Sustainable development for people or with people?
Over the last 15 years, the Andean Amazon has undergone an infrastructure boom, as well as a profound shift in the environmental and social governance of infrastructure projects. National governments and international development finance institutions (DFIs) alike have adopted strong new environmental and social safeguards (ESS), including most notably a commitment to prior consultation with project-affected indigenous communities (in some cases requiring the free, prior, informed consent – FPIC – of those communities) and the adoption of formal grievance mechanisms at DFIs. This chapter tests the association between the other two reforms – prior consultation and grievance mechanisms – and the environmental impact of infrastructure projects in Colombia, Ecuador, Peru, and Bolivia. It finds that prior consultation regimes have a strong, positive, and significant impact on the relative tree cover change near the site of the project. The other ESS tested here, the establishment of formal grievance mechanisms by DFIs, does not have a significant relationship with tree cover change, though it may be crucial in avoiding other risks. Finally, DFI and country safeguard frameworks appear to act as a mutually reinforcing network, in which each party’s system acts as an insurance policy against the other failing or disappearing altogether. Taken together, these findings show that indigenous rights are a crucial aspect of environmental management, and offer important policy implications for DFIs that prioritize environmental management but do not yet have social safeguards recognizing the rights of indigenous communities.