Lessons from Four Decades of Infrastructure Project-Related Conflicts in Latin America and the Caribbean

Sep 2017
This report investigates the nature and consequences of conflict in infrastructure projects in Latin America and the Caribbean (LAC). To the best of the authors’ knowledge, this is the first study on this scale at the infrastructure industry. A hybrid quantitative and qualitative research approach provided the data for the study. 32 interviews were conducted with 42 sustainability experts involved in the development of infrastructure in LAC. Then, a database of 200 conflict-affected infrastructure projects across six sectors was created to assess the nature and drivers of conflicts, the companies’ response to conflicts, and the material implications for projects, companies, and societies. Our analysis demonstrates that the nature of conflicts is multidimensional, and more dynamic than traditionally conceived by both firms and governments. Most conflicts materialize through the interaction of environmental, social, governance, and economic drivers over a long period. Overall, deficient planning, reduced access to resources, lack of community benefits, and lack of adequate consultation were the most prominent conflict drivers. In many cases, conflicts escalated because grievances and community concerns accumulated, going unresolved for many years. In general, conflicts may arise during any phase of an infrastructure project, but our analysis shows that the earliest phases are increasingly vulnerable to conflicts. Most projects in the database that were cancelled or postponed faced conflicts before operations. The consequences of such conflicts are increasingly detrimental for companies, investors, and national governments as conflicts cause projects to fail and harm national economies. Of the 200 projects in the database, 36 were cancelled because of conflicts, while 162 projects faced delays, and 116 faced cost overruns. Although all six infrastructure sectors evaluated in this research saw conflicts, resource, energy, and waste projects saw a disproportionate share.