Peruvian Peasants Confront the Mining Industry

By José De Echave

Mining in Peru: Historical Background

Mining in Peru is as old as the history of the country itself. From Colonial times to the present day, mining has been the main link between Peru and the world economy. Since the beginning of the 20th century, however, large foreign capital has been dominant in the mining industry, displacing the national business community. According to historian Alberto Flores Galindo, the formation of the Cerro de Pasco Corporation in New York in 1901 was “the event which would dominate not only the development of mining, but the whole of the economy of central Peru.”1 In a few years Cerro de Pasco became the largest company in the country with the greatest number of workers in its mines, foundries, railways, energy plants and cattle ranches (which dominated the country’s central Andean region). In a short time, other U.S. mining companies were to follow, such as Anaconda, American Smelting and Refining Company (ASARCO), and the Vanadium Corporation.

Another source of conflict arose within the companies, among workers recruited from a peasantry dispossessed of its lands and resources. The difficult living and working conditions, the occupational health problems, the accidents causing fatalities and serious injury prompted protests and the organization of workers in the main mining centers of the Sierra Central. From the beginning, the mineworkers’ unions raised anti-imperialist demands in their political platforms. In 1969 the Federación Nacional de Trabajadores Mineros, Metalúrgicos y Siderúrgicos del Perú (FNTMMSP, National Federation of mining, metallurgical, iron and steel workers of Peru) was founded—the most important organization of the mining labor force. For decades the mineworkers constituted one of the pillars of the union movement in the country. Until the end of the 1980s, labor conflict was the main social issue affecting the mining industry.

A second phase of mining expansion took place in the 1950s when subsidiaries of ASARCO and Utah Construction Company moved in. While the large (mainly U.S.) international corporations controlled gran minería (large-scale mining), local entrepreneurs concentrated on small and medium-scale mining.

The advance in mining severely undermined the previous environmental, social, economic and cultural balance in the affected areas. It also created conflicts over land-ownership, both with peasant communities and with local landowners. The environmental impact, as in the case of the foundries in the Sierra Central, led to community protests. “For the first time in Peru a movement of anti-imperialist nature came about."3

The 1990s: The Mining Boom, Restructuring, and New Conflicts

From the beginning of the 1990s, a set of policies was adopted which were mainly directed toward the opening up of the economy. Within the new legal and institutional framework created by neoliberal structural adjustments, and with a favorable international scene, by the middle of the decade many financial entities were backing the expansion of important mining projects.

The World Bank played a major role in this process. As part of its program, it pushed for reform of mining legislation that moved back toward liberalization, favoring above all investment by international companies. More importantly, it also decisively supported the process of privatization, which, in the course of the 1990s, put an end to the involvement of state companies in Peruvian mining. In addition, the World Bank directly financed 10 of the 27 mining projects that it supported in the whole of Latin America between 1993 and 2001.

In this context Peru underwent a new phase of expansion in mining. In the last ten years mining has grown at an average annual rate of 8%, contributing approximately 6% of the Gross Domestic Product of Peru, at the same time accounting for 50% of export revenue and 15% of Foreign Direct Investment. In Latin America, Peru occupies second place in the production of copper (fifth in the world), and first place in the production of gold and zinc (sixth and third in the world respectively).

Geographic Expansion and the New Centers of Mining Development

In the past decade the area occupied by mining within Peru has grown significantly. Titles to mining rights which covered barely 2,258,000 hectares in 1991, reached a peak of 15,597,000 hectares in 1997. This growth not only consolidated the presence of mining in its traditional zones, but also extended mining activity into other regions of the country. In addition, exploration intensified in regions where mining activity had never previously been developed. Toward the end of 1999, active mining rights occupied approximately 12% of national territory.

The expansion of mining also began to impinge on areas traditionally devoted to agriculture, severely affecting peasant communities. In Peru, lands belonging to rural communities represent 39% of the agricultural area of the whole country, and, by the end of the last decade, of the 5,680 recognized communities with property titles, 3,126 (that is 55% of the total) were in zones affected by mining. In this context, conflicts between mining companies and rural communities multiplied throughout the country.

Without doubt the main social conflict that the mining industry has faced in recent years has been precisely with the surrounding populations, unlike the situation in the 70s and 80s when the main issue was the labor conflict. The conflict with the communities is not new in Peru, but in recent years it has become part of a global conflict that has been repeated with similar characteristics in various regions of the world.

The dispute between mining companies and rural communities over the control and management of natural resources has been a central element of the conflict. The local populations and their organizations have come to see themselves as guardians of their ecosystems against an external force, and as the main locus of resistance against the advance of the transnational mining companies.4

The Organization of the Communities

Until the mid 1990s, the peasant communities addressed the conflict with the mining companies in a disjointed manner, without any notable support or advice. This was the case with the community of Vicco in the Pasco region (which opposed an expansion project of the mining company El Brocal), the communities near the Tintaya mine, and the various communities in the province of Yauli in Junín.

