Out of the conflict zone: the case for community consent processes in the extractive sector.

An examination of contemporary struggles over extractive industry projects shows that they are not adequately captured by current CSR strategies because they are not exclusively disputes about the environment, human rights or health and safety as those subjects are generally understood by companies. Rather, they are better understood as disputes over community control of resources and the right of community members to control the direction of their lives. This Article proposes that extractive industries can tackle the underlying causes of the growing opposition to their projects in the developing world by engaging in consent processes with communities and groups directly affected by projects with a view to obtaining their free prior and informed consent (FPIC). The authors propose that FPIC must be enduring, enforceable, and meaningful in order to take companies and communities out of their current defensive positions. FPIC should instead allow companies and communities to take up proactive positions--with those companies that have the consent of the communities in which they operate obtaining a competitive advantage and those communities that have enforceable agreements with companies obtaining control over the natural-resource-based development process on which their future depends.

I. INTRODUCTION

 
   These natural resources are ours ... If I enter your house, I knock 
   first. When have they asked our permission to enter a 
   community? ...  Never. (1) 
 
   Miguel Palacin, Peruvian Indigenous Leader, Sept. 3, 2007 

Why is it that, with many of the large extractive industry companies having taken up the mantra of corporate social responsibility (CSR) in recent years, (2) conflicts between such companies and their host communities are multiplying as never before? Today extractive industry companies can call upon a range of CSR initiatives, standards and tools to help them manage community relations responsibly, and many major companies have codes of conduct in place. Yet barely a day goes by without news of another multi-billion dollar energy or mining project being protested, delayed, occupied or otherwise blocked by community opposition. The number of disputes between foreign investors and host states is also on the rise and not since the 1980s have we seen as many government interventions in energy and mining investments as we have seen in the last two years--many as a result of or accompanied by vigorous community opposition.

An examination of contemporary struggles over extractive industry projects illustrates that they are not adequately addressed by current CSR strategies. Such strategies seek to address only a narrowly circumscribed range of headline-grabbing issues, such as extractive industry companies' complicity in human rights abuses by security forces, their involvement in corruption and their role in fueling armed conflict in diamond-rich countries. In addition to these important concerns, CSR must also begin to address the underlying causes of community opposition to extractive industry projects, which are likely to relate to the rights of communities to control the natural resources they have long seen as their own and of community members to control the direction of their lives. In other words, to overcome conflict, the new generation of CSR techniques must contribute to sustainable development.

Building on the findings of a number of recent studies, (3) this article proposes that extractive industries can tackle the underlying causes of opposition to their activities in the developing world by engaging in consent processes with communities directly affected by their projects with a view to obtaining their free prior and informed consent (FPIC). In addition to being free, prior, informed and consensual, FPIC must be enduring, enforceable and meaningful. Although fraught with contingencies and in need of considerable further analysis, FPIC presents the obvious next step in the evolution of the relationship between extractive industry companies and communities, as it is a model of stakeholder engagement with the potential to address the complex and dynamic root causes of community concern.

If implemented properly, FPIC processes should take companies and communities out of their current defensive positions, in which companies attempt to manage community-related risks in order to protect their social licenses to operate, and communities disrupt extractive industry projects in attempts to protect their ways of life. FPIC processes should allow companies and communities to take up proactive positions instead; companies that maintain the consent of the communities in which they operate will obtain a competitive advantage, while communities that have enforceable agreements with companies will have more control over the development processes on which their future depends. If properly obtained, FPIC should allow large extractive industry projects to go forward in a less conflicted atmosphere.