If a real estate project is intended to be carried out on the land of an indigenous community, prior consultation with that community is an essential element of the project's preparatory stage. Thus, companies that intend to develop or invest in real estate projects in Mexico should consider community consultation as part of their feasibility criteria.

Constitutional framework

In 1990 Mexico ratified Convention 169 – Indigenous and Tribal Peoples Convention. The convention took effect in 1991, after which Mexico assumed the obligation to harmonise its domestic legal framework with the convention's principles through the adoption and effective implementation of the appropriate legislation, regulations and policies which include adequate procedures for consulting the relevant indigenous communities whenever legislative or administrative measures that are likely to directly affect them are anticipated.

As a result, the Political Constitution of the United Mexican States was amended to incorporate the federal and local obligation to establish institutions and develop policies to guarantee the right of indigenous communities to be consulted before any legal action which might affect their culture or customs (including the issuance of ordinances, laws and regulations, as well as permits and licences) is undertaken.

Consultation requirements

In accordance with the above framework, most Mexican states now recognise the right of indigenous peoples and communities to be consulted by establishing – in either their local constitutions or specific indigenous rights laws – the requirements and procedures for carrying out such consultation within their respective jurisdiction.

As a result of international, federal and local regulations, investors must, before investing in or developing a real estate project (particularly one relating to the generation of energy or exploitation of hydrocarbons on indigenous lands):

  • undertake a social impact assessment;
  • undertake consultation with the local community, where appropriate; and
  • develop a benefit-sharing plan to share the project's profits with the community.

Prior consultation is a right of indigenous communities and people and must be:

  • undertaken prior to the authorisation of a real estate project;
  • duly and correctly informed;
  • undertaken in good faith;
  • transparent; and
  • respectful of the culture and identity of the indigenous peoples and communities, among other requirements.

Comment

Although the procedure for confirming the social impact of a project and undertaking the required prior consultation is expressly regulated only in laws applicable to the energy sector, Convention 169 establishes that indigenous peoples and communities must be consulted regarding any legislative or administrative act that may directly affect them. Thus, parties which plan to undertake real estate projects in Mexico must also consider these requirements.

For further information on this topic please contact Gabriela Harfush H at Santamarina y Steta by telephone (+52 81 8133 6000) or email (gharfush@s-s.mx). The Santamarina y Steta website can be accessed at www.s-s.mx.

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