Jessica Newfield April 17th 2014

Independent Research Topic: Resource Management and Indigenous Rights in the Pascua- Lama Case

Research question: Which political and economic actor(s) are responsible for the lack of sustainable resource management that led to the Pascua-Lama conflict, and is remediation for the

infringement of rights of the affected Diaguita people through international environmental law possible?

260410529 POLI 490

Introduction

“Mining investment is often surrounded by controversy, involving as it typically does

dispossession of people from their land and ecological degradation”1. This is the type of

statement that poses a huge reputational cost to Canadian mining companies and one that the

world’s largest gold producer, Barrick Gold Corporation (estimated $14, 547 million in revenue

for 20122), is facing with the controversy over its operations at the Pascua-Lama mine in the

Huasco Valley, Chile. If politically authoritarian regimes in Latin America have historically been

criticized for allowing foreign direct investments (FDI), extractive industries have also injected a

great amount of revenue into the Chilean economy. Chile has seen periods of neoliberal policies

as well as increased state intervention through segmented nationalization of its mining sector.

Regardless of the debate over whether mining activities should be privately or publicly

controlled, poor resource management poses a serious challenge to community development and

protecting the livelihoods of affected indigenous peoples. The question arises then of ‘who’ is

responsible for regulating the extractive sector in Chile and protecting indigenous rights

threatened by the operations of mining projects? More specifically, this paper will investigate

which political and economic actor(s) are liable for the lack of sustainable resource management

that led to the Pascua Lama conflict and whether the abuses committed towards the indigenous

Diaguita people could be remediated through Corporate Social Responsibility policies and

international environmental law mechanisms.

                                                                                                               1 Todd Gordon & Jeffery R Webber, Imperialism and Resistance: Canadian mining companies in Latin America, (Toronto: Third World Quarterly, 2008), 29:1, 63-87. 2 Barrick Gold Corporation, Annual Report 2012, (“Driven by Returns”, 2012), http://www.barrick.com/files/annual-report-2012/Barrick-Annual-Report-2012.pdf

The Rise of Global Norms and Mining: Barrick Gold’s Corporate Social Responsibility

Policies

The extractive industry has seen a new trend in resource management emerge through

‘soft law’. ‘Soft law’ can be understood as high-level principles that become prescriptive

standards through industry adherence to voluntary principles promoting corporate social

responsibility (CSR). Dashwood describes CSR as “the beyond-law obligations which

companies must adhere to because their economic activities affect the social and ecological

systems in which they are embedded”3. Moreover, she argues that adherence to CSR norms is

sustained by “stakeholder theory” which “extends the realm of actors to whom firms are

responsible, to include local communities affected by a firm’s operations, the natural

environment, employees, NGOs, governments (all levels), contractors, the media, and industry

associations (…) requires a fundamental shift in managerial objectives away from an exclusive

focus on shareholder value, towards a consideration of the rights and interests of all

stakeholders”4. Hence, mining companies become concerned with the acquisition of a ‘social

license to operate’ that communicates their credibility to all their stakeholders including

indigenous communities.

The Global Reporting Initiative (GRI), the Extractive Industries Transparency Initiative

(EITI), the Voluntary Principles for Security and Human Rights, the OECD Guidelines for

Multinational Enterprises, among other international initiatives, are the written and supporting

                                                                                                               3 Hevina S. Dashwood, The Rise of Global Corporate Social Responsibility: Mining and the Spread of Global Norms, Business and Public Policy, (New York: Cambridge University Press, 2012). 9. 4 Ibid, 61-62.

foundation to ‘soft law’5. Dashwood speaks of this normative shift as a transition from “rational

institutionalism” to “new institutionalism” which gravitates away from a solely profit

maximization logic to also include rights-based one6. Thus, Barrick Gold, as the world’s largest

gold producer and with a portfolio of 25 operating mines, is also leading in CSR performance:

the company was named to the Dow Jones Sustainability World Index (DJSI) for the sixth

consecutive year last September7 and in 2013 to Global 100 ranking of most sustainable

corporations in the world by Corporate Knights8. Growing international integration of

sustainable development concepts into resource extraction technologies and methods sustains

Barrick’s adoption of CSR policies: “Barrick’s efforts to align its CSR and sustainable

development policies with global standards confirm the global norms dissemination literature in

terms of the growing influence and weight, by the mid-2000s, of global CSR norms and

standards”9. It was the first Canadian mining company to join the Voluntary Principles on

Security and Human Rights, in spirit of ‘soft law’ and CSR norm diffusion. These Voluntary

Principles are a multi-stakeholder initiative (MSI) involving governments, corporations and non-

governmental organizations to promote and implement a set of principles for oil, gas, and mining

companies to follow on conducting a human rights risk and security assessment of their

