Michigan Journal of International Law Volume 33 Issue 4 2012 Foreign Investment and Indigenous Peoples: Options for Promoting Equilibrium between Economic Development and Indigenous Rights George K. Foster Lewis & Clark Law School Follow this and additional works at: https://repository.law.umich.edu/mjil Part of the Human Rights Law Commons, Indian and Aboriginal Law Commons, Natural Resources Law Commons, and the Oil, Gas, and Mineral Law Commons Recommended Citation George K. Foster, Foreign Investment and Indigenous Peoples: Options for Promoting Equilibrium between Economic Development and Indigenous Rights, 33 MICH. J. INT'L L. 627 (2012). Available at: https://repository.law.umich.edu/mjil/vol33/iss4/1 This Article is brought to you for free and open access by the Michigan Journal of International Law at University of Michigan Law School Scholarship Repository. It has been accepted for inclusion in Michigan Journal of International Law by an authorized editor of University of Michigan Law School Scholarship Repository. For more information, please contact [email protected]. FOREIGN INVESTMENT AND INDIGENOUS PEOPLES: OPTIONS FOR PROMOTING EQUILIBRIUM BETWEEN ECONOMIC DEVELOPMENT AND INDIGENOUS RIGHTS George K Foster* INTRODUCTION ............................................................................................ 628 I. THE IMPACTS OF FDI AND ITS HISTORICAL ANALOGS ON INDIGENOUS PEOPLES OVER TIME ................................................. 633 A. Conflicts in the Exploration and Colonialism Eras ............... 633 1. Spanish Conquests in the Americas ................................. 633 2. Anglo-American Colonialism and Expansionism ........... 635 B. FDI on Indigenous Lands in the Modern Era ........................ 637 1. Investments in Latin America .......................................... 637 2. Investments in the Asia-Pacific Region: FDI in the Philippines ....................................................................... 640 3. Investments in Developed Countries ............................... 645 II. RECENT PROGRESS TOWARD PROTECTING INDIGENOUS RIGHTS, AND How IT FALLS SHORT OF WHAT Is NEEDED .......... 653 A. Progressat the Domestic Level .............................................. 654 1. Domestic Indigenous-Rights Protections ........................ 654 2. Alien Tort Statute Jurisprudence ..................................... 657 B. Progressat the InternationalLevel ........................................ 660 1. The Inter-American Human Rights System ................... 660 2. Guidelines, Standards & Model Contractual Provisions ........................................................................ 66 1 3. U.N. Declaration on the Rights of Indigenous Peoples .......................................................... 664 III. PROPOSED N EXT STEPS .................................................................. 669 A. The Possibilityof Converting UNDRIP Wholesale into a Binding Convention ...................................................... 670 B. Measures Targeted at the Private Sector ................................ 673 1. The Basis for Applying UNDRIP to the Private Sector .... 673 2. Ways to Make UNDRIP Binding on Private Actors and Give Indigenous Peoples an Effective Private Right of Action .................................................... 674 * Associate Professor of Law, Lewis & Clark Law School. I would like to thank my fellow panelists at the 2011 Lewis & Clark Spring Symposium on The Future of International Law in Indigenous Affairs for their comments on a draft of this Article. I am also grateful to Professors Chris Wold, John Grant, Tung Yin, Dwight G. Newman, and Siegfried Wiessner for their comments on drafts. Finally, I would like to thank Seneca Gray, Joseph Terrenzio, Rohit Kapuria, Lisa Farrell, Patrick Sullivan, and Scott O'Dowd for their research assistance. The views expressed herein are not necessarily shared by my colleagues or my former law firm or clients. Michigan Journalof InternationalLaw [Vol. 33:627 IV. POTENTIAL OBJECTIONS AND How THEY CAN B E A DDRESSED .............................................................................. 681 A. The ProposedMeasures Are Feasible.................................... 681 B. Effective Implementation of UNDRIP Would Not Unduly Inhibit the Exploitation of Natural Resources or Impede Developm ent .............................................................. 683 1. Most Projects Would Remain Viable ............................... 684 2. Whatever Projects Would Be Precluded Are Not Worth Pursuing ......................................................... 686 C. Investorsfrom Implementing Countries Would Not Be Placed at an Undue Competitive Disadvantage.................... 