Peru: Corporations And Campesinos Clash Again – Analysis

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By Carla Hinson and Dominique de Wit

Peru, like many other Latin American countries, is heavily dependent on revenue generated through its extractive industries, such as copper, gold, and silver mining. Indeed, the mining of precious metals and minerals accounts for more than 60 percent of Peru’s total export income. While the development of the Peruvian mining industry has generated robust growth for the country’s economy, it has also been the cause of considerable friction between the Peruvian indigenous population and the federal government, which is widely seen as being complicit in the violations perpetrated by foreign mining corporations.

Peru

Peru

The constant struggle between foreign, as well as domestic, mining corporations and indigenous peoples culminated in violent protests over the weekend of May 26th and 27th. The Quechua indigenous population of the heavily-mestizo city of Cusco, located in the province of Espinar, is demanding reparations and increased corporate accountability from Xstrata, the Swiss multinational which owns the region’s Tintaya copper mine. According to the protestors, operation of the Tintaya mine has brought about water contamination in at least two local rivers—the Salado and Canipia—leading to the deaths of farm animals. Last August, the local Roman Catholic diocese conducted an environmental study which reportedly found high levels of arsenic, copper, mercury, and other heavy metals in a number of soil and water samples, confirming these accusations. Xstrata categorically denies responsibility for any such pollution.(1) The protesters are calling upon Xstrata to conduct additional environmental studies regarding the impact of Tintaya on the local environment (2), and to increase its “voluntary contribution” to the Espinar province from 3 percent of pre-tax profits (roughly $11 million USD per year), to 30 percent of pre-tax profits.(3) Thus far, Xstrata has rejected both demands, citing a lack of definitive evidence linking its mining operations to the pollution of local habitats, and claiming that its voluntary contributions are already very generous.

The Protest and the Government’s Response

Last week, protesters comprised of 1,500 striking miners and indignant townspeople, and led by Espinar’s mayor, Oscar Mollohuanca Cruz (4), erected a blockade of boulders and tree trunks on the main road leading to the mine. On Monday, however, a company executive claimed that the mine had been able to function normally despite the blockade.(3) Reports suggest that the protests were peaceful until Sunday, when protesters threw rocks at policemen and set fire to pastures adjacent to the main road. Protesters also briefly detained a local public official on Monday after overturning his car and setting it on fire. An estimated 30 police officers have been injured during the protests, while two protesters have been killed and at least 30 more have sustained injuries when police fired teargas into the amassed crowd. Police officials claim that the militant response was purely self-defense, and Prime Minister Oscar Valdés has issued a statement supporting the use of violence in response to the protests.(1)

According to official reports, President Ollanta Humala’s cabinet has called upon the Peruvian military to support the national police force in its efforts to regain control of the situation in Espinar, and to maintain a sense of security throughout the region. The government stressed that armed forces were deployed to regain peace, and commanded not to act unless provoked by extreme cases of civil disturbance.

The Peruvian government also declared a 30-day state of emergency in Cusco on Monday. The announcement was made through the state run newspaper, El Peruano, and consists of a complete suspension of constitutional rights, including those of assembly and transit.(5) This is the second 30-day state of emergency enacted by the Peruvian government within the last six months, the previous occurring in the province of Cajamarca in response to comparable protests against the $4.8 billion USD Conga Gold mining project, the largest investment in Peru to date.(1) Concerning the local population’s environmental concerns over Tintaya, Prime Minister Valdés has stated that the government perceives them to be exaggerated and therefore invalid.

On Tuesday, protests continued and 24 civilians were arrested for violating the conditions of the state of emergency.(6) The following day, the situation escalated with the arrest of the mayor of Cusco, bringing dialogue between the state and the protestors to a standstill.(7) The President of the Cusco region, Jorge Acurio, has stated that there is no possibility of negotiating a settlement while the mayor is held captive.

The government defends their authoritarian response, referring to protesters by such sharp titles as “radicalists” and “extremists.” Jorge Merino, Peru’s Minister of Mines and Energy, went so far as to claim that the protest was being led by “political groups with their own agenda,” insinuating that the demands of the people are neither valid, nor worth the government’s attention.(8) The administrations’ firm action against the social movement serves as just one example, among many, of President Humala’s increasing reliance on overtly conservative policies, breaking from the leftist platform he championed during his presidential campaign.

