International Best Practices for Ensuring Mines’ Viability

Q: How would you describe GMI Consulting´s anthropological and social approach?

A: We were the first consultants in Mexico to apply best practices for the social management of infrastructure megaprojects. In fact, the Canadian Chamber of Commerce gave us the Outstanding Business Award (COBA) in 2018 for being the most innovative company in Mexico. We developed a legal-anthropological method for the social management of megaprojects. We strengthened this methodology by incorporating the best international practices established by the OECD, human rights and business protocols and ILO’s principles.

GMI Consulting does all the fieldwork, sociological and anthropological work with the communities in the area surrounding a project. We also take care of the legal framework and thus provide greater certainty to our clients. Last year, we joined forces with QV Environmental Management and Bonfiglio Macbeth to form a consortium and offer something that nobody else provides in Mexico: the management of nontechnical risks for projects (environmental, social and land tenure).

This adds up to complete legal and technical risk management. In 2016, our company started researching social conflicts in Mexico, both in energy projects and non-energy projects. As a result of this research, we realized that 99 percent of the projects that are stopped due to a social conflict, have indigenous consultation, environmental, agrarian or land tenure issues. Let us consider an example from the energy sector. If we take the seven pipelines that were renegotiated by the CFE, all of them had problems that fell into one of these three variants. Additionally, it is important to bear in mind that many problems in the mining sector are caused by labor or union problems. These four issues are linked to each other.

When it comes down to environmental issues, if a company does not make a good environmental impact study, it will attract the attention of organizations that are going to oppose the project, creating a social problem. Everything is completely related. The way in which developers in Mexico have dealt with nontechnical risks is by managing them independently through various consultants. This is suboptimal. Risks need to be addressed through one single pipeline. To address this matter, we joined forces with two specialized firms. Each one is specialized in a particular field and focused on resolving nontechnical risks in an interdisciplinary way, addressing them from the start of a project to avoid problems over time.

Q: At what stage of a project can a company approach you?

A: Throughout the entire life of the project. We work with miners and manage all environmental issues, such as environmental impact studies, and all the monitoring that is required. As a consultant, you are constantly involved with the mine because you have to supervise environmental actions and deliver the operating logbooks to the Secretary of the Environment and Natural Resources (Semarnat).

As for agricultural management, negotiations are usually completed at the beginning, although there are many cases in which mining concessions are not regularized and soon after we have to deal with audits. The indigenous consultation is a very important issue. I am an adviser to CERALC project (Conducta Empresarial Responsible para América Latina y el Caribe) at the ILO for the application of Convention 169 in Mexico, which regulates these consultations. In the mining sector, we provide clients with legal and anthropological expertise to identify the existence of a collective subject that may be affected by the mining operation, which in turn could lead to an indigenous consultation process.

Q: Is there a big difference between a Mexican and a foreign company when addressing social management issues?

A: We conducted a comparative study showcasing Mexico, Chile and Colombia on the implementation within companies of due diligence processes related to human rights. In the case of Colombia and Chile, they have a National Action Plan on Human Rights and Businesses, which is a nonbinding protocol that asks companies to establish due diligence protocols regarding human rights and business. In Chile and Colombia transnational mining companies are the ones that have promoted ESG practices. This happened because they had to comply with the directives from their boards abroad as a preventive measure. These protocols are applied so that there are no risks in labor matters with the communities, clients and the supply chain.

In Mexico, there is a very large and strong local mining sector and also a very strong Canadian mining sector. Both seek to comply with these protocols in equal measure. When it comes to large mining companies there is no difference between how domestic or foreign mining companies work. In the case of smaller mining companies, there may be a difference.

Q: In what ways have your services changed in the recent past?

A: The current government has proposed 144 modifications to the Constitution in order to give greater recognition to the human rights of indigenous peoples according to international conventions and protocols. There is no doubt that we must recognize the human rights of indigenous people. However, the implementation of these modifications is not necessarily happening as it should. As a consequence, Mexico has no law that regulates indigenous consultations at the federal level. There are many state laws regarding the rights of indigenous people and some of them reference indigenous consultation issues, but in mining there is no federal law.

Mexico has been required to make indigenous consultations since 1991, when it ratified ILO Convention 169. However, it was not until the Energy Reform was established in the Hydrocarbons Law and in the Electric Industry Law that the obligation to hold indigenous consultations was clear. In mining, no law dictates who is in charge of holding an indigenous consultation. Nevertheless, the Mexican government has the obligation to hold one when there are significant impacts to indigenous communities.

This causes uncertainty in the mining sector. Projects are being placed on hold due to this issue. Mining concessions cover large areas of land that may be located within an indigenous territory. What is not known, because it has not been regulated in that sense, is what will happen with these concessions. There are offices that have recommended that a consultation be made prior to the concession, or hold another consultation before starting the exploration and another before starting the exploitation. No mining project can withstand the economic blow of making three indigenous consultations.