Peru: Calls to strengthen transparency mechanism

Published by MAC on 2016-06-21
Source: Statement, Deutsche Welle

We Urge the Incoming Government to Continue with the Application of International Commitments Regarding Transparency in the Extractive Sector

Pronouncement

8 June 2016

Lima - Non-renewable natural resources exploitation is crucial for most of our world’s economies, accounting for a large share of their GDP. Extractive activities are often related to social conflicts (which in some cases, criminalise the protestors), corruption, and above all, to the lack of knowledge and misinformation given to the population regarding rent, profits and the use of funds received by the State from taxes and royalties.

It is fundamental to make the economic cash-flow of the extractive industries more transparent. This is why the Initiative for Extractive Industries Transparency Initiative (EITI) is so relevant around the world and in our country. Representatives from governments, companies and civil society integrate the EITI with the aim of promoting transparency regarding payments to government by extractive industries, to prevent acts of corruption and improve the management of economic resources obtained through these activities. Nowadays, 51 countries are voluntarily part of this initiative.

Peru has been a member of this initiative since 2005. Since then, it has respected the standard criteria and requirements. Peru was the first country in Latin America to be categorized as a “complying country” and to implement two de-centralized projects that allow citizens to monitor the use of royalties in their localities, which are the Piura and Moquegua cases.

Unfortunately, the recent election campaigns didn’t have any concrete proposals regarding transparency in the extractive sector and how to prevent social conflicts. The EITI, as a mechanism promoting further transparency, can generate trust among the population and help prevent social conflicts.

In February of this year, the EITI National Commission of Peru presented the results of the Fifth Report of the EITI National Conciliation – ECN (prepared by the Consultancy Ernst & Young, aka EY) corresponding to fiscal year end 2014. 59 companies participated in this study. One of the participation criteria was that a company’s contribution must be greater or equal to 2% of total national production value in the case of mining sector and 1% for the hydrocarbon sector. This was meant to ensure a large coverage.

The Commission declared that the results of the report must reflect the following concepts: (i) Income Tax determined by the Taxpayer (from Sworn Affidavits presented by the subsectors of mining and hydrocarbons); (ii) Royalties (subsectors of mining and oil); (iii) Special Tax for Mining (only for the mining subsector); (iv) Effective law (only for the mining subsector).

The Fifth Report covered 85% of the mining production value and 95% of the value of the hydrocarbon subsector. Only one company which has a share of over 2% of the sector, Minera Chinalco Peru S.A., declared its intention  not to take part in the EITI report. The company’s decision not to participate negatively affects the country’s objective to comply with the EITI standard.

For this reason, we call upon the next government to offer continuity and strengthen this initiative, and to make transparent all payments to government made by non-complying companies such as Chinalco, thus showing its will to adhere to EITI standards and avoiding risking our country’s participation in an initiative which could contribute to improve the processes of environmental participation and transparency in our extractive resources.

After 11 years implementing the EITI, we need the full facts of the sector’s funding mechanisms to be part of a public policy of transparency, as well as faster management of the information provided by companies. The creation of a National Authority for Transparency and Access to Information would be a great opportunity to do this, as well as the promotion of the EITI and the Open Government Partnership (OGP).

The OGP promotes transparency, the fight against corruption, the expansion of social participation and the achievement of open, effective and responsible budget management and public information in governments. Our country has also been party to this international initiative since 2012, so it is necessary for the next government to express its continued support.

Finally, both the EITI and the OGP are fundamental in facing the present context of the weakening of socio-environmental standards in investments; we must point out that one of the recommendations of the Organization for Economic Cooperation and Development (OECD) in the Evaluation of Environmental Performance for Peru 2016 is the inclusion of environmental concerns within the EITI. Therefore, transparency and increased access to ENVIRONMENTAL information regarding extractive industries, such as the information related to processes for the granting of rights, evaluation and environmental oversight, have become safeguards for the generation of sustainable investments.

