A/HRC/44/43/Add.2 causes of many social conflicts and their escalation in the context of development projects, the exploitation of natural resources, and in the energy and agribusiness sectors, were closely linked to the lack of meaningful participation in decision-making processes affecting local communities. 15. As an illustration, in the mining sector, the current mining law requires companies to conduct consultations only after the exploration phase and before operations start. To provide opportunities for participation in decision-making processes, municipalities are required to “socialize” projects through open town halls and municipal “plebiscites”.4 Information on approval of concessions is disseminated through national media, such as newspapers and radio. 16. The Working Group heard numerous concerns about the above requirement being implemented in a discretionary manner. In particular, it received information regarding the systematic failure by municipal authorities to ensure meaningful participation from an early stage, when no irreversible decision has been made prior to the commencement of a project. The Working Group was informed, for example, about open town hall meetings being held when environmental licenses had already been granted. It was also unclear to what extent the relevant national ministries exercise oversight over the quality and effectiveness of municipal consultations. 17. In conversations with representatives of the business sector, the Working Group was informed that, in many instances, companies have obtained licences and concessions to operate in conformity with national legal standards, including the requirement to “socialize” projects and the outcome of environmental impact assessments. It nonetheless expresses its concern at the reported practice of certain companies sharing only partial information, focusing on the potential benefits that would arise from a project, such as creation of jobs, health benefits and education support for employees and their families, while failing to provide accurate information on the negative impact or on mitigation measures. In a context in which the State struggles to discharge its human rights obligations, including economic and social rights, the Working Group witnessed first-hand how such practices help to turn community members against each other and fuel mistrust and violence among communities, businesses and the Government. 18. The Working Group stresses not only that “socialization” does not correspond to meaningful participation, and is therefore inconsistent with international standards, but also that such practices greatly undermine trust in the State authorities, which are seen as acting exclusively in the interests of companies. 19. Access to information is an enabler of participation and a prerequisite for openness, transparency and accountability for decisions made. Announcement in national newspapers and radio of the approval of a concession may not be sufficient to inform fully rights-holders who might be affected by a project. 20. Both local communities (including indigenous communities) and businesses have signalled an urgent need for a clear institutional and regulatory framework on participation as a key element to address the root causes of social conflict. The current gaps have also negative consequences for business and investors, such as the costs of stalled operations, damage to a company’s reputation and investors withdrawing financing, like in the Agua Zarca dam case.5 21. The Working Group reminds all businesses that the meaningful participation of communities is a central aspect of human rights due diligence, as set forth in the Guiding Principles: it allows business to identify early on, and to better understand, the potential impact on human rights and risks of a project for the environment and people, particularly of those at greater risk of abuse, such as women, indigenous and afro-Honduran peoples, and persons with disabilities, and the associated concerns and grievances. 22. Engagement should take place at the earliest stage of a project and provide an explanation of the negative and positive impact on social, economic, cultural activities and 4 5 Ley de Municipalidades, Legislative Decree No. 134-90. See www.finnfund.fi/en/news/fmo-jand-finnfund-finalize-exit-agua_carca/. 5