                                                                                                               5 Abbi Buxton, International Institute for Environment and Development, MMSD+10: Reflecting on a decade of mining and sustainable development, (2012), http://pubs.iied.org/pdfs/16041IIED.pdf 6 Hevina S. Dashwood, The Rise of Global Corporate Social Responsibility: Mining and the Spread of Global Norms, Business and Public Policy, (New York: Cambridge University Press, 2012). 38-45. 7 Barrick Gold Corporation, 2012 Sustainability Report, “Barrick Achieves Dow Jones Sustainability World Index Ranking for Sixth Consecutive Year”, September 12, 2013, http://www.barrick.com/investors/news/news-details/2013/Barrick-Achieves-Dow-Jones-Sustainability-World-Index-Ranking-for-Sixth-Consecutive-Year/default.aspx 8 Barrick Gold Corporation News, Press Release, “Barrick named to Global 100 ranking of most sustainable corporations in the world”, January 23, 2013, http://www.barrick.com/files/press-release/2013/Barrick-named-to-Global-100-ranking-of-most-sustainable-corporations-in-the-world.pdf 9 Hevina S. Dashwood, The Rise of Global Corporate Social Responsibility: Mining and the Spread of Global Norms, Business and Public Policy, (New York: Cambridge University Press, 2012), 178.

operations10. They demonstrate corporate adherence to rights-based norms as their purpose is “to

guide Companies in maintaining the safety and security of their operations within an operating

framework that ensures respect for human rights and fundamental freedoms”11 and concern for

affected local communities such as indigenous peoples with the recognition of “the value of

engaging with civil society and host and home governments to contribute to the welfare of the

local community while mitigating any potential for conflict where possible”12. By joining these

principles, Barrick Gold is communicating its dedication and commitment to engage in positive

community relations with the local indigenous populations.

Barrick also endorses the International Council on Mining and Metals (ICMM) Position

Statement on Indigenous Peoples and Mining, which includes specific commitments to Free

Prior and Informed Consent (FPIC) of indigenous peoples by requiring its members to “respect

the rights, interests, special connections to lands and waters, and perspectives of Indigenous

Peoples, where mining projects are to be located on lands traditionally owned by or under

customary use of Indigenous Peoples; adopt and apply engagement and consultation processes

that ensure the meaningful participation of indigenous communities in decision making, through

a process that is consistent with their traditional decision-making processes and is based on good

faith negotiation; and work to obtain the consent of Indigenous Peoples where required by this

position statement”13. Hence, by endorsing this statement, Barrick is committing to principles of

social responsibility towards local indigenous peoples.

                                                                                                               10 US Department of State, Bureau of Democracy, Human Rights and Labor, Fact Sheet: Voluntary Principles on Security and Human Rights, 2012, http://www.state.gov/j/drl/rls/fs/2012/202314.htm 11 Voluntary Principles Initiative, Voluntary Principles on Security and Human Rights, 2000, http://www.voluntaryprinciples.org/wp-content/uploads/2013/03/voluntary_principles_english.pdf 12 Ibid. 13 International Council on Mining & Metals, Indigenous Peoples and Mining Position Statement, May 2013, http://www.icmm.com/publications/icmm-position-statement-on-indigenous-peoples-and-mining

Furthermore, it adopted the Equator Principles which are largely modeled after the

International Finance Corporation’s Performance Standards, which offer the most widely

accepted social and environmental standards for assuring corporate compliance with social and

environmental norms14. Standard 7 of the IFC Performance Standards is the most relevant

voluntary standard for acknowledging and protecting the rights of indigenous peoples as it

“recognizes that Indigenous Peoples, as social groups with identities that are distinct from

mainstream groups in national societies, are often among the most marginalized and vulnerable

segments of the population (…) Indigenous Peoples are particularly vulnerable if their lands and

resources are transformed, encroached upon, or significantly degraded. Their languages, cultures,

religions, spiritual beliefs, and institutions may also come under threat”15. Its main objectives

are:

“To ensure that the development process fosters full respect for the human rights, dignity,

aspirations, culture, and natural resource-based livelihoods of Indigenous Peoples, to

anticipate and avoid adverse impacts of projects on communities of Indigenous Peoples,

or when avoidance is not possible, to minimize and/or compensate for such impacts, to

promote sustainable development benefits and opportunities for Indigenous Peoples in a

culturally appropriate manner, to establish and maintain an ongoing relationship based on

Informed Consultation and Participation (ICP) with the Indigenous Peoples affected by a

project throughout the project’s life-cycle, to ensure the Free, Prior, and Informed

Consent (FPIC) of the Affected Communities of Indigenous Peoples when the

                                                                                                               14 International Finance Corporation, Performance Standards on Environmental and Social Sustainability, January 1, 2012, http://www.ifc.org/wps/wcm/connect/115482804a0255db96fbffd1a5d13d27/PS_English_2012_Full-Document.pdf?MOD=AJPERES 15 Ibid.

circumstances described in this Performance Standard are present, and to respect and

preserve the culture, knowledge, and practices of Indigenous Peoples”16.

Still, the IFC Performance Standards are more prescriptive than compulsory. Voluntary

initiatives, and CSR policies as a whole, do not hold mining companies accountable to their

promises of proper resource management and protection of indigenous rights.

