The Indigenous Peoples Rights Act of 1997: Does it Give IPs the Right to Veto Development Projects?


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Even if there is significant progress towards acceptance of the right to free and prior informed consent, there is still considerable confusion about how this right is most effectively exercised by indigenous peoples and best respected by other stakeholders in the resources industry. It is not enough for governments to invoke the public or national interest when considering allowing development on IPs’ lands; they must satisfy other legal requirements.

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The Indigenous Peoples Rights Act of 1997: Does it Give IPs the Right to Veto Development Projects?

  1. 1. The Indigenous Peoples Rights Act of 1997: Does it Give IPs the Right to Veto Development Projects? Resource and infrastructuredevelopments are often concomitantly related to indigenous peoples (“IP”) rights issues. IP rights are closelyassociated with human rights with environmentaland ethical business practices considerations. Among the project due diligence and risk assessments a resource and infrastructure developer must perform is the determination of the presence of IPs, whousuallyclaim and occupyareas of critical environmental significance, cultural heritage or high biodiversity. From the perspective of IPs,free and prior informed consent (“FPIC”) to development projects is regarded as a means for operationalizing the right to self-determination,respect for IPs decision-making processes and the associatedright to accept or reject projects that will affect them.To IPsthe right to FPIC is rooted in the exercise of customary law. However, recognition ofIPs’ right to veto proposed developments bringsconcerns thatsuch rights perceived rightfully or wrongly,poses an obstacle to national development. In the Philippines, not only mineral development but also energy projects like power transmission, petroleum, geothermal, hydro and even wind farms are being affected. The question that comes to a developer’s mind is whether Republic Act No. 8371, also known as the Indigenous Peoples Rights Act 1997 (“IPRA”) gives IPs the right to veto projects defined by governments as those in pursuit of “national interest”. Defining Consent: The Right to Say Yes or No Consent occurs when IPs give assent or approval to a development activity.As IP rights advocatesnote, the principleof free consent can only meaningfully exist whengroups also have the ability to say “no” to aproject[Viviane Weitzner, “Consultation Versus Consent: Going Beyond Reframing,” (2005)].However, the principle of consent is among the mostcontroversial in the debate over the natureand extent of IP rights. IP rights advocates justify IPs’ right to veto national development plans on human rights grounds citing the 1993 Vienna World Conference on Human Rights and Article 9 of the 1986 UN Declaration on the Right to Development which states that: "while development facilitates the enjoyment of all human rights, the lack ofdevelopment may not be invoked to justify the abridgement of internationally recognized human rights.The human right to development also implies the full realization of the right of peoples to self-determination, which includes, subject to the relevant provisions of both International Covenants on Human Rights, the exercise of their inalienable right to full sovereignty over all their natural wealth and resources.” To IPs, the right to give orwithhold their consent includes the right to determine the type of process of consultation and decision-making that is appropriate forthem.IPsalso view FPIC as embodying this right to say no without having to engage in aprolonged consultation or negotiation process.Resources companies
  2. 2. are thus confounded with the burden of understanding how to engage with indigenous communities in order to seek their consent in accordancewith the communities’ laws and procedures.Further complicating the issue is whether the role of the State is relegatedmerely to act as a facilitator in the FPIC process,not by creating new bodies from which to obtain FPIC, but byrespecting the indigenous authorities that already exist. [Cathal Doyle and Jill Cariño,“Making Free Prior & Informed Consent a Reality: Indigenous Peoples and the Extractive Sector” (May 2013)] In Saramaka Peoplev. Suriname(2008), the Inter-American Court held thatwhere private sector developers have proposals for the development of IPs’ lands, recognition of the right to FPIC does mean that IPs have the right to say 'yes' or 'no' to such proposals. The Court held that where there is 'compelling public interest', the State may seek access to and use indigenous territories and the resources therein but the State cannot simply invoke the public interest, it must also satisfy a number of additional requirements:(1) any acquisition of lands or use of those lands to exploit resources must be sanctioned by previously established law and in accordance with due process standards; (2) the State must show that the intervention is 'necessary' and has been designed to be the least restrictive from a human rights perspective; (3) the State must likewise show that means employed are closely tailored to the goal and that the cost to, or impact on, the affected people is 'proportional' to the benefit being sought; and (4) the proposed intervention should not "endanger their very survival as a people". While resource developers understand that FPIC is being promoted togiveIPs more leverage in their negotiations with companies, government and private industry engaging in projects of national interest often find it difficult to accept that communities havethe right to withhold consent. Consent is perceived by governments and the private industry to be incongruent with national sovereignty, as developers who usually obtain their license to operate from governments haveexpressed grave apprehensions that indigenous communities have a right to veto their projects.This is further complicated when a government has already given a license to the company for the activity. [Amy K. Lehr and Gare A. Smith,“Implementing a Corporate Free, Prior, and Informed Consent Policy: Benefits and Challenges”] World Bank and Resources Industry Responseto FPIC Two review processes on FPIC undertaken by the World Commission on Dams (2000) that addressedthe social aspects of dam-building, and the Extractive Industries Review (2004)gaverecommendations that theWorld Bank Group (“WBG”) rejected.The WBG Management Response rejected the recommendations on the grounds that "governments and industry do not support free prior informed consent, where this would represent a veto on development" and that "[d]iscussions with communities need to take place in the context of local law which may or may not give rights [of] prior informed consent…". The World Bank’s Board of Executive Directors instead decided to adopt the lower standard of 'free, prior, and informed consultation resulting
