The Sting in the India Trade Deal

A Constitutional Trojan Horse: advancing change through political stealth

Trade Minister Hon Todd McClay has announced that the New Zealand-India free trade agreement has been signed and that the formal parliamentary treaty scrutiny process is now under way. The full text of the agreement is now public and has been referred to Parliament’s Foreign Affairs, Defence and Trade Committee for examination.

Under Parliament’s standing orders, the committee must examine the treaty before the government brings in legislation to endorse it before the government ratifies it. This committee stage is supposed to be the chance to ask hard questions before New Zealand is committed domestically to the deal. McClay’s announcement confirms the next step:

Once FADTC has completed its examination, enabling legislation will be introduced and will follow the usual legislative process. This approach is consistent with that taken for the TPP, CPTPP, and agreements with the United Kingdom, European Union, and United Arab Emirates.

The striking feature of this FTA is that it brings the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) into the text of a trade treaty. That is not a side issue. It is a political and constitutional declaration inserted into an agreement that is supposed to be about trade. Article 13.2 states:

2. The Parties, subject to their respective reservations, affirm the following:

a. the United Nations Declaration on the Rights of Indigenous Peoples, adopted in New York on 13 September 2007 and their respective positions made on that Declaration.

But India insisted on an express reservation. In plain language, India agreed to the wording only on the basis that it would not alter India’s own domestic legal position:

The Parties agree that for India, “Indigenous Peoples” is without prejudice to India’s domestic legal classification, and any recognition of indigenous status shall be in accordance with India’s law or policy.

UNDRIP was adopted by the UN General Assembly on 13 September 2007. The UN’s own account of that vote is here and is the source of much in the next few paragraphs. The declaration passed by 143 votes to 4, with 11 abstentions and 34 absences. New Zealand was one of the four countries that voted against it. India voted in favour (see here) but immediately made it clear that it did so subject to an important reservation. That same reservation now reappears in the FTA.

The comments by India’s representative, Ajai Malhotra, show the point clearly. India supported UNDRIP in a broad diplomatic sense but took the view that the declaration did not really apply to India because India did not see itself as a state created by foreign domination over an indigenous population. That helps explain why India was willing to vote yes internationally while still insisting on a reservation.

New Zealand’s reasons for opposing UNDRIP in 2007 were set out bluntly by its Permanent Representative to the UN, Rosemary Banks. Her statement is worth revisiting because it described, with striking clarity, the very constitutional concerns now being brushed aside:

Unfortunately, New Zealand had difficulties with a number of provisions of the text. In particular, four provisions in the Declaration were fundamentally incompatible with New Zealand’s constitutional and legal arrangements, the Treaty of Waitangi, and the principle of governing for the good of all its citizens, namely article 26 on lands and resources, article 28 on redress, articles 19 and 32 on a right of veto over the State.

The provision on lands and resources could not be implemented in New Zealand, she said. Article 26 stated that indigenous peoples had a right to own, use, develop or control lands and territories that they had traditionally owned, occupied or used. For New Zealand, the entire country was potentially caught within the scope of the article, which appeared to require recognition of rights to lands now lawfully owned by other citizens, both indigenous and non-indigenous, and did not take into account the customs, traditions and land tenure systems of the indigenous peoples concerned. The article, furthermore, implied that indigenous peoples had rights that others did not have. The entire country would also appear to fall within the scope of article 28 on redress and compensation. The text generally took no account of the fact that land might now be occupied or owned legitimately by others, or subject to numerous different or overlapping indigenous claims.

Finally, the Declaration implied that indigenous peoples had a right of veto over a democratic legislature and national resource management, she said. She strongly supported the full and active engagement of indigenous peoples in democratic decision-making processes. New Zealand also had some of the most extensive consultation mechanisms in the world. But the articles in the Declaration implied different classes of citizenship, where indigenous had a right to veto that other groups or individuals did not have.

While New Zealand took international human rights and its international human rights obligations seriously, it was unable to support a text that included provisions that were so fundamentally incompatible with its democratic processes, legislation and constitutional arrangements.

New Zealand reversed its position in 2010 under John Key’s government. That reversal mattered. It meant the government accepted, or at least ceased opposing, propositions that New Zealand had previously described as fundamentally incompatible with this country’s democratic and constitutional arrangements. What had been rejected in 2007 as dangerous to equal citizenship and ordinary democratic lawmaking was, three years later, politically embraced.