The Pascua-Lama conflict: Evidence of Non-Compliance

The proposed open-pit Pascua-Lama gold mine is an interesting case for examining the

lack of enforceability of voluntary initiatives subscribed to by Canadian mining companies.

Despite Barrick’s indigenous community-relations efforts, the Pascua-Lama project was

suspended by the Chilean Supreme Court and environmental regulators in early April 2013 for

pollution of water supplies from the Estrecho River, used by the local Huascoaltinos community,

descendants of indigenous Diaguita peoples. Moreover, the Pascua-Lama project was

controversial from the start for its predicted negative effects on agriculture in the area and the

dangers it poses to the glaciers of the nearby Andean mountains17. CEDHA (Centro de Derechos

Humanos y Ambiente)’s Equator Principles Due Diligence Review of Barrick Gold’s liability in

the Pascua-Lama case describes the premise of the Diaguitas’ complaint to the Inter-American

Commission on Human Rights: “One of the key points made by the Diaguitas in their complaint

is that Barrick failed to consult their community or take into account their opinion, regarding

                                                                                                               16 International Finance Corporation, Performance Standards on Environmental and Social Sustainability, Performance Standard 7: Indigenous Peoples, January 1, 2012, 3 http://www.ifc.org/wps/wcm/connect/1ee7038049a79139b845faa8c6a8312a/PS7_English_2012.pdf?MOD=AJPERES 17 Ulmer, Alexandra.“Barrick heeds Chilean court, halts work on Pascua-Lama mine”. Reuters, 2013, http://mobile.reuters.com/article/topNews/idUSBRE93915J20130410?i=2&irpc=932

impacts, as mandated by inter-American law, Chilean law and by international law, particularly,

ILO Convention 169 on Indigenous Peoples. As such Barrick’s due diligence on indigenous

rights is in non-compliance. They argue further that the Pascua-Lama project is situated entirely

within Diaguita ancestral lands”18. The mine was launched in 2008 with an initial investment of

$8.5 billion. Since the court’s decision, Barrick’s stock dropped 7 percent on the Toronto Stock

Exchange (TSX). The company announced that it would “address environmental and other

regulatory requirements to the satisfaction of Chilean authorities”19. The controversy has also

exacerbated tensions between union and contract mine workers20. The uprising of the Diaguita

community is a clear indication of Barrick Gold’s lack of compliance with CSR policies,

particularly with respect to treatment of indigenous peoples’ demands. Moreover, the

contamination of water systems coming from the Estrecho River used by the Diaguita, shows

evidence against Barrick Gold’s Environment Policy, including the its Environmental

Management System Standard (EMSS) that is consistent with ISO 14001. The EMSS delineates

15 elements with statements on environmental standards and conduct for all Barrick operating

units to follow21. Clearly, Barrick has not met these social and environmental standards with the

Pascua-Lama case, and has demonstrated poor industry governance and resource management.

The very nature of voluntary initiatives is non-binding for mining companies. For

instance, the risk assessment section of the Voluntary Principles on Security and Human Rights

                                                                                                               18 Centro de Derechos Humanos y Ambientes (CEDHA), Equator Principles Due Diligence Review: Violations by Barrick Gold’s Pascua-Lama Project (Argentina & Chile), November 25, 2011, http://wp.cedha.net/wp-content/uploads/2011/11/Equator-Principles-Due-Diligence-Review-Barrick-Gold-Pascua-Lama-English.pdf 19 Alexandra Ulmer, “Barrick heeds Chilean court, halts work on Pascua-Lama mine”, Reuters, Santiago, April 10, 2013, http://mobile.reuters.com/article/topNews/idUSBRE93915J20130410?i=2&irpc=932 20 Mining Weekly, “Barrick Chile mine workers set to strike”, Reuters, October 30, 2013, http://www.miningweekly.com/article/barrick-chile-mine-workers-set-to-strike-2013-10-30 21 Barrick, Responsibility, Environment, Accessed February 10, 2014, http://www.barrick.com/responsibility/environment/default.aspx,

has no enforceable requirements: “Risk assessments should consider the local prosecuting

authority and judiciary’s capacity to hold accountable those responsible for human rights abuses

and for those responsible for violations of international humanitarian law in a manner that

respects the rights of the accused”22. Though these Principles reflect the intention to take into

consideration the international law consequences of infringing on the rights of indigenous

peoples, the use of non-binding language (i.e. “should consider”) demonstrates the inability of

these Principles to protect the rights of indigenous peoples affected by mining projects’

operations. Clearly, these standardized international voluntary initiatives and CSR policies are

failing to ensure responsible mining compliance. Though taking a normative stance on an issue

sets a precedent for hard-line measures furthering corporate social responsibility, evidently, ‘soft

law’ cannot be the sole protector of indigenous rights. It can be deduced that resource

management cannot be solely undertaken by industry actors such as Barrick Gold through CSR

policies. The question arises as to whether the Chilean government in this case has a more

substantial responsibility to ensure sustainable resource extraction and the protection of rights of

local communities.

