INSIGHT |
RECONCILING SOCIAL AND ENVIRONMENTAL PROTECTION WITH BUSINESS DEVELOPMENT LUIS VERA Former Partner at V&A
A first reading of the energy industry’s regulatory framework
includes two additional development phases that will add
suggests that environmental impact assessments should be
another 150MW of installed capacity. “Each development
prioritized, followed by indigenous consultations and finally,
stage required a different assessment, including social and
the social impact assessment. But Luis Vera, Former Partner
environmental impact assessments,” says Vera. Based on the
at socio-environmental law firm V&A, says this is not always
firm’s extensive work dealing with social and environmental
the case. “The logic behind this established timeline is at
issues, Vera believes it is essential for developers to be
odds with the actual fieldwork,” he says. “Environmental
aware of the importance of these steps. “Investors must
impact assessments have looser time frames and we use
become increasingly aware that nontechnical issues have a
this time to simultaneously cover the social aspects that
prominent social component,” he says. “Anthropologists and
overlap with environmental issues.” This means the firm
sociologists must be involved to build lasting relationships
can get a sneak peek at social insights such as indigenous
with local communities.”
presence or sensitive environmental areas prior to carrying out the consultation process.
When presenting its social and environmental impact assessments, V&A adds a chapter that takes into account
Compliance with the social and environmental requirements
the project location’s needs and regional development
when developing a large-scale energy project can prove
goals. “By doing so, our clients obtain increased certainty
challenging, especially considering the regulatory
on where to focus their investment, not only to grow
framework remains largely in the draft stage. Duplication
the company’s own business but also to contribute to
of responsibilities within government agencies does
the long-term regional development of the project’s
little to solve the problem, says Vera. “SEMARNAT and
location,” Vera says. The firm is also actively involved in
ASEA developed two different standards of the same
the public side of the social and environmental equation.
regulatory framework due to their respective mandates,”
“One of our partners is developing an algorithm together
he says. “Meanwhile, the Ministry of Energy’s social impact
with the Ministry of Energy so it can be more selective
guidelines are still on the drafting table, meaning social
in the projects it reviews, shifting from anecdotal to
impact assessments lack an established reference.”
standardized procedures.”
In 2017, the firm obtained 43 authorized social impact
In the near term, Vera worries litigation services will be
assessments, with 24 more in the pipeline for 2018. Using
more in demand due to the way the first procurements
this experience, V&A established a series of precedents
and allotments were carried out after the reform passed,
related to energy law interpretation and how environmental
both in the oil and gas licensing rounds and the long-
legislation applies to both regulated and nonregulated
term electricity auctions. “ASEA’s and SEMARNAT’s early
users. “V&A showcased consistency in all its assessments
heavy workload and understaffed agencies mean some
and legal interpretation to help decision-makers streamline
shortcuts were taken, such as hastily granted authorizations
their authorization and permitting processes,” he says. “Our
and procedures, casting doubt over the legality of a few
work also generates certainty in evaluation by financial
projects,” Vera explains.
entities.” From its outset, V&A established itself as a strategy firm Oak Creek’s Tres Mesas wind farm in Tamaulipas is among
rather than a litigation firm, given effective strategies
the large-scale energy projects V&A was involved in. It
eliminate the potential for later litigation, but that is
started as a pilot project that soon extended to a first and
changing. “We prioritized creativity over legal defense. But
second development phase totaling 148MW of installed
considering the coming scenario, we are also developing a
capacity, operating since May 2017. The project now
specialized litigation department,” says Vera.
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