respecting rights of participation and con-trol by citizens (Ley de los derechos de participación ycontrol ciudadanos no. 26300) establishes the tools forimplementing public participation at the municipallevel.258

According to the Tambogrande municipal authori-ties, the community vote initiated by the mayor also re-lied on legitimate legal authority. In 2001, approximately75 percent of Tambogrande�s voting population (28,000citizens) signed a petition circulated by the mayor thatcalled for an end to mining activities in the region andthe withdrawal of Manhattan Minerals Corp.259 Whileto the Peruvian Congress and several public institutionsreceived the petition, the State failed to acknowledge it.On February 16, the municipal council agreed by reso-lution to �respect the will of the residents to opposethe government�s wish to grant authorization to themining project in the district of Tambogrande� ( �hacercumplir la voluntad de inconformidad de los pobladores en tornoa las pretensiones del Gobierno Central de autorizar la explotacionminera en el Distrito de Tambogrande� ).260

Peru�s central government did not recognize theauthority of the community to deny mining throughuse of the consulta vecinal. Nor did the government findthat the community vote had any legal significance. Infact, the Peruvian government published a resolutionin February 2002 stating that such votes are illegal be-cause they conflict with laws (such as the EIA require-ments) that set forth the process by which the develop-ment of mining deposits are approved.261

In the end, the consulta vecinal provided a means forthe community to peacefully and formally express thesentiments of its members regarding the Manhattan

256 Id.257 Id.258 Id.259 Id.260 Id.261 Newcomb, supra note 237.

CASE STUDIES 23


mining project. While it does not appear to have con-travened any law that would render it �illegal,� it alsodoes not appear to be a legally-binding vote as definedby Peruvian law. Moreover, Peruvian law does not al-low such local votes to trump national government de-cisions. This is consistent with the central government�sposition, under three successive governments of dif-ferent political colors, that the central authorities con-trol the mining permit process, and that local authori-ties should not have the power to veto mining outrightin their communities.262


For the consultation dia-logue with MEM and the Min-ister of Agriculture, the Officeof the Ombudsman�s represen-tative in Piura invited 18 per-sons to represent the commu-nity. Those invited to the meet-ing included the mayor ofTambogrande and three leaders from the TambograndeDefence Front.263

In the case of the community vote, the �commu-nity� that was eligible to participate in the vote includedall the citizens who had registered for the 2001 elec-tions.


Manhattan Minerals claims that it made an effort inits initial consultations to provide informational and edu-cational materials about the impacts of the mine to theaffected communities. It disseminated informationwithin the community, including a monthly news bulle-tin, and published weekly letters from the president ofManhattan Minerals in the local newspapers.264 Man-hattan Minerals also organized information sessions andscreened mining documentaries for the public.265 Thecompany paid for a trip to Chile for some leaders ofTambogrande, including the mayor and president of theTambogrande Defence Front, to view the coexistenceof agriculture and mining at a nearby mine.266

However, the extent to which these actions dissemi-nated clear factual information on the potential nega-tive impacts of the mine is unclear. The information

provided largely focused on the community benefitsfrom the mine and the relocation process. A large num-ber of community members and municipal officialsclaimed that they were not provided specific informa-tion on the environmental and social impacts of themine.

The central government-initiated consultation dia-logue took place under the aegis of the Office of theOmbudsman. Although the Office of the Ombudsman

is highly respected among thePeruvian public,267 its capacityand effectiveness�particularlyat the regional level�is limitedby its shortage of resources.268

The central government pro-vided information to the pub-lic about the decisions reachedin the consultation dialoguethrough a letter to the Ombuds-man. In this letter, the govern-ment explained the proposal

formulated during the consultation dialogue and calledfor increased public participation in the EIA process.However, opponents of the mine felt that this proposaldenied them the right of prior informed consent bylimiting the community�s rights to simply placing con-ditions upon�but not being able to veto�the miningproject. On January 8, 2002, The Tambogrande DefenceFront formally removed itself from the dialogue.269

During the municipal consultation, the communitywas largely informed about the issues through materialdispersed by a group of individuals who opposed themine, and who were collectively registered as the �no�campaign.270 An election committee was established tooversee the vote.271 The community voted on whetherto allow or prohibit mining in the region�the termsand conditions for the acceptance of the mine werenot addressed in the voting process.272

The national government and municipal govern-ment took different approaches to the prior informedconsent process. The federal government clearly op-posed the municipal vote, because it was not a legalmechanism provided for under the applicable legisla-tive framework for approval or rejection of a mining

About 75% of the Tambograndevoting population signed a petitionthat called for an end to miningactivities in the region and thewithdrawal of Manhattan MineralsCorp., but the State failed toacknowledge it.

262 Email communication with Rachel Kyte (International Finance Corporation) (onfile with author).

263 Rousseau and Meloche, supra note 214.264 Id.265 Id.266 Id.

267 Id.268 Email communication with Rachel Kyte (International Finance Corporation) (on

file with author)269 Rousseau and Meloche, supra note 214.270 Id.271 Id.272 Id.

24

project.273 Conversely, the municipal government in ini-tiating the community vote demonstrated strong sup-port for the Tambogrande community�s right to priorinformed consent.

Third parties were also involved in the communityprior informed consent process. From the beginningof 2000, a number of NGOs from Piura and Limaformed the Tambogrande Technical Support Commit-tee to provide the Tambogrande Defence Fund withvaluable tools to back its opposition to the miningproject.274 International NGOs, primarily Oxfam, pro-vided financial support, commissioned environmentalstudies, and carried out awareness and education activi-ties. A Canadian group, Rights & Democracy, sent amission to observe and monitor the public consulta-tion process. Oxfam Great Britain provided financialsupport of US$20,000 to hold the community vote.275


Peruvian law required Manhattan�s EIA to includeinformation on the mine�s direct benefits to the com-

On March 23, 2003, the residents of Esquel, Argen-tina voted in a non-binding referendum to determine thefuture of a gold mine proposed by Meridian Gold Inc.About 75 percent of Esquel residents participated in thereferendum, and approximately 80 percent of them casttheir votes against the mining project, which Meridian in-tended to put into production by late 2004.

The community has been concerned with the mine�spotential impacts on water supplies (especially from theuse of cyanide), fish populations, agriculture, and the localecotourism industry. The proposed mine would be lo-cated about five miles from the town of Esquel and 28miles from Los Alerces National Park, a tourist destinationand home to an endangered species.

Initially, Meridian dismissed the referendum, statingthat it planned to continue with the exploration and per-mitting process as scheduled. However, the results of thereferendum increased pressure on local government offi-cials. Governor Jose Luis Lizurume of the Chubut Prov-ince asked Meridian to halt work on the mine until anadditional environmental study is completed. The com-pany has since hired a San Francisco-based non-profit or-

ganization, Business for Social Responsibility, to help it bet-ter understand community concerns.

Meridian brought in new consultants to review its ini-tial Environmental Impact Assessment (EIA). The EIA pub-lished by Meridian Gold was harshly criticized in a reportby Dr. Robert Moran.277 Dr. Moran stated that the EIAwould not be found acceptable by regulators in WesternEurope, America, or Canada. New consultants will alsopublish a new study that assesses the potential impacts ofthe mine on the community�s water sources. The resultsof the study will be audited by Argentina�s National Insti-tute of Water. A public hearing is scheduled to take place atleast 30 days after the study is published.

Meridian�s stock fell dramatically as a result of the un-certainties regarding the Esquel mine, and the companyadmitted that it made mistakes with the project. Meridianbelieves that it was too impatient in trying to push throughits project and that it should have spent more time con-sulting with the local community. The company stated thatit will not continue with the project unless the communitychanges its opinion on the project, but it is hopeful that itsnew efforts will build public support for the project.

ESQUEL MINING PROJECT (ARGENTINA)

munities and region, the forms of citizen participation,and the compensation and other mitigation measuresthat would be taken as a result of the mine�s impacts onthe community and its environment.276 As stated above,approval of the EIA has been withheld pending thesubmission of additional applicable information.

Since the community consultation processes dis-cussed in this case study have not yet culminated in anagreement between the mining company and the com-munity, there is no agreement or process to be imple-mented.

STILLWATER MINE (UNITED STATES)

The Stillwater Mining Company (SMC) producespalladium, a precious metal, in the Beartooth Moun-tains in Stillwater County, Montana, USA. This regionis also home to ranchers, trout fishermen and wealthylarge landowners seeking refuge from big cities. Overthe years, local environmental and community groups

273 Id.274 Id.275 Id.

276 Id.277 Dr. Moran is a hydrologist and geochemist who prepared a report on the pro-

posed mine site for Greenpeace Argentina and the Mineral Policy Center. SeeRobert Moran, Esquel, Argentina: Predictions and Promises of a Flawed EIA, (Mar.2003), available at http://www.mineralpolicy.org/publications/pdf/PredictionsPromisesFINAL.pdf (last visited Sept. 18, 2003).

