Governance in energy democracy for Sustainable Development

Governance in energy democracy

for Sustainable Development Goals:

Challenges and opportunities

for partnerships at the Isthmus

of Tehuantepec

Jacobo Ramirez

Department of Management, Society andCommunication (MSC), Copenhagen Business

School (CBS), Frederiksberg, Denmark

Correspondence:J Ramirez, Department of Management,Society and Communication (MSC),Copenhagen Business School (CBS),Frederiksberg, Denmarke-mail: [email protected]

AbstractThis study provides a public policy framework for the governance of energydemocracy toward meeting the United Nation’s SDGs, and proposes guidelines

for policymakers on designing partnerships that promote renewable energy. An

increasing number of multinational enterprises (MNEs) and publicorganizations are prioritizing energy democracy and decarbonization

strategies by investing in renewable energy. However, I argue that energy

democracy is not ‘‘just’’ about opening up the energy sector to large-scalerenewable energy investments. I explore the challenges facing the

implementation of energy democracy through a qualitative study conducted

from 2013 to 2020 of wind-energy investments at the Isthmus of Tehuantepec,Mexico. A key challenge preventing energy democracy and renewable energy

partnerships with indigenous communities at the Isthmus of Tehuantepec is the

lack of good governance – corruption, poor accountability, and limited access

to information about energy and the environment. Wind-energy investmentsimplemented under the understanding of Partnerships for the Goals may offer

sustainable alternatives for reaching the goal of Energy for All and mitigating

climate change according to the 2030 Agenda for Sustainable Development.Journal of International Business Policy (2021) 4, 119–135.https://doi.org/10.1057/s42214-020-00077-3

Keywords: sustainable development goals (SDGs); wind energy; communities; part-nerships; governance; energy democracy

INTRODUCTIONEnergy democracy and decarbonization strategies are becoming apriority for an increasing number of governments in the effort toreach clean-energy commitments such as the Paris Agreement andGoal 7 (‘‘Energy for All’’) of the Sustainable Development Goals(SDGs) (Baker, 2018; Mey & Diesendorf, 2018; United Nations,2015a, b, 2016a; van Tulder, 2018). However, different actors –policymakers, multinational enterprises (MNEs), and communities

Received: 30 May 2019Revised: 5 September 2020Accepted: 15 September 2020Online publication date: 26 October 2020

Journal of International Business Policy (2021) 4, 119–135ª 2020 Academy of International Business All rights reserved 2522-0691/21

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– have different understandings and views of whatis required to reach the SDGs (Avila, 2018; McDer-mott et al., 2019). In their rush to reach clean-energy commitments, many governments inemerging markets have introduced a discourse ofenergy ‘‘democratization’’ by encouraging interna-tional business investments (Presidencia de laRepublica, 2012) without integrating local commu-nities’ demands (Velasco-Herrejon & Bauwens,2020). While this has increased the generation ofrenewable energy (RE), a lack of partnerships, lackof rule of law, and lack of clear political will forpublic goods have precipitated mistrust, corrup-tion, and violence (Manzo, 2012). For example, inthe Latin American and Caribbean region, therehave been 121 allegations of human rights abusesrelated to RE investments since 2010 (61% ofallegations globally) (Business & Human RightsResource Centre, 2020).

Herein, I consider these arguments through theinteresting case of wind-energy investments at theIsthmus of Tehuantepec (hereafter Isthmus) insouthern Mexico. This region is populated byindigenous peoples whose main socioeconomicactivities are agriculture, fishing, and commerce,and has been the focus of many wind-energyprojects owing to its excellent wind resources(Manzo, 2012; Rubin, 1994). Mexico has imple-mented public policies supporting the SDGs (Go-bierno de Mexico, 2018) with a particular focus onGoal 7. Energy sector reforms have been graduallyimplemented through neoliberal public policiessince the late 1980s, following the WashingtonConsensus (Manzo, 2012). These policies facilitatedforeign direct investment (FDI) in the energy sectorwith limited government intervention (Manzo,2012), positioning Mexico as an ideal country forFDI in RE (Presidencia de la Republica, 2012), longbefore it signed and ratified the Paris Agreement in2016 (United Nations, 2015b). However, Mexicopresents large structural vulnerabilities such ascorruption and social unrest (PODER, 2015). Inaddition, new vulnerabilities have emerged since2018, as the federal government has enacted aseries of public policy shifts that have deprioritizedRE investments and reversed energy sector reforms(Secretarıa de Energıa, 2020).

I argue that a key challenge preventing energydemocracy and partnerships with indigenous com-munities at the Isthmus is the lack of good gover-nance – corruption, poor accountability, andlimited access to information about energy andthe environment (Baker, 2018; Rothstein, 2012;

Sovacool & Dworkin, 2015; Szulecki, 2018; Velasco-Herrejon & Bauwens, 2020). I analyze the role ofpublic policies in wind-energy investments at theIsthmus based on the following research questions:What are the challenges of governance in energydemocracy in wind-energy investments at the Isthmusof Tehuantepec? and How can we develop partnershipsfor energy democracy among public organizations,private enterprises, and indigenous communities at theIsthmus of Tehuantepec, building on their experienceand resources?

My research makes two important contributionsto public policy. First, I extend the current theoryof governance in energy democracy by providing aframework for the transition to sustainable energypartnerships, which introduces a novel way ofthinking about how decentralized RE models maysucceed (or fail) in terms of governance in energydemocracy (e.g., Becker & Naumann, 2017; Sova-cool & Dworkin, 2015; Stephens, 2019; Szulecki,2018; van Veelen, 2018). Second, I extend researchon factors for successful RE programs (e.g., Sova-cool, 2013) by proposing key public policies andactions toward energy democracy that MNEs couldadopt and that might have long-term implicationsfor capacity building, employment, access toinvestment and RE, and peace and justice.

This article is structured as follows. The nextsection reviews the concept of energy democracyand examines the challenges and opportunities forgovernance in energy democracy. This is followedby the research methodology of the qualitativestudy that I conducted over the past 8 years. Then, Ipresent my findings on Mexico’s public policiesconcerning the energy sector and climate changeand the implications for MNEs and local commu-nities. The discussion and conclusion elaborate onthe two main contributions of this research.

