Conduct and Review Environmental, Social and Human Rights Impact Assessments
Environmental Impact Assessments, Social Impact Assessments, and Human Rights Impact Assessments need to be conducted to assess the potentially adverse social, environmental, and human rights impacts of a particular investment and be better placed to manage and mitigate the risks. With an understanding of the impacts, site-specific environmental, human rights, and social parameters can then be included in the tender documents and incorporated into the investment contract entered into between the government entity and the investor.
Where a local community stands to be affected by an investment, it is important that a government engages early on with such a community. The internationally-recognized principle of free, prior, and informed consent, or FPIC, provides that indigenous peoples have a right to consultation on matters, like investments, that affect their rights and interests. There is also increasing international consensus that non-indigenous communities have a right to be consulted with and to participate in public decisions that affect their lives. Consulting with communities and obtaining FPIC also reduces the risk of social conflict, which minimizes transactional costs and ensures greater certainty for the project.