CASE STUDIES 25


have attempted to use many traditional legal tools, in-cluding participation in the environmental impact as-sessment process and citizen suits, to resolve their com-plaints over SMC�s mining operations.278 However, be-cause traditional avenues failed to yield results, thegroups began exploring the use of a new tool: the GoodNeighbor Agreement. In a Good Neighbor Agreement,the community negotiates directly with the local com-pany �to establish a set of principles and practices thatwill govern those aspects of the company�s businessactivities that most keenly affect the community.�279 InMay 2000, three local groups entered into a Good Neigh-bor Agreement with SMC. The agreement imposes onSMC more stringent environmental standards than re-quired by Montana or federal law, and also contains ex-pansive provisions on citizen access to information andpublic participation and monitoring concerning themine.280


SMC was not required by law to enter into the GoodNeighbor Agreement. Rather, SMC�s decision to enterinto the agreement stemmed in part from the need toprotect its corporate image as a socially-responsible com-pany. SMC is a publicly-owned company, and its inves-tors include socially responsible mutual funds. There-fore, its share prices and ability to attract investors wereparticularly sensitive to public criticism. After criticismof SMC�s operations were published in an article in theNew York Times, SMC appeared more willing to enterinto the agreement.281 Moreover, at the time, SMC wasalso facing a pending lawsuit from local community or-ganizations. SMC�s entry into the agreement also likelystemmed from the possibility that the lawsuit might bedismissed in exchange. The community organizationsdid in fact withdraw the lawsuits in exchange for theSMC�s commitments in the agreement.282


The company consulted with three grassroots or-ganizations: the Northern Plains Resource Council(NPRC), the Stillwater Protective Association (SPA), andthe Cottonwood Resource Council (CRC). NPRC is astatewide grassroots organization with numerous localaffiliates, including SPA and CRC.283 Several women par-

ticipated in the negotiations as representatives of thecommunity organizations.284 These groups did not pur-port to represent the general public, but they did en-gage in several outreach efforts with the rest of the com-munity.

These organizations made decisions through nego-tiations with SMC. At first, SMC was unwilling to sitdown with local groups, but SMC eventually changedcourse and supported the agreement.285 The negotia-tions for the agreement began in May, and lasted foralmost one year.286 The organizations� consent was ex-pressed through the negotiations leading up to their ul-timate signing of the agreement.


The local organizations that negotiated the GoodNeighbor Agreement had extensive experience, educa-tion, and access to information about mining. SPA andCRC, as members of NPRC, had access to NPRC�s le-gal, technical and advocacy expertise built up over yearsof community organizing.287 They also benefited fromstrong outside legal and technical support during thenegotiations, and an intensive negotiation skills trainingsession by an outside expert.288

Moreover, through the agreement, SMC expandedthe community groups� access to information. SMCguaranteed access to information and notice of pro-posals and meetings before final decisions are made.289

It also promised to disclose all data, sampling results,studies, reports, evaluations, plans, projects, audits, tran-scripts, and other documents derived from or collectedunder the agreement.290 Certain materials deemed con-fidential would only be disclosed to a limited numberof designated council representatives.291 In addition,SMC agreed to pay for the costs of various informa-tional materials and reports to inform the continuedconsultation, monitoring, and review processes envi-sioned under the agreement. For example, SMC wouldpay for costs of independent scientific and technicalconsultants who would conduct environmental audits,an evaluation of the company�s reclamation plan andbonding, a fisheries study and monitoring plan, a baselinewater quality report, and groundwater studies.292

278 Manuel Pulgar-Vidal y Adriana Aurazo, eds., Mejorando la Participación Ciudadanaen el Proceso de Evaluactión de Impacto Ambiental en Minería 137, 137-147(2003).

279 Id. at 137.280 Id. at 144.281 Id. at 145.282 Id. at 144.283 Id. at 139-140.

284 Id. at 143.285 Id. at 141.286 Id. at 141, 143.287 Id. at 144-145.288 Id. at 145.289 Good Neighbor Agreement, May 8, 2000, Section 1.0(c).290 Id. at Section 3.0.291 Id.292 Pulgar-Vidal et al, supra note 278 at 144; Good Neighbor Agreement, supra

note 289 at Section 4.1.

26

In this case, the community sought to be consultedwhen the mine was already in operation, after it hadlearned of the company�s plan to increase its produc-tion.293 The parties here were not opposed to the min-ing (or necessarily its expansion), but simply wanted thepractice to be environmentally and socially respon-sible.294 Correspondingly, the Good Neighbor Agree-ment guarantees the community the right to consulta-tion and participation in mining decisions�but doesnot provide the community with the power to veto amining project completely.

Neither federal nor state governments were repre-sented at the negotiating table for the Good NeighborAgreement.295 The negotiations did not include outsidethird parties. The agreement between the mining com-pany and these groups was formalized through alegallybinding and enforceable contract.

The agreement contains provisions for dispute reso-lution and enforcement. Parties are bound to first ne-gotiate in good faith to resolve disputes. If negotiationfails to resolve the dispute, parties may enforce the agree-ment through civil action in a district court, or may sub-mit the dispute to binding arbitration.296

The terms and conditions extend as long as theagreement is in effect. The agreement will terminatewhen the mining operations have ceased and the com-pany has fulfilled all federal and state closure and recla-mation requirements.297

Although the agreement itself was concludedthrough a one-time negotiation process, it provides for

continuing community consultation through commu-nity participation in company planning and environmen-tal management.298


The agreement contains a variety of mechanismsthat enable the community to monitor the company�soperations and engage in an ongoing dialogue on keyissues.299

The agreement supports the creation of citizenoversight committees to establish a process for consid-ering new issues and to monitor the implementation ofthe agreement.300 The SMC agreed to pay for the com-mittee members� and consultants� administrative andtravel costs, as well as the costs of citizen sampling upto $270,000 for the first two years of the agreement.301

Councils have the right to enter and inspect minefacilities, and to conduct citizen sampling, take photo-graphs, and meet with relevant SMC employees duringall such inspections. Councils are limited to no morethan two inspections per mine site per year, and mustcomplete each inspection within a reasonable periodof time.302

The agreement also imposes monitoring and report-ing obligations on SMC. For example, SMC is requiredto notify the relevant oversight committee if any waterquality trigger level is exceeded, and to prepare a cor-rective schedule that needs to be approved by the iden-tified stakeholder groups.303

293 Pulgar-Vidal et al, supra note 278 at 137.294 Id. at 145.295 Id. at 139.296 Good Neighbor Agreement, supra note 289 at Section 9.297 Id. at Section 15.

298 Pulgar-Vidal et al, supra note 278 at 137.299 Id. at 137.300 Id. at 144; Good Neighbor Agreement, May 8, 2000, Section 7.301 Pulgar-Vidal et al, supra note 278 at 144; Good Neighbor Agreement, supra

note 289 at Section 4.3.302 Good Neighbor Agreement, supra note 289 at Section 10.303 Pulgar-Vidal et al., supra note 278 at 144.

CASE STUDIES 27


T he case studies presented in the preceding sec-tion detail variations in the conceptualization andpractice of prior informed consent in different

contexts around the world. Stepping back from the richdetail of the individual case studies and looking at thebigger picture allows us to assess what these case stud-ies can cumulatively tell us about the community rightto prior informed consent in the mining context. Whatcan we learn from this information that can be appliedin other contexts? This analytical review provides a com-parative analysis of the key elements of the right toprior informed consent present in the case studies, high-lighting the different approaches to these elements andthe overall right to prior informed consent, and the po-tential advantages and shortcomings of these ap-proaches.

AUTHORITY FOR PRIOR INFORMEDCONSENT

The case studies reveal a range of different authori-ties �both legal and extra-legal�that provide the ba-sis for obtaining a community�s prior informed consentin the mining context. Several legal authorities�suchas a country�s constitution, statutes, regulations, and trea-ties entered into�in fact mandate prior informed con-sent, and have therefore served as powerful tools forcommunity groups seeking a voice in mining decision-making. Moreover, such legal authorities are a signifi-cant indicator of the level of importance that the coun-try places on a community�s prior informed consent,and of the growing support for the concept of priorinformed consent worldwide. Interestingly, the casestudies also reveal that mining companies have increas-ingly engaged in consultation with communities evenwhen not legally required to do so. Many of the ex-amples stem from extra-legal authorities and mecha-nisms, such as international and national mining guide-lines, corporate social and environmental responsibilitycodes, contractual agreements with the community, andcommunity votes.

LEGAL AUTHORITY

Legal authority for prior informed consent takes anumber of different forms. One way of securing com-munity rights is to obtain constitutional protectionthrough a judicial system. As discussed in the Voisey�s

Bay case study, the Canadian Supreme Court held thatwhere aboriginal people possess title to their traditionallands, governments must ensure that the aboriginalpeople participate in resource development, be prop-erly consulted, and receive fair compensation. Consti-tutional rights are extremely powerful because they de-rive from the supreme law of the land, and thereforecannot be overridden or overturned by government.Canada is the only country in this study to provide suchrights through the judiciary.

