ISDS tribunal awards $24 million to mining company that ignored Indigenous land rights

March 23, 2018: An international investment tribunal has compensated a mining company that ignored Indigenous land rights in a case heard under the Investor-State Dispute Settlement provisions of the Canada-Peru Free Trade Agreement.

The tribunal ordered the government of Peru to pay Bear Creek Canadian mining company  $18.2 million in compensation and $6 million in legal costs because the government cancelled a mining license after the company failed to obtain informed consent from Indigenous land owners about the mine, leading to mass protests.

A dissenting minority judgement about the costs noted that Bear Creek had failed to implement provisions of the ILO Convention on Indigenous Peoples to which Peru is a party, and which it had implemented through national laws.

This is a very dangerous precedent which may encourage other mining companies to use ISDS provisions in agreements like the TPP-11 in the Australian context. Although there are some exemptions in parts of the TPP-11 for laws relating to Aboriginal and Torres Strait Islander communities, there is no general exemption which would totally exclude a similar ISDS case. The only total exclusion is for tobacco regulation. The reference to the importance of indigenous rights inserted by Canada into the preamble is not legally binding, unlike the rest of the agreement.

The TPP-11 includes Canada, Japan, Malaysia and other countries which may have companies that invest in mining and other developments requiring consultation with Aboriginal and Torres Strait Islander communities. ISDS could be used if companies could argue that a legal or policy outcome harmed their investment.  Some Australian state governments are currently negotiating treaties with Indigenous communities, which might result in legal changes that could be subject to ISDS cases.