LITERATURE REVIEW AND THEORETICALSCOPE

Energy DemocracyEnergy democracy is a bottom-up social movementthat challenges the centralized monopoly of theenergy sector in the transition to RE (Becker &Naumann, 2017: 4; Stein, 2018: 259; Stephens,2019). It calls for decarbonization, access to RE, anddemocratic decision-making (Angel, 2016a; Ste-phens, 2019; van Veelen, 2018; van Veelen &Eadson, 2020). The movement emerged in Ger-many in the past decade out of communities’

Governance in energy democracy for SDGs Jacobo Ramirez

120

Journal of International Business Policy

frustration with conventional institutions andpolitical practices (Kunze & Becker, 2014; Williams& Sovacool, 2020: 7). It spread quickly in Europeancountries such as Denmark and the UK, which havea long history with participatory RE models such ascommunity RE (Kunze & Becker, 2014; van Veelen,2018; Williams & Sovacool, 2020), and has sincegained traction in other developed and emergingmarkets (Baker, 2018).

The current vision of energy democracy champi-ons decentralized RE sources that are separablefrom the grid (Stein, 2018: 258), including small-scale RE projects, community-owned programs,and cooperation between communities and MNEs(e.g., Becker, Angel, & Naumann, 2019). Neverthe-less, the frames and constructs of energy democracymay differ in emerging markets from those inEurope and the US (van Veelen, 2018; van Veelen &van der Horst, 2018). Scholars have discussed thechallenges for RE investments in emerging marketsin relation to community members’ motives,understanding, attitudes toward RE, access to infor-mation, participation, and access to finance (Bau-wens, 2016; Sovacool, 2013; Ulsrud, Winther, Palit,& Rohracher, 2015). Theory and research show thatenergy democracy is embedded in communitygovernance (van Veelen, 2018). Decentralizedframeworks can encourage energy democracythrough participative decision-making and the fairdistribution of benefits in RE production andsupply (Stein, 2018; Walker & Devine-Wright,2008; Weinrub & Giancatarino, 2015; Wirth,2014). The challenges and opportunities regardingthe governance of energy democracy in RE invest-ments in emerging markets are presented below.

Challenges and Opportunities in Governanceof Energy DemocracyThe principle of good governance is a cornerstonein the energy democracy debate (Rothstein, 2012;Sovacool & Dworkin, 2015; van Veelen, 2018).Good governance means minimal corruption, ruleof law, trust in politicians, improved accountabil-ity, transparent decision-making processes, thesharing of high-quality information about energyand the environment, the participation of allpeople, and ultimately, an overall goal of publicgoods (Angel, 2017; Rothstein, 2012; Sovacool &Dworkin, 2015: 439; Szulecki, 2018: 35). It is closelyrelated to Goal 16 of the SDGs: ‘‘Peace, Justice, andStrong Institutions.’’ However, in emerging markets,the role of strong institutions is challenged (Doh,

Rodrigues, Saka-Helmhout, & Makhija, 2017; Luiz,Ganson, & Wennmann, 2019; McDermott et al.,2019).

Governance in energy democracy is particularlyimportant for RE investments that directly affectcommunities (Velasco-Herrejon & Bauwens, 2020).Wind energy is a telling example of this in devel-oped and emerging economies; the building andoperation of wind farms requires the conversion oflarge areas of land (e.g., from agricultural to indus-trial), which is often owned and/or used by thecommunity and significantly affects those livingnearby (Copena & Simon, 2018; Manzo, 2012;Olson-Hazboun, Krannich, & Robertson, 2016). Inemerging markets, wind farms are often built inpoor, rural areas (Shen, 2020) that are inhabited byindigenous communities with a tradition of con-fronting corrupt governments and blocking MNEs’investments in RE (Manzo, 2012). Changes in landuse are a major cause of disputes among commu-nities (Martinez, 2020). These factors may con-tribute to the reported conflicts among perceivedsupporters and opponents of RE projects (Avila,2018; Maher, 2019).

Public policies that integrate local communitiesare key to diminishing such conflicts in thetransition to a decarbonized economy (CleanEnergy Council, 2018; Peterson, Stephens, &Wilson, 2015). Past research on Denmark, Ger-many, the Netherlands, and Scotland indicatesthat community RE models lead to positivecommunity attitudes toward wind energy (Toke,Breukers, & Wolsink, 2008; Weinrub & Gian-catarino, 2015). In addition, mutual trust andcooperation with communities can give MNEs acompetitive advantage because certain communi-ties have knowledge or resources that MNEsrequire (Doh et al., 2017; Madriz-Vargas, Bruce,& Watt, 2018). However, a lack of governance inenergy democracy may hinder opportunities forcommunity participation (Sovacool & Dworkin,2015; Szulecki, 2018).

There have been limited discussions of howpublic policy should be devised to meet climateand energy justice movements and of what energydemocracy would look like in emerging markets(Angel, 2016b; Baker, 2018; Jenkins, 2018; Sova-cool, 2013). Understanding the role of governancein energy democracy and the implications of publicpolicies for MNEs and indigenous communitiesmay facilitate the transition to a decarbonizedenergy sector.


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METHODSI collected information on Mexican public policiesand reforms implemented from 1992 to 2020 thatconcerned the energy sector and climate change. Ithen conducted three roundtable discussions (focusgroups) and unstructured interviews with thirtydifferent actors from 2013 to 2020 (see Table 1) toexplore and understand the implications of thesepublic policies for MNEs and local communities atthe Isthmus. The actors included government offi-cials from Mexico, Denmark, and the Netherlands;representatives from the European Union; man-agers from MNEs involved in wind projects; privateorganizations investing in wind-energy; NGO rep-resentatives; and members of local communitiesfrom the Isthmus, including indigenous people. Ipurposefully sampled the interviewees (Patton,2002) by approaching organizations and individu-als who were especially knowledgeable or experi-enced in public policy affecting Mexico’s energysector, FDI in wind energy, and communities livingnear wind farms.

