ILO 169 seen undermining investor confidence in Guatemala

Requirements for companies to consult indigenous communities are undermining investor confidence in Guatemala, according to a business group.

The International Labour Organization Convention 169 requires companies to carry out consultations over mining and other projects on land owned by indigenous communities, but the 1989 convention had not previously been formally established in the country, the committee of agricultural, commercial, industrial and financial industries (CACIF) said.

But now Guatemala's courts are requiring companies to conduct retroactive consultations, undermining confidence in legal certainty and punishing investors that have placed their trust in the country, CACIF said.

The statement follows a number of legal rulings on the issue, the committee added.

In February, Guatemala's supreme court ordered activities be suspended at the Tambor gold project after environmental NGO CALAS argued that local communities had not been consulted.

The project is being developed by Kappes, Cassiday and Associates subsidiary Exmingua.

"It is fundamental that the rights of investments, realized in accordance with laws and regulations in effect at the time, are recognized," the committee added.

CACIF called on authorities to formally enact the convention and to take into account efforts by the energy and mines ministry to ensure communities are consulted, but at the same time respect the rights of investors.