A comparison between private and public rules governing lithium mining in Argentina

July 5, 2024 by Kiran Champatsingh

Executive summary

The adoption of Electric Vehicles (EVs) is rapidly increasing in the Global North, serving as a prominent indicator of a consumer-led transition from fossil fuels to renewable energy sources. This transition toward EVs hinges on the expansion of global supply chains, which begins with the extraction of critical battery minerals such as lithium, which may have environmental and social impacts in the territories where it is extracted, leading to social claims from local communities and indigenous peoples who live in the area. In order to address such tensions, the corporate supply chain of battery minerals has driven an expanding landscape of transnational ESG regulations and accountability standards over the last decade to provide environmental and social protections across the world.

The proliferation of industry-driven standards alongside the process of creating new environmentaland social standards by lithium producing States raises the question of how these public regulations and private standards interact in the effective regulation of mining activity in producing countries. The extent to which private transnational standards converge or diverge from public regulation is still unknown. Both the number and the type of requirements vary allowing an analysis of their relationship in terms of complementarity or competition.

This report contributes to close that knowledge gap on the emergent ecosystem of ESG standardsand regulations on mining by addressing the following question: How are private transnational standards and public regulations converging or diverging on sources, targets and substance of accountability regarding Environmental Impact Assessment, public participation and Free, Prior and Informed Consultation in lithium mining (FPIC)? We try to answer this question by comparing Catamarca’s public regulations (a lithium-producing province of Argentina) and the Initiative for Responsible Mining Assurance Standard (IRMA), one of the most comprehensive standards across the world.

The comparative analysis between the IRMA Standard and Catamarca’s public regulations showsmixed results: both rules tend to converge regarding substantive requirements on Environmental Impact Assessment procedures, while there are some divergences on public participation. The biggest gap is on Free, Prior and Informed Consultation. The private standard seems to be more comprehensive than the public regulations regarding public participation and -especially- FPIC. However, it does not count with enforcement mechanisms other than denying certification or qualifying companies at lower levels of compliance to actually get compliance. The comprehensiveness is counterbalanced by the lack of strong enforcement mechanisms. On the other hand, the State counts with powerful enforcement mechanisms but has not adopted a comprehensive regulation for FPIC. Rather than relying on a potential substitution of public regulations by private standards, our policyrecommendation is to broaden public regulations where regulatory gaps remain and to enhance legal enforcement where comprehensive regulations already exist.

Read the full report.