Thursday, June 23 2022

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The Constitutional Court of Ecuador (the “To research”) recently ruled on a series of constitutional complaints brought against the development of mining projects in Ecuador (the “The decisions”). The decisions illustrate the Court’s ongoing approach to recognizing and strengthening the right to prior consultation of indigenous communities on extractive activities in the country. The decisions, however, appear to run counter to President Lasso’s attempts to reform the country’s historic economic policy by pledge promote foreign investment to stimulate Ecuador’s economic growth, particularly through the exploration and exploitation of hydrocarbons and mineral resources.

Below we discuss the decisions and some of their potential implications for companies in the extractive industries.

The decisions

  1. The Los Cedros decision (December 1, 2021)

On December 1, 2021, the Court revoked environmental licenses granted by the Ecuadorian government on the basis of the protection of the “rights of nature” in the Los Cedros case (the “Los Cedros decision”). The Los Cedros case was a constitutional action filed by the city of Cotacachi against the Ministry of Environment and the Ecuadorian public mining company ENAMI EP in relation to the Río Magdalena mining project carried out in partnership with the Canadian mining company Cornerstone Capital Resources in the Los Cedros Protected Forest (the ‘Forest”).

At the end of 2018, the lower appeal court concluded that the environmental licenses granted by the Ministry of the Environment to ENAMI EP in December 2017 for the exploration of minerals in the forest violated the rights of nature and the constitutional rights drinking water, healthy environment and environmental. consultation.

In the Los Cedros decision, the Court held that nature has rights under the Ecuadorian Constitution and that the rights of the forest have been violated by mining activities, which, according to the Court, under the precautionary principle, had caused damage to the biodiversity of the forest. The Court also concluded that the Ministry of the Environment had not properly assessed the impact of the authorized activities on people’s access to drinking water and a healthy environment, and that the communities concerned had not been consulted as required by local and international laws.

As a result, the Court revoked the environmental license and water permits for the mining project and prohibited any extractive activity that could be detrimental to the forest. He also ordered the Ministry of Environment to take all necessary measures to preserve the forest and its rights, and to draft new regulations imposing stricter environmental standards for permits for extractive activities.

  1. The Chocó Andino decision (January 12, 2022)

On January 12, 2022, the Court upheld the constitutional right of Indigenous communities to prior consultation before the government can move forward with similar mining and extractive projects. The underlying dispute concerned the legitimacy and strength of a referendum proposal addressed to the inhabitants of the city of Quito for prior consultation on the approval of mining concessions in the Chocó Andino Region (a region known for its biodiversity and endemism) (the “Chocó Andino Decision”). The referendum proposed to consult the community of the city of Quito on whether the exploitation of metal mines on a (i) large, (ii) medium, (iii) artisanal or (iv) small scale should be prohibited in the protected areas of the Chocó Andino Region.

The Court held that the questions proposed for the referendum met the relevant constitutional test established by Article 57(7) of the Ecuadorian Constitution, which provides for the right of indigenous communities to prior consultation. In particular, the article states that indigenous communities have the right to:

prior, free and informed consultation, within a reasonable time, on plans and programs for the exploration, exploitation and marketing of non-renewable resources located on their lands and likely to have an environmental or cultural impact on them; to participate in the benefits derived from these projects and to receive compensation for the social, cultural and environmental damage caused to them. The consultation that must be carried out by the competent authorities is mandatory and timely. If the consent of the consulted community is not obtained, the measures provided for by the Constitution and the law are taken.. (Free translation).

It is important to note that the Court clarified that if the indigenous community did not consent to the extractive activities proposed in the referendum, the result would apply to future mining projects in order to respect the principle of legal certainty. The Court also ordered the City of Quito to provide a map of the areas that comprise the Chocó Andino region to ensure that the community is able to clearly identify and be aware of the areas subject to the referendum.

The Chocó Andino judgment seems to have been a prelude to the Court’s continuing trend to strengthen the enforcement of indigenous rights, which was then followed by the Sinangoe judgment which, as indicated below, sets out the various measures that the government must take to satisfy Article 57(7) of the Constitution.