New Zealand’s FTAs with the United Kingdom and the European Union refer to indigenous rights and Māori participation. But the India agreement goes further. It is the first to affirm UNDRIP expressly. That is a significant escalation.

Everything points to this UNDRIP wording having been included at New Zealand’s initiative, not India’s. India appears to have agreed only on condition that its longstanding reservation was recorded. There is no obvious reason why India would want UNDRIP written into a trade agreement with New Zealand. After independence from Britain, India took the position that all Indians are indigenous to India, and that position is reflected in its laws and constitution.

In New Zealand, UNDRIP is not just an abstract international statement. It became the foundation for He Puapua, the 2019 report prepared for the government on how to implement UNDRIP in New Zealand. He Puapua is not a minor discussion paper. It is a blueprint for major constitutional change, including forms of co-governance. One example is paragraph 15: “If they choose, Maori must be able to participate in Crown governance.”

He Puapua shows why New Zealand’s 2007 objections to UNDRIP were not fanciful. They were realistic. Labour would not support UNDRIP in 2007, yet by 2019 a Labour-led government was sponsoring a working group to advance it. National, for its part, shifted in 2010 and has remained on that path. The current government is now taking the further step of affirming UNDRIP in an international treaty.

He Puapua illustrates the scale of the constitutional implications that Rosemary Banks warned about in 2007. Yet the political class has never squarely asked the electorate for a mandate for this programme. Instead, the project has advanced by bureaucratic process, elite endorsement and delayed disclosure.

In early 2019, the Labour-NZ First Cabinet authorised the Minister of Māori Development to lead a process to develop a plan to implement UNDRIP in New Zealand. That decision was based on a ministerial paper proposing a formal government process for advancing the declaration.

He Puapua was the result. It was delivered to the government in November 2019, but the public was not allowed to see it at the time. Media organisations sought it under the Official Information Act, and it was released only in April 2021 after pressure from the Ombudsman. That is not transparent government. It is disclosure dragged out by resistance.

Much the same pattern appears here. UNDRIP’s inclusion in the FTA was not publicly apparent until the treaty text was finally presented to Parliament last month.

This matters because UN General Assembly declarations are generally non-binding. That was one reason the Key government was able to minimise the significance of endorsing UNDRIP in 2010. A treaty is different. Treaties create binding obligations in international law. As Article 26 of the Vienna Convention on the Law of Treaties 1969 puts it: “Every treaty in force is binding upon the parties to it and must be performed by them in good faith.”

Once ratified, the India FTA will bind New Zealand and India in international law. That is why the affirmation of UNDRIP is not trivial. It takes language from a non-binding declaration and places it inside a binding treaty. Some may say this changes little because India is unlikely ever to pressure New Zealand to comply with UNDRIP. But that misses the real point.

If it truly changed nothing, it would not be there. The obvious reason for including it is not trade with India but politics within New Zealand. A trade agreement is being used to advance a domestic constitutional and political agenda. That is an abuse of the treaty-making process. A provision with no real trade function, but clear ideological value at home, has no legitimate place in an FTA.

Once this affirmation is in a ratified treaty, it will inevitably be invoked inside New Zealand as proof that the country is committed to UNDRIP in a serious and operative way, not merely in some airy symbolic sense. Lawyers, activists and judges will be invited to treat it as yet another marker of state commitment. To dismiss that as mere technicality would be naive.

The clause is irrelevant to trade between New Zealand and India. It does not lower tariffs, improve customs procedures or open markets. It serves no

commercial purpose. India has no practical reason to police New Zealand’s constitutional development. So why is the clause there? The unavoidable inference is that it has been inserted to advance a domestic political project under cover of trade policy. Whether that happened through ideological zeal within the bureaucracy or through deliberate ministerial choice, the effect is the same: Parliament is being asked to approve a trade treaty carrying constitutional freight that has never been honestly put to the public.

If Parliament approves the FTA with the UNDRIP affirmation intact, that approval will not be read narrowly. It will be taken by courts and officials as further evidence that both the executive and Parliament now endorse UNDRIP as an authoritative guide for New Zealand law and policy.

If Parliament endorses the FTA with the UNDRIP affirmation included, that will signify to the courts that not just the government but also parliament has endorsed UNDRIP as binding on NZ.