Signed:

Alfa-Redi ● Alternativa – Centro de Investigación Social y Educación Popular ● Ana Sabogal, representante del EITI-PUCP ● Asociación Arariwa ● Asociación Civil Centro de Cultura Popular Labor ● Asociación Interétnica de Desarrollo de la Selva Peruana (AIDESEP) ● Asociación Nacional de Centros (ANC) ● Asociación Peruana para la Conservación de la Naturaleza (APECO) ● Asociación Pro Derechos Humanos (APRODEH) ● Asociación Servicios Educativos Rurales (SER) ● CARE Perú ● Cáritas del Perú ● Central Asháninka del Río Ene (CARE) ● Centro Amazónico de Antropología y Aplicación Práctica (CAAAP) ● Centro de Conservación, Investigación y Manejo de Áreas Naturales – Cordillera Azul (CIMA-Cordillera Azul) ● Centro de Estudios para el Desarrollo Regional (CEDER) ● Centro de Investigación y Promoción del Campesinado (CIPCA) ● Centro para el Desarrollo del Indígena Amazónico (CEDIA) ● Centro Peruano de Estudios Sociales (CEPES) ● Chirapaq, Centro de Culturas Indígenas del Perú ● Ciudadanos al Día (CAD) ● Comisión de Derechos Humanos (COMISEDH) ● Confederación Nacional Agraria (CNA) ● Consejo de la Prensa Peruana (CPP) ● Consejo Machiguenga del Río Urubamba (COMARU) ● Convención Nacional del Agro Peruano (Conveagro) ● CooperAcción – Acción Solidaria para el Desarrollo ● Derecho, Ambiente y Recursos Naturales (DAR) ● Derechos Humanos sin Fronteras de Cusco ● DESCO Sur ● Environmental Investigation Agency (EIA) ● EQUIDAD, Centro de Políticas Públicas y Derechos Humanos ● Foro Ecológico del Perú ● Forum Solidaridad Perú (FSP) ● Fundación Ecuménica para el Desarrollo y la Paz (FEDEPAZ) ● Grupo Propuesta Ciudadana (GPC) ● Instituto de Defensa Legal del Ambiente y el Desarrollo Sostenible (IDLADS) ● Instituto de Desarrollo Socioeconómico (IDS) PROSPECTIVA AMAZÓNICA ● Instituto del Bien Común (IBC) ● ONG Caminemos Juntos ● Organización Nacional de Mujeres Indígenas Andinas y Amazónicas del Perú (ONAMIAP) ● Organización Regional de los Pueblos Indígenas de la Amazonía Norte del Perú (ORPIAN-P) ● Paz y Esperanza ● RED MUQUI Perú ● Red Peruana por una Globalización con Equidad (RedGE) ● Salud Preventiva Andina ● Servicios en Comunicación Intercultural (SERVINDI).

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All that glitters is not gold: Indigenous communities in Peru protest mining

Rachel Stern

Deutsche Welle

14 June 2016

High up in the Andes of Peru, a battle is raging between foreign mining businesses eying gold, and indigenous communities who want to protect their clean water and way of life.

The Andean highlands of Peru have long drawn those in search of fortune. Centuries ago, Spanish conquistadors arrived to plunder the rough, jagged landscape of its gold and silver, effectively ending the Incan Empire. Today, multinational mining companies cut into the earth to extract its abundant resources.

For the past 20 years, Yanacocha - the world's second-largest gold mine - has been operating in the dizzying heights of the mountain region. Heavy machinery cuts deep ridges into the ground, leaving unmistakable scars behind. Trucks laden with ore snake down roads from the mine.

The operators, U.S.-based Newmont Mining Corporation and Peruvian company Minas Buenaventura, say it has boosted the economy of what is Peru's poorest province. But some locals in its region of Cajamarca disagree.

They say they haven't gotten a fair share of the area's spoils, and that the sprawling open-pit mine pollutes their rivers and irrigation canals through nitrates used in explosives, chemicals used for processing the ore and fuel residues. Even worse, some say they have been repeatedly threatened and when they demonstrate to draw attention to their cause, they face police brutality.