  1. The Sinangoe decision (January 27, 2022)

In 2018, the A’I Cofán indigenous peoples of the Sinangoe region brought a constitutional action (protective action) alleging that twenty mining concessions and thirty-two concessions in the process of being approved violated their right to prior consultation, the right to live in a healthy environment, the right to drinking water, health and food, as well as than the rights of nature. The lower and appellate courts hearing the action confirmed the violation of the rights of the A’I Cofán people and, consequently, 52 mining concessions in the area of ​​the Cofanes, Chingual and Aguarico rivers in Sinangoe, which were granted without prior consultation, have been revoked.

Following the filing of extraordinary constitutional complaints (extraordinary protective action) against the decision of the Court of Appeal of the Ministry of Mines, as well as the mining companies concerned by the decision, on January 27, 2022, the Court confirmed the right of the A’I Cofán community to be consulted before the approval of mining concessions and other extractive activities on indigenous lands (the “Sinangoe Decision”).

The Court concluded that the mining activities taking place in and around Sinangoe have a direct impact on the right of the A’I Cofán peoples to cultural identity, self-determination, a healthy environment and health, in addition to potential impacts on the rights of nature.

Given that Ecuador has not yet enacted a law regulating the right to prior consultation, the Court took the opportunity to examine the scope and application of the constitutional right to prior consultation, and held that :

  • The prior consultation obligation is not limited to plans or projects within indigenous lands, but also to those that may affect indigenous lands environmentally or culturally, due to the broad scope of the Article 57(7) of the Constitution. In response to the respondents’ argument that the mining concessions were outside the official territorial boundaries of the A’I Cofán community, the Court held that the A’I Cofán community had property rights over their territories of possession. ancestral and not exclusively on what the State had designated as the territorial boundaries of their community.

  • The essential elements of “prior, free and informed”1 consultation that the State must respect are: a) the need to allow sufficient time for the indigenous peoples involved to gather information and discuss the issues that are consulted; b) good faith and the objective of reaching an agreement, without coercion, intimidation, pressure or manipulation by the State with the indigenous peoples, before or during the consultation process; c) adequate and accessible consultation; d) an environmental impact study, and e) an informed consultation.

  • In this sense, the Court has established that the information provided to indigenous peoples in the context of prior consultation must be clear and accessible and, where necessary, transmitted by authorized interpreters or in a language allowing members of the peoples and communities concerned to fully understand the information.

Finally, the Court explained two potential scenarios following the conclusion of a consultation process:

  • If indigenous communities consent to the underlying project after prior consultation, the State must ensure open communication channels and effective participation of indigenous peoples throughout the project implementation process. In addition, the Court determined that communities should derive benefits from these projects, as well as be compensated for the social, cultural and environmental damages they may suffer as a result of extractive activities.

  • If it is not possible to obtain the consent of the communities and it is nevertheless decided to go ahead with a project, the State is required to give objective, reasonable and proportionate reasons why it was not possible to accommodate the project or modify it according to the concerns, requests and proposals expressed by the communities that would be affected2 The Court also warned that under no circumstances can a project be carried out that generates excessive sacrifices to the collective rights of communities and nature.

Potential Implications of Decisions

The decisions establish a stricter framework of requirements for the development of extractive projects in Ecuador – which could be reinforced by future regulations on extractive industries permits if, for example, public bodies adopt the parameters set out in the Los Cedros decision. . In particular, the requirements relating to the prior and free consultation of the public and indigenous communities increase the burden imposed on private companies to demonstrate that their activities do not harm the areas in which they plan to operate in order to avoid the risk of their licenses revoked.

The decisions further confirm that companies and government are both responsible for ensuring that environmental and community rights are considered in their investment analysis and that proposed extractive activities will not damage areas affected by the disaster. ‘investment.

The requirement for prior consultation is likely to cause delays in starting new projects in the country, as well as subjecting investors to stricter scrutiny from the courts when assessing their impact on affected areas and communities.

Footnotes

1 To see ILO Convention No. 169 and Declaration on the Rights of Indigenous Peoples. Available at: https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_ILO_CODE:C169.

2 To see Article 83 of the Organic Law on Citizen Participation. Available at: https://www.oas.org/juridico/pdfs/mesicic4_ecu_org6.pdf.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.


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