Amending ICSID to safeguard indigenous rights

• Author: Dolan D. Bortner
• Position: Stanford Law School, J.D. Candidate, 2022; Brown University, A.B., 2017
• Pages: 1057-1106

AMENDING ICSID TO SAFEGUARD INDIGENOUS

RIGHTS

DOLAN D. BORTNER*

ABSTRACT

Investor-state arbitration incentivizes the exploitation of Indigenous lands.

Native communities are disempowered under international investment law

and, given centuries of colonial oppression, often submit to mistreatment by

multinational corporations. When they do, businesses prof‌it. When they resist,

prompting the state to expropriate foreign investments, arbitration reimburses

the claimants, often in full. Existing proposals to safeguard Indigenous rights,

which would redraft or reinterpret the investment treaties that give arbitration

its substance, fail to account for the unwillingness of corporations and arbitra-

tors to change the status quo. Modifying the procedural laws of ICSID, the larg-

est arbitration institution, to bar expropriated claimants who have violated

Indigenous rights would bypass this opposition and elevate Indigenous groups

by raising the costs of abuse.

This Note begins by describing the nexus of colonial history and interna-

tional investment law that disenfranchises Indigenous peoples. Then, in Part

II.B, it analyzes ICSID case law and previous modif‌ications to the Centre’s

Rules to argue that a human rights amendment is legally cognizable. It further

contends that this modif‌ication is politically feasible, given mounting opposi-

tion from ICSID’s member states and civil society to unethical arbitration out-

comes. The Conclusion discusses the benef‌its and limitations of this proposal

before exploring how it might serve as a steppingstone to the greater empower-

ment of Indigenous communities under international investment law.

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1058

II. ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1064

A. International Investment Law Facilitates and Encourages the

Extractive Industry’s Exploitation of Indigenous

Communities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1065

* Stanford Law School, J.D. Candidate, 2022; Brown University, A.B., 2017. The author is

grateful to Professor Deborah Hensler for her instruction and suggestions on the earlier drafts of

this Note. He would also like to thank the editors of the Georgetown Journal of International Law for

their comments and consideration as well as his wife and family for their constant support. This

Note is dedicated to the Aymara, Quechua, and Standing Rock Sioux peoples and all who strive

for self-determination in their ancestral homes. V

C 2021, Dolan D. Bortner.