  3. 3. in broad community support' in its operational policy 4.10 on IPs that was approved in 2005: “Reflecting Board discussions on the Extractive Industries Review (EIR) on August 3, 2004 and the Management Response to the EIR, the revised policy affords project-affected Indigenous Peoples a stronger voice through a process of free, prior and informed consultation. The Bank will provide project financing only where free, prior and informed consultation results in broad community support.“ The revised policy also gives greater weight to the self-identification criterion but does not call for it as a principal criterion because it is difficult to apply in practice. In projects where activities are contingent on establishing legally recognized rights to IPs’ lands and territories, the policy requires the borrower to set forth an action plan for the recognition of such rights.The policy does not prohibit physical relocation but requires the borrower to explore alternative project designs to avoid physical relocation, and when not feasible, to seek broad support of the affected communities as part of the free, prior and informed consultation process.As expected, this statement did not fully meet the expectations of some umbrella IP organizations as well as human rights advocacy groups. [“Implementation of the World Bank’s Indigenous Peoples Policy”, (August 2011)] The World Bank’s standard, of 'free, prior, and informed consultation resulting in broad community support' set the parameters for the International Finance Corporation’s (“IFC”) position on FPIC (2006). However, while IFC policy towards indigenous similarly requires 'free, prior and informed consultations', these are not required to lead to 'broad community support' but are interpreted as requiring 'good faith negotiation with and informed participation of indigenous peoples'. In the case of projects that may affect IPs’ lands, IFC clients are required to document IPs’ 'informed participation and the successful outcome of the negotiation'. Understandably, the International Council on Mining and Metals’ (“ICMM”)has been reluctant to openly commit to FPIC. Its “Position Statement on Mining and Indigenous Peoples” commits member companies to consult “with indigenous peoplesin a fair, timely and culturally appropriate way throughout the project cycle...based onhonest and open provision of information” in an accessible form, as well as to seek“broad community support for new projects or activities.” The statement also recognizesthat “following consultation with local people and relevant authorities, a decision maysometimes be made not to proceed with developments or exploration even if this islegally permitted.” However, according to the ICMM, “a blanket endorsement of the rightto FPIC is not currently possible, particularly given the difficulties entailed in applyingthe concept in practice.” [International Council on Mining and Metals (2010) “Good Practice Guide Indigenous Peoples and Mining,” cited in Irene Sosa, “License to Operate: Indigenous Relations and Free Prior and Informed Consent in the Mining Industry” (October 2011)]
  4. 4. IPRA Constitutional Challenge In the Philippines, IPRA recognizes the right of IPs to ‘self governance’ (s 13)and the principle of self-delineation in the identification and delineation of ancestral lands(s 51).However, the most ambiguous provisions of the law pertain to the rights of ownership over natural resources found in ancestral domains vis-a-vis the Regalian Doctrine. In less than a year IPRA was passed, a constitutional challenge was lodged with the Supreme Court (“SC”) alleging that IPRA’s provisions on IPs’ ownership and control and supervision over natural resources located in ancestral domains and lands are unconstitutional in violation of the Regalian doctrine. (Cruz v Secretary of Environment and Natural Resources, et al.) Of the fourteen (14) justices who participated in deliberating the petition, seven (7) voted to dismiss the petition and seven (7) other members voted to grant the petition. As the votes were equally divided and the necessary majority was not obtained, the case was redeliberated upon. However, after redeliberation, the voting remained the same and thus, pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition was dismissed and IPRA was declared constitutional. The SC held that the rights given to the IPs regarding the exploitation of natural resources under ss 7 and 57 of IPRA only amplified what has been granted to them under existing lawsbut the State retains full control over the exploration, development and utilization of natural resources. The SC interpreted s 57 as only granting to IPs ‘priority rights’ in the utilization of natural resources, not absolute ownership nor exclusive rights but only the right of preference or first consideration in the award of privileges provided by existing laws and regulations, with due regard to the needs and welfare of IPS living in the area. The SC stressed that the grant of priority rights does not preclude the State from undertaking activities, or entering into co-production, joint venture or production-sharing agreements with private entities, to utilize the natural resources which may be located within the ancestral domains nor is there any intention, as between the State and the IPs, to create a hierarchy of values. Also, the grant of priority rights to the IPs does not mean excluding non-IPs from undertaking the same activities within the ancestral domains upon authority granted by the proper governmental agency because to do so would unduly limit the ownership rights of the State over the natural resources. However, the SC declared the need for prior informed consent of IPs before any search for or utilization of the natural resources within their ancestral domains is undertaken. Where the State intends to directly or indirectly undertake such activities, it must, as a matter of policy and law, consult the IPs in accordance with the intent of the framers of the Constitution that national development policies and programs should involve a systematic consultation to balance local needs as well as national plans. IPRA grants to IPs the right to an informed and intelligent participation in the formulation and implementation of any project, government or private, and the right not to be removed therefrom without their free and prior informed consent.
