{"id":16859,"date":"2026-01-19T15:34:32","date_gmt":"2026-01-19T14:34:32","guid":{"rendered":"https:\/\/www.iisd.org\/itn\/?p=16859"},"modified":"2026-04-21T19:07:19","modified_gmt":"2026-04-21T17:07:19","slug":"defining-self-determination-amid-state-constraints-lessons-lupaka-gold-v-peru-naimeh-masumy","status":"publish","type":"post","link":"https:\/\/www.iisd.org\/itn\/2026\/01\/19\/defining-self-determination-amid-state-constraints-lessons-lupaka-gold-v-peru-naimeh-masumy\/","title":{"rendered":"Defining self-determination amid state constraints: Lessons from Lupaka Gold v. Peru"},"content":{"rendered":"

On June 25, 2025, the tribunal in Lupaka Gold Corp. v. Peru<\/a><\/em> rendered a groundbreaking decision, awarding the investor USD 40 million in damages. This ruling<\/a> highlighted Peru’s liability for its failure to ensure “full protection and security” against third-party interference, as well as for the actions of a local Indigenous community, with these actions attributed to the state under Articles 4 and 5 of the International Law Commission\u2019s Articles on State Responsibility for Internationally Wrongful Acts<\/a> (\u201cARSIWA\u201d). While framed as a conventional dispute over full protection, due diligence, and state attribution, the award pointedly reveals the stark limitations imposed on the right to self-determination for Indigenous communities. It underscores a governance structure that is firmly state-centric, where the state retains ultimate supervisory authority over investment regimes.<\/p>\n

This article argues that investment tribunals often adopt an overly restrictive interpretive framework when assessing governance in self-determination contexts. This framework bifurcates governance into internal and external categories, diverging starkly from the broader definitions established by the International Court of Justice (ICJ) and other international adjudicative bodies. The current focus on legal personality, constitutional recognition, institutional structure, and public law status constrains the understanding of governance within the framework of the right of Indigenous Peoples to self-determination. The narrowed formulation reveals a governance framework within ISDS<\/span><\/span> that, while seemingly cooperative, ultimately reallocates responsibility and Indigenous actions back to the state, undermining the authentic expression of self-determination.<\/p>\n

Tribunal\u2019s approach to governance, Indigenous authority, and attribution<\/strong><\/h2>\n

Lupaka Gold v. Peru<\/em> underscores the struggles investment tribunals encounter in delineating the normative contours of self-determination through the notion of governance and state agency. The case revolves around a contentious mining site on ancestral lands of the Par\u00e1n Community, which possesses a close legacy of self-governance and spiritual ties to its territory (paras. 113(b), 257\u2013259, 360\u2013361, 631(iii)). The Par\u00e1n Community sought to assert its authority through protests, occupations, and blockades, actions that disrupted mining operations, prompting allegations that Peru violated Article 805 of the Canada\u2013Peru FTA<\/span> by failing to exercise due diligence and ensure full protection and security (FPS) against third-party interference.<\/p>\n

In this context, Lupaka’s interpretation recast the Par\u00e1n Community’s protests not as valid expressions of Indigenous self-governance but as mere \u201cthird-party interference.\u201d This framing became the crux of its claims regarding the violation of the FPS standard. The claimant advanced the argument that the applicable legal norms imposed an obligation on Peru that extended beyond mere abstention; they required affirmative action to mitigate disruptions from local communities. The claimant explained that “social licence” is a clear responsibility of the government. This means that the state should not only acknowledge these conditions but also work to protect them using its laws and administration, rather than viewing them as just a basic social or political idea (paras. 259\u2013263 and 598). Following this line of thinking, the claimant cited Cengiz v. Libya<\/em> to illustrate that the obligation to fulfill FPS encompasses two critical components: a negative obligation to refrain from harming the investment, and a positive obligation to protect it from community interference (Respondent\u2019s counter-memorial para. 42). The claimant argued that the obligation of FPS defines the limits of governance for Peru, requiring the state to actively manage risks. This meant that Peru had a responsibility to organize, coordinate, and deploy its institutions in a way that would prevent Indigenous and rural communities from successfully blocking the mining project. In this context, the claimant presented governance as a centralized responsibility of the state, emphasizing its role as the main authority in maintaining public order with respect to the investment.<\/p>\n

In contrast, Peru presented a different view of governance in its argument, which shifts responsibility away from the central government through three main points:<\/p>\n