Many countries have statutes or regulations requir-ing community consultation in the mining process.Unlike constitutional rights, those rights derived fromstatutes or regulations can in fact be overturned by actof a legislative arm of government. In this study, bothPeru (as discussed in the Camisea and Tambograndecase studies) and Canada (as discussed in the Voisey�sBay and Diavik case studies) have statutory requirementsfor community consultation as part of the Environmen-tal Impact Assessment (EIA) process. In addition, Aus-tralia has adopted an innovative statutory authority forcommunity consultation, as discussed in the AboriginalLand Rights Act case study. This statute creates a rightto community consultation that is not rooted in the EIAprocess, and is in fact much more expansive. It creates�Land Councils��legally-recognized bodies composedof elected community members �to manage the priorinformed consent process. Such an established and le-gally-recognized organizing basis enables the commu-nity to more effectively assert its rights. Moreover, thestatute provides traditional Aboriginal owners with theright to consent to explorations on their land, whichincludes the right to veto any such explorations, as wellas the right to negotiate agreements and timeframes forsuch exploration. In other words, it is not simply the�passive� right to be consulted as part of an EIA pro-cess, but an �active� right to dictate whether or not min-ing development occurs in the first place.

International treaties also provide legal authority forthe rights of indigenous people to be consulted regard-ing development projects affecting their lands and re-sources. For example, as mentioned in the World Com-mission on Dams case study, the International LabourOrganization Convention 169 requires governments toconsult with indigenous and tribal peoples within theircountries regarding development projects and otheractivities affecting them, and lays down criteria for these

ANALYSIS

28

consultations. Countries that have ratified this treaty arelegally bound to implement it.304 However, as an inter-governmental agency, ILO has no enforcement power,and must rely instead on dialogue, political pressure, per-suasion, and financial assistance tocompel countries to comply.305 There-fore, although technically legally bind-ing, this treaty is essentially a �papertiger� without any real teeth to forcecompliance. Nevertheless, it stillserves as a valuable source of moraljustification and legitimacy for effortsto promote prior informed consent.

EXTRA-LEGAL AUTHORITY

The case studies also reveal that mining companieshave occasionally sought a community�s consent evenwhen not legally required to do so. A number of moti-vating factors could prompt a company to seek acommunity�s prior informed consent to its project. Thecompany could be acting out of a sense of responsibil-ity or commitment to an ethical standard (i.e., a �goodcorporate citizen�), or to foster a better relationship withthe local community and government, prevent civil un-rest, and create a more comfortable atmosphere for itson-site workers. A company could also be acting touphold a positive public image or avoid a negative one.A company could also be reacting to pressures fromthe community, the press, or its stockholders. A combi-nation of these factors likely motivates a company�sdecision to voluntarily seek a community�s consent fora mining project.

There are various types of extra-legal authoritiesthat support such voluntary consultation. For example,the World Commission on Dams guidelines�althoughnot legally binding and certainly controversial�consti-tute extra-legal authority for prior informed consent,stating that �all countries should be guided by the con-cept of free, prior and informed consent, whether ornot it has already been enacted into law.�306 Similarly, asmentioned in the World Commission on Dams casestudy, the United Nations Draft Declaration on theRights of Indigenous Peoples�although it has not yet

been adopted�constitutes persuasive authority for theright to prior informed consent. The Draft Declarationstates that indigenous peoples may require states toobtain their �free and informed consent prior to the

approval of any project affecting theirlands, territories and other resources,particularly in connection with thedevelopment, utilization or exploita-tion of mineral, water or other re-sources.�307 In addition, nationalguidelines�such as those adopted bythe parties in the Canadian

Whitehorse Mining Initiative case study�also consti-tute extra-legal authority for prior informed consent.Finally, many mining companies�such as ManhattanMinerals in the Tambogrande case study�have envi-ronmental and social responsibility policies and codesthat could form the basis for voluntary community con-sultation initiatives. Although all of these authorities areextra-legal in the sense that they are non-binding anddo not require the company to engage in communityconsultation, they can influence corporate action.

Companies have used a variety of extra-legal mecha-nisms to engage in consultation with and obtain priorinformed consent of the community. Several case stud-ies illustrate the potential role of contractual agreementsas a mechanism for obtaining and formalizing prior in-formed consent. For example, in the Stillwater casestudy, the company consulted with community groupsin the process of negotiating the �Good NeighborAgreement.� Although the agreement would be con-sidered an extralegal mechanism, because the companywas not required by law to enter into it�it was a le-gally-binding agreement once executed. The case stud-ies highlight several other agreements�contracts withthe community in the Camisea case study, ParticipationAgreements in the Diavik case study, Impact-BenefitAgreements (IBAs) in the Voisey�s Bay and Ekati casestudies�that are all different names for similar typesof extra-legal mechanisms used to consult with a com-munity, and to obtain and formalize its prior informedconsent.

These contractual mechanisms have a distinct ad-vantage over the international and national guidelinesdiscussed above in that they are clear, transparent, rec-ognized by government, and�most importantly�en-forceable in court. However, there may be practicalobstacles that limit a community�s ability to enforce these

Although technically legallybinding, the ILO Conventionis essentially a �papertiger� without any real teethto force compliance.

304 Countries that have ratified this treaty include Norway, Mexico, Columbia, Bo-livia, Costa Rica, Paraguay, Peru, Honduras, Denmark, Guatemala, the Nether-lands, Ecuador and Fiji. Introduction to ILO Convention No. 169, available at http://www.ilo.org/public/ english/r�/mdtsanjose/indigenous/intro169.htm (last vis-ited Apr. 7, 2003).

305 See Convention No. 169: Its Nature and Fundamental Principles, available at http://www.ilo.org/public/english/employment/strat/poldev/papers/1998/169guide/169gui de.htm#C3 (last visited Apr. 7, 2003).

306 World Commission on Dams, supra note 9, at 219.307 United Nations Draft Declaration on the Rights of Indigenous Peoples, supra note 8

at Part VI, Article 30.

ANALYSIS 29


provisions, such as a lack of funding, legal knowledge,capacity to monitor compliance, or access to informa-tion. Moreover, reliance on corporate self-regulationraises a larger issue about the role and duty of the state.Does the state have a duty to protect all of its citizens,or can the state rightfully leave this to voluntary corpo-rate initiatives?

Government officials have also used extra-legal au-thority to pressure companies into going beyond whatthe law may require. For example, in the Ekati case study,a Canadian Minister essentially used his authority toapprove the required water license as leverage to forcethe company to negotiate the Environmental Agree-ment, Socio-Economic Agreement, and Impact-Ben-efit Agreements with the affected communities�noneof which were legally required. Similarly, in the Diavikcase study, the Canadian regulatory agencies may haveused their licensing authority to pressure the miningcompany to enter into agreements with the surround-ing communities. Moreover, as illustrated in the Diavikcase study, even without explicit pressure from the state,mining companies may engage in voluntary public con-sultation up front, in order to avoid the potential delayassociated with the more heavy-handed regulatory re-quirements for public consultation that may be imposedupon them later in the process.

The Tambogrande case study provides one of themost interesting and innovative examples of a localgovernment�s use of an �extra-legal� mechanism topublicize and promote the community�s right to priorinformed consent. In this case, the municipality ofTambogrande held a community vote on whether ornot the mine should be developed, and an overwhelm-ing majority of residents voted against the mine. Al-though the municipality believes that it relied on legiti-mate legal authority in submitting the issue to commu-nity vote, the national government has not recognizedthe vote as legally authorized or binding. Even if thecommunity vote does not carry any legal weight, it hasserved as a powerful extra-legal mechanism for com-munity consultation, allowing communities to expresstheir voice and generate public support for their rightto prior informed consent.

RIGHTS DERIVED FROM LAND TITLE

Land title is a key determinant of a communitygroup�s ability to successfully assert its right to expressits prior informed consent to a project. As documentedin a recent field study, indigenous peoples without landtitle face greater difficulties than those with land title inparticipating in consultations over mining develop-

ment.308 Moreover, having a �recognized land base� mostlikely enables indigenous people to enter into negotia-tions on a �stronger footing.�309

In addition to providing greater negotiating power,land title is also the basis for certain types of legal au-thority for consultations and prior informed consent.For example, as discussed in the Voisey�s Bay and Ekaticase studies, Canada provides a constitutional right tocommunity consultation for indigenous populationswith title to their traditional land. Similarly, Australia�sAboriginal Land Rights Act grants traditional Aborigi-nal land-owners the right to consent to explorations ontheir land. The Act also significantly expands indigenousland title, thus strengthening the coverage of this right.

Interestingly, several case studies demonstrate thateven potential land title can enhance community lever-age in mining-related decisions. In the Voisey�s Bay casestudy, the community cited its unsettled land claims inthe area to be mined as authority for its right to consentto the mining project. Ultimately, the communities wereable to use their leverage to enter into consultations andnegotiations with the mining company, an MOU on theenvironmental impact assessment process, an environ-mental management agreement, interim land claims ar-rangements, and individual IBAs. Similarly, in the Ekaticase study, the fact that the community had pendingland rights may have been a factor in the Minister�s de-cision to require negotiation of IBAs as a condition forconsent for issuing the water license. In both cases, be-cause the communities had potential title to the land atissue, they could more persuasively and forcefully exerttheir rights to consultation and participation.