The topics covered in the interviews androundtable discussions were tailored to gaugeactors’ reactions to Mexico’s energy public policiesand the development of wind parks at the Isthmus;actors’ visions regarding wind-energy investmentsand energy democracy; MNEs’ motivation andchallenges in wind-energy investments at the Isth-mus; details of the consultation process (or lackthereof); the implications for indigenous commu-nities’ socioeconomic activities; and the relation-ships and conflicts among different actors.

Given the sensitivity of the issues involved, Icould not record the primary data collection;however, I took notes during all my interactionsand transcribed them after each meeting. All inter-actions took between 15 min and 2 h. Owing to theCOVID-19 pandemic, interviews that took place in2020 were held online (e.g., Microsoft Teams,WhatsApp, and Zoom), with additional e-mailcorrespondence.

I also systematically downloaded approximately1000 news reports on wind energy; monitored 47webpages from which I took notes on indigenouspeoples’ protests; and analyzed 52 reports on windfirms’ sustainable investments, business andhuman rights, and wind energy in Mexico. Fur-thermore, I analyzed Mexico’s online platform(https://www.agenda2030.mx) for tracking pro-gress toward achieving the SDGs (Gobierno deMexico, 2018).

Empirical Material AnalysisI organized the empirical material using NVivo11(qualitative software). My experiences as aresearcher are naturally partial and incomplete;hence, to ensure the quality of the empiricalmaterial (Patton, 2002), I triangulated the datawith previous research on the Isthmus’ indigenouspeople (e.g., Manzo, 2012; Martinez, 2020; Rubin,1994). The triangulation process was used to com-pare, contrast, and complement my informants’inputs with external documents. This processhelped me develop a broader understanding ofwind farms at the Isthmus and public policiesconcerning RE, which I postulated might be factorsin facilitating or preventing communitypartnerships.

Figure 1 Lack of basic infrastructure at Juchitan-Isthmus of

Tehuantepec.


122


https://www.agenda2030.mx

In the first stage of analysis, I analyzed publicpolicies implemented in Mexico between 1992 and2020 that concerned the energy sector and climatechange to identify crucial constitutional reforms,laws, and regulations. I then queried the intervie-wees about the implications of such reforms andintegrated their observations into my analysis (seeTable 2). This was an ongoing process because newpublic policies were enacted in Mexico after theinitial round of interviews held in 2013 (seeTable 1).

In the second stage of analysis, I developedinterpretations by reanalyzing my observations,narratives from empirical material, and pastresearch. I clustered such narratives to furtheranalyze the different perspectives on features ofgovernance in energy democracy that might influ-ence actors’ partnerships toward reaching Goal 7.This process was interactive, beginning at themicrolevel of indigenous people’s responses toMNEs’ sustainable energy investments and govern-ment public policies in pursuit of SGDs. I analyzedfour related practices of good governance: infor-mation sharing, transparency, public goods, and

human rights (Rothstein, 2012; Sovacool & Dwor-kin, 2015; Szulecki, 2011; van Veelen, 2018).

FINDINGS

Public Policies for Sustainable RE Developmentin Mexico, 1990–2020Mexico is traditionally an oil-producing country.However, since the 1990s, the Mexican govern-ment has gradually implemented a comprehensivelegal and institutional framework through neolib-eral public policies for its transition to RE (seeTable 2). In 2000, the election of President VicenteFox Quesada marked the end of 71 years of unin-terrupted rule by the Institutional RevolutionaryParty (PRI). Fox quickly identified the state ofOaxaca as ‘‘abandoned’’ and ‘‘underdeveloped’’(Aznarez, 2001), leading to its inclusion in the PlanPuebla Panama mega-project to open it up to FDI inwind energy. Fox’s successor, Felipe CalderonHinojosa, advanced a powerful discourse of sus-tainable development, pushing toward ‘‘energydemocracy’’ and a ‘‘green economy’’ with urgency(Field Notes; Presidencia de la Republica, 2012).

Figure 2 Framework for transitioning to sustainable energy partnerships.


123


Various laws, regulations, and endorsements ofinternational conventions to help investors pro-ceed with wind-energy projects were establishedduring Calderon’s presidency (Table 2). In 2013, aconstitutional energy reform was undertaken thatfinancially incentivized RE investment in the formof carbon bonuses (Gobierno de Mexico, 2018;Interviewee 8). These incentives appealed to orga-nizations seeking to invest in RE projects amidpressures to move away from carbonized invest-ments and the rise of ‘‘carbon offsetting,’’ andpositioned Mexico as a ‘‘hot country to invest in

RE’’ (Interviewee 22; Table 2). A manager at a Dutchfund explained their motives for investing in RE inMexico as follows:

We have pressure from our members to move our invest-

ments from carbonized energy such as oil and gas into RE.

This is the reason for our ‘‘adventure’’ to invest Dutch

pension funds in wind-energy projects in Mexico [Isthmus].

(Interviewee 16).

Many wind-energy developers based their pro-jects at the Isthmus. By 2019, there were 2447 windturbines in Mexico, with 1600 of these located

