Parallels in Extractive Sector Regulation: Lessons for Canadian Investors in Bolivia

Bolivia, like Canada, has a long and complex history of colonization and evolving state relations with Indigenous peoples— especially in the context of extractive industries such as mining and oil and gas development. These shared historical and sociopolitical dynamics give rise to notable similarities in how extractive activities are approved in both countries. As a result, Canadian investors exploring   opportunities in Bolivia may find familiar elements in the regulatory and community engagement landscape.

Consultation as a Legal Requirement.

In both Bolivia and Canada, the approval process for extractive activities begins with mandatory and extensive consultations with affected Indigenous or local communities. In Bolivia, Article 30 of the Political Constitution affirms that any community with a shared cultural identity, language, historical tradition, institutions, territoriality, and worldview has the right to be consulted before the commencement of any extractive (or business) activity likely to affect them.

These consultations must be conducted through culturally appropriate mechanisms and completed prior to project initiation. Similarly, in Canada, consultation with Indigenous peoples—defined as First Nations, Inuit, or Métis—is constitutionally mandated before extractive activities may proceed in areas affecting their rights or lands.

This duty stems from Section 35 of the Constitution Act, which affirms Indigenous rights and has been reinforced by numerous Supreme Court decisions. While the legal duty to consult typically rests with the federal or provincial government, private companies are often closely involved in the consultation process as a key step toward securing regulatory approvals

The Role of Consent and “Social License”

Beyond consultation, the issue of consent plays a critical role in both jurisdictions.

In Bolivia, companies must obtain what is commonly referred to as a “social license”— the ongoing approval and acceptance of a project by the local community. Although this concept is not codified in law, it has binding practical effects,  articularly in the mining sector. The absence of a social license can lead to partial or  total suspension of a project, as well as other legal and operational risks. 

In Canada, the framework for consent has evolved, particularly in light of the government’s ratification of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP). This framework includes the obligation to obtain free, prior, and informed consent before projects are initiated on Indigenous lands. However, under current Canadian law, failure to secure full consent does not  necessarily prevent a project from proceeding—except in cases where Indigenous  title has been legally established. 

Sociopolitical Resistance and Community Expectations

Despite differences in the legal enforceability of consent, both countries experience sociopolitical challenges that can significantly delay or disrupt projects. 

In Canada, protest movements have played a central role in extractive sector debates. A notable example occurred in 2020, when members of the Wet’suwet’en Nation and their allies blockaded infrastructure in opposition to the Coastal GasLink pipeline. The protests caused significant national economic disruption despite the eventual continuation of construction.

Similarly, in Bolivia, local communities and civic groups have protested extractive operations. In 2023, protesters led by the Civic Committee of Potosí (Comcipo) blockaded a lithium processing facility, demanding legislative guarantees for greater local participation and increased royalties.  Their threat of an indefinite strike highlighted the importance of sustained community engagement and benefit-sharing.

Economic Participation and Benefit-Sharing

Finally, both Bolivia and Canada have developed mechanisms for economic inclusion of local and Indigenous communities in extractive projects.  

In Bolivia, there are increasing demands from local stakeholders—especially in resource-rich regions such as Potosí— for a greater share of profits and royalties from lithium and other mineral extraction. Similarly, in Canada, Indigenous communities frequently negotiate Impact Benefit Agreements (IBAs), revenuesharing deals, equity participation, and other forms of compensation related to extractive projects.

Conclusion

Canadian investors in Bolivia will encounter a regulatory environment that, while distinct in its legal structure, mirrors Canada’s in key respects. Both countries  require meaningful consultation with affected communities, have developed  consent-related frameworks, face occasional sociopolitical resistance, and prioritize  benefit-sharing arrangements.

Understanding these parallels can help Canadian stakeholders navigate Bolivia’s extractive sector more effectively— leveraging their experience at home to foster  respectful, informed, and sustainable partnerships abroad.