Community Participation in Development.

• Author: Foster, George K.

TABLE OF CONTENTS INTRODUCTION 41 II. COMMUNITIES' GROWING FORMAL RIGHTS AND 15 POWERS A. Local Regulatory Powers and Revenue-Sharing 46 Mandates 1. Developments in the United States 46 2. Developments Around the World 50 a. The Decentralization Trend 51 b. Results of Decentralization 55 B. EIA Requirements and Public Participation 57 in Environmental Decision Making and 1. Developments in the United States 58 a. The US EIA Regime 58 b. Access to Information and 59 Participation in Environmental Decision Making c. Access to Justice 62 2. Developments Around the World 64 C. Development Safeguards for Indigenous 67 and Traditional Communities 1. International Instruments and Human 67 2. Domestic Legal Frameworks 71 a. Developments in the United States 71 b. Developments Around the World 75 III. EMERGING PRIVATE SOURCES OF COMMUNITY 78 INFLUENCE AND BENEFITS A. Financial Institution Standards and 78 Non-Binding Guideline B. Community Development Agreements 82 IV. EXPLAINING THE GLOBAL WAVE OF COMMUNITY 86 PARTICIPATION A. Deficiencies of Higher Authorities and 87 B. Political Concessions Short of Control 90 1. The Line Between Influence and Control 91 2. Reasons for Resisting Local Control 93 C. Private Mechanisms as Supplements to 95 V. Conclusion 98 I. INTRODUCTION

Once marginalized in the decision making over business activities with high environmental and social impacts, local communities around the world are increasingly playing a more assertive role. (1) It is now common in many countries for municipalities, citizen coalitions, indigenous peoples, and other local groups to wield significant influence over the development process. Local interests may exercise this influence by enacting zoning ordinances, (2) offering comments during environmental impact assessments (EIAs), (3) or filing citizen suits, (4) among other possibilities. It is also increasingly common for local interests to receive compensation for project impacts or even to collaborate with developers as business partners. (5) In short, communities are participating in development in ever more diverse and meaningful ways: as regulators, as law enforcers, as commentators, and as economic actors.

Regulatory powers of local governments are one important source of community influence. Many local governments have acquired more expansive powers through a global trend toward "decentralization," (6) or have sought to use preexisting powers in novel ways. Such regulatory assertiveness can be seen, for example, in efforts by local governments in the United States and Spain to ban hydraulic fracturing--or "fracking"--within their territories. (7) Meanwhile, many local governments have secured mandated shares of revenue collected by higher authorities from development activities, such as severance taxes from mining and oil and gas extraction. (8)

Local interests have also acquired more influence through a global proliferation of requirements for higher authorities and project developers to conduct EIAs before undertaking development projects. (9) EIA regimes typically require decision makers to take into account potential impacts on communities and give members of the public the right to receive information and offer input during the process. (10) Stakeholders have also gained access-to-justice rights in many countries, allowing them to participate in the enforcement of environmental laws implicated by development projects. (11) Stakeholders availing themselves of these opportunities have delayed, blocked, or secured modifications to numerous projects--two prominent recent examples being the Keystone XL Pipeline in the United States (12) and the Whites Point Quarry and Marine Terminal in Canada. (13)

At the same time, indigenous communities are increasingly accorded special safeguards to address their unique vulnerability to the impacts of development and barriers to participation in decision making. (14) These safeguards have enabled indigenous groups to halt several major development projects to which they were opposed, from a proposed coal terminal near Seattle (15) to a gold mine in Chile. (16)

Moreover, when indigenous or other local communities are amenable to development proposals, they are increasingly able to negotiate private agreements with project developers that provide for impact mitigation and benefit sharing. (17) Benefits provided under these agreements may include shares of profits or production, infrastructure improvements, employment or contracting preferences, and even equity stakes in projects. (18)

Scholars have engaged aspects of these developments, but the literature is fragmentary. Separate lines of scholarship address discrete components of what this Article dubs collectively "community participation in development." These separate lines explore, for example, local fracking bans and moratoria, (19) decentralization processes in foreign countries, (20) public participation in environmental matters, (21) rights of indigenous communities, (22) and particular types of community-developer agreements. (23) Yet the time is ripe for examining these phenomena collectively--for considering to what extent they relate to one another and their significance as a whole. When such an examination is undertaken, it becomes clear that all of these phenomena are interrelated and mutually reinforcing. It becomes clear, moreover, that together they constitute a global wave of reform and innovation that is transforming relations between local communities, higher authorities, and project developers around the world.

And yet--as remarkable as these gains by local interests are--many communities have not yet secured what they consider a sufficient voice in decision making or an adequate share of benefits. In some cases, higher authorities refuse to transfer powers or benefits sought by local communities (24) or move forward with projects despite strong local opposition. (25)

Higher authorities' motivations vary, but principled arguments can sometimes be made for declining to give further influence or benefits to local communities. Notably, entrusting local governments with greater regulatory powers may risk a weakening of environmental standards or enforcement, due to limited local capacity or accountability. (26) Benefits accorded to local interests may be siphoned off by corrupt local elites. (27) Transferring more revenues to the local level may exacerbate economic disparities within a country or region (28) or even fuel separatist movements. (29) Higher authorities may also be concerned that communities in the vicinity of a project cannot objectively assess its risks and benefits, and would hold the broader public interest hostage to unfounded local fears. (30) For all of these reasons, communities have often fallen short of their aspirations in the political arena.

This Article will demonstrate that all of these events--the gains secured by communities as well as their limitations--result from a recurring set of causes and countervailing forces. It will show in particular that the global wave of community participation in development can be explained by the following three-part model. First, the diverse formal rights and powers that local interests have secured are all attributable to pressures on higher authorities, which result from perceived deficiencies in higher authorities' ability or willingness to protect local communities and the environment, or to share benefits equitably. (31) Second, although higher authorities have ceded various forms of influence and benefits, they have carefully tailored each category of community rights and powers in a specific way: to avoid outright local control over major development activities. (32) Third, private mechanisms have emerged that increasingly supplement communities' formal rights and powers. (33) These mechanisms offer flexibility and can produce further gains without the need for more extensive political change. Yet private mechanisms have limitations of their own and their viability ultimately depends on communities possessing--and effectively leveraging--robust public sources of influence. (34)

The discussion in this Article will proceed as follows. Part II will explore several formal sources of influence and benefits that communities around the world have secured in recent years, or have begun to use more aggressively. Part III will examine private mechanisms that have emerged as further sources of community leverage. Part IV will explain why the global wave of community participation has manifested and why its public and private aspects have assumed their particular forms. Part V will conclude.

2. COMMUNITIES' GROWING FORMAL RIGHTS AND POWERS

   In recent decades, local governments and stakeholders around the world have acquired diverse rights and powers under domestic and international law, which they can use to influence development and secure benefits. The subparts that follow explore several such formal sources of leverage: (i) local governments' regulatory powers and revenue-sharing mandates, (ii) EIA requirements and public participation in environmental decision making and enforcement, and (iii) safeguards specific to indigenous and traditional communities. (35)

   1. Local Regulatory Powers and Revenue-Sharing Mandates

      1. Developments in the United States

         In the United States, local regulatory powers derive from the state's inherent "police power" to protect health, safety, welfare, and morals. (36) Although the police power resides in the state government, all states have delegated certain aspects of that power to local governments, including the authority to enact land-use regulations in the public interest. (37) The nature and scope of that delegation vary, but local governments generally have the authority to enact a wide range of regulations governing the use of land within or near municipal boundaries. (38) Mechanisms for regulating land use include the adoption of...