Foreign Investment and Indigenous Peoples: Options for Promoting Equilibrium between Economic Development and Indigenous Rights

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 make way for gold mining by non-Indians. 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 Amazon. 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 opposition 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 encroachments 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. They are therefore best seen as forming part of a broad, global pattem of encroachment of private commercial interests onto the lands of indigenous peoples, facilitated by national governments, which began long ago and has never stopped. From Peru to Papua New Guinea, from Siberia to Sudan, indigenous peoples have suffered, and continue to suffer, the loss of their lands, the erosion of their cultures, and even the decimation of their populations as a result of this pattern. At one time, the commercial interests seeking access to indigenous resources generally originated in jurisdictions claiming sovereignty over the territory in question. Today these actors often hail from countries that make no such claims, and their activities represent a form of foreign direct investment (FDI). Investments of this nature pose unique threats. Many of the indigenous peoples that have managed to retain their distinct identity into the twenty-first century have done so in large part because they inhabit remote and challenging terrain, the resources of which domestic outsiders lack the means to exploit. MNEs, by contrast, frequently do have those means and, due to increasing global resource scarcity, are being drawn to ever more remote areas in search of resources. Moreover, FDI can lead to scale effects (that is, cumulative environmental or social impacts from the increasing scale of industrial activity), even if domestic actors are involved in similar activities. FDI thus presents both threats and opportunities to indigenous peoples. Unfortunately, the former all too often predominate over the latter because governments tend to prioritize economic development over indigenous rights, and existing domestic and international legal frameworks are incapable of appropriately balancing the two. This Article identifies the specific deficiencies in those frameworks and outlines options for promoting equilibrium.