This panel will be hosted by Cámara de Comercio de Bogotá in Bogotá, Colombia (Cl. 67 #8-32)
International projects usually involve multiple stakeholders, among these are local communities, whose interests and priorities might clash with those of multinational corporations. The tension between stakeholders may lead to undesirable consequences affecting the outcome of the project or the communities. Consultations to the communities are carried out to influence administrative and legislative decisions that may affect them. Under international law, pursuant to human rights treaties and international instruments including the ILO Convention 169, consulting the communities that could be affected is binding. In particular, consultations must be undertaken in good faith, seeking to achieve consent. Pursuant to the 1966 International Covenant on Civil and Political Rights (ICCPR), the State must ensure the effective participation of members of minority communities in decisions which affect them. Consultation is a mechanism developed by domestic legislation, that may or may not require—in addition to informing, and asking the communities and/or natives for their feedback—that consent be obtained by the government of the host State to move forward with the investment project.
For example, pursuant to Article 330 of the Colombian Constitution, indigenous and AfroColombian communities (among others) have the right to prior consultation. That right entitles those communities to participate in decisions that may affect their lives, territory and political and economic worldview. Similarly, pursuant to Article 30 of the Bolivian Constitution, indigenous peoples have the right to be consulted through appropriate procedures, whenever legislative or administrative measures related to the exploitation of non-renewable natural resources may affect them.
A handful of investment arbitrations have shed some light on the issue of consultations and community participation. In Bear Creek v. Peru, the tribunal ruled that the State was bound to monitor closely the efforts conducted by the investor to obtain consent from the communities, and to voice its concerns throughout the consultation process. There is increased recognition of social corporate responsibility standards—under which corporations must respect essential human rights.
This panel will consider the right to consultations of communities, the obligation of the State concerning consultations, and several related questions. Do consultations to the communities that might be affected by investment projects require their consent to the project moving forward? Is the State obligated to closely support an investor throughout the process of obtaining a social license to operate? Or must the investor exercise its own due diligence in the consultation process with the communities? Should compensatory damages payable to an investor be reduced on the basis of contributory fault for failure to comply with guidelines provided by the community during consultations?