RAKIA’s Arbitration Notice: Various Issues and India’s Response
Ras Al Khaimah Investment Authority (RAKIA), an Emirati investor has recently initiated an arbitration claim against India seeking compensation of $44.71 million under the India-UAE Bilateral Investment Promotion and Protection Agreements (BIPA). Some important questions are answered here:
What is the Dispute about?
The dispute between RAKIA and the Indian government relates to a memorandum of understanding (MoU) between the government of Andhra Pradesh and Ras Al-Khaimah, a UAE Government agency for the construction of an alumina and aluminium refinery. The planned project was based on assured bauxite supplies from Andhra Pradesh Mineral Development Corporation (APMDC) to Anrak Aluminium. However, in April 2016, the government of Andhra Pradesh, through a notification, cancelled the MoU amid protests.
Why this issue cropped up?
The bilateral treaties secure the investors’ interest and empowered them to use international arbitration. In this case, the MoU was cancelled due to protests by Tribals. Andhra government refused the supply due to the concerns of the tribal population in those areas. This matter highlights two issues. Firstly, the indigenous people were not considered while finalizing the MoU. Secondly, it highlights the need of addressing the local issues first before entering into such agreements.
What has been India’s response to the Issue? What should be done?
The Indian government has decided to set up an inter-Ministerial committee to address issues stemming from the notice issued by the UAE. In order to tackle such issues in near future India must include provisions relating to the protection of indigenous people in BITs. Many Countries like Canada has incorporated several exceptions to protect the rights of indigenous people in its BIT, even in TPP right of locals from New Zealand is ensured. Also strenthing laws at the domestic level is again a requirement. Lastly views of locals/tribal must be included while making policies on investment and they should not be seen as hurdle in the development process.
Related Questions
What is BIPA?
A BIT or BIPA is a bilateral agreement in which two countries sit together and decide the conditions for private investments by citizens and firms of the two countries. The investment discussed under BIT is obviously FDI. Pakistan and Germany had signed world’s first BIT in late 1950s. At present, India has around 83 BITs or BIPAs. read here for different kinds of agreements.
What are Constitutional / Legal Protections for Tribals in India?
The major constitutional provisions for protection of tribals include Article 15 (right to equality), Article 16(4) (reservation in employment); Article 46 (special care for weaker section); Article 330 (reservation in Lok Sabha), Article 332 (Reservation in Legislative Assemblies); Article 338 (NCST); Article 275(1) (Grants in aid for tribal welfare scheme); Article 164 (Tribal welfare minister for Bihar, Madhya Pradesh and Odisha); Fifth schedule (article 244) and Sixth Schedule (article 244 (2)) etc. Further, the Forest Rights Act, 2006 protects the individual and community rights of tribal people in forest areas. In Samatha v. State of Andhra Pradesh &Ors (1997) case Supreme Court declared that transfer of tribal land to private parties for mining was null and void under the Fifth Schedule.
What are international provisions for Protection of Tribals in India?
There are several International statutes that guarantee right to the locals. Firstly, the United Nations Declaration on the Rights of Indigenous People, 2007 provides them right against forcible displacement and relocation from their lands or territories without free, prior and informed consent. Secondly, International Labour Organization (ILO) Convention concerning Indigenous and Tribal Peoples, 1989 recognizes right to land and natural resources by Indigenous and Tribal Peoples.
