Statement by Victoria Tauli Corpuz,
Special Rapporteur on the rights of indigenous peoples
70th session of the General Assembly
Item # 70 (a)
20 October 2015
Your Excellencies, Distinguished delegates,
Ladies and gentlemen,
I have the honor to present today my second report to the General Assembly. I would like to start by expressing my gratitude to the numerous States, indigenous peoples, and others for the support they have provided as I have carried out my mandate accorded to me by the Human Rights Council over the past year, my first as Special Rapporteur.
I dedicate the thematic section of the present report to an analysis of international investment agreements and investment clauses of free trade regimes and their impacts on the rights of indigenous peoples. This, I view as the starting point for that issue, which I intend to be of continuing importance throughout the course of my mandate. The report discusses a number of areas of concern, relating both to direct violations of the rights of indigenous peoples and the systemic impact of those regimes on their lives and communities. Investment clauses of free trade agreements and bilateral and multilateral investment treaties, as they are currently conceptualized and implemented, have actual and potential negative impacts on indigenous peoples’ rights, in particular on their rights to self-determination; lands, territories and resources; participation; and free, prior and informed consent. That is not to suggest that investments are inherently destructive. Future studies will focus on how investment agreements can be equally beneficial for indigenous peoples and investors.
The present report also highlights my analysis of the unjust elements of the prevailing system of global economic and financial governance and the constriction of the protective capacity of States and local governance systems. It discusses how indigenous peoples, as some of the most marginalized in the world, bear a disproportionate burden of a system that contains systemic imbalances between the enforcement of corporate investors’ rights and human rights. The report concludes that both a more thorough review of implications of international investment and free trade agreements and deeper policy and systemic reforms are needed to ensure the respect, protection and fulfilment of indigenous peoples’ rights.
Overview of international investment and free trade agreements
International investment agreements are designed to protect foreign investors and their interests within States hosting investment projects. The three main types are bilateral investment treaties, which are signed between two States and focus on investment; regional investment treaties that are signed between multiple countries within a region and also focus on investment; and provisions within multilateral and plurilateral trade and investment agreements which contain clauses on both investment and free trade such as the North American Free Trade Agreement or the Trans-Pacific Partnership Agreement. While the majority of investment treaties are negotiated between developing and developed countries, with 75 per cent of bilateral investment treaties estimated to be between developing and developed countries, the proportion of South-South investment agreements is growing. Developing countries enter into the agreements to open up their markets to foreign investors because of the expectation of jobs, investment and growth in gross domestic product (GDP). International investment agreements seek to provide substantive rights to investors that protect against expropriatory, unfair and discriminatory conduct by States hosting investment projects.
One significant feature of investment and free trade agreements are provisions for the establishment of investor-State dispute settlement mechanisms. Those allow investors to challenge States for perceived violations of their rights under international investment agreements within binding arbitration mechanisms. Investors have direct access to such mechanisms with regard to any dispute that may arise within the context of international investment agreements, and are not obligated to exhaust domestic remedies beforehand, thereby eliminating any form of judicial review. The non-judicial tribunals can award compensation with no limitation to investors if the State is judged to have violated clauses in the investment treaty. Some 78 per cent of the known 608 investor-State dispute settlement claims bought against 101 countries have been against less developed countries. In 2014, the most challenged State practices under investor-State dispute settlement proceedings were cancellations or alleged violations of contracts or concessions and revocations or denials of licences or permits.
International investment, free trade and the human rights of indigenous peoples
A strong link to lands, territories and natural resources is a characteristic commonly associated with indigenous peoples. As outlined in articles 8, 25, 26, 29 and 32 of the United Nations Declaration on the Rights of Indigenous Peoples, indigenous peoples have the right to the lands, territories and resources that they have traditionally owned, occupied or otherwise used or acquired, as well as the right to own, use, develop and control such resources. Article 1 of the International Covenant on Civil and Political Rights which establishes collective and individual rights to own property complements the provisions within the Declaration. Both non-discriminatory and expropriation clauses within investment and free trade agreements have significant potential to undermine the protection of indigenous peoples’ land rights and the strongly associated cultural rights. Non-discriminatory clauses entitle foreign investors to equal treatment to that afforded to nationals and other third parties. It means that if the rights of indigenous peoples are not explicitly included as exceptions to such provisions, then any special protections of their lands, either under customary law or even through specific indigenous land rights legislation, could be rendered obsolete in the context of investments.
