This report seeks to build the “business case” for sponsors of large-scale, high-impact projects to treat the consent of the host community as a requirement of project development.
- Kirk Herbertson, Associate
While much has been written on the legal, normative, and development arguments for ensuring that host communities have the opportunity to consent to a project, there has been relatively little attention paid to how obtaining the free, prior informed consent (FPIC) of host communities is in the pecuniary interest of project sponsors and their financial backers. This report seeks to build the “business case” for sponsors of large-scale, high-impact projects to treat the consent of the host community as a requirement of project development.
The argument is set out in four sections. Section I provides context by briefly reviewing the origins and evolution of the FPIC requirement in international law and development discourse. It argues that while community FPIC first emerged as an international norm applicable to indigenous peoples, it has come to be widely seen as critical to the fair treatment of all communities. Section II then directly addresses the business case for FPIC. It identifies and describes the various types of risks associated with developing projects that lack the support of their host community. Section III focuses on case studies. Through a series of real-world examples, it illustrates some of the ways in which the risks of community opposition can manifest themselves. It also provides a positive case study that demonstrates how early attention to FPIC issues can avoid significant costs during implementation. To the extent possible based on publicly available information, each case study quantifies the financial impacts that community opposition (or its avoidance) has had on the project and its sponsor.
We appreciate the input provided by Clive Armstrong, Jennifer Coulson, Anne Perrault, Anita Roper, Bruce Schlein, Jake Siewart, Julie Tanner, and Elizabeth Wild, in the development of this report.
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