In the Latin American and Caribbean region, infrastructure is critical for economic growth and improving human well-being, but poorly planned projects can cause significant conflicts. The nature of these conflicts is dynamic and multidimensional, often the result of the interaction of environmental, social, governance, and economic drivers over a long period.
As the study we conducted with Harvard University shows, deficient planning, reduced access to resources, lack of community benefits and adequate consultation are the most prominent conflict drivers.
The results of our analysis of 200 conflict-affected projects in Latin America and the Caribbean indicate that there is a need to shift from developing unsustainable projects resulting in conflicts, delays, and cancellation to developing sustainable projects where conflict and its drivers are effectively prevented and managed.
The findings of this analysis are relevant today as we ask why conflicts emerge and how we can best avoid and manage them.
Why do infrastructure projects lead to conflict?
The causes of conflicts are interrelated and often cause a cascading effect that influences more drivers and can escalate from conflicts to violent confrontations. The drivers of conflict can be grouped in four categories:
- Social: lack of benefits to local communities led to conflict in 84% of the cases we analyzed, in which there was usually a sense that communities were not being adequately compensated for potential negative effects. Other predominant social drivers were concerned about reduced access to resources, impact to cultural heritage, and forced relocations.
- Environmental: actual or potential degradation of ecosystems and pollution are major causes of conflicts. Communities are also concerned about loss of natural capital, water issues and climate change. Environmental damage caused by projects can often affect a community’s perception of a proposed project or generate distrust of a specific developer.
- Governance: project failures often occur due to deficient planning or because local people are not consulted —or poorly consulted— in the development of the project. A lack of transparency in the information led to conflict in 68% of the cases analyzed, with corruption also causing many of them.
- Economic: in a few cases, conflicts escalated because the government did not implement the works it had agreed to as the price of infrastructure services was too high or due to unfair profit distribution.
A volatile mix: What happens when projects and conflict collide?
When conflicts occur, projects are affected in myriad ways. The most common impact is project delays at some point in its life cycle, as was the case in 81% of the cases studied. These delays usually lead to budget overruns or additional costs due to redesign or changes in strategy.
The potential for unexpected impacts increases rapidly when developing projects in urban centers. Disruptions in urban environments may result in additional delays and their potential to affect nearby communities is far greater.
In cases when project redesign is needed, experts argue that conflicts could have been avoided had the project been developed in another location or in a way that incorporated community concerns into the design from the start.
How to manage conflicts?
There are several measures that can be taken to effectively manage conflicts. Key among them is to establish an appropriate institutional context that improves planning, ensures appropriate policies and legislation are in place, and ensures institutional capacities for effective implementation of those policies and legislation.
Conflicts can be more effectively managed immediately by communicating with affected parties through deeper consultations and appropriate press engagement.
We also found that, in general terms, projects supported by International Financial Institutions tend to fare better in conflict management. The involvement of independent experts to provide an objective evaluation on ongoing conflicts was effective in dealing with conflicts in 39% of cases. Most project opponents in such cases did regard a third-party intervention as objective and meaningful, especially when experts were members of International Financial Institutions (IFIs).
What was particularly interesting, in part due to the increasing availability of information for stakeholders, is that conflicts in infrastructure projects occur today much earlier in the project cycle than 30 years ago.
Since this study was published, we have worked within the IDB Group to develop a definition of sustainable infrastructure, along with financial, institutional, and project preparation mechanisms to deliver sustainable infrastructure. We are actively implementing these processes in our own projects and in our work with governments in Brazil, Colombia, Peru, and Mexico. For example, Peru’s new National Infrastructure Plan incorporates the IDB Group’s Sustainable Infrastructure Framework across its plan.
We believe that by ensuring all sustainability considerations are covered from the beginning of a project and throughout its entire life cycle, most conflicts will be prevented and those that do occur can be more effectively managed.
Photo credit: Bruna Fiscuk