Table 1 List of interviewees

No. Position/Profession Organization Country of

interview

Nationality Year of

interview

1 Roundtable participants Members of the Communal Assembly Mexico Zapotec* 2013, 2015,

2017

2 Consultant Green Energy Consultancy Firm Germany German 2013

3 Fisherman Self-employed Mexico Ikoot* 2013

4 Oaxaca State Secretary of

Indigenous Affairs

Oaxaca Government Mexico Mexican 2013

5 Corporate Social Responsibility

Director

European wind firm Denmark Danish 2013

6 Diplomat Embassy of The Netherlands in

Mexico

Mexico Netherlands 2013

7 Fisherman Self-employed Mexico Ikoot* 2013

8 Commercial Advisor Embassy of Denmark in Mexico Mexico Danish 2015

9 Technical Sales Management European wind firm Mexico Mexican 2015

10 Human Rights Defender Communal Assembly Mexico Zapotec* 2015

11 Social Relations Manager European Wind Firm Mexico Mexican 2015, 2017

12 Commercial Advisor Mexican Government Mexico Mexican 2015

13 Trade and Investment

Commissioner

Government Agency for Trade and

Investment

Denmark Mexican 2015

14 Human Rights Defender Communal Assembly Mexico Zapotec* 2016, 2017

15 Commercial Advisor Trade Council: Government Agency Mexico Danish 2017

16 Public Relations Manager Pension Fund Organization Switzerland Dutch 2017

17 Engagement. Advocacy Campaigns NGO Switzerland Mexican 2017

18 Farmer Self-employed Mexico Zapotec* 2017

19 Deputy Director & Head of Europe

Office

NGO Switzerland British 2017

20 Financial Advisor IADB Denmark Spanish 2018

21 Coordinator Environment & Climate NGO Denmark Danish 2019

22 Consultant to the Americas Market Enterprise Association Denmark Danish 2019

23 Senior Manager NGO: Community Relations Switzerland Argentinian 2019

24 Deputy Trade and Investment

Commissioner

Government Agency for Trade and

Investment

Mexico German 2019

25 Investment Director Investment Fund Agency Denmark Danish 2019

26 Director Energy and Sustainability Mexican MNEs Mexico Mexican 2019

27 Head of Sustainable Performance Multinational Corporation Denmark Danish 2020

28 Head of Economic and Cooperation

Section

Embassy of Mexico in Denmark Denmark Mexican 2020

29 Responsible Partners Program European Wind-Energy Developer Denmark Danish 2020

30 Activist and Reporter Self-employed Mexico Zapotec* 2020

*Indigenous Mexicans.


124


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across 32 farms on the Isthmus (Asociacion Mexi-cana de Energıa Eolica (AMDEE) [Mexican WindEnergy Association], 2019). Wind turbines in thisregion accounted for approximately 62%(2756 MW) of the total wind energy produced inMexico in 2020 (Zavala, 2020). The Ikoots andZapotecs (indigenous peoples from the Isthmus)have had conflicting responses to Mexico’s REtransition, as presented below.

Challenges for Governance in Energy Democracyat the Isthmus of TehuantepecIn the 1980s, Zapotecs surprised Mexico and therest of the world when Juchitan – the head of themunicipality at the Isthmus – democraticallyelected a socialist party – Coalition of Workers,Peasants, and Students of the Isthmus (COCEI) torun the local municipality (Rubin, 1994). This senta strong message to the technocratic market-ori-ented PRI party that had ruled at the local and statelevels since 1929 (Field Notes). MNEs and govern-ment officials often have different understandingsof wind investment and the eventual spillovereffects on local communities. Although some com-munity members at the Isthmus are open todeveloping partnerships with MNEs in wind-energyprojects, others are mistrustful of MNEs and thegovernment and reject the prospect of wind-energyinvestment owing to the failure for over 20 years toconsider the perspectives of local indigenous com-munities when planning and building wind parks(Roundtable, 2013). These community membersseek to defend their territories and preserve theirlanguages, traditions, and customs, often by fight-ing, resisting, and pursuing justice (Field Notes;Routable 2015). Below, I present some of the mostsalient challenges (as per Goal 16) in wind-energyinvestments (as per Goal 7).

Lack of information and transparencyInclusive and transparent decision-making is a keycharacteristic of good governance in energy democ-racy (Rothstein, 2012; Sovacool & Dworkin, 2015;Szulecki, 2018). The roundtable discussionsrevealed that wind-energy investments at the Isth-mus have been marked by a lack of participatorygovernance and democratic engagement withmembers of civil society (Roundtable, 2013,2017). Public consultations for RE were only writ-ten into Mexican legislation in 2014 under theElectric Industry Law (see Table 2). Under thislegislation, energy developers must inform boththe property owners and the Mexican energyT

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secretary of their proposed plans (Electric IndustryLaw, Article 73). This appears to be in accordancewith Indicator 16.10 of Goal 16: Ensure public accessto information and protect fundamental freedoms, inaccordance with national legislation and internationalagreements (United Nations, 2016b). However, inmany cases, public consultations were held onlyafter the approval of FDI by the Mexican federalgovernment (Interviewee 12; Roundtable, 2013),suggesting that consultations were not ‘‘prior’’ asstipulated by ‘‘free, prior, and informed consent’’principles of ILO Convention 169 (InternationalLabour Organization, 2017). It appears that publicconsultations were held only to meet the require-ment of the law and not to actually discuss theproject or gauge community opinion (Roundtable,2015).

NGO reports, news reports, and interviews indi-cated that local communities have limited access toimportant information regarding the development,potential effects, and financial aspects of wind-energy investments (Interviewee 17; PODER, 2015).Consultations about wind projects at the Isthmuswere held with local communities for the first timein 2014 and 2015 and involved sharing informa-tion regarding the construction process; the func-tioning of wind turbines; job creation in theconstruction process; myths and realities regardingwind turbines, such as health and noise; environ-mental impacts; and the economic importance ofthe investments (Centro de Colaboracion Cıvico,2015, see Table 2; Field Notes). No informationregarding project financing, taxes paid to state andlocal governments, or corporate profits was pro-vided (Roundtable, 2015). This lack of specificfinancial information fostered skepticism in localcommunities, fueled by their experiences with thecorrupt practices of local government officials(Field Notes). For example, the mayor of San Mateodel Mar – a municipality in which some of theconsultations were held – falsified the assistance listto meet the minimum requirement stipulated bythe Mexican laws and ILO Convention 169 for thenumber of local communities agreeing to land usechange from agricultural to industrial (Field Notes;Roundtable, 2013; Interviewees 7 & 18).

The failure to provide actionable information in atimely and coherent manner has, unsurprisingly,created mistrust toward MNEs among members oflocal communities at the Isthmus; much suspicionof corruption and dishonesty exists (Interviewee14, 2017). According to the data collected, multiplelocal communities perceive public consultations as

a means of forcibly acquiring communal land forstrategic projects to mitigate climate change(Roundtable, 2017; Table 2). A fisherman in SanMateo del Mar expressed, ‘‘If so much money isbeing invested in the region…then why are so fewmembers of local communities actually seeing it?’’(Interviewee 7).