1057

1. An Overview of International Investment Law: The

Case of Bear Creek Mining Corp. v. Republic of Perú. . 1065

2. Companies Ignore Indigenous Rights Because

They Prof‌it When Abused Communities Do Not

Seize Their Investments, and Arbitration

Reimburses Them When They Do . . . . . . . . . . . . . 1069

a. Foreign Corporations Prof‌it from Centuries of State

Abuse That Have Silenced Indigenous Peruvians . 1072

b. Resistance to Corporate Excess Is Fruitless When

Foreign Businesses Can Simply Demand

Reimbursement from the State . . . . . . . . . . . . . . . 1073

3. The Risk of Arbitration Keeps States from

Defending Indigenous Communities, Which Are

Often Too Marginalized to Advocate for

Themselves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1077

B. Amending Arbitration Institutions Is a More Promising

Route to Preventing Indigenous Exploitation than Current

BIT-Oriented Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1079

1. Scholars Propose Drafting New BITs or

Reinterpreting Existing Ones . . . . . . . . . . . . . . . . 1080

2. Amending ICSID Is an Attainable Route to

Elevating Indigenous Rights in Arbitration . . . . . . 1083

a. An Overview of ICSID . . . . . . . . . . . . . . . . . . . . 1084

b. Contrary to Critics, Denying Arbitration to Offending

Claimants Is a Feasible Way to Safeguard

Indigenous Communities . . . . . . . . . . . . . . . . . . . 1086

c. Precedent Indicates that Barring Violators Is Not Too

Drastic a Change to ICSID’s Rules . . . . . . . . . . . . 1087

d. Adding a Human Rights Amendment Enjoys Ample

Support in ICSID Case Law . . . . . . . . . . . . . . . . 1089

e. States Might Support the Amendment Because It

Resonates with International Trade Law, Boosts

State Power, and Ref‌lects Public Demands . . . . . . . 1096

3. How Would a Human Rights Amendment Advance

Indigenous Rights in Practice? . . . . . . . . . . . . . . . . 1101

III. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1104

I. INTRODUCTION

Recent improvements in the treatment of Indigenous communities

under international law do not yet empower them to defend their

rights from infringement by the global economy. On the one hand,

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1058 [Vol. 52

modern international law has grown to become “one of [I]ndigenous

peoples’ principal weapons against mistreatment f‌lowing from colonial

legacies.”

1

Perhaps most vividly, the 2007 U.N. Declaration on the

Rights of Indigenous Peoples (UNDRIP) vests these communities with

ample authority over the practice of their traditions and customs,

2

non-

removal from ancestral territories,

3

and the development of their lands

and resources.

4

Id. art. 32, ¶ 1. These provisions, unprecedented in the post-colonial era, have begun to be

incorporated even by countries that originally opposed the Declaration. UNDRIP was adopted by

the U.N. General Assembly with a vote of 143 countries in favor, 11 abstaining, and 4 opposed.

Among the naysayers were Canada and the United States. Press Release, General Assembly,

General Assembly Adopts Declaration on Rights of Indigenous Peoples; “Major Step Forward”

Towards Human Rights for All, Says President, U.N. Press Release GA/10612 (Sept. 13, 2007).

Yet, in the years since the Declaration’s adoption, both countries have come to endorse it.

Roxanne T. Ornelas, Implementing the Policy of the U.N. Declaration on the Rights of Indigenous Peoples,

5 INT’L INDIGENOUS POL’Y J. 1, 2 (2014). On March 5, 2013, the U.S. Department of the Interior

announced an “Action Plan to Implement the Memorandum of Understanding (MOU)

Regarding Interagency Coordination and Collaboration for the Protection of Indian Sacred

Sites.” Id. at 14. Evincing much the same principle of Indigenous control over sacred lands as

Articles 11, 12, and 32 of UNDRIP, the Department recognizes the “essential” quality of “tribal

input” in the management and protection of their ancestral lands. Id. Going even further, in

February 2018, the Government of Canada proclaimed its “support [for] the implementation” of

UNDRIP. Overview of a Recognition and Implementation of Indigenous Rights Framework, CROWN-

INDIGENOUS REL. & N. AFF. CAN., https://www.rcaanc-cirnac.gc.ca/eng/1536350959665/

1539959903708 (last visited May 5, 2020). In this same declaration, the Government pledged itself

to create a legal framework to ensure that the state “recognizes, respects and implements

Indigenous rights, including inherent and treaty rights, and provides mechanisms to support self-

determination.” Id.

Nevertheless, the global reaff‌irmation of Indigenous

rights has occurred in parallel with the emergence of multinational cor-

porations as forceful actors on the world stage “and increasingly so in

[I]ndigenous spaces.”

5

Whatever rights Indigenous groups might hold

in the abstract, their capacity to enforce them is hindered by the gulf

between their resources and those of the businesses that mine near or

under their ancestral homes. As rising energy demand and dwindling

supply push the extractive industry ever closer to Indigenous lands,

these communities lack viable tools in their f‌ight for self-preservation.

The past several decades have witnessed an explosion in the market

for natural resources. In 1980, the global economy extracted 40 billion tons

1. The Double Life of International Law: Indigenous Peoples and Extractive Industries, 129 HARV. L.

REV. 1755, 1755 (2016) [hereinafter The Double Life].

2. G.A. Res. 61/295, annex, Declaration on the Rights of Indigenous Peoples, art. 11, ¶ 1

(Sept. 13, 2007) [hereinafter UNDRIP].

3. Id. art. 10.

4.

5. The Double Life, supra note 1, at 1755.

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