If you thought getting planning permission to extend your listed home in England was tough, spare a thought for infrastructure investors in Colombia.
The prior consultation procedure in Colombia is notoriously complex but is essential to obtain the required environmental licence. The process is a legal mechanism that grants leaders from indigenous communities privileged information about infrastructure projects carried out in their lands. The prior consultation is carried out to obtain a better understanding of the impact, disruption and threats that these projects may cause to the ethnic, cultural and social integrity of indigenous communities.
“There are more than 115 indigenous communities in Colombia,” began an energy executive in Bogota, “they represent approximately 4.4% of the population. Prior consultation is a Constitutional right for these communities to participate in legislative or administrative procedures related to projects in their territories, in order to promote and protect their culture and the environment in which they live.”
“There are more than 115 indigenous communities in Colombia […] Prior consultation is a Constitutional right for these communities to participate in legislative or administrative procedures related to projects in their territories.”
Energy executive, Colombia.
The implementation of prior consultations has proved challenging as state entities and the National Ombudsman’s office have not properly assisted indigenous communities in carrying out consultations. This also results in problems for companies wanting to invest in Colombia. Investors face legal voids and a lack of institutional presence in certain territories, which hinders progress.
A seasoned lawyer representing infrastructure developers explained, “Unfortunately, there is a legislative gap. There is no law, issued by Congress, that regulates the process and this creates legal uncertainty, especially in the face of high-impact projects such as mines, O&G exploration, energy generation or roads. This leads to a situation where huge projects and investments depend on processes that are not clearly defined.”
“There is no law, issued by Congress, that regulates the process and this creates legal uncertainty, especially in the face of high-impact projects such as mines, O&G exploration, energy generation or roads.”
Infrastructure lawyers, Colombia
In this context, the president of the Andesco Congress, the national association of public services and communications companies, said that USD 11 billion in renewable energy projects are currently in danger of suffering major delays and construction setbacks due to the poor implementation of the prior consultation process.
Some industry stakeholders believe there are too many vested interests in an unregulated process, on both sides of the debate. An infrastructure developer observed, “The current reality is that economic development takes priority over sustainable development in Colombia. I know of mining and energy projects that have been rammed through without proper consideration of the impact on local communities. Many companies don’t take the process seriously, they have no idea how to negotiate with a community that has no road access and believes the ground is sacred. On the other side, many communities now realise the leverage they have and often seek to exploit the process.”
Investors are calling on the National Directorate for Prior Consultations of the Ministry of Interior to ease the bureaucratic procedure and assist companies in their dialogue with local communities. Business representatives argue that companies cannot replace the state in its functions at a time when the prior consultation process seems more important than ever after President Iván Duque created the National Directorate for Prior Consultations in 2019.
In addition to conventional due diligence, our sources advised that infrastructure investors should gather as much local intelligence as possible, should demand to see permits and should ensure that developers have short, medium and long term plans for the protection of the environment and the communities. Furthermore, investors should insist that anthropologists are engaged early in the process and that suitable lines of communications are established with the community leaders. Failure to do so could lead to lengthy legal proceedings, and unnecessary investment risk.