Developments in state attribution, governance, and Indigenous self-determination in mining investment disputes

Explore other chapters in the Mining Disputes Insights Series 2026.

Key takeaways

• Mining investment disputes increasingly sit at the intersection of Indigenous rights, State regulation, and investor protection.
• Tribunals are scrutinizing State conduct through the lens of Indigenous consultation, consent, and governance.
• Recent awards suggest an expanded willingness to attribute Indigenous community conduct to States in certain circumstances.
• These developments are reshaping legal and commercial risk for mining investors operating in Indigenous territories.

Why this matters

Social licence challenges and Indigenous governance issues are increasingly influencing project viability, regulatory stability, and exposure to international arbitration claims.

Policy and legal background: Indigenous rights and resource development

Mining disputes increasingly sit at the volatile intersection of foreign investment protection and Indigenous peoples’ rights. This tension is particularly acute where extractive projects overlap with Indigenous lands and legal orders. Over the past two decades, strengthening international norms around consultation and self-determination has coincided with investors drawing on bilateral investment treaties to protect their mining projects from State measures (or those potentially attributable to States).

As a result, social conflicts are increasingly channeled into investor-State arbitration, where recent decisions are reshaping the allocation of legal risk. Tribunals now demonstrate a greater willingness to scrutinize State conduct through the lens of Indigenous rights — in some cases holding States financially responsible for disruptions linked to Indigenous governance and protest. This shift has three key elements: evolving consultation frameworks, the attribution of conduct to the State when Indigenous authorities exercise governance powers, and the role of Indigenous self-determination in investment arbitration cases.

What the legal framework requires

UNDRIP and free, prior and informed consent

Article 32 of the United Nations Declaration on the Rights of Indigenous Peoples (“UNDRIP”), adopted in 2007, articulates minimum international standards for the protection of Indigenous rights in the context of resource development. While UNDRIP is not itself a binding treaty, it has become a central reference point for assessing the legitimacy of State decision‑making in extractive projects.

Article 32 requires States to consult and cooperate with Indigenous peoples in good faith to obtain their free, prior, and informed consent (“FPIC”) before approving projects affecting their lands or resources. It also calls on States to provide fair redress for activities that result in adverse environmental, economic, social, cultural, or spiritual impacts. Although these obligations are formally directed to States, failure to meet them creates significant legal, financial, and operational risks for investors — particularly where social opposition intensifies and escalates into project disruption.

International Labour Organization Convention No. 169

The International Labour Organization’s Convention No. 169 (“Convention 169”), adopted in 1989, is one of the earliest binding international instruments affirming Indigenous peoples’ right to participate in development plans and programs affecting them. Its impact is limited by low ratification, but it has influenced regional jurisprudence and domestic consultation regimes, especially in Latin America.

Soft law

Beyond treaties and customary international law, soft law instruments have also contributed to consolidating expectations regarding Indigenous consultation and consent. While not legally binding, these instruments shape domestic regulation, corporate due diligence, and how tribunals assess State conduct. For example:

• The International Law Association’s 2012 Sofia Resolution affirmed the centrality of FPIC in decisions concerning natural resource exploitation on Indigenous lands.
• The 2013 report of the UN Special Rapporteur on the Rights of Indigenous Peoples characterized Indigenous consent as the “general rule” for extractive projects affecting Indigenous territories.

Taken together, these instruments reflect an emerging consensus that meaningful Indigenous participation is a foundational element of legitimate resource development.

Regional human rights jurisprudence and the Saramaka principles

The Inter-American Court of Human Rights has been central in operationalizing these norms. In Saramaka People v. Suriname (2007), the Court held that States must consult Indigenous and tribal peoples on projects in their traditional territories, and obtain FPIC where impacts are significant.

In a subsequent interpretation judgment, the Court articulated three safeguards for large‑scale extractive projects: effective participation of Indigenous peoples; a reasonable benefit‑sharing regime; and prior environmental and social impact assessments.

These Saramaka principles have become a cornerstone of regional Indigenous rights jurisprudence, informing both domestic legal reforms and the analysis of international adjudicative bodies beyond the Inter‑American system.

Implications for investment treaty arbitration

Investment treaties typically guarantee protections such as fair and equitable treatment, full protection and security, and protection against expropriation. Tensions emerge where States seek to comply with Indigenous rights obligations by suspending, modifying, or revoking mining concessions, prompting investors to allege treaty breaches. Such frictions have featured prominently in recent mining disputes in Latin America.

Early signals: Bear Creek Mining v. Peru

In Bear Creek Mining, Peru revoked mining concessions held by a Canadian investor following opposition from the Indigenous Aymara community. An arbitral tribunal under the International Centre for Settlement of Investment Disputes (“ICSID”) found that Peru had breached the fair and equitable treatment standard and awarded damages for expropriation, albeit limited to sunk costs. A dissenting arbitrator would have further reduced damages to reflect the investor’s contribution to the social conflict. This case underscored the commercial importance of maintaining social licence and managing consultation risks in Indigenous territories.

A more contested development: Lupaka Gold v. Peru

The ICSID tribunal’s award in Lupaka Gold represents a more recent and more controversial development. Members of the Indigenous Parán community had blockaded a mining site. Despite the investor’s request, the Peruvian authorities declined to intervene, emphasizing dialogue instead.

The tribunal found that Peru had breached its obligation to provide full protection and security, as it attributed the conduct of the Parán community to the State under international law. Applying the International Law Commission’s Articles on State Responsibility, the tribunal found that the community exercised elements of governmental authority under Peruvian law, including territorial control and enforcement powers.

This approach marked a shift from the traditional reluctance to attribute the actions of Indigenous communities to the State. By grounding attribution in delegated authority rather than direct State control, the tribunal significantly expanded the circumstances in which States may be held responsible for actions taken by Indigenous groups.

Why it matters legally

These decisions suggest a meaningful shift in how tribunals assess State responsibility in contexts involving Indigenous governance:

• Indigenous governance authority may be attributed to the State.
• State reliance on dialogue or non‑intervention can expose governments to treaty‑based liability.
• Indigenous rights norms, while not directly binding on investors, increasingly shape the legal landscape against which State conduct is assessed.

The Lupaka decision raises difficult questions about Indigenous autonomy and self‑determination. If Indigenous governance is treated as an extension of State authority for attribution purposes, States may face incentives to recalibrate self-governance arrangements to manage exposure to investment claims.

What mining companies should do now

• Treat Indigenous consultation and engagement as ongoing risk management, not a one‑time permitting exercise.
• Document consultation efforts and community engagement throughout the project lifecycle.
• Anticipate that domestic consultation disputes may have downstream implications for treaty protection.
• Align legal, ESG, and operational strategies where projects intersect with Indigenous governance structures.

Mining companies and investors operating in Indigenous territories should assess how consultation practices, government responses to social conflict, and Indigenous governance arrangements may affect exposure to investment treaty claims.

Our Global Metals & Mining team advises clients on managing consultation and social licence risk across the project lifecycle, including in the context of investment arbitration and treaty-based disputes.

Our Mining Disputes Insights Series highlights recent court decisions, legal developments and policy shifts that are influencing how capital is deployed, how transactions are structured, and how projects are advanced and defended when challenged. Each article offers focused insight on a specific pressure point or recent development, with an emphasis on practical consequences for mining companies, investors, and other market participants. Across the series, we explore questions that matter to both operational and deal teams.

For a closer look at developments affecting the mining sector and guidance on addressing challenges and opportunities, check out our Mining Prospects blog.