NEGOTIATION WITH LOCAL COMMUNITIES: HOW TO BUILD A LONG-TERM RELATIONSHIP

• Jurisdiction: Derecho Internacional

MINING LAW & INVESTMENT IN LATIN AMERICA
(April 2003)
CHAPTER 11A
NEGOTIATION WITH LOCAL COMMUNITIES: HOW TO BUILD A LONG-TERM RELATIONSHIP
José Antonio Urrutia
Patricio Leyton F.
Urrutia & Co
Santiago, Chile

The empowerment of local communities is a process occurring all around the globe. Communities, directly or indirectly affected by the development of natural resources projects, demand to be involved in the decision-making process. Consequently, it is essential to create and develop good relationships with these communities that have an enormous power in the final development of a particular project.

Traditional processes of public participation are being highly criticized by Non- Governmental Organizations and local communities, as it has been stated that they do not allow a genuine space for their participation. In these processes, the economic, cultural and language differences are particularly relevant which are made evident between highly sophisticated project developers and local communities.

This paper presents some examples, and through them approaches, on how to build long term relationships with communities while at the same time negotiating with them the development of a project.

Chile has a tradition connected to the development of natural resources projects. From north to south, Chile is rich in Fisheries, timber and certainly mining resources. The three case studies presented in this paper are located in the northern part of Chile but referring to different natural resources: energy, mining, and water.

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The north of Chile is known for being extremely dry (the Atacama Desert, located in this area, is the driest desert of the world), and only few local communities defy nature by living there. Land in itself is not scarce but fresh water is scarce, thus becoming an essential element for the development of the land. Projects that, one way or another, affect a watercourse will certainly face tremendous opposition from the community.

The three cases under study had the pppppossibility to affect a watercourse and consequently had a fast and deep effect on the community who actively intervened and wanted to be heard. In these cases, we developed certain strategies that can be useful for the other projects in other areas of the world.

Case Study One: Water from the Dessert.

The objective of this project was the development of new water supply sources in the country's northern area aiming at a long-term sustainability to enable the competitive development of industrial, agricultural and sewage sectors.

A few years ago, the company submitted several consumptive -permanent and continuous- underground water use right applications before the Directorate of Water Works (DOH, Direction de Obras Hidráulicas). Waters would be extracted by mechanical elevation from several wells located on fiscal grounds that were under the authority of the Ministry of Public Properties.

In 1994, the Ministry of Public Properties and the National Commission of Indigenous Affairs (CONADI) entered into a Framework Agreement to carry out a land formalization program of indigenous lands in the northern part of Chile, pursuant to the Indigenous Peoples Act. Under such Agreement, the projected wells were located in the fiscal properties requested by the indigenous communities.

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Consequently, the Land and Water Committee of the Ministry of Public Properties requested the company to discuss the issue with the aforementioned communities, in order to harmonize the legitimate interests of the indigenous groups with those of the company.

First of all, and before conversations began, research was undertaken regarding each community, their habits, needs, organization, number of inhabitants, relationship with and participation in other projects, among others. To this end, non-indigenous people who had established close relationships with indigenous communities were firstly interviewed. Secondly, contact was made with the CONADI, the governmental agency responsible for indigenous issues throughout the country, to arrange the interviews with the applicable communities.

Subsequently and also jointly with CONADI, we analyzed all the agreements signed by private individuals and the areas' indigenous communities, investigating which had been the most successful and beneficial for them.

The overall conclusion is the existence of an overarching mistrust between indigenous communities and companies installed in the area or companies interested in developing projects that involve the region's natural resources. This is due to the historical abandonment of these communities; for a long time, indigenous people have witnessed large project developments in lands formerly owned by their ancestors, without any respect or retribution for it. On the other hand, the few agreements signed were never honored or had no positive outcomes for the communities. Based on such background, an...