Riela - SyS September 2014

1. Pros and Cons of Prior Consultation for Projects in their territories. “The needs of the many outweigh the needs of the few” Riela - SyS September 2014

2. BACKGROUND • Mexico was the second country to ratify the ILO 169 Convention on September 5, 1990 • Even though the Convention was ratified, Mexico failed to revise its legal system to implement prior consultation • In 2009, the Inter-american Court of Human Rights (CIDH) issued the “Rosendo Radilla vs Mexico” ruling, which changed the Mexican legal system forever.

3. Rosendo Radilla • The judiciary must carry out an ex officio “control of conventionality [control of compliance]” of its domestic legislation to determine whether it conforms to the American Convention • The foregoing derived in an integral revision of human rights laws in Mexico and included the concepts of “control of conventionality” and “constitutional control” for the first time in the history of Mexico • International treaties executed by Mexico became laws applicable in Mexico and courts (and administrative bodies) became bound to interpret and implement them

4. The foregoing means that, among many others, ILO 169 Convention became effective and a formal part of the Mexican legal system. • Mexican authorities and project developers were not ready to handle or even aware of the implications of the foregoing (and at some levels are still not aware). • No governmental authority took the lead in the implementation and project developers were not made aware of the consequences of prior consultation.

5. Examples of failed projects

6. Mareña 2012 Description of the Project: Largest wind farm in Latin-America with an installed capacity of 396 MW which would supply power to FEMSA factories and Oxxo stores throughout the Country. $1 Billion Dollars total investment (30% - 70% ratio). Relevant due diligence aspects considered: zoning, metes and bounds, encroachments, agrarian situation (Ejido), permitting and licensing. Table of permits. Failed to consider: Social and political background. Unfair distribuiton of payments. Ikjöt tribe. ILO Convention 169. Ejido Amparo (ex officio and immediate injunction). http://www.youtube.com/watch?v=B2t5CwcGqBA

7. Wirikuta 2012 Description of the Project: Exploitation of 35 mining concessions (silver and gold) at San Luis Potosí. Total investment project: $100 million USD, creating 700 direct jobs plus $10 million USD invested in environmental projects. Relevant due diligence aspects considered: concession titles, rights of way and usufructs, permitting and licensing. Table of permits. Failed to consider: Indigenous presence (Huicholes), sacred areas and plants, and cosmogony of the community. The result was that all the mining concession of First Majestic Silver Corp were returned to the Federal Government, along with the corresponding land. The Project caused waves throughout the human rights community and became the flagship of Prior Consultation in Mexico. http://www.youtube.com/watch?v=eCtsHjTRl_w

8. Acueducto Independencia Yaquis 2013 Description of the Project: Construction of an aqueduct to increase supply of potable water to the State capital of Sonora, Hermosillo. The project commenced in 2010 and was concluded on 2013. Conflict: The Yaqui indigenous tribe considers that the construction of the aqueduct affects their right over the water contained in the Yaqui River and the El Novillo and Abelardo L. Rodríguez dams. The Yaqui tribe argued that the Federal Government breached their hearing rights as not Prior Consultation took place in order to grant the corresponding authorizations. Consequences: The Supreme Court of Justice granted an “amparo” in favor of the Yaqui tribe, under which the EIA obtained by the government was declared null and void and the federal authority was mandated to carry out Prior Consultation towards reaching an agreement. The resolution is a landmark in Mexico, as it was the first document to actually spell out Prior Consultation as a right and obligation. http://www.youtube.com/watch?v=B9VjihL8mcw

9. The state of the art • Energy Reform: • Articles 118 through 121 of the new Hidrocarbons Law as well as 117 through 120 of the new Electric Industry Law mandate the need to perform Prior Consultation and a Social and Cultural Impact Study. • SENER has created to Undersecretaries: Oil and Electricity. Each undersecretary has created a Prior Consultation Department. • Only a few amount of projects have been approved (1 Oil and 1 in Electricity) and in both cases the determination was that consultation was not required.

10. The state of the art • Energy Reform: • Local NGO’s (advised by CEMDA) are flooding the courts with amparos under the “self-adscription” principle. • Lack of proper laws, regulations, as standards has opened the floodgates to every group and interest to stall projects. • The flag raised by the energy reform will permeate across all the Mexican legal system, particularly infrastructure and zoning plans. • Right now, due to the lack of proper legislation and clear administrative procedures, a huge volume of projects remain stalled or on the verge of being blocked by local NGOs.

11. Conclusions • From a strict legal standpoint, today local communities have more solid legal arguments to prevail in court. We expect this scenario to be reverted in the short run. • The classic way of developing projects in Mexico (energy, infrastructure, or even legislation) changed with the RosendoRadilla resolution. • The definition of progress cannot exclude the cosmogony of local indigenous tribes. Viceversa, the cosmogony of local indigenous tribes cannot exclude progress as a basic premise. • Avoid heavy industry activities • Technology as a means to reduce impact while maintaining progress • Non-interfering incidence with local communities through community development programs based on investment in infrastructure. • Smart “shared benefits”. Think global act local.