Unfortunately, however, land title in developingcountries is often not clear and, in the case of indig-enous peoples, may not respect traditional land owner-ship. Moreover, governments may lack the time and re-sources to clarify land title when a mining project isproposed. As a result, mining projects often move for-ward without clarifying the underlying land title issues,thus denying affected communities the potential to as-sert their right to consent.310

THRESHOLD DEFINITIONS

Exploring the definitions of three key concepts in-volved in the right of prior informed consent��com-

308 Viviane Weitzner, the North-South Institute, Through Indigenous Eyes:TowardsAppropriate Decision-Making Processes Regarding Mining On or Near AncestralLands, 2002, at 33.

309 Id. at 25310 Email communication with Rachel Kyte (International Finance Corporation) and

Martin Scurrah (Oxfam America) (on file with author).

30

munity,� �consent,� and �decision-making processes��is critical to the understanding and practice of this right.The following discussion analyzes the range of defini-tions given to these concepts in the case studies.

COMMUNITY

In examining how �community� is defined in thecontext of prior informed consent, the case studies ex-amined: Who is the community? How is the geographic,ethnic, or other scope of the community defined? Wholegitimately represents the community? Is it simply rep-resentatives from local community organizations, or isit necessary to reach out to more diverse groups, suchas women, to ensure that all elements are consulted?

The definition of community adopted or manifestedby actual practice in a particular case delineates the uni-verse of stakeholders with the right to participate in theprior informed consent process. This universe shouldbe expansive enough to include all relevant and inter-ested parties, �in order to promote equity and avoidfuture conflict resulting from lack of inclusion.�311 Onceit is known who is included within the definition of acommunity, the affected parties will better be able toidentify who must be consulted.

Defining the community and identifying legitimaterepresentatives is particularly challenging when the af-fected community contains diverse elements with dif-ferent demands and needs, and varying abilities to ex-press their voices. For example, women in the commu-nity, who often face disproportionate negative impactsfrom mining development,312 may have a weaker voiceand may not be represented in community organizations.The World Commission on Dams guidelines specificallyrecognize the importance of involving women and othervulnerable groups in the decision-making process.

The negotiation of agreements with communityrepresentatives or stakeholder bodies can be a legiti-mate means of obtaining the community�s prior in-formed consent �so long as the individuals or organi-zations are in fact representative of the community as awhole. The Camisea case study provides an example of

efforts by a resource extraction company to include di-verse community interests in the prior informed con-sent process. In this case, Shell conducted a stakeholderidentification study, through which it identified and con-sulted with more than 200 organizations representing avariety of stakeholder interests. Moreover, Shell did notlimit its efforts to these organizations, but actually con-ducted extensive direct outreach in the communities,providing opportunities for consultation with womenand others that may not have been represented in thecommunity organizations.

The need to ensure that all elements of a commu-nity are properly accounted for is particularly impor-tant when the resulting agreement will affect more thanone locality. The World Commission on Dams has im-plicitly acknowledged the legitimacy of representativeconsent, stating that stakeholders should negotiate agree-ments on energy and water resource developmentthrough representative stakeholder bodies. However,special precautions must be taken to ensure that indus-try does not express a bias in its process of selectingcommunity representatives by, for instance, consultingonly with politically and economically powerful groupswhile ignoring the voices of others.

The Northern Land Council, established under theAboriginal Land Rights Act, provides an example ofsuch assurances, by specifically setting aside five Coun-cil positions for women. Compare this with the selec-tion process for the aboriginal representatives who par-ticipated in the consultative process to create nationalmining guidelines in the Whitehorse Mining Initiative(WMI). In this case, there were no assurances that thead hoc selection process would result in aboriginal par-ticipants who were in fact representative of the largeraboriginal community in Canada.

CONSENT

The case studies presented a range of mechanismsfor determining community consent, including a fewexamples of direct community consultation through acommunity vote. Direct representation through votingis one of the most effective ways to ensure that eachmember of the community has a voice in the processof providing legitimate consent. However, even directrepresentation requires the difficult determination ofwhat constitutes �consent.� In other words, how muchof the community must agree in order to constituteconsent?

In the Tambogrande case study, all citizens of themunicipality who had registered for the 2001 elections

311 See Sweeting and Clark, supra n. 1 at 51.312 These impacts can include: fewer job opportunities for women in mining com-

munities, as many countries ban female labor in mines; erosion of women�sstatus and role in subsistence production as the community shifts to a casheconomy; greater impacts from environmental harms, as women are often moreresponsible for subsistence agriculture; loss of assistance in agriculture as men goto mines to work; and greater stress on family life as men go to far-off mines towork and women are left to maintain the household. See International Institutefor Environment and Development and World Business Council for SustainableDevelopment, Breaking New Ground: Mining, Minerals, and Sustainable Develop-ment, 2002, (hereinafter �MMSD�) at 206.

ANALYSIS 31


were allowed to participate in the community vote.Approximately 74 percent of the eligible voting popu-lation voted, and about 72.5 percent of them votedagainst the mine.313 In a similar, very recent case, 60percent of the residents of Esquel, Argentina, votedagainst the development of a gold mine in their com-munity.314 In Voisey�s Bay, all members of the LabradorInuit Association (LIA) and Innu Nation tribes wereallowed to vote on whether or notto approve the Impact BenefitAgreements (IBAs) that their rep-resentatives had negotiated withthe mining company. In the end,82 percent of the LIA�s membersand 68 percent of the Innu mem-bers voted to approve the IBAs.

In all the case studies, the prior informed consentof a community was not defined as absolute consensus.Rather, consent (or lack of consent) was expressed by asignificant majority of people in the community�andwas deemed to constitute a sufficient expression of priorinformed consent. If the numbers had been closer�had only 50 percent of people expressed consent, forexample � the determination would have been moredifficult.

When the community is not directly consulted, andis instead consulted through its representatives or com-munity organizations, it is even harder to define thethreshold for consent. Do all representatives or com-munity organizations need to agree? If not, which ones,and how many, must agree? As Goldzimer suggests,there is no single standard that would be appropriate inall cases.315 As is the case for defining the community tobe consulted, consent should be defined in a way thatensures the agreement is representative of the affectedcommunities and their factions.

DECISION-MAKING PROCESS

Consultative processes are the sum of the tech-niques used by companies and governments to engagethe community about the potential for a mining project,educate it about the project�s consequences, and deter-mine its position on the issues. Consultative processes

are frequently ridden with conflicts and controversies,since they often do not align with the traditional deci-sion-making processes used by indigenous societies. Thedecision-making process is key to the effectiveness ofthe prior informed consent process and is discussedmore fully in the section below on �Framework of PriorInformed Consent Process.�

Consultative processes canoften weaken and fragment com-munities, particularly through �di-vide-and-conquer� tactics used bysome companies.316 Moreover,consultative processes often re-place traditional decision-makingauthority with less cohesive forms

of decision-making, thus exacerbating the problem ofcommunity fragmentation.317 However, several of thecase studies reveal efforts by industry or government tostrengthen community decision-making processes, andthereby minimize the destructive potential of the con-sultation process.

The Voisey�s Bay case study features a uniquemechanism through which the community acted on itsown to determine and articulate its needs and demandsin a cohesive, inward-looking way. In this instance, theInnu community, when first faced with the prospectsof mining development on their land, did not simplywait to be consulted. Rather, the community establishedits own task force to formulate its position on miningdevelopment. This task force served as a forum for thecommunity to discuss the issues of mining on Innulands, the potential for economic development oppor-tunities, probable environmental degradation, and theabsence of a land rights agreement. The task force ledto production of a report that provided a clear man-date for the leaders to confront the mining develop-ment. The report indicated that the Innu people wouldnot consent to mining development without an IBA,environmental assessment, and a land claim agreement.

The Camisea case study also provides an exampleof efforts to engage and strengthen�rather than re-place� traditional decision-making structures. In thiscase, Shell worked closely with the indigenous federa-tions, where decision-making reflects traditional deci-sion-making in native communities. Shell also tooksteps�such as providing meeting notes, portable com-puters and printers, a two-way radio, and boat fuel�toimprove communication between federation officialsand native communities.

Consent should be defined in away that ensures the agreementis representative of the affectedcommunities and their factions.

313 This statistic is calculated based on the following information from the Tambograndecase study: 74 percent of the eligible voting population cast a ballot in the commu-nity vote, and 98 percent of the population voted against the mine.

314 This statistic is calculated based on the following information: 75 percent of Esquelresidents participated in the vote, and 80 percent of them voted against the minedevelopment. Lynne Oliver, Meridian Gold Off 9%, Esquel Residents Vote AgainstMine, Wall Street Journal, Mar. 24, 2003, available at http:online.wsj.com/ar-ticle/ 0,,BT_CO_20030324_004612,00.html?mod=COMPANY (last visitedMar. 24, 2003).

315 Goldzimer, supra note 177.316 SeeWeitzner, supra note 308 at 31.317 See id at 30.

32

Although it does not engage traditional decision-making processes, the Aboriginal Land Rights Act cre-ates innovative entities to help indigenous communitiesvoice their demands in a more unified, cohesive way.The Act creates four Land Councils to identify and rep-resent interests of the communities. The Land Coun-cils consult with the community, negotiate on its be-half, and manage the prior informed consent process.Since the Land Councils consist of community mem-bers who are directly elected by the community, thecommunity may view the Land Council�s decisions asbeing more legitimate than that of a community leaderor group that is selected by industry to represent theviews of the community. In addition, Land Councilscan act as a check on divide-and-conquer techniques,since the full Land Council is required to consider adecision of the larger community to ensure that it meetsthe requirements of due process, and can reject the de-cision if it is unreasonable.