Lack of public goods: education, jobs, and accessto REThe Mexican government, wind-energy developers,and businesses investing in the Isthmus regionargue that transforming unproductive landthrough the installation of wind turbines bringsjobs and development to the region (Manzo, 2012).More than 20 years have passed since Mexicobegan implementing public reforms to open itsenergy sector to FDI (see Table 2), yet somecommunities at the Isthmus still lack basic infras-tructure, such as paved roads, drains, purifiedwater, access to RE, and Internet access (FieldNotes, see Figure 1). The quality of education isalso lacking; of the communities I visited, manylacked basic literacy skills (Field Notes). Studyprograms for the Isthmus do not provide basiceducation on how the transition from burningfirewood for cooking and heating purposes to REwould help reduce health hazards and carbonemissions (Field Notes). The visited communitieshad not heard about the SGDs. For example, aninterviewee commented, ‘‘[The SDGs] sound good,but I don’t know what [they are] about’’ (Intervie-wee 3).

Wind-energy MNEs and investors have imple-mented programs for the well-being and socialdevelopment of communities living near windparks on the Isthmus, including the constructionof a community football court; summer courses onenvironmental education, health and sports; and aculture of peace (Asociacion Mexicana de EnergıaEolica (AMDEE) [Mexican Wind Energy Associa-tion], 2020). Nevertheless, these social develop-ment programs are individual efforts that lackcoordination among local communities, munici-palities, and other MNEs (Field Notes). Little efforthas been made to develop local skilled workforcesto work on wind farms (Interviewee 4). Intervie-wees tended to agree that there is limited capacityat the Isthmus to research, develop, and manufac-ture RE technologies, including wind energy (In-terviewee 26). Many components for RE projectsare imported, mainly from Europe (Interviewee 9).Ultimately, news reports indicated that by 2012,


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employment rates at the Isthmus had decreasedbecause agricultural land was leased to wind-energydevelopers (e.g., Beas-Torres, 2012) – a stark con-trast from the promised development and jobs.

Heterogeneous communities and human rightsIn general, the indigenous communities I visitedare not against RE investments. They are concernedabout the impact of climate change on theirsocioeconomic activities (e.g., agricultural and fish-ing), particularly diminished production (FieldNotes). Nevertheless, they are against the processin which wind-energy investments have been con-ducted in their region and the lack of access toparticipation (Field Notes; Interviewee 30; Routa-ble 2013, 2015). During my research, I graduallyidentified that the local communities were dividedinto three groups: (1) community members whoown land and want to keep leasing it to wind-energy developers; (2) communities that want tocontinue participating in wind-energy developers’social programs; and (3) communities that rejectwind-energy investments (Field Notes). The divi-sion of local communities has evolved into socialconflicts between the opponents and supporters ofwind-energy investments at the Isthmus. The desirefor peace in the region was a recurrent narrative inmy investigation. A local resident commented thatthey ‘‘do not want narcos, violence and crime;[they] just want to keep working as [their] ancestorsdid in fishing and agricultural activities and defend-ing [their] territory’’ (Interviewee 18). Disputesamong communities often descended into vio-lence, conflict, and human rights abuses (Business& Human Rights Resource Centre, 2020). Accord-ing to the Mexican Center for Environmental Law(Hernandez, Cerami, Bartolo, Hernandez, & Cebal-los, 2017), between July 2015 and July 2016, therewere 35 attacks against human rights defendersrelated to mega-projects and other wind-energyinvestments in Oaxaca. One assassination wasregistered in 2013 and another in 2016 in relationto wind-energy projects, with eight human rightsviolations in 2015 and four in 2016, includingintimidation, criminalization by physical aggres-sion, harassment, defamation, and illegal depriva-tion of liberty (Roundtable, 2017).

The Mexican Constitution presents accountabil-ity procedures to protect the human rightsenshrined in international treaties and recognizessocial and economic rights (Camara de Diputadosdel H. Congreso de la Union, 2011). However,when human rights abuses related to wind-energy

investments in Oaxaca were reported to officials,local police forces failed to respond (Field Notes).According to the data collected, in municipalitiessuch as San Mateo del Mar, protestors of wind-energy developments have reportedly been jailed –as one activist and journalist described it, ‘‘Localpolice forces protect wind-energy projects and notlocal communities’’ (Field Notes, Interviewee 30).This has fueled local conflicts that continue to thisday; in June 2020, 15 people were killed in SanMateo del Mar in relation to these disputes (TheGuardian, 2020). Although public policies imple-mented in Mexico since the 1980s aimed todemocratize the energy sector, it is a dangerousplace to be a human rights defender – moredangerous than any other country in the world(Human Rights Council, 2018).

In contrast to the continued human rights abusesrelated to wind-energy developments, MNEs havepublicly conveyed that their practices respecthuman rights. For example, one MNE’s websitestated the following:

…[our organization] expects its business partners to respect

human rights and will take measures to promote responsible

practices…in relation to our organization’s value chain. Our

firm will identify and consult with the local people whose

human rights might be impacted by our operations, includ-

ing engaging in dialogue with local communities to identify

and address any human rights risks and opportunities

(President and Chief Executive Office of a European wind

firm [website], 2014).

The good intentions of MNEs appear to conflictwith the lack of good governance in wind-energyinvestments at the Isthmus concerning publicconsultations and the protection of human rightsdefenders.

Lack of partnershipsAlthough MNE representatives have deployedresources (e.g., via corporate social responsibility)to ensure positive engagement with local commu-nities, these investments seem to be understooddifferently by local communities (Asociacion Mex-icana de Energıa Eolica (AMDEE) [Mexican WindEnergy Association], 2020; Field Notes; Roundtable,2017). Representatives of communal assemblies atthe Isthmus express an ‘‘unwillingness to partici-pate in any kind of partnership model to provideconsent to further wind-energy investment in theircommunities’’ (Interviewee 14, 2016). A member ofthe Assembly of the Indigenous Peoples stated thefollowing:


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We do not believe that [wind farms] will offer any of the

benefits that the politicians and foreign firms claim our

communities would receive. [MNEs] want us to lease our

land on unfair terms… It’s abusive. (Interviewee 3).