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  1. Definition of social licence:<\/strong> Peru argued that “social licence” is an informal, unwritten, and ever-changing agreement between a corporation and the local community (para. 34, 87). It emphasized that this concept is “not a formal permit or a state responsibility” (para. 91). Additionally, Peru asserted that obtaining a formal permit, as understood in traditional administrative law, is not necessary (para. 91). In this framework, social licence exists outside the reach of state regulatory authority, meaning the central government does not have any due diligence obligations in this regard.<\/li>\n
  2. Corporate responsibility for local order:<\/strong> Peru argued that the corporation is responsible for maintaining peaceful and harmonious relationships with the local community within its area of influence. This view shifts the responsibility for managing local interactions onto the company. The company is expected to handle community expectations, build trust, and gain tacit consent, while the state’s role is limited to facilitating dialogue, not enforcing corrective actions to protect private investment (para. 105).<\/li>\n
  3. Indigenous self-determination and state responsibility:<\/strong> Citing ILO<\/span> Convention No. 169 and the UN Declaration on the Rights of Indigenous Peoples (UNDRIP), Peru argued that actions taken by Indigenous communities are rooted in their right to self-determination. Peru claimed that when these communities express their rights through protests, blockades, or occupations, the state cannot be held responsible for such actions (para. 197). Because the state is bound by international obligations to respect Indigenous autonomy, its ability to intervene is limited, shielding it from liability for community resistance.<\/li>\n<\/ol>\n

    In addressing Peru\u2019s liability, the tribunal took a different approach. The tribunal’s findings delineate a clear and significant framework for state responsibility with respect to Indigenous communities under the FTA.<\/p>\n

    First, the tribunal establishes that Peru bears a robust affirmative obligation to exercise due diligence in protecting the investment, which includes actively managing and mitigating community resistance. It concludes that Peru did not meet this responsibility, stating that its attempts at dialogue were “ineffectual” and did not meet the necessary standards under FPS parameters (para 360). The state is expected to take proactive measures to anticipate and neutralize potential disruptions rather than merely convening discussions or relying on non-coercive strategies.<\/p>\n

    This compartmentalization becomes evident in the tribunal\u2019s attribution analysis according to the ILC Articles on State Responsibility. It attributes the Par\u00e1n Community\u2019s blockades and occupations to Peru, interpreting the community as an organ of the state under Article 4 ARSIWA (Claimant\u00b4s memorial, para. 237 et seq.; Respondent\u2019s counter-memorial, para. 385). As a registered rural community, constitutionally recognized and structured as a public law entity, its actions are regarded as integral to the state apparatus. The tribunal maintains that references to autonomy, ILO Convention No. 169, and UNDRIP do not alter this classification. As the tribunal noted, “The autonomy of the Par\u00e1n Community, as well as references to ILO Convention No. 169 and UNDRIP, do not change this characterization. While autonomy is acknowledged, it does not diminish the fact that the Community, as a public law entity, is integral to Peru’s state apparatus” (para. 239).<\/p>\n

    By designating the Par\u00e1n Community as a state organ, the tribunal effectively integrates Indigenous governance within the state\u2019s framework, portraying the community as a decentralized extension of the Peruvian state. This characterization holds one significant consequence: it neglects the fact that the Par\u00e1n Community\u2019s authority predates state recognition, rooted in customary law and self-determination, rather than originating from a hierarchical endowment of powers. However, it denies that this authority extends to controlling external actors, resource exploitation, or the fate of the mining project. In this sense, governance powers are distinctly split: inward-facing authority over community life is allocated to the Par\u00e1n Community, while outward-facing authority over investment, resource development, and relations with companies is reserved for the central state. This \u201cinside\/outside\u201d structure severely restricts the community\u2019s ability to influence the most consequential decisions affecting its territory, effectively limiting its governance role. As a result, the community’s collective actions, including protests and blockades, are classified as state conduct under Article 4 ARSIWA (para 240). Furthermore, even if the Par\u00e1n Community were determined to act ultra vires<\/em>, the tribunal invokes Article 7 ARSIWA to assert that such actions remain attributable to the state, as they occurred through formal institutional channels. Thus, the tribunal’s reasoning regarding the nature of state organs is rooted in formal criteria that encompass legal personality under domestic law, constitutional recognition, a defined institutional structure, and public law status.<\/p>\n