PROCEDURAL ASPECTS OF THE PRIORINFORMED CONSENT PROCESS

ACCESS TO INFORMATION

Many communities lack sufficient information andeducation to enable them to participate effectively inprior informed consent processes. Often, communitieshave no experience with large-scale mining projects, andtherefore cannot draw on their own experiential knowl-edge base. They may lack access to project informa-tion, and even when such information is provided, itmay be unclear, highly technical, or not translated intothe local language. They also may lack certain types ofinformation, such as the economic value of resourcesor the short-, medium-, and long-term impacts of themining process, which puts them at a disadvantage inthe negotiation process.318 These informational hurdlesmust be overcome in order for communities to be ableto participate on an equal footing.

As discussed in the case study, the World Commis-sion on Dams guidelines recognize this necessity, stat-ing that access to information, legal, and other supportshould be available to all stakeholders, particularly in-digenous and tribal peoples, women, and other vulner-able groups, to enable their informed participation indecision-making processes.

The Camisea case study represents an extensive ef-fort at improving community access to information. Inthis case, Shell disseminated relevant bilingual writtenmaterials to stakeholders, created a regularly-updatedproject website, and held a series of participatory work-shops. It also communicated information to communi-ties directly through its Community Liason Officers(CLOs). The CLOs distilled information into simplerform for presentation to the communities, using inno-vative training tools such as briefing notes, posters, vid-eos, pictures, and scale models. This case study high-lights some of the mechanisms that can be used tobridge the information gap. However, because the im-pact of these efforts was somewhat limited by the CLOs�lack of cross-cultural training, the case study also pointsto the importance of cultural training and sensitizationin information dissemination efforts.

The timing of providing access to information is criti-cal. In contrast to the Camisea case study, educationalefforts in Ekati emerged only after the negotiated agree-ments were already in place. In the Ekati case study, therewere no special efforts to educate the communities aboutmining impacts and the communities� rights during thenegotiation period for the various agreements.

The case studies also provide good examples ofhow communities can use negotiated agreements to in-crease their access to information. In the Ekati case,the community was able to create, through the Envi-ronmental Agreement, an independent EnvironmentalMonitoring Agency, which has enhanced the educationof the affected communities on mining issues througha web site, newsletter, and meetings. Similarly, in theStillwater case study, the Good Neighbor Agreementpermitted the community to secure access to key dataand documents that would enable them to better moni-tor and enforce the agreement.

The case studies also highlight several examples ofthe right to prior informed consent being fundamen-tally undermined as the result of the lack of access toinformation. For example, while the Aboriginal LandRights Act is one of the few examples of the right toveto a mining project, it is difficult for Aboriginals toexercise this right, because the Act denies them accessto necessary information. Informational requirementsfor exploration proposals are fairly minimal, and com-panies are not even required to specify which mineralsthey are looking for. Additionally, in the Diavik casestudy, the communities lacked necessary geological, tech-nical, commercial and organizational information, pos-ing a significant obstacle to the construction of fairagreements.

318 See id at 29. See also MMSD, supra note 312 at 224 (noting that �the overuse oftechnical language can form an instant barrier to communication,� and that �avail-ability of transport, child care, and the timing and location of meetings are alsocritically important to enable a cross-section of the community to participate�).

ANALYSIS 33


It is also important to consider the nature of theinformation that is being disseminated. Even when themining company does engage in educational or infor-mational efforts, the information provided may not al-ways be balanced or factual, and may be unfairly tiltedtowards the mining interests. For example, in theTambogrande case study, Manhattan Minerals allegedthat it provided information aboutthe impacts of the mine to affectedcommunities. It claimed to have ar-ranged for Tambogrande leaders tovisit a mine site, disseminated amonthly news bulletin, publishedinformational materials in the news-paper, organized information ses-sions, and screened mining documentaries for the pub-lic. However, the information that was provided focusedlargely on the community benefits from the mine andthe relocation process. Many community members andmunicipal officials claimed that they were not providedspecific information on the environmental and socialimpacts of the mine. In this case, NGOs�and to alesser degree, the central government� stepped in tofill the gap. Both national and international NGOs car-ried out extensive awareness and education activitiessurrounding the community vote. Prior to the vote, thecentral government initiated its own consultation dia-logue with the community, and provided informationto the public regarding the decisions reached in the dia-logue.

TIMING OF CONSULTATION

Both international and national mining guidelineshave recognized the importance of including commu-nities in project planning processes from the outset ofa mining project. According to the World Commissionon Dams guidelines, stakeholders must participate fullyin �all negotiated agreements throughout the process,from options assessment to final implementation, op-eration and monitoring.�319 Similarly, the WhitehorseMining Initiative guidelines provide that consultationwith aboriginal communities should occur �at all stages�in the mining process.320 The Whitehorse Mining Initia-tive is a good example of a government carrying outcommunity consultation at an early stage. In this case,officials elicited the views of community members inthe development of a national mineral policy, not in thecontext of an actual mining project.

The various case studies confirm the numerous rea-sons why early consultation and involvement is criticalto enabling the community to act as genuine partners inthe process. First, early consultation is necessary in or-der for the community to exercise any meaningful in-put into whether or not the project is in fact developed.Second, early consultation allows the concerns of the

community to be incorporated ona timely basis into the project de-sign. Such modifications may be dif-ficult to make once a project is un-derway. In the Camisea case, Shellsought to identify issues with thecommunity prior to or during thedesign phase, rather than after the

start of operations. This allowed Shell to modify theproject design to address community concerns aboutthe building of access roads. The revised design optedinstead to rely solely on helicopter and river transportto deliver supplies. Consultations that address commu-nity concerns early in the process are more likely to gen-erate community support for the project.321

In contrast, lack of inclusion in the initial stages ofthe process is likely to generate community resentment,distrust, and resistance to the project. In theTambogrande case study, Manhattan Minerals did notengage in any real consultation efforts until explorationwas complete and it had already received a mining con-cession from the central government. The community�slack of inclusion in the process generated stiff opposi-tion to the project, and led the community to create itsown consultation process implemented through thecommunity vote.

In sum, it is vital for a community to be involvedearly on in the conception of a project in order to setan appropriate agenda for the consultation process. TheTambogrande case study is illustrative. There, thecompany�s informational efforts focused primarily onthe displacement of residents, while the community�sconcerns regarding the mining project�s effect on thelocal agricultural economy were largely left unaddressed.Thus, it is crucial that the affected communities be con-sulted early and often, so that the focus of later consul-tation efforts can properly address the local resident�senvironmental, social, and economical priorities.

SCOPE OF COMMUNITY RIGHT

This issue goes to the core of the debate over acommunity�s right to prior informed consent�what

Consultations that addresscommunity concerns early inthe process are more likely togenerate community supportfor the project.

319 World Commission on Dams, supra note 9, at 216.320 Accord Final Report, supra note 66 at 27. 321 Goldzimer, supra note 177.

34

exactly does this right entail? Does a community havethe right to completely veto mining development on itsland, or can it only set terms and conditions for its imple-mentation? What degree of shared decision-makingdoes this right actually imply?322

The case studies reveal enormous variety in thescope of the community�s right to consent. While somecommunities have asserted or even been accorded theright to completely veto a mining project on their land,this right is rarely recognized by national governmentsor mining companies in practice.323 More often, as re-flected in the case studies, the community is simply al-lowed to take part in discussions regarding how to man-age the impacts and benefits of a project. Internation-ally, the recognition and promotion of the right to priorinformed consent in the report of the World Commis-sion on Dams and the Draft Declaration on the Rightsof Indigenous Peoples confirm the growing pressurefor recognition of such a right at the national level.

Of all the case studies, only in the Aboriginal LandRights Act case does a national government recognizethe right of a community to veto a mining project onits lands. In all of the other case studies, only the rightto be consulted or to set conditions for developmentwas acknowledged. As noted in the case study, Aborigi-nal communities have frequently exercised this author-ity, having vetoed at least 122 exploration license appli-cations over the past 20 years.

Even if the right to veto is not explicitly recognized,communities have still claimed such a right. For example,in the Voisey�s Bay case study, the LIA and Innu as-serted that their consent was required before the projectcould go ahead. However, the Canadian Supreme Courtrecognized only a right to be consulted, not the right toveto a project. In this case, the communities did in factconsent to the project, so it is not clear whether thecompany or government would have respected the com-munities� self-proclaimed right to veto the project. Inthe Tambogrande case study, the community attemptedto assert its right to veto the project through the com-munity vote process. However, the national governmentdenied the legality of the community vote, and has notrecognized the community�s right to veto a miningproject on its land. In a similar subsequent case, the

community of Esquel, in Argentina, asserted its rightto veto development of a gold mine through a non-binding vote in which residents voted overwhelminglyagainst the mine. In response, the provincial governorordered the mining company to stop work pending apublic hearing on the project�s environmental impactassessment.324

In most of the case studies, the scope of thecommunity�s right was limited to participation in set-ting the conditions for development of the project. Insome cases, the community exercised its right throughparticipation in regulatory processes, for example, bydefining how the EIA would measure project impactsin the Ekati case study or by participating in water li-cense hearings in the Voisey�s Bay case study. Commu-nities were also able to participate in the negotiation ofagreements between government and industry (e.g., theEnvironmental Agreement in the Ekati case study). Inmost of the case studies, however, the scope of thecommunity�s right was limited to the right to negotiatean agreement directly with the company over the termsof the mining and the benefits to the community. Forexample, in the Ekati and Voisey�s Bay case studies, thecommunity negotiated Impact Benefit Agreements withthe company. Similarly, in the Stillwater case, severalcommunity-based groups negotiated a Good NeighborAgreement to safeguard local interests. In many of thesecases, the community�s right included the right to moni-tor these agreements through participation on moni-toring bodies created in the agreement.

