Dept. of Real Estate & Construction Valuing terra nullius: Dealing with the impact of pipeline and infrastructure projects in the Arctic Mikhail M Soloviev National Research University, Higher School of Economics, Moscow, Russian Federation Vasilisa Platonova Far East Federal University, Yakutsk, Russian Federation Natalia Yakovleva Winchester Business School, University of Winchester, UK Richard Grover Oxford Brookes University, Oxford UK

Dept. of Real Estate & Construction REPUBLIC SAKHA / YAKUT in the RF

Dept. of Real Estate & Construction Samples of industrial program’s influence to the town-planning development (2): Mirny (Sakha / Yakut) - Diamonds

Dept. of Real Estate & Construction Samples of industrial program’s influence to the town-planning development (1) Nerungry (coal extraction centre) Samples of mineral resources program’s influence to town-planning development (1): Nerungry (Sakha / Yakut)- Coking Coal NERUNGRY

Dept. of Real Estate & Construction European settlement in the Arctic 1630s Russian forces reach the lower Lena River 1670 King Charles II grants the Hudson Bay Company control over Price Rupert Land (North West Canada) Attractions of natural resources that could be exported from the region not settlement Oil discovered in Mackenzie River (Canada) in 1920s but large scale commercial production starts in Alaska 1968 Russian exploitation of the Arctic resources from 2 nd Five Year Plan of – command economy so not bound by economic viability Strategic position of region from 1940

Dept. of Real Estate & Construction Industrial development of Circumpolar region: Comparative development of Russia and North America

Dept. of Real Estate & Construction Economy of Circumpolar region

Dept. of Real Estate & Construction

Pressures from development Large distances from centres of population and industry Limited local demand for energy and area too remote for energy-intensive industry Fragile ecology takes time to recover Extreme climatic conditions Permafrost and shifting ground conditions Flooding in spring and icebergs on rivers Growing damage to ecology – impact on livelihoods of indigenous peoples

Dept. of Real Estate & Construction Frozen Ground Influence Buildings - on “Legs” Communications - on “Air”

Dept. of Real Estate & Construction 1)Frozen Ground (depth ~ 6 m) Problems for foundations

Dept. of Real Estate & Construction 2) Flood Dangerous (see level of river)

Dept. of Real Estate & Construction Flood Dangerous (see level of river)

Dept. of Real Estate & Construction Environmental Impact of development (United Nations Environment Programme)

Dept. of Real Estate & Construction Problem of valuing Arctic lands Terra nullius – no man’s land – a land with few people, no agriculture, no formalised rights, no obvious boundaries Valuation is about a exchange value – willing buyer and willing seller. Land had a use value but not commodified Evidence from Labrador of development of property rights with the commercialisation of hunting for furs – externalities that needed to be controlled – previously no hunter impacted on another Valuation is about valuing property rights – what are the rights of the indigenous peoples? Problem indigenous peoples throughout the world have in asserting claims to the lands they traditional use – often regarded as having permissive use rights over public lands as long as the will of the state permits

Dept. of Real Estate & Construction Valuing land rights- the historic approach 1941 and 1951 American-Danish defence agreements – construction of Thule Airbase and Ballistic Missile Warning System in Greenland 1953 Inughhuit people of Uummannaq ordered to leave area and resettled 90 miles away –left homes and hunting grounds with whatever they could carry, shortly before granted citizenship and expropriation would have required statutory approval 1999 Eastern High Court of Denmark ruled that Danish Government had acted illegally No specific recovery – compensation of 500,000 kroner (£44,500) for loss of income from poorer hunting area – no compensation for loss of homes as grants and loans given to build new ones – individual payments of 15,000 or 25,000 kroner because of unlawful action Compensation for disturbance but not loss of land

Dept. of Real Estate & Construction Valuing land rights: some fundamental principles Specific protections for indigenous and tribal peoples from International Labour Organization Conventions C107 (1957) and C169 (1989) UN Declaration on Rights of Indigenous Peoples (2007) General protection of property rights under Universal Declaration of Human Rights and regional conventions and right to have breaches of human rights determined by independent tribunals FAO Voluntary Guidelines on Responsible Governance of Tenure (2012) States should acknowledge the social, cultural, spiritual, economic, environmental and political value of land to indigenous peoples with customary tenure systems States should recognise and protect legitimate tenure rights of indigenous peoples to the ancestral lands on which they live Those with customary tenure should not be forcibly evicted from their ancestral lands

Dept. of Real Estate & Construction Searching for a way ahead: Mackenzie Valley Berger Inquiry Conflict of interest between businesses and indigenous communities Adverse impact of industrial development on lands of indigenous peoples and their communities Environmental degradation would destroy the livelihoods of communities Future of North should not be determined by southern ideas of frontier development but by those who live there Pipeline development should be halted until after native land claims had been settled

Dept. of Real Estate & Construction Oil wells of Mackenzie region

Dept. of Real Estate & Construction Current and potential development of Mackenzie Basin

Dept. of Real Estate & Construction Mackenzie Valley development Land claims with indigenous groups settled by Canadian government in 1980s and 1990s – last agreement 2001 Claims settlements encouraged by court cases  1973 Supreme Court ruling on Calder (Nisga’a) case that colonisation did not extinguish native tenure  1997 Delgamuukw v British Columbia decision of the Supreme Court of Canada established that native title can only be surrendered to the Crown and determined what evidence can be used to substantiate claim to title, including oral evidence 2001 Memorandum of Understanding between 4 production companies and Mackenzie Valley Aboriginal Pipeline Corporation – 2003 full participant in project Aboriginal Pipeline Group owns 33.3% share in consortium Individual aspects of development need consent of each aboriginal group through whose land the pipeline passes Degree of aboriginal control over development and financial beneficiary from it

Dept. of Real Estate & Construction Nunavut Surrender and land grant Creation of public government for the area – 85% of population Innuit De facto autonomous homeland for Innuit though de jure government for everyone 80% of land Crown land; 18% Innuit surface rights; 2% Innuit sub-surface and surface rights Direct benefit from mineral extraction where Innuit own sub-surface rights Access agreements where Innuit own surface rights Potential for planning gain

Dept. of Real Estate & Construction Eastern Siberia – Pacific Ocean Pipeline 2001 revival of project to link Russian oilfields with China 2006 environmental concerns meant route changed to include Republic of Sakha (Yakutia). Potential impact on Evenki reindeer herders, supposedly under special protection – Evenki a minority in region where Sakha are majority Route determined by RF Government and Transneft Evenki and other local communities asked to comment on environmental impacts assessment but not consulted about the overall decision about the pipeline. Poorly developed mechanisms for compensation of affected land users led to small amounts of compensation being awarded to affected groups Gap between Russian legislation on protection of indigenous minorities and reality

Dept. of Real Estate & Construction Conclusions Valuation is about valuing property rights not land Problem for indigenous peoples that their ancestral lands seen as terra nullius Developments can cause environmental degradation and loss of livelihoods whilst no benefits from the development In Canada change in attitudes (indicated by the Berger Report) and legal cases have provided a framework in which indigenous populations can exercise a degree of control over development and share in its benefits. In Russia legal protections exist for indigenous peoples but the way in which major projects are planned mean that limited account is taken of their concerns