LETTERS TO THE EDITOR: Prior consent of indigenous communities vital if developing nation projects a

LETTERS TO THE EDITOR: Prior consent of indigenous communities vital if developing nation projects are to succeed

By Sakiko Fukuda-Parr

Financial Times; May 07, 2004

Sir, Sir Mark Moody-Stuart ("A warning for the World Bank", May 4) raises concern that the World Bank's extractive industries review would be counter-productive to the goals of reducing poverty, stimulating growth and improving environmental standards. He argues that requiring "prior and informed consent" of local communities along with other institutional conditions that ensure environmental and financial sustainability of investments would be just utopian, unrealistic goals. Actually, these approaches are both practical and necessary.

Success stories exist in Alaska, Australia and Canada, where local communities were brought into decision-making processes - they were able to preserve their way of life even while sharing the profits from mining projects. Why should similar initiatives not be adopted for developing countries?

As the Human Development Report 2004 (which is due in July 2004) will demonstrate, ignoring demands of indigenous people may have worked in earlier decades but cannot in today's political realities. There would be a high cost if local communities were left out. Much of future investments in extractive industries are expected to be in indigenous people's territories. Investments that take away the economic basis of their livelihoods threaten their very existence. The Lihir gold mine's operations in Papua New Guinea destroyed sacred sites and led to environmental degradation. Not surprisingly, many communities increasingly oppose any further activity in their territories because of their past experience of misinformation and inadequate compensation.

The spread of democracy and growth of global networks have strengthened the political power of these protests and so can no longer be ignored. Some companies that have turned to working with communities did so after learning the hard lessons from ignoring them and facing protests. Local communities opposed the Yanacocha gold mine in Peru after some of the promised tax revenues from the government were not received and a mercury spill in 2000. Since then, the company owning the mine has engaged in consultations, formalised complaint systems and sought to invest in local and urban development.

In the interest of long-term sustainability and profitability of investments, empowering communities requires explicitly recognising their rights, consulting them on project design and creating incentives for increasing mutual benefits. This is a matter of respecting human rights as well as a practical necessity.

Sakiko Fukuda-Parr, Director and Lead Author, Human Development Report 2004: Cultural Freedom in Today's Diverse World, United Nations Development Programme, New York, NY 10017, US