With the mining sector in Latin America entering a “different phase” of environmental, social, governance (ESG) scrutiny, law firm Dentons reports that across the lithium and copper corridors of the Andes, water is no longer just an environmental variable, but a permitting constraint, a trigger for social conflict, a source of legal exposure and often the deciding factor in whether a project proceeds.

According to Dentons Paz Horowitz (Ecuador based) counsel Jordi Ventura and senior associate Carolina Elizade, the regulatory, legal and financing environment surrounding mining projects has evolved significantly over the past decade. Measures once considered sufficient – including compliance checklists, sustainability reports and audit certifications – are no longer meeting the expectations of courts, regulators, lenders, investors and affected communities.

The pair argue that the central question in 2026 is no longer whether mining companies can articulate ESG commitments, but whether those commitments are supported by governance systems capable of withstanding legal, operational and financing pressures.

The shift comes amid changing global disclosure expectations, including developments within the European Union’s Corporate Sustainability Reporting Directive framework, the Omnibus reform package and the legally effective Stop-the-Clock directive, which are influencing reporting requirements throughout international supply chains.

Ventura and Elizade identify three key areas driving this transition.

First, water, biodiversity and Indigenous rights have become central to project viability across the lithium and copper corridors of the Andes. Water, in many cases, has become the determining factor in whether a project proceeds, they state.

Second, disclosure has evolved beyond a communications exercise and now functions as a control framework subject to due diligence, assurance and financing scrutiny. The focus has shifted from what companies report to whether reported information can be substantiated.

Third, tailings governance has moved “decisively” into boardroom discussions, highlight Ventura and Elizade, with recent litigation demonstrating that liability assessments increasingly follow operational control rather than corporate structure.

Water Becomes a Critical Mining Risk

Across the Andes’ lithium and copper regions, water has emerged as one of the most significant mining risks, highlight Ventura and Elizade.

According to their legal analysis, water is no longer merely an environmental consideration, but instead is increasingly becoming a permitting constraint, a trigger for social conflict, a source of legal exposure and, in many instances, the deciding factor in project approval.

While the legal framework governing Indigenous rights is well established, they say its implementation remains complex.

International instruments and regional jurisprudence recognise Indigenous peoples’ rights over land and natural resources but also affirm rights relating to land and water, as well as free, prior and informed consent before projects affecting these resources are approved, explain Ventura and Elizade.