According to the collected data, an importantaspect of successful wind investments is the devel-opment of partnerships for the democratic partic-ipation of local people: ‘‘The critical point isparticipation. People want to participate directlyin decision-making, planning, implementation,and managing’’ (Interviewee 4). Local communi-ties’ expectations for participation appear to con-flict with the expectations of governments andMNEs. Different explanations exist for this. Giventhe lack of peace and justice in Mexico, trust amongcommunities and wind-energy developers is lim-ited (Interviewee 4). Local and international NGOshave guided local communities to defend theirrights and lectured them about community part-nership schemes in Europe (Interviewee 23). Forexample, in Germany, wind farm constructiongenerated competition among farmers to rent theirland to developers (Interviewee 2). It appears thatsome indigenous people aspire to do business withMNEs as equals. A member of the local assemblycommented, ‘‘We have the land, and [MNEs] havethe technology, so I believe that we can do businesstogether’’ (Interviewee 10).

Based on this specific statement, I asked anexecutive from a European wind MNE whetherthey plan to integrate indigenous people as keypartners. The executive commented:

…the other part of the story is that [indigenous people] do

not envision or their leaders who give them that informa-

tion [on partnership schemes] do not tell them that yes, of

course [you have the land]; but where is a wind turbine

manufactured? Well, in Europe… Wind-energy projects are

more complex than [indigenous people] can imagine.

(Interviewee 11, 2015).

The government, businesses, and financial insti-tutions appear to view partnerships with localcommunities as ‘‘irrelevant’’ and ‘‘nonpragmatic’’for wind energy in Mexico (Interview 26; Round-table, 2017). As one interviewee noted with con-cern, ‘‘Local communities cannot understand thecomplexities involved in wind investment in rela-tion to financing, the technology involved, and theconstruction itself. It is not pragmatic to involvelocal communities in these processes’’ (Interviewee9). A wind-energy developer commented, ‘‘We arenot the owners of the projects, we ‘just’ build the

wind parks, so we cannot make the decisions aboutinvolving local communities as active partner in aproject’’ (Interviewee 11, 2017). The pertinentquestion is finance: how can local communitiesaccess financing for RE projects, such as from theIADB? An IADB representative critically com-mented, ‘‘A guarantee for communal RE projectshas to be provided; if the Mexican governmentcould provide such a guarantee, we would be happyto finance a community-owned wind-energy pro-ject’’ (Interviewee 20). However, Mexican law doesnot establish a framework for possible cooperativeschemes (see Table 2). In 2012, local communitiesof Ixtepec on the Isthmus were motivated toparticipate in a community wind-energy projectto mitigate climate change and protect their liveli-hoods (Field Notes; Roundtable, 2013). The com-munity, in collaboration with a European NGO,solicited the Mexican government through thestate-owned electricity firm CFE (Commision Federalde Electricidad) to provide credit to build a windfarm in the city of Tehuantepec (Roundtable,2013). The inquiry never progressed. An executivefrom a wind MNE commented that ‘‘…it is hard for[indigenous people] to understand the huge invest-ment involved in this project’’ (Interviewee 11,2017).

The well-intended strategies implemented byMNEs and the public policies developed in Mexicoseem to be understood differently by local commu-nities, which might be a source of the conflict thathas erupted in the region. Unfortunately, theconflict itself seems to damage the possibility ofpartnerships. An MNE director of energy andsustainability stated:

…Local communities protesting against MNEs’ investments

are motivated to show their frustration against the local,

state, and federal governments, particularly in Oaxaca. This

is the reason that some investors don’t want anything to do

with local communities. (Interviewee 26).

Mexico’s context is vastly different from manyother economies transitioning to RE (Mey &Diesendorf, 2018; Interviewee 2). Despite the intro-duction of public policies for Mexico’s energytransition, in reality, carbonized energy productionand consumption continue. The federal govern-ment in control since 2018 has canceled many REbids/auctions for new RE investments. In 2020, theSecretarıa de Energıa (SENER) [Ministry of Energy]proposed a new policy based on the intermittencyof RE, named ‘‘Reliability, Security, Continuity andQuality in the National Electric System’’ (Secretarıade Energıa, 2020). This policy establishes that


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public transmission and distribution services arestrategic areas of the government of Mexico and arenecessary for maintaining energy security andindependence. The policy establishes new controlsto guarantee the supply of electrical energy. How-ever, the policy generated strong criticism andpublic pronouncements from the private sector (seeTable 2). The proposed policy was rationalized asfollows:

The government’s objective in the field of electricity gener-

ation is to strengthen CFE’s monopoly and reduce compe-

tition in the electricity market. The Mexican government

wants to increase its dependence on conventional genera-

tion, including domestic natural gas and hydroelectric

power. (Interviewee 28).

Energy democracy is a contentious ‘‘window-dress-ing’’ framework that appears to be implemented inthe context of this research as the decentralizationof the energy sector, without considering indige-nous peoples’ voices. These arguments are elabo-rated in the following section.

DISCUSSIONWind-energy investments at the Isthmus presentcontradictory tendencies in their governance ofenergy democracy (e.g., Becker & Naumann, 2017;Szulecki, 2018). Public policies and constitutionalreforms have been implemented to decentralize theMexican energy sector by promoting large-scalewind-energy investments from national and for-eign MNEs based on the technocrat premises of theWashington Consensus (Table 2). However, suchreforms fail to integrate communities’ demands forparticipation in decision-making processes. Thismight be the most basic form of communityparticipation in energy democracy. The lack ofgood governance regarding information sharing,transparency, public goods, and human rights(Rothstein, 2012; Sovacool & Dworkin, 2015; vanVeelen, 2018) appears to limit partnerships andcreate a source of conflict and discontent amonglocal communities (Maher, 2019). Below, I elabo-rate on the challenges of governance in energy andpropose an alternative to develop partnerships forenergy democracy in the context of this research.

