Abstract

Excerpted From: Pete Heidepriem, Indigenous Rights, Investor-State Disputes, and Canadian Law, 68 South Dakota Law Review 51 (2023) (161 Footnotes) (Full Document)

Canada has done a tire-squealing 180 with respect to the United Nations Declaration on the Rights of Indigenous Peoples (the “Declaration”). In September 2007, when 143 countries voted in favor of adopting the Declaration, Canada was 1 of the 4 countries in the United Nations (“UN”) General Assembly to vote against it. But as of June 2021, Canada's evolution on the Declaration resulted in it passing a law (“C-15” or the “Act”) embracing the Declaration and requiring the government to begin implementing it in the following two years.

Canada's about-face could impact how Indigenous rights fare in certain investor-state arbitrations, and the country's implementation of the Declaration may serve as a model for states across the globe. Investor-state arbitrations are venues where Indigenous peoples' rights have not been a priority of the arbitral tribunal. The investor-state arbitrations discussed here are proceedings grounded in international investment agreements (“IIAs” or “Agreements”) that involve claims between a foreign investor and a state. In resolving those claims, the tribunal often trains its analytical lens on a narrow set of applicable legal principles and de-emphasizes international human rights law and Indigenous peoples' rights. The foreign investor frequently prevails. An asymmetry in power favors investors and clearly does not favor Indigenous peoples.

As a practical example, this might mean that the investor will be able to conduct a mining operation on ancestral lands of Indigenous peoples even though the peoples oppose the project. If the host state aligns itself with the Indigenous peoples and blocks the mining, the tribunal will find that the state violated the Agreement and conclude that the state owes the investor a significant sum of money under the terms of the Agreement. The end result is that the tribunal sidelines the interests of the Indigenous peoples and imposes a financial penalty against the state for breaching the Agreement. In a way, this is a natural consequence of international investment law that is not unreasonable. But Indigenous peoples suffer serious negative impacts from some of these investments, and they have compelling objections to a process that minimizes their voice.

A recent tailwind in Canadian law for the rights of Indigenous peoples presents an opportunity to promote and protect Indigenous rights in investor-state arbitrations. The developments in the law of Canada could do so in two contexts: foreign investments in Canada and investments of Canadian companies abroad.

But this positive step for Indigenous rights must be stated as something that is possible, not promised. Canada's passage of C-15 shows an earnest interest in eventually implementing the Declaration. It provides that the minister designated under the Act has two years to consult with Indigenous peoples and other federal ministers before producing an action plan “to achieve the objectives of the Declaration.” So the following proposals show how the action plan can include practical measures to promote Indigenous rights in investor-state disputes. First, for foreign investments carried out in Canada under IIAs, Canada should require foreign investors to abide by certain substantive aspects of the Declaration. And second, for Canadian companies doing business pursuant to IIAs in other states, in the event of an investor-state arbitration, Canada should be obligated to file an amicus brief evaluating the Canadian company's compliance with the Declaration, and if the company violated the Declaration, Canada should penalize the company.

While this article offers these proposals with respect to Canada, they could be a blueprint for any state implementing the Declaration. They also differ from the solutions described in recent articles, mostly in their specificity and concreteness. The current array of solutions is based on strong reasoning and is consonant with this article's arguments, yet the solutions advanced in various articles tend to be more abstract with respect to how they may operate. This article builds on the bedrock of those articles, seeking to apply their sound principles to the discrete scenario of Canada and C-15.

To set the proper foundation, this article provides a brief background on the Declaration in part two. Part three features a discussion of Canada's journey from opposing the Declaration to passing C-15. Then part four addresses investor-state arbitrations generally and the challenges Indigenous peoples face when seeking to advance their interests in those tribunals. Finally, part five articulates specific policies Canada should adopt to implement the Declaration for the benefit of Indigenous rights in investor-state arbitrations, and this part distinguishes these proposed policies from the solutions offered in other articles.

[. . .]

With C-15, Canada has a unique opportunity to make a significant improvement in the protection of the rights of Indigenous peoples. After the UN's adoption of the Declaration in 2007, it was a dormant, non-binding instrument with virtually no force in relation to Canadian law. Canada's implementation of the Declaration will radically change that. Implementing the Declaration will be an extensive process touching many different aspects of life in Canada, including economic facets of life and the social or cultural experiences of citizens. One specific application of the Declaration is the way it can invigorate Indigenous peoples' rights in the context of international investment and investor-state disputes. Canada should adopt laws protecting those rights when foreign investment occurs in its borders and when Canadian companies do business abroad. Hopefully, other countries that have yet to implement the Declaration can also take similar steps to strengthen the rights of Indigenous peoples.

The author is a trial lawyer in South Dakota and Adjunct Professor of Law at the University of South Dakota Knudson School of Law. J.D., Georgetown University Law Center. B.A., Arizona State University.