Nearly half of the social conflicts in Peru right now are related to oil, gas and mining projects, according to Jose de Echave of the Peruvian organization Cooperacción. De Echave says that Peru’s booming economy, led by major investment in oil, gas, and mining, is outpacing the capacity of the government to control and regulate the industry. He says conflicts arise when communities are not consulted and citizens do not see revenues from these projects going to schools, hospitals, and other improvements in poor communities. Speeding up implementation of the voluntary Extractive Industries Transparency Initiative (EITI) in Peru, and including more company participation, would be an important step, de Echave said.
De Echave's remarks came during a conference held by Oxfam America and the Revenue Watch Institute in Washington, DC titled "From Conflict to Consensus: Extractive Industry Transparency in Latin America." The conference included speakers from citizen organizations in Bolivia, Ecuador, Mexico, and Peru, as well as the Peruvian Ambassador to the US Luis Valdivieso and Anwar Ravat, the World Bank’s manager of the Extractive Industry Transparency Initiative.
Patricia Diaz, Oxfam America's program officer in South America following the hydrocarbon industry, says conflicts erupt in Peru and other countries as “communities express frustration with what they perceive to be significant social and environmental costs associated with extractive industries, and only limited social benefits. These conflicts not only destabilize Peru but create a difficult operating environment for American and other companies.” She also said that conflicts flare up when mines and pipelines are set up without the free, prior, and informed consent of local people.
Oxfam America and Revenue Watch Institute are advocating for governments and companies to disclose payments made for oil, gas, and mining projects as a means to build trust and reduce conflicts. Citizens would be able to see how much money their government receives from companies, and if they are getting a fair share of revenue devoted to their communities. Diaz says this information would help avoid conflicts such as the one seen in the Tacna and Moquegua regions of Peru last year, when the government altered mining royalty payments, setting off protests by 20,000 people resulting in three deaths. “More information on the mining revenues that each region would be receiving could have helped to avert this conflict,” she said.
A few days after the Washington event, and after months of pressure from Oxfam America and others, the Inter-American Development Bank formally endorsed EITI. In the U.S. Congress, Diaz and others also held a briefing to urge action on proposed legislation to require extractive industry revenue disclosure. If enacted, the law would require companies subject to US Securities and Exchange Commission rules to disclose payments to governments. “Civil society in Peru would have a key tool for ensuring that these payments ultimately benefit the local communities most affected by mining and hydrocarbon projects,” Diaz said in Washington. “And US companies and consumers would benefit through better operating environments and steady access to the raw materials you depend on.”