  5. 5. While the SC allowed the use of customary laws in determining the ownership and extent of ancestral domains on the basis of Art XII s 5 par 2 of the Constitution, it declared that the use of customary laws under IPRA is not absolute, for the law spoke merely of primacy of use and only prescribes their application where these present a workable solution acceptable to the parties, who are members of the same indigenous group. This restrictive application of customary laws basically forecloses any further inquiry into the interpretation of traditional resource rights since it is nothing but an aid to the mediation or dispute resolution process among indigenous peoples and not a reference for ascertaining the nature and incidents of their native title. For this reason, FPIC has been incorporated into the Philippinelegal system with administrative regulations dictating the procedures to record and validate consent. Nevertheless, these regulations have been criticized for turning FPIC into a formalitythat is “no longer based on customary laws.” [Marcus Colchester, “Free, Prior and Informed Consent Making FPIC work for Forests and Peoples” (2010)]. The Legal Rights and Natural Resources Center (“LRC”)believes that the FPIC process is being reduced to a formal exercise in positive law, allowing the National Commission on Indigenous Peoples, as the designated government authority, to sign away rights to lands and resources by providing certificates of compliance with FPIC. This bureaucratic process according to the LRC is not iterative, nor is it rooted in customary laws and systems of decision-making. [JojiCariño and Marcus Colchester, “From Dams to Development Justice: Progress with 'Free, Prior and Informed Consent' Since the World Commission on Dams” (2010)] The FPIC process usually commences with the mapping of IP tenure rights. Most oftenthe field-based investigation reveals conflicting claims withinor between communities. Considerable time and resources may be needed to resolve these disputes andanti-development interest groups usually take advantage of the dispute to prolong the FPIC process or to make it a total failure so the developer will just walk away.In my experience as a resources lawyer, the FPIC process may alsobe taken advantage of by a disgruntled “socio-political faction” or “unrelenting landowner”sometimes becoming a minority right of veto and not the actual decision of the community. Resources companies are often confounded with the burden of understanding how to engage with indigenous communities in order to seek their consent.Companies must also deal with the elders,the traditional authorities and various leadership structuresat different levels in the negotiation process, which further convolutes the process. Even local politicians have often times meddle with the FPIC process in the guise that IPs are part of their constituencies too. Conclusion Even if there is significant progress towards acceptance of the right to FPIC, there is still considerable confusion about how this right is most effectively exercised by IPs and best respected by other stakeholders in the resources industry. International jurisprudence states that it is not enough for governments to invoke the public or national interest when considering allowing
  6. 6. development onIPs’ lands; they must satisfy other legal requirements. As gaining IPs’ consentthrough a formal and documented process mayprovide developers a stronger license to operate, it is thus important that developers undertake a thorough understanding of the legal and regulatory framework with IPs.Given the complexity in applying the concept of FPIC, development agencies and the private industry are more inclined to adopt the standard of 'free, prior, and informed consultation resulting in broad community support’ where'broad community support' is interpreted as requiring 'good faith negotiation with and informed participation of indigenous peoples'.In the Philippine context, the ruling of the Supreme Court to uphold the constitutionality ofIPRAwas due to a technicality. The resolution mandating the State to consult the IPs in accordance with the intent of the framers of the Constitution when it intends to engage in development activities in IP lands, in effect was a ‘decision without a decision’.Aconstitutional revisit of IPRA seems to be in order to put all resource development stakeholders in the proper perspectivegiven the inherent instability of the decision. Fernando “Ronnie” Penarroyo is the Managing Partner of Puno and Penarroyo Law ( He specializes in Energy, Resources and Environmental Law, Business Development and Project Finance.