TIMEFRAME AND LOCATION FOR CONSULTATIONS

The timeframe and location for the consultationscan be key determinants of a community�s ability toeffectively participate in the prior informed consentprocess. As revealed in a recent study, most consulta-tions suffer from inappropriately short timeframes, leav-ing communities feeling like there was not enough timeto explore and understand the implications of theproject.325 Moreover, if consultations are held in inac-cessible or distant locations, community members maynot be able to participate, due to lack of funding orinability to travel.

The World Commission on Dams guidelines ex-plicitly recognize the need for an extended timeframefor negotiations, stating that communities need suffi-cient time to examine proposals and to consult amongthemselves. In most of the case studies reviewed, there

322 See MMSD, supra note 312 at 224 (noting that �Currently one of the biggestareas for debate is the extent to which consultation implies some degree ofshared decisionmaking�).

323 See, e.g., id (noting that �while mining companies increasingly recognize thatcommunities and NGOs should be involved in defining mitigation measures orsocial development projects, sharing decision-making on core management issuesis not easily accepted.�) Consultations that address community concerns early inthe process are more likely to generate community support for the project.

324 Business News Americas, Meridian Told to Halt Work at Esquel � Argentina, Mar.23, 2003.

325 Weitzner, supra note 308 at 29.

ANALYSIS 35


did not seem to be any apparent problems with thetimeframes for consultation. It is, however, interesting tonote that the Aboriginal Land Rights Act provides theCommonwealth Minister with the authority to increasethe prescribed 12- month consultation period if neces-sary, and that this mechanism has regularly been used.

In many of the case studies, negotiations were heldin the local community. For example, in the Camiseacase study, Shell�s Community Liaison Officers heldhundreds of meetings at the local community level.However, when Shell began inviting select indigenousfederation leaders to attend international seminars andmeetings, community members became resentful. Shellthen started holding its meetings within the region andmaking attendance as open as possible. Also, in theVoisey�s Bay case study, the Environmental AssessmentPanel hearings were held in 10 communities in Labra-dor�not in the nation�s capital. In the Whitehorse Min-ing Initiative case, where the largescale meetings wereheld at distant locations, the communities were providedwith funding for travel expenses.

ROLE OF GOVERNMENT IN NEGOTIATIONS

The government can play a crucial role in levelingthe balance of power between the community and themining company in consultation processes. However,often this is not the case. A recent study suggests thatindigenous communities perceive that �governmentsconsistently side with companies rather than fulfillingtheir obligations to indigenous peoples, and are usuallynot even present when consultations and negotiationsproceed.�326 The case studies reveal numerous ways inwhich governments can strengthen the community�sposition in consultations and negotiations with miningcompanies.

Governments can help level the playing field byproviding funding to communities to build their capac-ity to participate in negotiations.327 Under the Aborigi-

nal Land Rights Act, the Australian government pro-vides funding to the Land Councils, which are made upof elected Aboriginal community members who nego-tiate on behalf of their communities. In the Diavik casestudy, the Canadian federal and territorial governmentsprovided funding to the advisory board to monitor andoversee the implementation of the EnvironmentalAgreement. In the Voisey�s Bay case study, the provin-cial and federal governments agreed to finance the ex-penses relating to the Environmental ManagementAgreement for the first five years, and to provide itsenvironmental advisory board with an annual budgetof $450,000. Similarly, in the Ekati case study, both thenational and territorial governments provided somefunding for the Environmental Monitoring Agency cre-ated under the agreement.

In addition, governments can enter into agreementswith communities and/or the mining companies to pro-tect the communities� rights. For example, in the Ekaticase study, the central and territorial governments en-tered into an Environmental Agreement with the min-ing company to protect the community from harmfulenvironmental impacts. In the Voisey�s Bay case study,the central and territorial governments entered into anEnvironmental Management Agreement with the in-digenous communities to ensure environmental co-management. In the Diavik case study, the federal andterritorial governments entered into an EnvironmentalAgreement with the mining company and communities,and the territorial government entered into a Socio-Eco-nomic Monitoring Agreement with the mining company.

Alternatively, rather than entering into agreementsitself, the government can require or pressure the min-ing companies to enter into agreements directly withthe community. For example, through the AboriginalLand Rights Act, the Australian government requiresmining interests to negotiate agreements with local com-munities to obtain their consent to mining on their lands.In the Ekati case study, the Minister used his authorityto approve water licenses as leverage to force the min-ing company to enter into negotiations and protectiveagreements with the communities. Similarly, in theVoisey�s Bay case study, the government also enteredinto interim land claims arrangements with the local com-munities, which provided them with additional leveragein negotiating agreements with the mining company.

Where a country�s laws require public consultationand hearings, a government can promote communityconsultation by strictly enforcing these requirements.The Tambogrande case study provides an example ofthe negative consequences of not enforcing these re-

326 Viviane Weitzner, the North-South Institute, Through Indigenous Eyes:TowardsAppropriate Decision-Making Processes Regarding Mining On or Near AncestralLands, 2002, at 5.

327 As revealed by the case studies, government funding for community consentprocesses has largely been limited to the United States, Canada, and Australia. Incountries where public resources are scarce, the mining companies have pro-vided most or all of the financial support, which may raise issues about the inde-pendence of the process. Churches and other religious institutions representanother source of support for community consent processes. In Camisea, forexample, the Catholic University is serving as a facilitator to engage the commu-nity in dialogue. Email communication with Rachel Kyte (International FinanceCorporation) (on file with author). However, the University does not seem tohave much credibility in this case, and there are a serious lack of legitimate insti-tutions to facilitate the community consent process in Peru. Email communica-tion with Martin Scurrah (Oxfam America) (on file with author).This is likely aconsistent problem throughout developing countries, and speaks to the needfor government to play a significant role in providing the funding and support forcommunity consent processes.

36

quirements. In this case, Peru�s national governmentgranted mining concessions by supreme presidentialdecree without fully consulting with the local govern-ments. At the same time, the Tambogrande case studyalso illustrates the potential for local governments toplay a significant role in supporting a community�s rightto prior informed consent, in this case, by initiating acommunity vote. Although the cen-tral government did not recognizethe legality of the vote, it has sinceheightened government attention toand enforcement of the EIA regu-lations.

ROLE OF THIRD PARTIES

Like government, third parties�such as NGOs�can play an instrumental role in helping to level thepower balance between communities and mining com-panies in the community consultation process. This rolewas illustrated in the Camisea case study, where NGOshelped build the community�s capacity to effectively par-ticipate in the consultation process. NGOs assisted com-munities with establishing their needs and demands byconducting baseline studies and by discussing findingsand recommendations with the communities. They alsoprovided social, environmental, and technical input toShell, thus informing and shaping Shell�s consultationprocess to meet community needs. Finally, NGOs playeda crucial role in monitoring the project�s socio-environ-mental impacts, acting as an independent �third eye�for the community.

NGOs played a similar capacity-building role in theTambogrande case study. A number of domestic NGOs,for example, formed a committee to provide technicalsupport to the community to back its opposition to themining project. International NGOs provided financialsupport, commissioned environmental studies, carriedout awareness and education activities, and monitoredthe public consultation process.

When either governments or NGOs become in-volved in the process, there is a risk that they may notadequately represent the community�s interests. In somecases, they may have a different agenda from the com-munity. On the other hand, these third parties may holddifferent positions on certain issues, due to their tech-nical expertise or access to information that has notbeen available to the community. Thus, the communitymust be vigilant in defining the role of third parties inthe process, engaging in a dialogue and process to set acommon agenda, and monitoring the communicationsand actions of the third parties.

NGOs played a crucial role inmonitoring the project�ssocioenvironmental impacts,acting as an independent �thirdeye� for the community.

FORM OF AGREEMENT

The World Commission on Dams guidelines em-phasize the importance of using legally-binding formalagreements to memorialize the results of the prior in-formed consent negotiations. Formalized agreements�such as contracts �have the advantage of being clearer,

more transparent, and more en-forceable than informal agreements.

