Abstract This article addresses the protection of indigenous peoples and their natural habitats in Colombia when investment projects are planned or implemented. Special attention is paid to the mechanisms of prior informed consultation; and free, prior, and informed consent. The Colombian case is relevant because it is at the vanguard of protecting the rights of indigenous peoples and their territories, and it is home to tough policy choices, balancing indigenous rights, the environment (as a megadiverse country), and the economy (highly dependent on mining exports). From a law and sustainable development perspective, this article analyzes a novel combination of various statistical data sets and case law and includes tests of the outcomes of prior informed consultation processes and their interaction with environmental licensing based on regression analyses. The conclusions point to the scale of the use of the protection mechanisms, the patterns in the behavior of indigenous peoples and in the outcomes of the mechanisms, the need to reinterpret transaction costs, and the crucial role of the constitutional court.