"I've been beaten twice just for a peaceful protest against one project that would drain our lake," says Eduardo Ramirez (not his real name*), a local activist who says runoff from the mine has already contaminated the waters he uses for farming. "We don't know who to trust, since Yanacocha has contracts with the police."

Precious water

In the area around Cajamarca, water is a particularly critical resource. That's because mining is a thirsty business that consumes massive amounts of that liquid of life, stripping soil and vegetation that help to replenish underground aquifers.

The population in the region is growing and in its capital city of the same name, water supply is already insufficient to meet need, says Robert Moran, a Colorado-based hydrogeology consultant who did an independent analysis of water in the region in 2012.

At the time of his visit, municipal water was available only a few times a day in many sections of Cajamarca. The other issue, he says, is the danger of contamination from chemicals released by mining and mineral processing.

"Roughly 70 percent of the city's water is supplied by the El Milagro facilities, which take water from the Rio Grande below the Yanacocha operation," wrote Moran.

That water is at risk of contamination from mining operations - some insist that mining activities have already polluted it. Moran says "the city has inadequate resources (analytical, financial, etc.) to strongly support these allegations."

Newmont: 'We are trying to help'

For its part, Newmont says it does what it can to mitigate the environmental impact of the Yanacocha mine. It says it invested more than $1 billion in environmental and social responsibility projects in the region between 1993 and 2012, such as health care, community infrastructure and facilities, agricultural support, and education. The local community also has better access to water, thanks to the company's efforts, says spokesman Omar Jabara.

A recently constructed water reservoir provides year-round water to a handful of smaller communities near the city of Cajamarca, even during the six-month dry season.

"Cajamarca's regional government doesn't have any water storage capacity, and that's why we're trying to help," says Jabara.

The region received more than 418 million soles (111.2 million euros) in mining royalties from 1996 to 2011, according to a 2014 report, co-authored by the Columbia University Law School Human Rights Clinic and local nonprofits - much of which goes to the local and regional government.

But that same report also notes that over half of Cajamarca residents still live in poverty. "Mining has not lifted the region out of poverty, and instead has produced social and environmental conflict for our communities," the report says.

Dangerous protests

That conflict often plays out in the form of protests against the operations, particularly around lakes facing drainage for mining purposes. One such protest is being led by subsistence farmer Máxima Acuña, who has been resisting alleged attempts to force her off her land for years. Acuña and her family say they have withstood violent eviction attempts, including beatings that left her and one of her daughter's unconscious. The mining company denies any involvement.

Yanacocha claims it bought the land in 1997 from the local community, and that Acuña, who won the prestigious Goldman Environmental Prize in 2016, is illegally occupying it. A court case contesting her ownership is still pending. The joint venture that owns the Yanacocha mine wanted to set up a new project, the Conga gold mine, in the region but the project has been on hold since 2011, according to Newmont.

It's a dangerous time for environmental activists in the region. In 2012, four deaths in the nearby town of Celendin were linked to protests against the Conga project, says Maryum Jordan, a lawyer with the NGO Earthrights International in the Peruvian capital of Lima.

One farmer, Elmer Campos, is still seeking compensation for medical costs for when he was shot in the back while protesting expansion of the Yanacocha mine in 2011, according to Jordan.

But a law passed in 2014 freeing police from criminal responsibility if they kill or injure someone in the line of duty means protesters in the future would have no legal avenue to challenge police brutality.

Jordan added that she's also heard reports about activists facing criminal charges when they hadn't done anything, as retaliation for their activism. Some of them face up to 65 charges each, including things like kidnapping and public obstruction of roads, she says.

Still, as protests continue, the mining company is yielding to some of the demands from Cajamarca residents. It recently announced it would not forge ahead with the Conga project "for the foreseeable future." It's one small victory for communities there.

"When you stand up to mining interests, it feels like David battling Goliath," says Ramirez. "But Máxima [Acuña] shows us that the fight is not hopeless."

*Out of fear for reprisal, the interviewee requested his real name not be used