Given the multitude of mining and petroleum projects, agribusiness investments, special economic zones, tourism developments and infrastructure projects taking place across almost all of the world’s continents, often on indigenous lands, whether demarcated or not, conflicts between land rights and investment and free trade agreements are likely to become increasingly common. Indigenous peoples are vulnerable to experiencing a disproportionate burden of such conflicts, not only due to the frequency with which their lands are used for investment-related projects but also as a result of the additional loss of the cultural, non-economic benefits that indigenous people often derive from land.
The right to free, informed and prior consent is included within the United Nations Declaration on the Rights of Indigenous Peoples and the right to consultation in ILO Convention No. 169. Despite those provisions, only representatives from national Governments negotiate, draft and agree on investment agreements, which are often conducted in strict privacy. Given that such agreements are formally binding on all levels of government and that many investment projects have significant impact on indigenous peoples, that situation is a violation of the rights to free, informed and prior consent, participation, consultation and self-determination. Application of the principle of free, informed and prior consent to investment and free trade agreements provides an opportunity to integrate the needs and perspectives of indigenous peoples into the provisions of such agreements and investments and prevent future abuses of their human rights. When such opportunities are lost, the potential preventive effect of respecting the right to free, informed and prior consent remains unfulfilled.
Links to land and waters are integral to indigenous culture and identity. Therefore, barriers to indigenous land ownership created by international investment agreements and free trade agreements are also an assault on the cultural rights of indigenous peoples. Furthermore, the displacement commonly caused by the loss of land and territory can undermine the cultural integrity and protections of indigenous communities. Any undermining of indigenous self-governance mechanisms caused by international investment agreements and free trade agreements will also further degrade cultural rights protections.
The threats to the right to self-determination and self-governance posed by investment and free trade agreements compound long-standing and systemic violations of the rights of indigenous peoples. The violations have included gross and sustained assaults on the cultural integrity of indigenous peoples; the denigration and non-recognition of customary laws and governance systems; a failure to develop frameworks that allow indigenous peoples to exercise their right to development and self-governance; and practices that strip indigenous peoples of autonomy over their lands and natural resources. It is in that sense that international investment agreements are contributing to the perpetuation of colonial and post-colonial power structures that have caused the systematic racism and discrimination towards, and the marginalization and exploitation of, indigenous peoples.
Such unequal power relations between indigenous peoples and corporations and States also contribute to endemic levels of poverty among indigenous peoples. Indigenous peoples account for 5 per cent of the world’s population, while representing 15 per cent of those living in poverty. 33 per cent of all people living in extreme rural poverty globally are from indigenous communities. Those figures are particularly alarming given the wealth of natural resources that are located within indigenous territories. That degree of poverty is a violation of indigenous peoples’ rights to development, as well as of their economic and social rights to an adequate standard of living, housing, food, water, health and education.
While international investment and free trade have a number of direct impacts on the human rights of indigenous peoples, it is also important to consider the systemic implications of the collective impact of such agreements and practices at the national and international levels. This includes the asymmetry between the state and private actors who are conferred very strong rights and enforcement mechanisms while rules governing the responsibilities of private actors often contained in “soft” international law. While investors are able to access a strong and arguably disproportionate form of remedy, States and/or indigenous peoples are often unable to effectively legally challenge corporate practices that severely undermine the realization of human rights. That contributes to a dangerous accumulation of power among international corporate actors, which impedes States’ abilities to act as an effective regulator and protector of human and indigenous peoples’ rights.
Provisions within international investment and free trade agreements can constrict the policy and legislative space in which Governments operate. That has been referred to in literature about international investment agreements as a “chilling effect” whereby the State becomes constrained in its ability to rule in the public interest owing to a wish to avoid sometimes billion-dollar arbitration and settlement costs. The “chilling effect” of investment and free trade agreements could reduce the often already-low political will of States to take actions to fully implement the rights of indigenous peoples.
The “chilling effect” can also be exacerbated by the practical impact of the loss of public funds during investor-State dispute settlement hearings and the costs of Governments defending themselves within tribunals. The loss of public funds to private actors on a large scale diminishes the amount of public funding available to broadly promote the public good, and human and indigenous rights more specifically. Historically the majority of countries who have been sued under investor-State dispute settlements are developing countries. As many indigenous peoples live in developing countries and are among the most marginalized within those States, they are highly vulnerable to the effects of the loss of public funds. That vulnerability is compounded by the specific risk of autonomous indigenous governments losing funding in the context of national Governments trying to recoup resources lost in investor-State dispute settlement hearings through withholding funding to local authorities, which can include tribal governments or other indigenous governing bodies.