Traditionally the main peasant federations operating at the national level had not seriously involved themselves with the issue of mining, despite the fact that many of their members demanded attention and support for the defense their rights against the mining companies. Neither the Confederación Campesina del Perú nor the Confederación Nacional Agraria paid any kind of sustained attention to this problem in their strategies.

In October 1998 an initial meeting took place in Lima bringing together forty communities from different regions where mining was established.⁵ The meeting enabled communities from six regions to approach each other for the first time, to exchange experiences, and to make an initial analysis of the problem. They also agreed to set up a coordinating body for communities affected by mining, as well as a committee to organize a first national congress.

Thus, in less than a year, following twelve regional meetings, in October 1999 the first national congress of communities affected by mining took place, and the Coordinadora Nacional de Comunidades Afectadas por la Minería (CONACAMI, national confederation of communities affected by mining) was formed. Miguel Palacín Quispe, representative of the community of Vicco de Cerro de Pasco was elected president of the organization, and the first administrative council included leaders from the main zones in conflict: Cajamarca, Yauli, La Oroya, Pasco, Cusco, Huancavelica, Sierra de Lima, and Arequipa.

The main strategies deployed by CONACAMI revolved around strengthening the organization, training its members, forming alliances, and developing campaigns. The mining companies and the State authorities such as the Ministry of Energy and Mines, identified CONACAMI and the non-governmental bodies allied to this organization as “grupos antimineros”(anti-mining groups).

The new organization and allied institutions—mainly NGOs, some of them international—devoted an enormous effort to supporting the local populations in conflict, in the old as well as the new mining regions. The initial focus was basically to defend the economic, social and cultural rights of the local populations against the mining operations; however, gradually the action tended toward questioning the current legal framework which generated a situation hostile to their rights and benefited the mining companies, in particular the international groups.

To the extent that the disputes between mining companies and communities turned into a global conflict, CONACAMI became part of various international networks, which made possible an important exchange of experiences and specific support for the main cases in conflict.

Types of Popular Mobilization Against the Mining Industry

The conflicts of the last decade were of two types: those that occurred in the old mining areas, in which the workers’ unions were pivotal to the struggles, and those in the new mining areas which saw the emergence of new organizations and networks of resistance.

In general, in the old mining areas, despite strong criticisms directed at the mining companies, the demands of the local populations were that their economic, social and cultural rights, which had been affected by the mining, would be recognized. They sought to establish a relationship of mutual respect between the people and the mining companies, demanding that the companies bring their activities into line with the people’s aspirations for better living conditions. In the great majority of the cases, in the old mining areas, despite the negative perception of mining activity, the affected local populations did not demand the definitive withdrawal of the companies from their lands, but rather required a drastic change in their operations. In this first group of conflicts, several cases stand out: that of the province of Yauli in Junín, considered one of the most contaminated areas in South America; the lakeside communities of the Lago de Junín, between the regions of Junín and Pasco, affected by the old mining operations in the area; and the communities of Espinar in el Cusco, near the Tintaya mine, now owned by BHP Billiton, the most important mining consortium at the global level.

A second group of cases involves local populations that are showing a serious resistance at the very outset to mining activity in their territories, including expansion projects. Cases such as Tambogrande, Huancabamba and Ayabaca in Piura, or that of some zones in Cajamarca and Chinchero in Apurímac, are good examples of local populations that categorically oppose mining activity. For these people mining is not compatible with their conception of development.

The conflict that set the people of Tambogrande against the Canadian company Manhattan Minerals (in the northern region of Piura) is one of the emblematic cases of resistance to the launch of a mining project. The people of Tambogrande managed to paralyze that mining project, making use of various methods of resistance and action, including the convening of a local referendum, in which the district municipality and the Frente de Defensa de Tambogrande (The Tambogrande Defence Front) called on the local population to come out to vote on the viability of the development of mining activity on their territory. The result was a resounding NO to the development of mining activity in that district.6  recognized that its presence had “affected the way of life and customs of the people”: “We recognize that we did not understand the magnitude of these changes, nor did we listen to the valid demands and concerns expressed during these years by the community of Cajamarca.” Without doubt, the termination of exploration at Cerro Quilish was a heavy blow to the mining company and a great victory for the local population of Cajamarca and its organizations.

In addition, the case of Tambogrande witnessed the first direct confrontation between agricultural and mining development. Generally in Peru, mining has been established in high Andean zones of basically subsistence agricultural and livestock activities. In this case, however, the mining project had to face the resistance of farmers who had managed to consolidate the most important agricultural valley in nothern Peru, with established export markets. Alliances between small and medium-sized farmers, smallholders and day-laborers, teachers, traders, the Catholic Church, and in general the various social sectors of the locality and the region, were a distinctive characteristic of the case of Tambogrande.