Challenges in Energy DemocracyRelational partnerships based on trust and cooper-ation could be key for attaining the SDGs (Kowszyk& Maher, 2018; van Tulder, 2018; van Zanten &van Tulder, 2018). Our understanding of energydemocracy from Europe (e.g., Angel, 2017; Szulecki,

2018; van Veelen & Eadson, 2020) can be extendedby recognizing that democracy has a differentconnotation in the context of this research. Thecommunities I consulted demand access to infor-mation and meaningful participation in complexdecision-making processes for wind-energy invest-ments, and they aspire to live peacefully in asociety where public policies are respected, as perGoal 16. At the same time, some aspire to partic-ipate in RE partnership agreements. This conflict-ing interest among local communities, MNEs, andlocal government is problematic. If the current lawsand legislation were followed, the specific type ofpartnerships could be discussed among communi-ties and firms. Such discussion might help tointegrate communities’ demands while transform-ing the energy sector and securing energydemocracy.

This study supports previous research on thedynamics of conflict among local communitiesderived from RE investments (Avila, 2018; Maher,2019; Manzo, 2012). This emerging finding hasrarely been discussed in the theory and research ongovernance in energy democracy beyond Europe(Angel, 2017; Baker, 2018). Thus, the first contri-bution of this research to public policy is anextended understanding of governance in energydemocracy through a framework for a transition tosustainable energy partnerships (see Figure 2). Thisframework introduces a novel way of thinkingabout how decentralized RE models may succeed(or fail) in terms of governance in energy democ-racy (e.g., Becker & Naumann, 2017; Rothstein,2012; van Veelen, 2018).

Governance in energy democracy provides anopportunity to transform the energy system in linewith the SDGs. As indicated in Figure 2, the designand implementation of decentralized RE models forpartnerships in RE (Goal 17) that consider thecontext and needs of different communities arefacilitated when public goods such as qualityeducation (Goal 4), RE (Goal 7), decent work (Goal8), reduced inequalities (Goal 10), and climateaction (Goal 13) are in place against a backdrop ofstrong institutions (Goal 16). However, withoutgood governance, the prospects of partnership REmodels are limited, as illustrated by the gray dottedline in Figure 2. In short, without good governancein energy democracy (see Figure 2), it is challengingfor MNEs to start a dialogue with the local com-munities that are willing to engage in wind-energypartnerships. Given the challenging social fabric atthe Isthmus, where there is widespread corruption,


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lack of accountability, impunity in protecting localcommunities and human rights defenders, andmistrust within communities as well as towardMNEs and local, state, and federal governments,there is a need to invest in ‘‘good’’ governance.Good governance in energy democracy might helpto restore trust and cooperation with local commu-nities. It is my hope that human rights abusesattributed to wind-energy investments at the Isth-mus might decrease as principles of good gover-nance in energy democracy are implemented in theregion. This might be a stepping-stone toward adialogue with the communities that reject any kindof interaction with government officials andMNEs.0

The global energy transition offers an unprece-dented opportunity for transformation across polit-ical, social, and economic dimensions (e.g., Baker,2018; Williams & Sovacool, 2020). I posit thatMexican technocrat policymakers missed an oppor-tunity to transition toward good governance inenergy democracy by enforcing basic principlesstipulated in the SDGs (e.g., Goal 16) and thendevising public policies aligned with energy democ-racy. Decentralization of the energy sector is not‘‘just’’ opening the energy sector for MNE invest-ments; decentralization needs to integrate theprinciples of good governance into energy democ-racy. For example, the earliest conceptualization ofenergy democracy states that ‘‘energy productionmust…neither pollute the environment nor harmpeople’’ (Kunze & Becker, 2014: 8). In the Europeancontext [Denmark and Germany] in which itoriginated, this implies the avoidance of disasterssuch as Chernobyl; elements of good governanceare taken for granted (e.g., Stein, 2018). In thecontext of this research, ‘‘nor harm people’’ isrelated to basic principles of human rights such aspeace (e.g., Szulecki, 2011). This leads to a contra-diction in Mexico, as public policies are presentedand promoted as energy democracy; however, theydo not integrate communities’ demands or needs –the very definition of energy democracy in Europe.Although the technocratic transition to RE or thenotion of ‘‘development as a threat to tradition’’might seem to jeopardize wind-energy investments,and although this might be the case in Europe, it isnot true in Latin America, as shown at the Isthmus.

The SDGs were agreed upon by nation states(United Nations, 2015a). My findings challenge theSDGs by suggesting that Goal 17, among others, isnaıve in its lack of consideration for the morefundamental interests of key actors – local

communities – such as stronger institutions, aspresented in Goal 16. I posit that the objective ofMexico’s energy transition was not communitywellbeing, but large-scale RE investment framed as‘‘democratization’’ (Table 2). In the context of thisresearch, the public policies to reach Goal 7 wereimplemented using a top-down approach. Goodgovernance in energy democracy requires therecognition and involvement of indigenous com-munities and consideration for customary laws andother nonstate forms of rulemaking at global tolocal scales (McDermott et al., 2019: 510). Indige-nous people are becoming more relevant key actors;they have begun to make their voices heard inrejecting technocrat public policies and vindicatingtheir own modes of existence, organization, andrights (Business & Human Rights Resource Centre,2020). As suggested in Figure 2, focusing on Goal 7without a holistic approach to considering com-munities’ demands appears to be insufficient forachieving the SDGs.

Based on the analysis from this research, thefollowing section offers an alternative transitionpath toward a decarbonized society and the pursuitof the SDGs.

MNEs’ Opportunities for RE Partnershipswith Local CommunitiesAlthough Mexico’s public policies to promote FDIin RE may decarbonize the existing economy, theyare unlikely to transform it. To transform theenergy structure and reach energy democracy, amuch more profound transformational change isrequired that would affect the political, social,cultural, and economic environments on a dailybasis (e.g., Gevorkyan, 2018). The transformationto energy democracy requires a long-term approachwith suitable legislation, governance, and MNEsupport. MNEs could play a key role in attainingthe SDGs, such as by transferring the successfulprinciples of community RE models from Europe toemerging economies. Governments and MNEsneed to ‘‘apply their creativity and innovation tosolving sustainable development challenges’’ (Uni-ted Nations, 2015a: 29). Decentralized RE modelstoward Goal 7 will help mitigate climate change, asper Goal 13, and assist MNEs in contributing toGoals 4, 8, 10, 16, and 17 (Figure 2). Thus, thesecond contribution of this study is to extend thefactors involved in the success and failure of REprograms (Sovacool, 2013) by proposing key publicpolicies and business actions for governments and


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MNEs, as indicated by the dashed arrows inFigure 2.