The processes governing international investment and free trade agreements can be at odds with a human rights approach in many ways. There is a lack of transparency, social dialogue and legislative oversight during the negotiation and drafting process of international investment agreements. Indigenous peoples and formal representatives are not included in negotiation and drafting processes despite the fact that the resulting agreements are legally binding upon their jurisdictions. Judicial oversight in relation to international investment agreements is also extremely lacking, thereby undermining the rule of law. Investors have direct access to investor-State dispute settlement mechanisms and do not have to exhaust national remedies first; therefore, judicial review of international investment agreements is completely circumvented. Given the public interest and human rights concerns involved in international investment agreements and their enforcement, as well as the huge sums of public money sometimes at stake, the lack of legislative oversight and judicial review is indefensible. Practices that systematically undermine democratic principles and the rule of law progressively limit the ability of States and local authorities to protect human and indigenous rights.
Key challenges and promising practices
Neoliberal economic theory has driven the liberalization of international trade, the opening of markets to foreign investors and the development of international legal mechanisms. Many leading financial institutions endorse neoliberalism as a coherent economic theory that if adhered to will bring development to all. The widespread and unquestioning endorsement of that economic theory, and its legitimization of free trade and investment agreements, can act as a barrier to cultivating the political will necessary for reform. In parallel to neoliberalism, the development path many Governments have taken and continue to focus on is extractive activity which directly affects indigenous peoples. The competition between host States to attract foreign investment often leads to a race to the bottom in terms of social and environmental protection. Lack of coherence within international law, lack of formal enforcement mechanisms to ensure that trade and investment agreements uphold human rights, the multiple arbitration mechanisms, rules and agreements in an opaque environment pose additional challenges. Those challenges undermine the abilities of policymakers and legislators to gain a systemic picture of international investment and free trade regimes and their effect on human and indigenous peoples’ rights and prevent them from developing effective options for reform.
I would not like to end without mentioning some promising practices which have emerged and which I would like to develop further in subsequent reports related to this issue. The most important one worth mentioning is the inclusion of exception clauses to protect the rights of indigenous peoples and promote sustainable development. For example, indigenous land could be exempted from non-discrimination and expropriation clauses. Available information about exception clauses to protect the rights of indigenous peoples and their effectiveness is very limited and is an area that I plan to include in my ongoing engagement with Member States. Provisions that aim to more broadly preserve States’ regulatory space and/or minimize exposure to investment arbitration can include clauses that exclude certain types of assets from the definition of investment, clarify State obligations under international investment agreements to narrow the scope of investor challenges, contain exceptions to transfer-of-funds obligations and more carefully regulate investor-State dispute settlement processes.
I would like to end my statement by mentioning that in addition to conferences and official country missions which I took part in since my last oral presentation to the General Assembly in October 2014, I also took part in meetings on how to follow up on the Outcome Document of the WCIP whose main call is to strengthen the mandate of the Expert Mechanism on Indigenous Peoples’ Rights. I fully support the efforts to do this. I believe that for me to carry out more effectively my mandate as a Special Rapporteur on Indigenous Peoples Rights, I have to enhance even further my engagement with Member-States to address obstacles and develop more best practices. I also hope to facilitate more dialogues between indigenous peoples and governments. I certainly hope that more human and financial resources be made available not only for my mandate but for the whole Special Procedures Work, within the Office of the High Commissioner for Human Rights which provides support to all the Special Procedures mandate holders.
Finally, I would like to thank all of you, Member-States, indigenous peoples’ representatives, the OHCHR and other UN Treaty Bodies, agencies, funds and programmes and the NGOs who are contributing in the effective implementation of the UN Declaration on the Rights of Indigenous Peoples and ILO Convention No. 169. I also thank you all for inviting me to speak directly with you and to jointly explore what else should be done to protect indigenous peoples rights. I would like to reaffirm here my strong commitment to this role, and with this commitment to contribute to solutions to the human rights challenges brought to my attention and to be proactive in efforts to prevent those from arising or escalating.
I thank you all for your kind attention.
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