Overview of the Súper RIGI Initiative
The Súper RIGI is an economic initiative spearheaded by the administration of Javier Milei, aimed at attracting investments exceeding $1 billion. This tool has been devised to draw capital into emerging industries at the forefront of technology. However, experts assert that the project provides extraordinary benefits for a period of 30 years without clearly defining the activities covered, lacking an official fiscal impact assessment, and without enforceable environmental, productive, or technological conditions.
The government is particularly keen on attracting data centres and cryptocurrency mining farms, which are substantial infrastructures essential for the development of artificial intelligence. These constructions have already showcased significant environmental impacts in countries like the United States, including noise pollution, heat emissions, habitat fragmentation detrimental to biodiversity, excessive water consumption leading to scarcity for nearby populations, and increased electricity prices for local residents.
Previous Similar Initiatives
This decision by Milei has a direct precedent. In August 2024, a similar initiative was implemented by decree called the Regime of Incentives for Large Investments (RIGI), which focused on promoting mining and the exploration of gas and oil. According to the Foundation for Environment and Natural Resources (FARN), this measure results in significant “environmental deregulation” as it does not require ecological impact studies and restricts provincial authorities’ ability to regulate the use of natural resources.
Ariel Slipak, an economist and lecturer at the University of Buenos Aires (UBA), as well as the coordinator of FARN’s Research area, elaborated that the RIGI is more than just an incentive scheme involving fiscal, customs, or exchange exemptions; it effectively provides legal protection for large and extractive investments. He highlighted that one of the initial articles of this regime stipulates that municipal, provincial, and even national regulations must not conflict with the benefits granted to RIGI beneficiaries. In essence, the exemptions provided by RIGI supersede environmental, labour, or other regulatory legislations.
Investment Landscape Under RIGI
Two years post-implementation, there are currently 40 projects committed under the RIGI, amounting to over $138 billion, as reported by the RIGI Observatory, which is a collaborative initiative involving FARN, the School of Politics and Government of the National University of San Martín (EPyG-UNSAM), the Centre for Legal and Social Studies (CELS), the Transnational Institute (TNI), the Fiscal Equity Working Space (ETFE), and the Centre for Public Policies for Socialism (CEPPAS).
Among these projects, 21 relate to mining (including lithium, copper, gold, and fracking sand), 13 to hydrocarbons (oil, gas, and fertilisers), three to energy, two to infrastructure, and one to steel production. Of the 40 proposals submitted, 21 have already received approval, comprising 12 in mining, five in oil and gas, and the remaining four in energy, infrastructure, and steel. The approved projects entail an investment of approximately $46.6 billion.
Focus on Extractive Industries
The oil sector stands as the primary destination for the investments assured under the RIGI, with seven projects accounting for 43.3% of the announced capital, largely driven by developments associated with Vaca Muerta, the largest unconventional hydrocarbon reservoir in the country and one of the most significant globally. Following oil, copper emerges with six projects, contributing 24.6% of the total investment, while natural gas (including LNG plants and associated infrastructure) represents 17.2% through five initiatives.
Although lithium accounts for the highest number of projects with 11, it constitutes merely 10.5% of the total investment. Collectively, these four subsectors account for a staggering 95.6% of the capital committed under the RIGI, while the remaining seven subsectors contribute only 4.4%.
Legal and Environmental Concerns
The RIGI not only guarantees stability for investments but may also transfer disputes from local territories to international arbitration tribunals, thereby reducing the intervention capacity of communities and Argentine justice. The Súper RIGI, officially known as the Law on the Incentive Regime for Large Investments in New Industries, reportedly offers even greater tax exemptions than the original RIGI, favouring large extractive industries, particularly in hydrocarbons and lithium.
Slipak expressed concerns that the Súper RIGI appears tailored to the needs of high-energy-consuming projects such as data centres and cryptocurrency mining, which also generate increased heat in urban areas. This initiative includes sectors like renewable energies and experimental activities, including biotechnology and artificial intelligence.
Legislative Developments and Community Impact
The Súper RIGI project has already received preliminary approval in the Chamber of Deputies and is now awaiting debate in the Senate. This proposal has sparked a discussion regarding the extent of incentives necessary to compete for investments in strategic sectors such as data centres and the conditions that should be demanded in return.
Slipak noted that the project fails to include specific environmental conditions regarding energy consumption, water usage, carbon emissions, or cumulative impact assessments. He described this oversight as particularly worrisome, given the potential for the regime to encompass large-scale digital infrastructure projects and data centres. Such facilities can demand significant volumes of energy, water, and land, and without clear regulations, their establishment could strain electrical networks, exacerbate water conflicts, and consolidate critical infrastructure in private hands without adequate public oversight.
Indigenous Communities at Risk
Silvina Ramírez, a Doctor of Law from UBA and a member of the Indigenous Law Association (AADI), highlighted that the Súper RIGI reflects an economic model that could adversely affect Indigenous communities. She pointed out that these communities are among the most affected, not only due to the disregard for their rights but also because the precarious framework that allowed for gradual progress towards collective land titling is being systematically dismantled.
Ramírez expressed alarm that any new local ecological protection laws that might hinder extractive investments could lead companies to take the state to international arbitration. She emphasised that while Indigenous communities are accustomed to legal harassment, this situation is about to become more complex.
Legislative Proposals for Protection
The project states that any potential conflicts will be resolved by international justice, with beneficiaries choosing where to address disputes based on the regulations of institutions like the Permanent Court of Arbitration, the International Chamber of Commerce, or the International Centre for Settlement of Investment Disputes (ICSID), all based outside Argentina.
Esteban Paulón, a deputy and member of the Socialist Party of Argentina, raised concerns regarding the installation of data centres, which consume considerable amounts of energy and water. He noted that the Súper RIGI does not include provisions for the protection of Indigenous peoples or environmental safeguards. Paulón proposed a specific initiative to incorporate environmental protections, sustainability measures, and human rights considerations, which he believes are absent from the original text. He underscored that the current proposal leaves many Indigenous communities and the environment vulnerable.
This initiative sets forth that the regulations under the Súper RIGI must adhere to seven protections: the right to a healthy environment; the original authority of provinces over their natural resources; national laws on minimum environmental protection standards; international human rights treaties with constitutional or supralegal hierarchy; the Escazú Agreement; ILO Convention 169 on Indigenous and Tribal Peoples; and principles of prevention, precaution, intergenerational equity, progressivity, and non-regression concerning environmental matters.
Currently, the Súper RIGI awaits further deliberation in the Senate, where the ruling party is negotiating certain aspects with the opposition to secure the project’s approval.