1. Expansion of education, training, and develop-ment programs in RE (SDG 4): Currently, com-munities are not familiar with the benefits of RE.It is necessary to help them learn and discusshow people interact with energy. Public policiesshould be developed to integrate sustainabledevelopment and RE into elementary to highereducation. Technical and engineering highereducation programs and RE training are requiredto create local skilled workforces.

a. Public policies should be designed to createfunding systems that provide incentives forinstitutions and students to access RE educa-tion, such as scholarships, grants for livingexpenses, and student loans.

b. MNEs should work with local educationalinstitutions and policymakers to develop suit-able RE education programs.

2. Promote employment through RE (SDG 8):MNEs should develop and promote localemployment in RE by implementing trainingand internship programs targeting local commu-nities and connecting students with the local RElabor market.

3. Improving access to RE (SDG 7, 10 & 13):Financial incentives exist for MNEs to invest inRE; moreover, incentives should be created toencourage end consumers to access RE to reducegreenhouse gas emissions. Inequalities in REaccess could be targeted through the following:

a. Financial services to motivate end users toreplace traditional biomass cooking systemswith modern RE-powered stoves.

b. Financial support through tax incentives forRE consumption.

4. Ensuring compliance with laws and regulations(SDG 16): Binding mechanisms are needed toensure that governments and MNEs comply withexisting national and international laws andregulations on RE investments.

5. Fostering accountable and transparent govern-ments (SDG 16): Public policies at the federal,state, and municipal levels should facilitate thesustained dissemination of information onnational RE developments to help local

communities build trust in the governmentand make informed choices.

6. Renewable ownership (SDG 17): Public policiesshould encourage the participation of localcommunities beyond public consultations, aspresented in the Electric Industry Law and ILOConvention 169. Coownership with local com-munities should be incentivized, along withcommunity ownership. Coownership consti-tutes a new form of participation in emergingmarkets committed to an RE transition.

a. Funding could help communities develop REprojects such as wind farms. This could lead tostakeholder partnerships in RE investmentsamong financial institutions, MNEs, localgovernments, and local communities.

b. MNE partnership programs with local com-munities in decentralized RE models couldfunction as an indicator of MNEs’ actionstoward the SDGs.

A long-term approach to implementing theseproposals could elicit a transformation to an eco-logically sustainable economy. If all actors workedtogether, the poor governance patterns in energydemocracy could be reversed. Community REmodels could be an opportunity for MNEs tomobilize local communities’ existing resources,such as knowledge of trade, commerce, andcollaboration.

LIMITATIONSAlthough this research focuses on the specificcontext of the Isthmus, the human and develop-ment demands of local communities describedherein echo the silent voices of those in developedcountries who feel left behind because of large-scaleenergy investments and those who experienceincreased inequalities and climate change impacts.This study presents a number of limitations. Accessto additional groups would likely have provided adifferent perspective from the findings presentedherein. In addition, I relied on a local translator toconverse with the Ikoots and Zapotecs indigenouspeoples; the translator was not a professionalinterpreter, which might have led to misinterpre-tations in the conversations.


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Implications and Future ResearchEnergy reforms in Mexico for decentralized REcould encourage partnerships among wind firms,investors, and local communities. Community REmodels, such as those implemented in LatinAmerica or Asia, could serve as a rationale forpolicymaking (Madriz-Vargas et al., 2018; Sova-cool, 2013). European businesses and governmentsthat have implemented community RE modelscould be a source of inspiration for new windinvestments in developed and emerging markets.Businesses and local governments could imple-ment a decentralized model with strong demo-cratic energy governance at all levels, which couldfoster community empowerment and capacity,particularly in understanding RE (technical issues)and financial capacities. Thus, public policiesshould allow both collective and individual par-ticipation to challenge existing energy expendi-tures and shift public resources and institutionalinvestments toward new investment models forcommunity ownership (Burke & Stephens, 2018).Future research could examine how businesses andgovernments manipulate national laws and inter-national conventions to obtain RE investments.This study presents an empirical analysis of how agovernment can facilitate centralized FDI modelswhile failing to provide good governance inenergy democracy.

CONCLUSIONInvesting in wind energy may be key to ensuringmodern and affordable energy for all; mitigatingclimate change; and enhancing education, inclusiveemployment, and good governance in energy democ-racy. SDGs for a better world could be achievedthrough partnership models in sustainable develop-ment projects. Public policies should provide aplatform for partnerships with marginalized people,such as through community RE models. This studyshould help policymakers redesign existing laws andinternational trade agreements and conventions tohelp both emerging and developed economies tran-sition to decarbonized societies.

ACKNOWLEDGEMENTSThe author is extremely grateful for the constructiveand thoughtful guidance provided by ProfessorSuzana B. Rodrigues, guest editor, and by the anony-mous reviewers. An early version of this manuscriptwas presented on June 25, 2020 at the Centre forBusiness and Development Studies (CBDS) and theInstitute of Development Studies (IDS) Virtual SeminarSeries. I thank Ana Pueyo, Wei Shen, Maribel Blasco,Hans K. Hansen, and Rajiv Maher for their helpfulcomments regarding earlier versions of this manu-script. This work was supported by the Department ofManagement, Society and Communication (MSC) atCopenhagen Business School (CBS).

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ABOUT THE AUTHORJacobo Ramirez is an Assistant Professor of LatinAmerican Business Development at CopenhagenBusiness School (CBS). Ramirez’s main researchinterest is organizational strategy in fragile statesand other complex institutional environmentsfacing security risks, displacement, and socialunrest. Ramirez’s current work focuses on howrenewable energy investments affect indigenouspeoples’ communities and livelihoods. JacoboRamirez was born in Mexico to indigenous Mexicanparents from the Isthmus of Tehuantepec, and haslived and worked in Copenhagen since 2006.

Publisher’s Note Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutionalaffiliations.

Accepted by Suzana Rodrigues, Guest Editor, 15 September 2020. This article has been with the author for three revisions.


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