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

Development Projects?

Resource and infrastructure developments are often concomitantly related to

indigenous peoples (IP) rights issues. IP rights are closely associated with
human rights with environmental and 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, who usually claim and occupy areas 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 associated
right to accept or reject projects that will affect them. To IPs the right to FPIC is
rooted in the exercise of customary law. However, recognition of IPs right to
veto proposed developments brings concerns that such 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 developers 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 advocates note, the principle of free consent can only meaningfully exist
when groups also have the ability to say no to a project [Viviane Weitzner,
Consultation Versus Consent: Going Beyond Reframing, (2005)]. However, the
principle of consent is among the most controversial in the debate over the
nature and 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 of development 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 or withhold their consent includes the right to determine
the type of process of consultation and decision-making that is appropriate for
them. IPs also view FPIC as embodying this right to say no without having to
engage in a prolonged consultation or negotiation process. Resources companies
are thus confounded with the burden of understanding how to engage with
indigenous communities in order to seek their consent in accordance with the
communities laws and procedures. Further complicating the issue is whether
the role of the State is relegated merely to act as a facilitator in the FPIC process,
not by creating new bodies from which to obtain FPIC, but by respecting the
indigenous authorities that already exist. [Cathal Doyle and Jill Cario, Making
Free Prior & Informed Consent a Reality: Indigenous Peoples and the Extractive
Sector (May 2013)]

In Saramaka People v. Suriname (2008), the Inter-American Court held that

where 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 to give IPs
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 have the 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 have expressed 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 Response to FPIC

Two review processes on FPIC undertaken by the World Commission on Dams

(2000) that addressed the social aspects of dam-building, and the Extractive
Industries Review (2004) gave recommendations that the World 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 Banks Board of Executive Directors instead decided to
adopt the lower standard of 'free, prior, and informed consultation resulting
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 Banks Indigenous Peoples
Policy, (August 2011)]

The World Banks standard, of 'free, prior, and informed consultation resulting in
broad community support' set the parameters for the International Finance
Corporations (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
peoples in a fair, timely and culturally appropriate way throughout the project
cycle...based on honest 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 recognizes that following consultation with local people and
relevant authorities, a decision may sometimes be made not to proceed with
developments or exploration even if this is legally permitted. However,
according to the ICMM, a blanket endorsement of the right to FPIC is not
currently possible, particularly given the difficulties entailed in applying the
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)]
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 IPRAs 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 laws but 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.
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 Philippine legal system with
administrative regulations dictating the procedures to record and validate
consent. Nevertheless, these regulations have been criticized for turning FPIC
into a formality that 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. [Joji
Cario 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
often the field-based investigation reveals conflicting claims within or between
communities. Considerable time and resources may be needed to resolve these
disputes and anti-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 also be 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 structures at 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
development on IPs lands; they must satisfy other legal requirements. As
gaining IPs consent through a formal and documented process may provide
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 of IPRA was 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. A
constitutional revisit of IPRA seems to be in order to put all resource
development stakeholders in the proper perspective given the inherent
instability of the decision.

Fernando Ronnie Penarroyo is the Managing Partner of Puno and Penarroyo Law
(fspenarroyo@punopenalaw.com). He specializes in Energy, Resources and
Environmental Law, Business Development and Project Finance.