That concern is not speculative. It is illustrated by extra-judicial remarks from Supreme Court Justice Susan Glazebrook, who retired in February but has been given a two-year acting warrant extending her judicial influence until at least 2028 (a parting gift from then Attorney-General Judith Collins). In The Declaration on the Rights of Indigenous Peoples and the Courts, published in 2020, Glazebrook wrote that “UNDRIP is becoming increasingly embedded in Aotearoa’s legal framework.” Even while acknowledging that the declaration was formally non-binding, she treated it as part of the wider “decolonisation” project she favours: see The Rule of Law: Guiding Principle or Catchphrase? at p 22.

The body of her article is important because it shows how judges may reason from apparently non-binding international material to practical influence within domestic law. The following passages, with emphasis supplied by me, illustrate why ratifying the FTA in its present form is not a harmless gesture.

In 2010, New Zealand reversed its position and endorsed the Declaration, stressing that it accorded with government policies related to the Treaty of Waitangi (the Treaty or te Tiriti) but also stressing the Declaration’s non-binding and aspirational nature….

A significant development occurred in March 2019: Cabinet gave its approval for the Minister of Māori Development to lead a process to develop a national plan of action on New Zealand’s progress towards the objectives of the Declaration. The Cabinet Paper recognises that the Declaration contains principles and duties consistent with the Treaty. It is said that New Zealand is committed to the common objectives of the Treaty and the Declaration, alongside existing legal and constitutional frameworks….

….This means that treaties entered into by New Zealand are not automatically part of domestic New Zealand law. They only become part of domestic law if enshrined in legislation.

This is not the full picture, however. First, customary international law is automatically part of the common law unless inconsistent with a statute. But, as I have said, the whole of the Declaration has not reached that status yet. More importantly, however, the courts do refer to treaties that New Zealand has entered into but have not been enshrined in legislation and thus are not part of New Zealand domestic law. Courts can and do refer to such unincorporated treaties when interpreting New Zealand statutes. Unincorporated treaties can also be considered in developing the common law and deciding cases where an international dimension is present. The courts do not treat unincorporated treaties as directly binding in New Zealand law because of course they are not. But the courts do apply a presumption that Parliament did not intend to legislate contrary to international law. There are two ways this presumption plays out. The first relates to the interpretation of statutory provisions. Applying the presumption, provisions will be interpreted to be consistent with international law (as found in both treaties and custom), if possible. If it is not possible, the statute prevails. The second relates to a situation where statute law gives discretion to the executive arm of government. The courts have held that such discretionary powers must be exercised in accordance with New Zealand’s international obligations, even if those obligations are not incorporated into statutes. Again, this is subject to any contrary provision in a statute.

It is not too much of a stretch to presume that Parliament also intended to legislate in a manner consistent with a declaration, like this one, that was passed by the UN General Assembly by such a large majority and that the executive took a positive decision in 2010 to endorse and a further decision this year to develop an implementation plan for. I would suggest, therefore, that the courts may well treat the Declaration in the same way as unincorporated treaties. This is especially the case where, as I discuss later, the Declaration in fact elaborates on rights already enshrined in the Treaty.

The significance of those passages is plain enough. Glazebrook already treated the Key government’s 2010 endorsement of UNDRIP, and the Labour-NZ First Cabinet’s 2019 decision to begin an implementation plan, as signals that courts could properly treat UNDRIP as influential and authoritative. He Puapua can only strengthen that view. Parliamentary approval of this FTA will be read in the same way: as yet another official endorsement of a far-reaching constitutional project. That is why this is not an obscure drafting point but a matter of first-order public importance.

What is most objectionable in all this is the contempt it shows for ordinary New Zealanders. Constitutional change of this magnitude should be argued for openly, defended honestly and submitted to democratic judgment. Instead, it has been advanced by ministers, officials and sympathetic elites through opaque processes, delayed disclosure and legal increment. That is no way to alter the foundations of a country.

The obvious remedy is greater democratic control. If politicians, officials or judges wish to drive constitutional change, they should have to defend it before the public in clear terms and win consent for it, not smuggle it through advisory reports, bureaucratic process or the fine print of a trade treaty.

That is the real issue raised by this agreement: not trade, but whether constitutional change in New Zealand will occur by democratic choice or by political stealth.