The Chilean State and Liberalization of the Extractive Sector: A Harsh Indigenous Reality

Mineral wealth is a highly politicized issue in Chile; soon to become one of the 10 largest

gold producers in the world. In 2010, the mining industry represented 19.2 % of the gross

domestic product (GDP)23, substantiating its denomination as the “sueldo de Chile”24. Still,

                                                                                                               22 Voluntary Principles Initiative, Voluntary Principles on Security and Human Rights, 2000, 3, http://www.voluntaryprinciples.org/wp-content/uploads/2013/03/voluntary_principles_english.pdf 23 PwC, Mining in the Americas, 2012, 10, http://www.pwc.com/en_CA/ca/mining/publications/pwc-mining-in-the-americas-2012-03-en.pdf

generated resource wealth is not necessarily funneled into social development projects for

communities involved in the mining process. With the emergence of structural adjustment

programs (SAPs) accompanying the deregulation and liberalization of international markets in

the 1980s, Chilean fiscal policies, such as the Foreign Investment Protection Agreements

(FIPAs), became increasingly favorable to foreign investors “offering them national treatment

with respect to mining rights”25. Moreover, free trade agreements simultaneously became

prevalent between the US, Canada and Latin Americans states, notably the North American Free

Trade Agreement (NAFTA) and Free Trade Area of the Americas (FTAA). Chile was starting to

become simultaneously a socially progressive and fiscally conservative state. In force since July

1997, the Canada-Chile Free Trade Agreement (CCFTA) is a clear example of an open

investment and trade relationship between the two countries. The CCFTA’s objectives include

eliminating barriers to trade and facilitating cross-border movement of goods and services

between the two countries’ territories, and increasing investment opportunities26. Since the

CCFTA was instated, Canada-Chile bilateral merchandise trade has more than tripled. Canadian

imports from Chile totalled $1.7 billion in 2012. In addition, the stock of Canadian direct

investment in Chile stood at $13.7 billion at the end of 2012, while the stock of Chilean direct

investment into Canada stood at $7.0 million. Canadian companies have mainly invested in

mining, utilities (water and energy), chemicals, infrastructure, and financial services.27

                                                                                                               24 Singh, Jewellord T. Nem, Governing the Extractive Sector: The Politics of Globalisation and Copper Policy in Chile. Journal of Critical Globalisation Studies, Issue 3, 2010. 25 Hogenboom, Barbara and Jiberto, Alex E. Fernández The New Left and Mineral Politics: What's New? Revista Europea de Estudios Latinoamericanos y del Caribe / European Review of LatinAmerican and Caribbean Studies, No. 87, Centrum voor Studie en Documentatie van Latijns Amerika (CEDLA), 95, 2009. 26 Canada-Chile Free Trade Agreement (CCFTA), Trade Policy and Negotiations Division I (TPE), Foreign Affairs, Trade and Development Canada, Government of Canada, 1997. http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/chile-chili/index.aspx?lang=eng 27 Canada. Bilateral Relations. Canada-Chile Relations. [Ottawa], 2013. http://www.canadainternational.gc.ca/chile-chili/bilateral_relations_bilaterales/canada_chile-chili.aspx?menu_id=7

In Chile, the Mining Code is the principal legislation that governs the mining sector.

Article 1 and 2 of Title I on the “State Ownership and Mineral Rights” provides the most

substantial provisions on mining concessions. According to Article 1: “The State has absolute,

exclusive, inalienable and imprescriptible ownership of all mines, including natural guano

deposits, metal bearing sands, salt deposits, coal and hydrocarbon deposits and fields and other

fossil substances except surface clays, regardless of property rights of natural or legal individuals

over lands wherein they may be found”28. It is clearly stated here that the Chilean state has

complete authoritative power over its natural resources. Article 2 prescribes the conditions for

mining concessions: “A mining concession is a real and immovable right, distinctive and

independent from property rights over the surface tenements, although owned by the same

individual. Said rights may be claimed against the State and any other person and may be

mortgaged or subject to other real rights and, in general, all acts and contracts. Said concession is

subject to the same civil laws as all other immovables or properties, except insofar as contrary to

the provisions of the organic constitutional law on mining concessions of this Code”29. The

Mining Code is backed by the Mining Concessions Act, otherwise known as the Organic

Constitutional Law on Mining Concessions (Law 18097) and the Cochilco Charter Law (Law

decree nº 1349/76). The right to mine is obtained by compliance with the steps necessary to

obtain a mining concession that are detailed in the Code. Concessions provide a favorable

environment to foreign mining companies while still under the supervision and jurisdiction of the

Chilean government. Foreign mining corporations pay a royalty that becomes tax revenue for the

                                                                                                               28 Government of Chile, Ministry of Mining Chilean Copper Commission (COCHILCO), Mining code, 1983 http://www.cochilco.cl/descargas/english/legislation/mining_code.pdf?idNorma=1004876&buscar=Ley+20.363 29 Ibid.

state: between 4 and 5 percent in 2005. The royalty tax brought the state more than 570 million

USD in 200830.