This report examines differentmechanisms used to formalize theterms and conditions upon whichprior informed consent wasgranted by the community, as wellas other accords between the min-

ing company and the community. In most of the casestudies, agreements were formalized through legally-binding contracts between the mining company and thecommunity. Under the Aboriginal Land Rights Act, forexample, the mining company negotiates legally-enforce-able lease agreements with the Land Council. Similarly,the agreements with the community in the Camisea casestudy, the Participation Agreement in the Diavik casestudy, the Impact Benefit Agreements in the Voisey�sBay and Ekati case studies, and the Good NeighborAgreement in the Stillwater case study, are all formal-ized contractual agreements between the communityand the company. In other cases, the community en-tered into formal agreements with the government, suchas the environmental co-management agreement andinterim land claims agreements between the LIA andInnu Nation and the federal and provincial governmentsin the Voisey�s Bay case study. A final category of for-malized agreements used in these case studies were thoseexclusively between the mining company and the gov-ernment, such as the Socio-Economic MonitoringAgreement in the Diavik case study.

Some of the prior informed consent processes stud-ied here adopted less formal agreements. For example,in Voisey�s Bay, the LIA and Innu Nation entered into aMemorandum of Understanding (MOU) on how theenvironmental effects of the proposed project wouldbe reviewed. An MOU, although a source of guidanceand persuasive authority, does not carry the legal weightof a binding contract. Similarly, the Whitehorse MiningInitiative and the World Commission on Dams issuednon-binding guidelines, as the large scale and scope andpolicy nature of these processes did not lend themselvesto the types of formal legal commitments that are moreeasily reached in the context of actual mining cases.However, the absence of any requirement for the min-ing company or government to enter into a binding,

ANALYSIS 37


formalized agreement can make implementation ofthese guidelines difficult. For example, in the WhitehorseMining Initiative case, post-Accord implementation wasvery limited due to the lack of an agreed-upon form forthe outcome, the absence of performance goals, andthe lack of sanctions for non-compliance.

CONFLICT AND DISPUTE RESOLUTION

For conflicts arising in the course of negociations,the World Commission on Dams guidelines recommendthe use of an independent dispute resolution body thatis created with the participation and agreement of stake-holders. The guidelines suggest that stakeholders referany disagreements they have in negotiations to this body,and allow it to examine the issue and provide assistance.None of the other prior informed consent processesexamined in this study specifically included provisionsfor conflict and dispute resolution during the course ofthe negotiations. Some case studies did, however, in-clude mechanisms for resolving conflicts and disputesthat arose out of the agreements ultimately reached, asdiscussed in the �Implementation� section below.

DURATION OF TERMS AND CONDITIONS OF PRIOR

INFORMED CONSENT

This report also looked at the timeframe duringwhich the terms and conditions established as a resultof the prior informed consent process remained in ef-fect in the various case studies. In most cases, the termsand conditions set forth in the consent agreements wereapplicable during the exploration, development, andoperational phases of the mining operation. A few casestudies also specifically included measures that extendedthrough closure of the mine. For example, in the Ekaticase study, the Environmental Agreement required themining company to post security for the reclamationof land-related disturbances through closure of themine. Similarly, in the Diavik case study, the agreementrequired that the company provide adequate securitymeasures for closure and rehabilitation of the mine site.

EXTENT OF CONTINUED CONSULTATION

The ability of a community to consult with a min-ing company at the later stages in the mining processmay be critical for ensuring that its rights and interestsare properly respected. As mining proceeds, the envi-ronmental, social and economic impacts of the opera-tion may change due to unforeseen circumstances. Un-less communities have additional opportunities to con-sult with the company and to amend the terms and con-

ditions for consent, the right to prior informed consentmay be ineffective in promoting sustainable develop-ment of the resource.

The Whitehorse Mining Initiative Accord providesthat consultation with aboriginal communities shouldoccur �at all stages� in the mining process.328 However,the case studies indicate that consultation generally con-sists of a one-time negotiation during the initial stagesof the project, and is unlikely to continue in later stagesof the mining process. The Aboriginal Land Rights Actcase study illustrates the difficulties of consultationthrough onetime negotiation. Under this Act, prior in-formed consent is only required at the exploration stage,not at the mining stage. Therefore, once the commu-nity has consented to exploration, it is also deemed tohave consented to the subsequent mining. The lack ofa right to consent at the mining stage has made it diffi-cult for traditional owners to make arrangements withmining companies that effectively safeguard their rights,as communities are forced to negotiate a deal on themining stage when the viability and worth of the mineare uncertain.

The Voisey�s Bay case study presents an innovative,albeit limited, means of continuing community consul-tation throughout later stages of the mining process. Inthis case, community members serve on an Environ-mental Management Board that oversees implementa-tion of the Environmental Management Agreementbetween the LIA and Innu Nation and the Canadianand provincial governments. The board has the author-ity to provide advice to the government regarding per-mit applications, leases, construction and operationplans, and rehabilitation and closure plans throughoutthe life of the mine. This mechanism allows communi-ties to provide significant input into the mining pro-cess.

Finally, the Stillwater Mining Company GoodNeighbor Agreement included several innovative mea-sures for ongoing consultations with the community.For example, citizen groups are to be consulted con-cerning future operating permit amendments and prop-erty acquisitions for future tailings and waste rock dis-posal and workers camps.

LONG-TERM IMPLEMENTATIONOF THE PROCESS

Institutional mechanisms to ensure that a miningcompany complies with the terms and conditions of

328 Accord Final Report, supra note 66 at 27.

38

consent are essential to the effective exercise of the rightof prior informed consent. The terms and conditionsof consent �even if formalized in contractual agree-ments�are often not implemented due to lack of po-litical will or follow- up.329 This report examined thevarious mechanisms used in the case studies to ensureand enhance implementation of the consent agreement,including monitoring and enforcement mechanisms inparticular.

The World Commission on Dams guidelines rec-ommend that consent agreements provide for�implementable institutional mechanisms for monitor-ing compliance.�330 The case studies provide severalgood examples of such mechanisms. In the Camiseacase study, for example, Shell facilitated inspections byNGOs to ensure compliance with itscommitments. It developed an ar-rangement with the Peruvian Environ-mental Network (RAP) to undertakequarterly independent monitoring,and issue public reports on each visit.Allowing inspection by outside NGOshelps to enhance transparency is particularly importantwhen local communities lack the capacity to monitorimplementation on their own.

The monitoring mechanisms most commonlyfound in the various agreements were independentmonitoring committees or advisory boards staffed inpart by community members or their representatives.For example, in the Voisey�s Bay case study, the Envi-ronmental Management Agreement created an environ-mental advisory board that included two communityrepresentatives. Through the board, the community rep-resentatives can oversee the company�s fulfillment ofits environmental and socio-economic obligations.

Similarly, in the Ekati case study, the Environmen-tal Agreement required the creation of an independentEnvironmental Monitoring Agency, with seven direc-tors who are appointed by the government, BHP, andFirst Nations. The Environmental Monitoring Agencyreviews and advises on the company�s environmentalmanagement and monitoring activities, as well as gov-ernment regulatory activity; facilitates aboriginal involve-ment in the regulatory process; and produces annualreports. Finally, the Stillwater Good Neighbor Agree-ment creates citizen oversight committees to monitorimplementation of the agreement and establish a pro-cess for considering new issues. The agreement also

guarantees access to information necessary for effec-tive monitoring�the right to enter and inspect minefacilities (up to two inspections per mine site per year),conduct citizen sampling, take photographs, and meetwith relevant company employees during all such in-spections.

Several of the agreements also impose monitoringand reporting obligations on the company. For example,the Environmental Agreement in the Ekati case studyrequires BHP to report annually on its environmentalcompliance, monitoring programs, research, operationsand future activities, and remedial or mitigative action.Similarly, under the Stillwater Good Neighbor Agree-ment, the company is required to notify the relevantoversight committee if any water-quality trigger level is

exceeded, and to prepare a correctiveschedule that needs to be approvedby the identified stakeholder groups.

Effective monitoring and imple-mentation can only occur where thereare clear performance indicators. Inthe Whitehorse Mining case study, the

parties failed to agree on specific guidelines for imple-mentation of the goals established in the signed Ac-cord. The Accord simply provided that implementationwould occur through �building broader support withinconstituencies based on the momentum achieved andencouraging stakeholder support for principles andgoals.� Due to this broad language and lack of measur-able indicators of performance (or non-performance),implementation under the Accord has been very limited.

Effective enforcement mechanisms�such as forafor redress, sanctions for non-compliance, and finan-cial security measures�are also crucial to ensuringimplementation of consent agreements. Several agree-ments specifically designate fora for enforcement pur-poses. In the Diavik and Ekati case studies, disputesarising out of the agreement are referred to arbitration.In the Stillwater case study, the parties are bound tofirst negotiate in good faith to resolve disputes, and fail-ing this, may enforce the agreement through civil ac-tion in a district court or binding arbitration. The vari-ous contractual agreements�such as the Impact Ben-efit Agreements in the Voisey�s Bay or Ekati case stud-ies, or the lease agreement in the Aboriginal Land RightsAct case study�are enforceable in court.

Effective enforcement also requires sanctions fornoncompliance and financial security measures to en-sure ability of the company to comply with them. Forexample, in the Diavik case study, the EnvironmentalAgreement specifies that adequate security measures to

329 See Weitzner, supra note 308 at 30.330 World Commission on Dams, supra note 9.

Effective monitoring andimplementation can onlyoccur where there are clearperformance indicators.

