Gabino Fraga
Managing Partner at Grupo GAP
Grupo GAP
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View from the Top

Law and Negotiation: a Recipe for Success

Mon, 10/22/2018 - 17:43

Q: Why should companies prioritize social matters in mining projects?
A: Companies should treat the communities they are renting or buying land from as investors. Maintaining a good relationship with surrounding communities is a crucial way to guarantee the future of the project. This is especially important in Mexico, as the country’s constitution places international norms over federal law, which means that a human rights violation could have repercussions not only at the federal level but also with the Inter-American Court of Human Rights.
These types of consequences can be avoided by being clear with the surrounding communities about the project from the very beginning. They need to know exactly what they will receive and what they will have to give as well. Conflict resolution is our most demanded service and our main added value. We do not only facilitate access to land but we also help clear up misunderstandings and blockades among other issues. Grupo GAP solves these problems by litigating and stopping blockades as quickly as possible. Blocked operations not only cost companies thousands of dollars, they also damage the environment because tailings and waste can start to build up.
Q: How does Grupo GAP differentiate itself from the rising number of competitors entering the Mexican mining industry?
A: Our expertise is one of our biggest differentiators. During a crisis, other law firms that are not specialized in mining often start to offer services to the industry but they cannot compete with our 20-year experience in the sector. We also find that many of our competitors give advice from their offices without ever visiting the site, which can be a problem in social matters. When dealing with surrounding communities, it is important to be able to perfectly combine the law with negotiations to ensure complete harmony. Other firms just send the agreements to be signed whereas we go to the field and directly get to know these communities until we can make an agreement. We also draft the agreements on the spot with the communities to make sure there are no doubts about the clauses. Sometimes this process can take several months but it is worth doing as any sign of a conflict can end in blockades later on even if an agreement is signed between both parties.
We are a small firm that not only employs lawyers but also economists and social workers, which helps guarantee the legal certainty of projects. The firm has a presence in Guerrero with Torex Gold, Durango with Excellon Resources and in several projects throughout the country owned by Industrias Peñoles.
Q: What social and land conflicts does the mining industry face in Guerrero and how do you help your clients overcome these?
A: Guerrero has a great deal of potential when it comes to the mining industry but it must provide a higher level of legal certainty to attract more projects. During the 16th century, the conquistadores decided to explore the land that would eventually become the state of Guerrero because it was one of biggest gold-producing regions at that time.
We helped Torex Gold start a project in 2011 and the challenges were incredible. We faced continuous issues with organized crime due to the location of the project. We had to establish a strong relationship with community leaders and make sure they understood we are not affiliated with the government. We created a new neighborhood for 120 families with churches, schools and more. In the end we were able to start the project.
These types of projects can show that in Guerrero it is possible to do business without getting involved in illicit activities. Mining projects can generate employment and development in many areas, with the potential to change the economy of the state. Since we started to work in Guerrero, we have noticed that the government has become a lot more open to the mining industry, viewing us as an ally instead of an enemy.