Notwithstanding the evident revenue that the Chilean government can gain from such a

royalty tax, the question remains whether this tax revenue is being channeled from mining into

social programs and services. Specifically, is this tax revenue allocated to community

development projects for local populations affected by extractive activities? There is no mention

of community development in the Mining Code nor in the Organic Constitutional Law on

Mining Concessions. As so far as community relations with indigenous peoples are concerned,

these pieces of legislation are also strongly lagging. The Political Constitution of the Republic of

Chile protects the “Common Good” of public land, which is partially indigenous land. State

recognition of specific territories and land being indigenous is an added layer to the complexity

of land rights governance in Chile. Article 19 states: “In no case may anyone be deprived of his

property, of the assets affected or any of the essential faculties or powers of ownership, except by

virtue of a general or a special law which authorizes expropriation for the public benefit or the

national interest, duly qualified by the legislator”31. Formally, the Constitution prevents, or at

least sets rigid conditions on private material acquirement of expropriated land, but as with most

legislation, there is room for interpretation. Does indigenous land fall under the territorial

ownership of the Chilean government? What constitutes indigenous territory if indigenous

claims to land have already been superseded by expropriation? In this context, it is difficult to

                                                                                                               30 Sustainable Development Strategies Group, Report: Current Issues in the Chilean Mining Sector, Colorado, 2010, http://www.sdsg.org/wp-content/uploads/2010/02/10-10-08-CHILE-REPORT.pdf 31 Political Constitution of the Republic of Chile, Chapter III: Constitutional Rights and Obligations, Article 9, 1990, http://www.cochilco.cl/descargas/english/legislation/political_constitution_of_the_republic_ofchile.pdf?idNorma=1004876&buscar=Ley+20.363

guarantee protection of indigenous rights associated with land entitlement when the government

has the legal backing to oversee that land as it sees fit.

The infringement on the Diaguita peoples’ land rights is not a singular instance of abuse

of indigenous rights. The Mapuche, majority indigenous population of Chile, share a history of

strenuous relations with the Chilean state. Indeed, there is a precedent to the Pascua-Lama

conflict of indigenous resistance with Mapuche labor movements fighting for cultural and

territorial rights:

“In view of the conflicts for lands, the State privileges the political economic interests,

that is, it will do all it can to maintain political stability and economic growth, even at the

expense of sacrificing the Mapuche people. The State made the economy the ordering

axis of the various aspects of the life of the country; with political-economic arguments it

seeks to compete in the international sphere, primarily in the framework of the

transnationalization of the economy, where the capitalist-financial system has neither

limits nor borders. It is maintained that there are no alternatives for investment and that

the communities will not find themselves so affected given the “compensations” that are

offered, which, in our judgment, do not resolve the historical demands of the Mapuche in

the slightest”32.

If national legislation regarding mining in Chile has somewhat regulatory power on foreign

mining concessions, the mining code in the country has become increasingly lax and amenable to

extractive companies’ interests instead of taking a stance on protecting the livelihoods of its

indigenous populations, as demonstrated by the fact that the Chilean court rejected the Diaguitas’

                                                                                                               32 Kowalczyk, Anna Maria. Indigenous Peoples and Modernity: Mapuche Mobilizations in Chile. Latin American Perspectives, Vol. 40, No 4. Reinventing the Lefts in Latin America: Critical Perspectives from Below, 2013, 130.

proposal to permanently close down the Pascua-Lama project. Kowalcyzk summarizes this

conflict of interests: “Striving for indigenous rights often means negotiating with the modern

nation-state, whose very structure functions as a safeguard of dominant interests”33. There are

evident loopholes in Barrick Gold’s CSR policies and the Chilean national mining code that thus

fail to protect the livelihoods of affected indigenous communities. International environmental

law has therefore emerged as a more formal recourse to poor resource management and the

abuse of indigenous communities such as the Diaguita people.

From International Environmental Law to Transnational Criminal Law

International or ‘hard’ law has traditionally left extractive industries unregulated and has

stayed much in alignment with the sovereignty doctrine that regiments the international law

regime. Principle 21 of the Stockholm Declaration substantiates this doctrine: "States have, in

accordance with the Charter of the United Nations and the principles of international law, the

sovereign right to exploit their own resources pursuant to their own environmental policies, and

the responsibility to ensure that activities within their jurisdiction or control do not cause damage

to the environment of other States or of areas beyond the limits of national jurisdiction"34. Yet,

despite the sovereignty doctrine, it can be argued that international environmental law can

influence non-state and private behavior such as mining companies through its norms-creation

function: “Actors’ conduct, one line of reasoning goes, is shaped not only by a logic of

consequences (the rational pursuit of material interests), but also by a logic of appropriateness,

