Workshop on International Law, Natural Resources and Sustainable
Development
Transferring Wealth, Developing Poverty
Christiana Ochoa
School of Law, University of Indiana
In the highlands of Colombia, the accessible gold contained in a single mountain has
sustained a town for four hundred years. The town’s economy and sense of community has
been relatively stable, allowing the population to maintain decent and honorable livings.
Nearby, an ecologically vital land area lies in nearly pristine condition, evidently preserved
and revered by the region’s population. Unfortunately, this fragile equilibrium between
human economic needs, harvestable natural resources, and environmental protection has
recently been disrupted, likely forever.
This paper will recount this town’s experience with the seemingly inevitable investment by
foreign mining companies and the International Finance Corporation in one of Latin
America’s many gold-rich regions. The town of Vetas serves as a complex example of how
the wealth of local people too often slips through their hands. In some cases wealth is
inefficiently lost all together, as happens when ecological value is irremediably depleted. In
others (e.g., gold extraction and onward sale), wealth is transferred outward, facilitated by
both public and private law, taking its leave from the local dominion of a population. A small
percentage of local wealth is transferred to the national government, through taxes and
royalties. A much larger portion, however, is transferred further outward, to transnational
companies and their investors.
This paper will explain the role law plays in this complex process. All the while, however, the
paper will maintain its focus on the effects these wealth transfers often have on local
populations. The paper will draw on this account in order to propose alternate legal designs
for natural resource extraction projects. It will argue that any natural resource project
should be structured to ensure that local communities and environments are left more
healthy, wealthy and secure after extractive projects than they were before they came to
town.