Another important case is that of Cajamarca and the conflicts connected with the operations of Minera Yanacocha, whose project was the first large-scale investment of the mining boom of the 1990s. Minera Yanacocha also represented the first important alliance between a national group and an international company, in this case the Newmont Mining Corporation. It was a project in which the World Bank Group participated as shareholder via its International Finance Corporation.7

On the other hand, the start of operations of Yanacocha also constituted a founding moment for new social movements. The activity of this company has been accompanied, through all these years, by a series of conflicts with urban and rural sectors of the population of Cajamarca—a city of 286,000 inhabitants and capital of the regional department by the same name. To the initial problems of under-valuation of lands that they had acquired from the communities, were added complaints about problems of contamination, mainly of the water supplies of the region and the spilling of 151 kilograms of mercury along 40 kilometers of road that ran past the villages of Choropampa, San Juan and Magdalena, causing severe poisoning.

However, perhaps one of the most serious conflicts generated by Minera Yanacocha arose from its most important expansion project, the attempt to exploit Cerro Quilish.8 This was because Cerro Quilish “possesses an ecosystem of streams where the basins of the Río Grande and Río Porcón originate, which in their turn supply water to the peasants in the rural area and then head to the city of Cajamarca.”9 To this was added the fact that Cerro Quilish is considered an important symbol of benevolence and protection both for the peasants and for the city.

On October 5, 2000, the Provincial Municipality of Cajamarca issued an ordinance10 declaring Cerro Quilish and the valleys of the Rio Porcón and Rio Grande to be a “Protected Provincial Municipal Reserve.” The mining company contested the decree and lodged an appeal, a process culminating in a May 2003 ruling by the Constitutional Tribunal—the supreme judicial authority in the country—affirming that “the companies have the right to carry out prospecting and exploration work on the concessions granted in their favor.” The Ministry of Energy and Mines then authorized Minera Yanacocha to carry out exploration in Cerro Quilish, leaving the way clear for the company to begin work.

The reaction of the local population was immediate, and in rural areas as well as in the city demonstrations were held against the start of the exploration. Municipal authorities, professional bodies, political parties and movements, churches, universities, neighborhood associations and youth groups joined the peasants’ demand that the order of the Ministry of Energy y Mines be overturned. In effect, the entire mobilized population of Cajamarca ended up paralyzing the city for several days.

The people’s protest was successful, as both the company and the Ministry had to back down: the Ministry had to annul its resolution, and Minera Yanacocha, in a public announcement,11

Significance of the Conflicts and the Strategic Importance of the Communal Demands

It appears to entire populations in Peru is that there is a lack of control over the territorial expansion of mining, a lack of means to protect their rights, and a lack of effective instruments to safeguard the natural resources of the country: 82.5% of land in the district of Cajamarca, where Cerro Quilish is located, is today occupied by mining concessions; in the case of the neighboring district of Encañada it is 91%. In Tambogrande it has reached almost 50% of the territory. This presence of mining, even at the exploration phase, exerts strong pressure on the control and management of natural resources strategic to the life of these populations. The perception of the communities is that the current legal framework grants them neither the channels nor the instruments with which to defend their rights.

A report by the World Bank itself, in which it reviews its own role in the promotion of extractive industries in different parts of the world,12 concludes that the expansion of the mining industry resulting from the structural reform programs has generated unnecessarily high social and environmental costs. The response of the peasant communities and their organizations has led to open questioning of the current neo-liberal model, of the reforms implemented in the 1990s, and of the role of international bodies such as the World Bank in promoting the mining industry.

Creating a Different Scenario

The community and non-governmental institutions involved in the mining conflicts have developed a set of initiatives that provide a clear framework to defend the rights of the local populations and the surrounding areas, accompanied by proposals for new regulations to ensure the relevant environmental and social management of the zones of mining influence. Some of the components of the alternative proposal for mining that are starting to be developed are as follows:

For their part, the mining companies have rigidly defended the legal framework, arguing that the rules of the game should remain stable so as to maintain a favorable climate for new investment projects. The mining groups have tended to opt for establishing voluntary self-regulating mechanisms, such as codes of conduct, that seek to define criteria of behavior for carrying on their activities within a favorable context. The development of such mechanisms has sent out the message from the mining industry that it recognizes certain negative consequences of its activities, and that these can be controlled without the need for new instruments of public regulation. This situation raises a fundamental debate on how to deal with the different conflicts in the zones of mining influence; the dilemma is thus between self-regulation or public regulation.