                                                                                                               33 Kowalczyk, Anna Maria. Indigenous Peoples and Modernity: Mapuche Mobilizations in Chile. Latin American Perspectives, Vol. 40, No 4. Reinventing the Lefts in Latin America: Critical Perspectives from Below, 2013, 124. 34 United Nations Environment Programme, Declaration of the United Nations Conference on the Human Environment, Principle 21, Stockholm, June 1972, http://www.unep.org/Documents.Multilingual/Default.asp?documentid=97&articleid=1503

leading actors to assess their conduct in light of applicable norms and attendant expectations of

other actors”35. As such, there are key pieces of international legislation with normative value

and regarding the rights of indigenous peoples such as the right to Informed and Prior Consent

(IPC) and self-determination: the 1998 United Nations Declaration on the Rights of Indigenous

Peoples and the 1989 International Labor Organization (ILO) Convention 169 on Indigenous and

Tribal Peoples. Article 8 and 10 of the UN Declaration are the most relevant to community

relations between the mining sector and indigenous communities. Article 8 states:

“1. Indigenous peoples and individuals have the right not to be subjected to forced

assimilation or destruction of their culture. 2. States shall provide effective mechanisms

for prevention of, and redress for: (a) Any action which has the aim or effect of depriving

them of their integrity as distinct peoples, or of their cultural values or ethnic identities;

(b) Any action which has the aim or effect of dispossessing them of their lands, territories

or resources; (c) Any form of forced population transfer which has the aim or effect of

violating or undermining any of their rights; (d) Any form of forced assimilation or

integration; (e) Any form of propaganda designed to promote or incite racial or ethnic

discrimination directed against them”36.

Article 10 details the concept of IPC: “Indigenous peoples shall not be forcibly removed from

their lands or territories. No relocation shall take place without the free, prior and informed

consent of the indigenous peoples concerned and after agreement on just and fair compensation

and, where possible, with the option of return”37.

                                                                                                               35 Bodansky, Danoel, Jutta Brunnée, and Ellen Hey, “International Environmental Law: Mapping the Field.” Chap.1 in The Oxford Handbook of International Environmental Law, edited by Daniel Bodansky, Jutta Brunnée and Ellen Hey. 1-25. Oxford: Oxford University Press, 2007, 12. 36 United Nations, Declaration on the Rights of Indigenous Peoples, Article 8, 2008, http://www.un.org/esa/socdev/unpfii/documents/DRIPS_en.pdf 37 Ibid, Article 10

Moreover, Article 14 and 15 of the ILO C-169 are particularly critical for formally establishing

indigenous land rights and resource management. According to Article 14:

“1. The rights of ownership and possession of the peoples concerned over the lands

which they traditionally occupy shall be recognised. In addition, measures shall be taken

in appropriate cases to safeguard the right of the peoples concerned to use lands not

exclusively occupied by them, but to which they have traditionally had access for their

subsistence and traditional activities. Particular attention shall be paid to the situation of

nomadic peoples and shifting cultivators in this respect. 2. Governments shall take steps

as necessary to identify the lands which the peoples concerned traditionally occupy, and

to guarantee effective protection of their rights of ownership and possession. 3. Adequate

procedures shall be established within the national legal system to resolve land claims by

the peoples concerned”38.

Article 15 prescribes indigenous ownership and management of natural resources that are

deemed part of indigenous land:

“1. The rights of the peoples concerned to the natural resources pertaining to their lands

shall be specially safeguarded. These rights include the right of these peoples to

participate in the use, management and conservation of these resources. 2. In cases in

which the State retains the ownership of mineral or sub-surface resources or rights to

other resources pertaining to lands, governments shall establish or maintain procedures

through which they shall consult these peoples, with a view to ascertaining whether and

to what degree their interests would be prejudiced, before undertaking or permitting any

programmes for the exploration or exploitation of such resources pertaining to their

                                                                                                               38 International Labour Organization, Convention 169 on Indigenous and Tribal Peoples, Article 14, (1989), http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---normes/documents/publication/wcms_100897.pdf

lands. The peoples concerned shall wherever possible participate in the benefits of such

activities, and shall receive fair compensation for any damages which they may sustain as

a result of such activities”39.

It is clearly ordained that indigenous peoples be consulted in terms of governance and

management of their land and resources.

Chile ratified the ILO Convention 169 on September 15th, 2008, but Canada still has not.