ANALYSIS 39


rehabilitate the mine site must be in place at all timesduring the life of the mine. Similarly, in the Ekati casestudy, the company was required to post security forprogressive reclamation of the landrelated disturbancescreated by the project. These funds may also be drawnupon if the company does not comply with require-ments in the Agreement, including non-compliance withreporting requirements or failure to rectify faulty man-agement plans.

In spite of the monitoring and enforcement mecha-nisms built into a consent agreement, a community can-not compel implementation if it lacks the capacity touse these mechanisms. In several of the case studies,the mining company or government provided funds toenable communities to exercise its rights to monitor and

enforce the agreements. For example, in the Stillwatercase study, the mining company agreed to pay for ad-ministrative and travel costs of committee members andconsultants, as well as costs of citizen sampling up to$270,000 over the first two years of the agreement. Inthe Camisea case study, Shell agreed to meet all expensesfor RAP�s monitoring visits and paid RAP a small sumfor internal use. In the Diavik case study, the miningcompany and federal and state governments providedfunding for community-staffed advisory boards andimplementation committees. In the Voisey�s Bay casestudy, the provincial and federal governments agreed tofinance the first five years of the Environmental Man-agement Agreement and to provide its environmentaladvisory board with an annual budget of $450,000.

40

Communities are increasingly becoming aware ofand asserting their right to control the development of mineral resources on lands that they

occupy or use, thereby setting their own priorities fordevelopment that has an impact on their lives, liveli-hoods, and culture. Recognizing the legitimacy and im-portance of this right, governments are increasingly re-quiring mining companies to consult with communitiesand, in a limited number of cases, obtain their consentfor mining development projects. Mining companies arealso becoming more aware of the need for consultationand consent, even in the absence of legal requirements.The case studies illustrate the growing number of con-texts in which the right to community consent has beendemanded, recognized, and exercised, revealing anemerging trend toward including communities as keypartners in mining decision- making.

This trend is reflected in various international in-struments that have recognized the right to communityconsent. For example, International Labour Organiza-tion Convention No. 169�a legally-binding treaty�provides that indigenous and tribal peoples

shall have the right to decide their own priori-ties for the process of development,� to ex-ercise control, to the extent possible, over theireconomic, social, and cultural development,�[and to] participate in the formulation, imple-mentation and evaluation of plans andprogrammes for national and regional devel-opment which may affect them directly.331

It also provides that such peoples are �not [to] beremoved from lands which they occupy,� unless �nec-essary as an exceptional measure� and with their �freeand informed consent.�332 Similarly, various extra-legalauthorities �such as the Extractive Industries Review,333

the World Commission on Dams guidelines,334 theUnited Nations Draft Declaration on the Rights of In-

digenous Peoples,335 and the Draft Inter-American Dec-laration on the Rights of Indigenous Peoples336�lendmoral legitimacy to the right to community consent,particularly with respect to indigenous peoples.

The recognition of the right to community con-sent in these international instruments raises the issueof whether the right to community consent constitutesa customary rule of international law (or �custom�). Acustom would bind not only parties to a particular treaty,but all nations.337 In order for a rule to rise to the levelof a custom, the rule must be �generally accepted as arule of conduct.� 338 General acceptance can be provedby showing that (1) State practice is consistent with therule, and (2) States act according to the rule out of abelief that it is a legal�rather than simply a moral orpolitical�obligation to do so.339 Because the Interna-tional Court of Justice has required that State practicebe both extensive and virtually uniform,340 it may bedifficult currently to establish consistent State practicewith respect to community consent. Many states do notin fact require companies to obtain community consentin practice, even if they may profess to do so. More-over, even where States have required companies toobtain community consent, they have diverged in theirinterpretation of what this right actually involves. Theright to community consent has ranged from simplyproviding information to communities regarding theimpacts of a proposed mine, to actually according com-munities the right to veto a proposed mining project.Therefore, the lack of consistent State practice makesit more difficult to establish the existence of a custom-ary right to community consent.

CONCLUSION

331 ILO Convention 169, supra note 7, Article 7.332 Id.,Article 16.The Convention, however, stops short of granting such communi-

ties the absolute right to veto a mining development project, stating that �wheretheir consent cannot be obtained, such relocation shall take place only followingappropriate procedures established by national laws and regulations� whichprovide the opportunity for effective representation of the peoples concerned.�Id.

333 Extractive Industries Review, supra note 5.334 World Commission on Dams, supra note 9, at 219 (providing that �all countries

should be guided by the concept of free, prior and informed consent, whetheror not it has already been enacted into law.�)

335 United Nations Draft Declaration on the Rights of Indigenous Peoples, supra note 8,Part VI, Article 30 (stating that indigenous peoples may require states to obtaintheir �free and informed consent prior to the approval of any project affectingtheir lands, territories and other resources, particularly in connection with thedevelopment, utilization or exploitation of mineral, water or other resources.�)

336 Draft of the Inter-American Declaration on the Rights of Indigenous Peoples,ArticleXVIII (1995) (providing that �the States shall not transfer or relocate indigenouspeoples except in exceptional cases, and in those cases with the free, genuineand informed consent of those populations��)

337 Once a custom is established, it becomes binding on all States, regardless ofwhether those States in fact expressed an intent to be bound by the custom orcontributed to its formation. However, �a State may exclude itself from the ob-ligations of the particular customary rule by persistent conduct exhibiting an un-willingness to be bound by the rule or a refusal to recognize it as law.� Restate-ment of Foreign Relations Law of the United States, Section 102, comment b,cited in David Hunter et al., INTERNATIONAL ENVIRONMENTAL LAW ANDPOLICY, 2d ed., 311 (2002).

338 The Scotia, 14 Wall. 170, 187 (1871), quoted in The Paquete Habana, 175 U.S.677, 20 S. Ct. 290 (1900).

339 See Hunter, supra note 337 at 311.340 See Id. at 311.

CONCLUSION 41


However, in spite of the traditional requirementsfor proving customary law, some rules have in fact beenrecognized as customary law even where State practiceis far from uniform. For example, certain environmen-tal law principles found throughout international trea-ties and declarations�such as sustainable development,the precautionary principle, and Principle 21 of theStockholm Declaration341�have been recognized injudicial opinions and elsewhere as customary law, eventhough States vary greatly in their in-terpretation and implementation ofthese principles.342 Although the de-bate as to whether such principles arein fact customary rules continues, thebasis for recognition of these prin-ciples as customary law suggests thata custom may form even in the midstof inconsistent State practice, thus�reflecting changing notions of how customary law ismade.�343

Moreover, even if no customary right to prior in-formed consent exists at present, such a right is argu-ably forming. The case studies reflect the efforts ofStates across the globe to incorporate community con-sent mechanisms, suggesting that in time State practicemay become more extensive, and therefore �consistent.�In addition, the World Commission on Dams Guide-lines represents a concerted international effort to de-fine the scope of the right to prior informed consent,indicating that there may be evolving consensus on thedefinition of this right. As State practice becomes moreconsistent, and international processes help to create auniform definition of prior informed consent, the ar-gument becomes stronger that a customary right exists.

Even in the absence of a right to community con-sent under customary international law, there are nu-

merous options for formalizing the right under nationallaw and through extra-legal authorities. Under nationallaw, the legal basis for the key elements of communityconsent can be found in environmental impact assess-ment legislation and in innovative statutes like the Aus-tralian Land Rights Act. States have also relied on ex-tra-legal authority to require mining companies to seekcommunity consent, for example by calling for munici-pal referendums or by using their licensing or permit-

ting authority as leverage to requirecompanies to enter into agreementswith communities. Moreover, evenwhen not required to do so, miningcompanies have sought communityconsent and formalized it through arange of mechanisms, including im-pact-benefit agreements, GoodNeighbor Agreements, and environ-

mental and social impact monitoring agreements.

Designing and implementing effective communityconsent processes is essential to protecting communityrights and interests. Engaging communities as partnersin decision-making allows communities to guide thedevelopment of the mining activity, helping to ensurethat short-term mining interests do not compromisethe community�s longer-term needs for survival. More-over, as is increasingly being recognized by mining com-panies, community consent can also help to improvemining operations worldwide. Community input can leadto mining projects that are better suited to local condi-tions, generate support from the community, avoid so-cial resistance and the associated negative publicity orconsumer boycotts, and enhance worker productivityand morale.

Prior informed consent processes constitute valu-able tools for community groups seeking to protect theirrights, for mining companies seeking to be good cor-porate citizens and improve their mining operations, andfor governments seeking to promote sustainable devel-opment. As a consequence, formal recognition and useof these processes is likely to continue and expandaround the globe.

341 Principle 21 prohibits States from acting within their own territory so as tocauseharm outside their territory. Stockholm Declaration on the Human Environ-ment (1972),available at http://www.unesco.org/iau/tfsd_stockholm.html (last vis-ited May 28, 2003).

342 See Hunter, supra note 337 at 313.343 Id.

Engaging communities aspartners helps ensure thatshort-term mining interestsdo not compromise thecommunity�s longer-termneeds for survival.

42

Documents

Cover Photos (top to bottom) - Environmental Law Institute · Cover Photos (top to bottom): Alfredo Rengifo Navarrete, mayor of the municipality of Tambogrande in Peru, casts his