Balancing community interests and development in Colombia

Thursday, November 9, 2017

Latin America's energy sector has come under increasing socio-environmental scrutiny as communities seek greater public engagement on the part of authorities and project developers.

To shed light on this issue in Colombia, BNamericas spoke to Astrid Martínez, a researcher at local economic and social think tank Fedesarrollo.

BNamericas: There seems to be increasing noise and debate regarding public consultations. Is this a new phenomenon?

Martínez: It is not a current phenomenon and has been in place for at least two years.

In our work we differentiate what are prior consultations from public consultations, the latter of which are a more recent phenomenon and have had great publicity after the consultation in Cajamarca that prohibited mining in that municipality, where AngloGold has a very large gold project.

That company, in the following two or three months, decided to reduce its operations to the minimum and announced that it was temporarily withdrawing from the country. All this garnered more publicity because it was a mega-mining project.

The material reality is that until now it [the phenomenon] is not that large because it is limited to some consultations where there is no mining or oil production.

Public consultation is part of the constitution and there is a law that would obligate mayors to conduct public consultations in the case of projects that have a big impact on development in their territories, which has not occurred. Before these latest events, they had not been carried out.

It is a resource that authorities have, at the national level as well as the territorial level, to carry out a consultation, and say if a project that has a high impact in their territory can be carried out or not.

Perhaps the objective fact that has occurred is that there have been rulings by the constitutional court that say that public consultations undertaken by leaders of territorial entities are binding. And they obligate whoever called the consultation to implement the results, even in the case of mining and hydrocarbons production, where the state is owner of the subsoil and the territorial entities are responsible for territorial planning.

Therefore, territorial entities allege that there can be no production in the subsoil without passing through the ground and that the ground falls within their jurisdiction, on one hand. On the other hand, the court has said that the state also includes territorial entities and what the national and territorial levels should do is harmonize decisions and coordinate them.

BNamericas: Do you believe this legal wrangling has increased uncertainty with regard to oil sector investment?

Martínez: In the oil sector, for the reasons I mentioned, until now I would say it has not had an impact on the perception of investors. Maybe that could occur more in the case of mining.

In the case of oil, that kind of movement among leaders or communities in producing zones has not been seen, despite the electoral climate.

With regard to the legal wrangling, what happens, according to what we found in the study we carried out with experts, lawyers and constitutionalists, is that the constitutional court in particular creates law and protects rights in those cases in which there has been no illegal development.

Therefore, the immediate consequence would be to look for those legal developments to have greater certainty of how far those rights can go. There is a bill to create a prior consultation law that is required, because if not, the court will always rule in favor of the indigenous community, its interests and cultural values since there is no legal framework that limits and say what is the influence area of a project, what are the communities that will be recognized.

There has even been talk of dynamic censuses, when one as an investor should have certainty of the communities with whom one must enter into dialogue with regarding the impacts of a project, and that sign has to be given by someone in government. This currently does not happen.

The interior ministry says there are such communities or there is no ethnic community in the influence area of a project, and later these communities appear creating uncertainty. The census of the interior ministry is not the last word.

This bill envisions the regulation of all these issues and also the coordination among entities of the state so that what one decides goes against what another decides.

Read Are public consultations partly to blame for Colombia's hydrocarbons dip?

BNamericas: Public consultations and natural resources extraction seem to go hand in hand, but what is their role in Colombia's expanding electric power infrastructure which in the case of transmission lines, for example, can run for hundreds of kilometers?

Martínez: The issue in this case relates more to prior consultations than public ones as distinct communities can be encountered along a line's route.

Prior consultations are those that have to do with ILO agreement 169 which refers to ethnic communities. Public consultations do not require that it be an ethnic community.

With respect to the power sector, the worry has to do more with power projects and not so much transmission, because public consultations have led to questions regarding the development of hydroelectric projects.

There is only one example I know of until now, the development of a small hydroelectric plant in La Cabrera, but there is concern that it will extend to hydroelectric projects in the rest of the country, which is why it is important to have clear regulations.

In terms of public consultations, the initiative that was being talked about was the modification of the territorial planning law to define well the authorities at the national and territorial level. The government has ruled out this for now and instead is mulling the development of town meetings and other mechanisms of participation rather than touching the law.

It is not a catastrophe, it is not that Colombia has gone off the radar of investors, far from the case. On the contrary, the current situation of these agreements creates many opportunities and much interest to develop projects. But it will require the development of a legal or regulatory framework to rectify these types of things and, above all, coordination mechanisms between state entities.

There have been some mechanisms such as PINE [projects of national and strategic interest] which are spaces of inter-institutional coordination that have worked very well in the case of large projects, such as Quimbo, such as the 4G [program].

About Astrid Martínez

Astrid Martínez holds an economics degree from Universidad Nacional de Colombia, a master in economics from Universidad de los Andes and a Phd in economics from Unicamp Brasil.

Her prior posts include technical VP at local banking and financial entities association Asobancaria, corporate planning director at Ecopetrol, general manager of Transmilenio and president of Empresa de Energía de Bogotá.