It is difficult to hold Canadian mining companies accountable for respecting international human

rights norms for indigenous peoples, when the Canadian government has yet to ratify this

essential hard law principle. Therefore, it is unrealistic for Canadian mining companies to be

sanctioned only on the basis of international environmental legislation. International

environmental law needs to better incorporate all relevant actors such as the indigenous peoples

that are not insufficiently protected from non-compliant ratifiers of the ILO 169: “Perhaps, most

importantly, international environmental law has had to find ways of accommodating the distinct

interests of a large variety of states and actors, whose participation in international environmental

regimes, albeit in different ways, is crucial if environmental problems are to be addressed with at

least some measure of success”40. Transnational criminal law shows promise for overcoming

such failings. Indeed, offences (criminal, economic, social, environmental and cultural) that

affect states in a transboundary manner, such as the offences outlined in the Pascua-Lama case,

fall under transnational criminal law. Since there is no direct liability under international law for

individuals convicted of crimes, transnational criminal law is enforced indirectly through

                                                                                                               39 International Labour Organization, Convention 169 on Indigenous and Tribal Peoples, Article 15, 1989, http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---normes/documents/publication/wcms_100897.pdf 40 Bodansky, Danoel, Jutta Brunnée, and Ellen Hey, “International Environmental Law: Mapping the Field.” Chap.1 in The Oxford Handbook of International Environmental Law, edited by Daniel Bodansky, Jutta Brunnée and Ellen Hey. 1-25. (Oxford: Oxford University Press, 2007), 25.

domestic courts with reference to “suppression conventions” that impose criminal or

administrative sanctions41. Thus, offences committed by extractive companies such as Barrick

Gold will be criminalized under transnational criminal law with emphasis on domestic courts’

jurisdictions: “Efforts to end impunity for serious and deliberate forms of economic, social and

environmental harm must focus on changes in domestic legal systems. Although support from

international actors and institutions is critical, struggles for justice and respect for the rule of law

must ultimately be won at the domestic level. In order to end impunity for serious and deliberate

forms of economic, social and environmental harm, domestic authorities must have the

resources, powers, and obligation to investigate and prosecute these crimes when they fall within

their jurisdiction"42. Criminalization of environmental and social offences seems more efficient

than simply prohibiting such offences. Emphasizing the fact that the government of the host

country to a foreign mining company’s operations has a regulatory duty to its citizens to monitor

mining concessions, to ensure that domestic production is not hindered and that human rights of

its populations are respected, national legislation regarding foreign mining is an irreplaceable

form of resource management and is reinforced by transnational criminal law. Hence,

transnational criminal law is increasingly crucial for providing sanctioning enforcement of social

and environmental standards in extractive industries, and protecting the rights of indigenous

peoples through domestic court hearings.

                                                                                                               41 R. J. Currie, International & Transnational Criminal Law, 2010, 17. 42 One Justice Project, Theory of Change, http://www.onejusticeproject.org/about-the-one-justice-project/approach/

Redefining the Stakeholders of Extraction: Indigenous Empowerment

Beyond the punitive and criminalizing function of transnational criminal law,

implementation of adequate resource management and protection of indigenous rights must be

carried out more proactively. It is not sustainable for mining companies to only modify their

operational standards in response to complaints and engage with affected indigenous

communities solely through consultation. Transnational criminal law is a reactive measure to

combat the take-over of private corporate interests in the state model of development: “What lies

at stake in these broader debates is not a technical solution to problems of water pollution or

royalty rates but a core problem of neoliberal democracy that extends far beyond mining itself:

whose interests is economic development designed to serve? Who is empowered to speak on

their behalf? These questions are not limited to neoliberal regimes, but their focus on private

sector-led initiatives makes the issue of representation particularly acute”43. Fulmer questions the

validity of the claim that neoliberal initiatives such as foreign mining contribute to the economic

development of “Third World” countries: “global ‘development’ itself is an industry that often

manufactures poverty to ‘solve’ it and then fails to do so, justifying further intervention in the

lives of local communities”44. Singh addresses this issue of justifying neoliberalist policies

through extractive development projects: “the mining sector has undergone a gradual but

successful transformation from statist developmentalism towards the neoliberal model of

development (…) Consequentially, the new institutions in place after the dictatorship partake in

the further institutionalisation of the neoliberal market strategy and the deepening of the role of

capital, characterised by the exclusion of other voices in decision-making – such as labour and

                                                                                                               43 Fulmer, Amanda M, et al. Indigenous Rights, Resistance, and the Law: Lessons from a Guatemalan Mine. Latin American Politics and Society, Vol. 50, No. 4, 2008, 95. 44 Ibid, 96.

environmental groups – and the use of a competitiveness discourse to advocate governance

reforms in CODELCO”45. If foreign mining projects are meant to provide translatable wealth to

the host country of its operations, then indigenous communities would be benefiting directly

from these projects rather than making official complaints to the IACHR as in the case of the

Diaguita people at the Pascua-Lama mine.

