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Indigenous ‘priorities’ and the threat of investor-state arbitration

Indigenous ‘priorities’ and the threat of investor-state arbitration

TC Energy’s pursuit of investor-state arbitration over U.S. President Joe Biden’s cancellation of Keystone XL serves as a dull warning to Mexico.


As the world observes the one-year anniversary of the war in Ukraine that stalled hydrocarbon projects and resulted in windfall profits for the oil and gas industry, efforts to plaster fossil fuel pipelines over Indigenous territory in North America have ramped up. Indigenous land defenders resisting the Coastal Gas Link (CGL) pipeline in British Columbia, operated by TC Energy—the firm behind the failed Keystone XL project—have been criminalized. Canada’s energy-sector interests in Mexico under the Canada-United States-Mexico Agreement (CUSMA) follow a parallel line. In late January, on the heels of the North American Leaders’ Summit in Mexico City, the Indigenous affairs bodies of the Canadian and Mexican governments signed a memorandum of understanding (MOU) with a stated objective: to provide “a mechanism for collaboration and engagement in areas of mutual interest.”

Analogous MOUs on Indigenous affairs have formed part of the Canada-Mexico Partnership for some time. But in recent years, new gas pipelines in Mexico owned by Canada’s TC Energy—formerly TransCanada Corporation—have been dogged by both financial controversy and Indigenous resistance.

Anna Zalik is a professor in global geography at York University. Photograph courtesy of Anna Zalik

This recent unveiling of a Canada-Mexico MOU on Indigenous priorities coincides with TC Energy’s release of its annual report announcing a final investment decision on the stalled Tuxpan-Tula gas pipeline in Mexico, based on a “take-or-pay” contract with the Mexican government. The firm notes that it’s “working with [Mexico’s Federal Electricity Commission] on the Tula pipeline’s west section to procure necessary land access and resolve legal claims.” In 2020, a regional council opposed to that project—given its impact on water sources, ecological conditions, and territorial rights—successfully pressured the Mexican government to reroute the pipeline. But over the past year, and ramping up in recent months, “consultations” have started in earnest to push the pipeline forward in communities neighboring those that opposed the previous route. These consultations are advanced by representatives of Mexico’s National Institute of Indigenous Peoples acting on behalf of the Mexican Federal Electricity CommissionThe regional council opposed to the pipeline has stated that although the rerouting may change specific impacts, the destruction of the environment in the Puebla-Hidalgo mountains will remain the same.

TC Energy’s “necessary land access” to the region, alongside the shutdown of massive protests in Canada in support of Wet’suwet’en resistance to CGL prior to the first COVID lockdown, exemplify why Canada has declined to ratify International Labour Organization Convention 169 on the rights of Indigenous peoples. TC Energy describes itself as the single largest Canadian investor in Mexico and has been a lead in the Canada-Mexico Energy Partnership. Export Development Canada has invested billions of dollars in both the firm itself and Mexico’s Federal Electricity Commission.

Eliana Acosta Márquez is a professor-researcher at the Directorate of Ethnology and Social Anthropology at Mexico’s National Institute of Anthropology and History. Photograph courtesy of Eliana Acosta Márquez

The various TC Energy pipelines constructed or in development in Mexico financially tie that country to ongoing imports of U.S.-fracked gas to fuel its energy grid. A former net exporter of energy to the United States, Mexico became a net importer in 2017. This followed the 2014 Mexican energy reform that opened the country to foreign, private investment in the sector in a form unparalleled since Mexico’s expropriation of the transnational oil industry in the late 1930s. Currently, TC Energy boasts seven gas pipelines in Mexico (five in operation and two under construction) and is now a contractor on priority Mexican government infrastructure projects. Among them are the Dos Bocas Refinery, the Interoceanic Corridor, and the Mayan Train, which, taken together, share features with the massive infrastructure project previously dubbed the Plan Puebla Panama. TC Energy audaciously declares it has been “adopted by the Mexican government.” In this picture, TC Energy’s pursuit of investor-state arbitration over American President Joe Biden’s cancellation of Keystone XL serves as a dull warning to Mexico. Although the possibility of investor-state arbitration was removed for the U.S. and Canada under CUSMA, it remains in place over the Mexican energy sector under Annex 14 of the new pact and parallel trade agreements. For Mexico, collaboration on “Indigenous priorities,” as they affect TC Energy, is clearly pressing.

Anna Zalik is a professor in global geography at York University. Her research concerns the political economy and ecology of the transnational oil and gas industry. She has studied the Mexican oil and gas industry since 2004. Eliana Acosta Márquez is a professor-researcher at the Directorate of Ethnology and Social Anthropology at Mexico’s National Institute of Anthropology and History. Her work centres on ancestral knowledge and community management of water and territory as related to dispossession processes. She conducts research in Puebla State’s northwestern mountains and other regions of Mexico.

Originally posted on The Hill Times