689 C ON CLU SION ............................................................................................... 69 1 INTRODUCTION By the spring of 1875, tales of Black Hills gold had brought hun- dreds of miners up the Missouri River. ... Alarmed by the white men's gold craze and the Army's failure to protect their territory, Red Cloud and Spotted Tail made strong protests to Washington of- ficials. The [President's] response was to send out a commission "to treat with the Sioux Indians for the relinquishment of the Black Hills." In other words, the time had come to take away one more piece of territory that had been assigned to the Indians in perpetuity. -Dee Brown, Bury My Heart at Wounded Kneel At least 20 people died and 50 were injured on Friday in clashes between Peruvian police and Amazon tribes opposed to foreign companies pursuing oil and mining projects in the rainforest. In- digenous leaders accused police of shooting at hundreds of protestersfrom helicopters to end a road block on a remote jungle highway .... Thousands of Amazon natives... have blocked roads and waterways in the area in a bid to force the government to re- voke a series of investment laws passed last year and to revise concessions granted to foreign energy companies. -Oil Daily, June 8, 20092 The quotations above refer to distinct conflicts that are widely separated by time and geography but remarkably similar in other respects. The first describes events leading to the Black Hills War of 1876, in which the U.S. Army forced the Lakota Sioux and Northern Cheyenne onto reservations to 1. DEE BROWN, BURY MY HEART AT WOUNDED KNEE 177, 278-79 (2000). 2. 20 Killed in Peru Clashes, OIL DAILY (Energy Intelligence Grp., New York, N.Y), June 8, 2009. Summer 2012] ForeignInvestment and Indigenous Peoples make way for gold mining by non-Indians.3 The second describes a violent episode in a conflict between native groups and the Peruvian government, which began in 2009 when the government took steps to expand mining and oil operations by multinational enterprises (MNEs) in the Peruvian Ama- zon.4 In both cases, outside commercial interests discovered valuable natural resources on native lands and sought to exploit them despite opposition from local indigenous peoples. And in both cases, a national government sided with commercial interests and used military force to quash the opposi- tion and secure access to the resources. It is tempting to conclude, therefore, that the history of the Old West is repeating itself in the rainforests of South America. Yet it is too simplistic to view these events in Peru-or other recent en- croachments onto the lands of indigenous peoples elsewhere'-as a throwback to any particular time or place. The factors these conflicts have in common have manifested countless times over the centuries, all over the world.6 They are therefore best seen as forming part of a broad, global pat- tem of encroachment of private commercial interests onto the lands of indigenous peoples, 7 facilitated by national governments, which began long ago and has never stopped. From Peru to Papua New Guinea, from Siberia 3. ENCYCLOPEDIA OF NATIVE AMERICAN WARS AND WARFARE 48-49 (William B. Kessel & Robert Wooster eds., 2005). 4. For more on the June 2009 incident and more recent clashes in Peru, see Special Rapporteur on the Situation of Human Rights & Fundamental Freedoms of Indigenous Peo- ple, Observationson the Situation of the Indigenous Peoples of the Amazon Region and the Events of 5 June and the Following Days in Bagua and Utcubamba Provinces, Peru, Human Rights Council, U.N. Doc. A/HRC/12/34/Add.8 (Aug. 18, 2009) (by S. James Anaya); Renzo Pipoli, Peru Natives Once Again Resort to River Barricades to Protest, INDIAN COUNTRY TODAY, Jan. 2, 2011, http://indiancountrytodaymedianetwork.com/ictarchives/2011/01/02/ peru-natives-once-again-resort-to-river-barricades-to-protest-81936. 5. See Brant McGee, The Community Referendum: ParticipatoryDemocracy and the Right to Free, Priorand Informed Consent to Development, 27 BERKELEY J. INT'L L. 570, 573-74 (2009) (describing a number of recent development projects on indigenous lands in Latin America and elsewhere undertaken without local consent, and discussing acts of vio- lence against their indigenous opponents); discussion infra Part I.B. 6. See infra Part I. 7. There is no universally accepted definition of the term "indigenous peoples' but the term is used herein with the meaning given by an oft-cited U.N. report: [Indigenous peoples] are those which, having a historical continuity with pre- invasion and pre-colonial societies that developed on their territories, consider themselves distinct from other sectors of the societies now prevailing in those ter- ritories, or parts of them. They form at present