This dispossession of indigenous communities of their right to their land and natural

resources as a result of foreign extraction is a widespread infliction. Indeed, the Pascua Lama

situation is not an unusual case. Every year since 2005, Barrick’s annual board of directors’

meeting in Toronto is marked by protests46 denouncing the company’s environmentally

hazardous and unethical operations and to support impacted communities across the globe such

as communities in Papa New Guinea, Dominican Republic, Tanzania, and the Marinduque Island

in the Philippines47. Hence, a critical scrutiny of extractive companies’ operations is always

imperative:

“ It is important to study what is happening beyond the first steps of using mineral wealth

as the basis for a new development model. Finding the right balance between attracting

foreign direct investment and ensuring a fair share of revenues for the public sector is

hard, especially since mineral prices are very volatile as recent market swings have

shown (…) local communities and natural environments need to be well protected or

compensated for pollution or other damage by extraction (…) revised agenda for the

future should include not only state regulation, taxation, and management of the region's

                                                                                                               45 Singh, Jewellord T. Nem. Governing the Extractive Sector: The Politics of Globalisation and Copper Policy in Chile. Journal of Critical Globalisation Studies, Issue 3, 2010, 44. 46 Dart, Chris. “Occupy Protestors Target Barrick AGM”, Torontoist, May 3rd, 2012, http://torontoist.com/2012/05/occupy-protestors-target-barrick-agm/ 47 Protest Barrick.“April 30: Confront Barrick Gold!”, http://protestbarrick.net/

extractive export industries but also policies and practices that empower rural peoples to

determine the terms of local development and to participate in the broader national and

international processes”48.

Indigenous theory is useful for understanding the different relationship that indigenous peoples

might have to resource management and land use.

“Most Native people do not reject modernization or participation in larger economies.

However, traditionalists recognize a responsibility to participate in the economy with the

intent of ensuring the long-term health and stability of people and the land; in this

context, development for development’s sake, consumerism, and unrestrained growth are

not justifiable (…) The modern reality demands that indigenous people use the land much

more intensively and in very different ways than their ancestors did. However,

traditionalists believe that Native people must assert their consciousness of nature and

power by demanding that their territories be used in ways that respect indigenous notions

of justice, not simply for the short-sighted generation of wealth for others”49.

Thus, indigenous resistance to large-scale mining projects such as the proposed Pascua-Lama

mine accentuate alternative notions of sovereignty and justice that align well with sustainable

resource management and cultural and socio-economic rights preservation that is lacking

currently in the mining industry in Chile.

                                                                                                               48 Hogenboom, Barbara and Jiberto, Alex E. Fernández The New Left and Mineral Politics: What's New? Revista Europea de Estudios Latinoamericanos y del Caribe / European Review of LatinAmerican and Caribbean Studies, No. 87, Centrum voor Studie en Documentatie van Latijns Amerika (CEDLA), 2009, 99. 49 Alfred, Taiaiake. Peace, Power and Righteousness. (N.p.: Oxford UP, 2009), 85.

Conclusion

Chile offers a stable and favorable legal environment for Canadian foreign mining. Its

mining sector is characterized by hybrid protectionist-neoliberal economic policies, which have

triggered heated debate within the country about the state’s economic interests to the detriment

of its indigenous populations. If public-private partnerships rise as an alternative to clashes

between state and foreign owned enterprises, national legislation should still be respected by

foreign Canadian mining companies. If these companies’ employees are not respecting the rights

of the local indigenous communities affected by the mine sites’ operations, it would seem that

the primordial course of action here is for Canada to commit to hard law obligations like the ILO

C-169. However, sole reliance on international law is inadequate in that international court

decisions will be restricted by sovereign jurisdictional power. As in the case of the Pascua-Lama

mine, even after the Inter-American Commission on Human Rights rejected the Chilean state’s

claims of respecting human rights and extractive due diligence standards, the Chilean Supreme

Court did not permanently suspend Barrick’s operations at the Pascua-Lama mine50. Treatment

of the IACHR’s decisions demonstrates that international law doesn’t have the binding power to

get all concerned parties to abide by its regulations. International ‘hard’ law on mining holds

great promise, if it is complimented with greater enforcement of national laws through

transnational criminal law mechanisms such as “suppressions conventions” and more stringent

industry-led voluntary initiatives that instate rigorous ecostandards on due diligence and supply

chain transparency of multinational corporations’ activities. Therefore, there is not one political

and economic actor solely responsible for the Pascua Lama conflict. The conflation of several

                                                                                                               50 Gonzalo Aguilar Cavallo, Pascua Lama, Human Rights, and Indigenous Peoples: A Chilean Case Through the Lens of International Law, Goettingen Journal of International Law 5, 2013, 215- 249.

variables led to it: flexible and non-binding CSR policies and voluntary initiatives, lax Chilean

mining code and open foreign investment environment, a dichotomous relationship between the

Chilean state and indigenous peoples characterized by history of oppressive assimilationist

policies, “treaty congestion”51 and discrepancy of international law commitments (i.e.

unenforceable ILO C-169). If the Diaguita people cannot have their rights reinstated fully

through the IACHR, there is growing hope and expectation that transnational criminal law will

strengthen national court systems to better regulate and criminalize unethical corporate practices.

                                                                                                               51Bodansky, Danoel, Jutta Brunnée, and Ellen Hey, “International Environmental Law: Mapping the Field.” Chap.1 in The Oxford Handbook of International Environmental Law, edited by Daniel Bodansky, Jutta Brunnée and Ellen Hey. 1-25. Oxford: Oxford University Press, 2007, 4

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