Corporate Response

Despite the local protests, Xstrata claims it remains committed to future investments in the country, particularly a $1.5 billion USD expansion project of the Tintaya mine scheduled for late August. In an official statement issued Monday, a spokesperson for Xstrata stated that the company is willing to work through local and national authorities to engage in an open dialogue with local citizens, and will consider increasing the 3 percent donation to local development. While the corporation claims to be following appropriate environmental regulations, Xstrata says it will increase monitoring efforts in order “to clarify any perceptions or concerns that the population may have.”(2)

History of the Tintaya Mine

Conflict surrounding the Tintaya mine in has been constant since its establishment in 1985. The government initially acquired the land for the mine from local citizens, paying a paltry $3 USD per 2.45 acres, whereupon the mine was state-owned until its subsequent privatization in 1994. Currently, the community owns just 1 percent of the land surrounding the mines. In initial appeals to local landowners, the government promised mining jobs for the entire community; over 25 years later, the government has yet to make good on its promise of employment, and the community awaits economic benefits stemming from the local mining operation.(9) By the late 1990s, numerous protests had erupted in response to several factors, the most prominent being the mine’s adverse impact on the environment, such as waste water leaking into local water sources, contaminating pastures and rendering local water supplies unfit for human and animal consumption. Furthermore, complaints about human rights violations have surfaced, including forced evictions, as well as incidents of rape and other physical abuse. Finally, local dissatisfaction with the mining project resulted from a growing perception among the local population that they were being denied their fair share of the economic benefits accruing from the project.

Following the repeated outbreak of protests against the Tintaya mine throughout the 1990s, a “Dialogue Table,” consisting of all parties involved in the protests, was formed to facilitate communication and enable collaborative resolution of the issues raised by the community regarding the mine. The Dialogue Table, a permanent mechanism since 2004, consists of local NGOs (such as CONACAMI and CooperAcción), international NGOs (such as Oxfam America and Oxfam Australia), and the mine owner, Xstrata (formerly BHP Billiton). In light of the current protests, it appears that the Dialogue Table has failed to address grievances of transcendent importance concerning persistent environmental abuses and chronic instances of underdevelopment.

Political Outlook

Humala’s authoritarian approach to forcibly bring an end to the current protest proves that the administration is now more concerned with cultivating a booming economy than protecting the rights of its people. Humala’s increasingly centrist principals resemble those of former President Lula da Silva of Brazil. President da Silva’s political stance became consistently centrist throughout his presidency, particularly when dealing with populist impulses of other leftist leaders within South America, including Chavéz of Venezuela and Morales of Bolivia. While Lula cultivated Brazil’s economic growth through centrist policies that imposed little regulation on financial markets, he also implemented and strengthened numerous social programs, thereby attempting to balance economic growth and social well-being.(10) In order to toe this politically-attractive line, it is likely that Humala will follow the example set by Lula and continue to promote centrist policies, at the detriment of the indigenous communities of Peru. The Tintaya protest is a clear sign that significant dissatisfaction exists among the local population rooted in the administration’s failure to ensure that the economic success of the mine trickles down to the surrounding community.

Conclusion

The Tintaya mine has been a source of mounting tension between the local population and the owners of the mine since its establishment, and a consensus between these actors is long overdue. In order to protect the rights of the local population and ensure that a portion of the profits of the mining industry benefits the community, and not simply the corporation and its shareholders, several basic policy and administrative changes should be enacted by both the Peruvian government and Xstrata.

First, Xstrata needs to address the issue of water contamination by commissioning an outside, unbiased organization to conduct environmental research in the area so as to determine the environmental effects of the mine. Although Xstrata claims to adhere to regulations, such claims do not necessarily indicate that the mine in fact is not causing the documented contamination of water supplies.

Admittedly, $11 million USD is no trifling sum. However, despite the copper mine’s continued success, many citizens in the area are still living in dire poverty and face adverse health conditions on a daily basis. While the protesters’ call for an increase in Xstrata’s financial contributions is valid, it is also absolutely necessary that there be an increase in transparency regarding how the local government is utilizing current contributions. A clear outline stating how current donations are being used and how the increased funds will be implemented to benefit the people of Espinar province should be made available to the public by the provincial government.

Finally, the people of Espinar have the right to not only be free from the negative impacts of copper mining, but to also enjoy a share of the economic benefits of the booming Tintaya mine. Although the Espinar protesters were forced to resort to radical means for their voices to be heard, their demands are far from extreme. In the future, increased collaboration between both international and local actors is necessary to satisfy local demands and enable the long-term sustainability of the project. Such a dialogue should occur within the Dialogue Table, or, if the forum proves to be defunct, a revitalized version of it.

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Authors:
Carla Hinson
and Dominique de Wit, Research Associates at the Council on Hemispheric Affairs


About the author:

COHA

COHA, or Council on Hemispheric Affairs, was founded in 1975, the Council on Hemispheric Affairs (COHA), a nonprofit, tax-exempt independent research and information organization, was established to promote the common interests of the hemisphere, raise the visibility of regional affairs and increase the importance of the inter-American relationship, as well as encourage the formulation of rational and constructive U.S. policies towards Latin America.

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