In Peru, most mining companies today have codes of conduct, and in January 2003 the Sociedad Nacional de Minería, Petróleo y Energía (SNMPE, National Society of Mining, Petroleum and Energy) presented its own Code of Conduct that was endorsed by almost all the medium and large-scale mining companies. This document consists of basic regulations dealing with subjects such as transparency, equity, respect for ethnic diversity, dialogue, occupational health and safety, and the endeavor to harmonize business and production interests with the sustainable development of society.

A global revision of the voluntary codes of conduct, be it by companies or industrial groups, can give us an idea about the real effectiveness of such instruments. According to Oxfam America,13 one of the positive aspects of the codes is that they give the affected populations the opportunity to demand that the companies conduct themselves in a responsible manner. Among the weaknesses, the report points out, is that there is often a substantial difference between what the code says and what in the end takes place in the zones of influence; besides, these instruments lack enforcement mechanisms and independent systems for monitoring and evaluation: the representatives of the companies themselves act as legislators, judges and jury of their own activities, without the participation of third parties.14

On the other hand, an analysis carried out by OECD15 of 246 voluntary codes, points out that they do not incorporate minimal universal norms established by the international system of human rights. It also indicates that these codes do not grant the plaintiffs access to the procedures they need in order to present their demands. On the essential debate self-regulation or public regulation, the Oxfam Community Aid Abroad report points out very clearly that they “do not consider the voluntary mechanisms as an alternative to state regulation.”

-- Establishment of a comprehensive environmental policy and creation of environmental authorities independent of the state.
-- Establishment of a framework for the active participation of the communities, local authorities, and other parties in mining zones.
-- Consideration of the social and cultural impact of mining on the territories inhabited by indigenous communities.
-- Definition of effective mechanisms of distribution of the earnings of the mining companies, with strategies to combat poverty and to improve living conditions in mining zones.
-- The substantial improvement of working conditions, environment, and health for the mineworkers.

Without doubt the sustained growth of mining in the last decade has provoked unprecedented opposition in different parts of the country, characterized notably by the rise of a concerted people’s movement, mostly rural and at national level. This movement has been one of the new social markers of Peru since the end of the 1990s.

With their total opposition to new projects and their move to restore people’s rights in the old mining zones, the communities have questioned central aspects of the economic model that took hold in the country and that made mining into one of the privileged sectors of the economy.

One of the main gains of the movement generated by the affected populations in the most emblematic cases of conflict—such as Tambogrande, Quilish and Tintaya—is to have shown that development, with its essential component of economic growth, must have an ethical dimension, with unrestricted respect for human rights, democratic principles and citizen participation.

Realities such as that of Peru present additional challenges for the fostering of a suitable relationship among the various interest groups in areas where an activity such as mining is developed, so as to avoid any form of marginalization, to reinforce strategies of harmony and tolerance, and to encourage the informed participation of the populations. This continues to be the main challenge in the agenda of the communities and the bodies that share the aim of building a new social contract in the zones of mining activity.

References
Aste Daffos, Juan, José De Echave Cáceres & Manuel Glave Testino (2004): Procesos de Concertación en Zonas Mineras en el Perú. Canada: International Development Research Center (IDRC).

Buckles, Daniel (2000): Cultivar la Paz. Conflicto y colaboración en el manejo de los recursos naturales. Canadá: IDRC.

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Notes
1. Thorp & Bertram 1985.
2. New forms of investment characterized the mining sector in the 1970s: the appearance of state mining companies, mainly in Third World countries, changed the property structure of mining activity on a global level.
3. Flores Galindo 1993, p. 51.
4. See De Echave 2001.
5. The meeting took place on November 23-24, 1998 and was organized by the NGO CooperAcción.
6. “The NO vote won with 25,381 votes, that is 93.95% of the votes cast, taking into account spoiled and blank votes. The rate of absenteeism was 26.8%, a very respectable rate given that voting was not obligatory -- unlike the current practice in official elections -- and that the rate of absenteeism in the general elections in 2001 in the district had been 15%” (Rousseau & Melache 2002).
7. Joint venture in which Newmont Mining Corporation owns 51.35% of the shares, Buenaventura 43.65% and the International Finance Corporation of the World Bank 5%.
8. According to initial estimates it contains 4 million ounces of gold.
9. Aste Daffós et al. 2004.
10. Municipal order 012-2000-CMPC.
11. Unprecedented in Peru, the company made a public declaration of its guilt in a communiqué that appeared in the main national newspapers on November 4, 2004.
12. Extractive Industries Review 2003.
13. Mining Ombudsman 2002.
14. For example, in the case of the Code of SNMPE, a consultative committee made up of past presidents of that body deals with compliance.
15. Organization for Economic Cooperation and Development (represents the main industrialized economies).