Río Blanco: history of a mismatch in Peru

By Chris Hufstader

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Just a few days before the referendum organized by the mayors of three districts in Piura, in the area of the proposed Rio Blanco mining Project run by Majaz Mining Company, there is intense public debate. Comments on the referendum and mining in Piura from from ministers, entrepreneurs, and even high representatives of the Catholic church are in the media. Piura is latest epicenter of the sometimes conflicted relationship between large mining projects and communities.

Given everything this project represents for the government and the mining industry, all the attention is not surprising. This is a huge copper mine that will require an investment of about US$ 1.4 billion and that could export around US$ 1.0 billion a year for the next 20 years. The recent acquisition of close to 90 percent of the shares of the Majaz main company—the English junior miner Monterrico Metals Plc—by the Zijiin Mining Group Ltd. consortium, does nothing but add more weight in the balance for the development of the project, especially now that the Peruvian government wishes to sign a trade agreement with China.

The conflict, nevertheless, did not start this week, and the referendum that intends to collect the opinion of the local population about the continuation of the Majaz mine, is just the latest controversy. There have been a series of problems that have marked the presence of this mining company since it entered the scene in 2001.

Early concerns

From the beginning, the concerns about the environmental impact of this mining project have marked the tone and character of this debate. Located in the Huancabamba mountains, the mining concession area will cover a total of 6,473 hectares (about 18,858 acres) of deserts and cloud forests. The forests act like a sponge, collecting rain water and feeding it into the rivers that flow into the agricultural basins of Chinchipe (in Cajamarca) and Quiroz (in Piura). The communities of Yanta and Segunda y Cajas, under whose territories the copper deposit lies, immediately expressed their worries about the potential destruction of these fragile eco-systems and the effect on their agricultural lands. Soon other peasants and biologists from Piura joined in with concerns about the impact mining would have on the rich biodiversity of the area. The preliminary results of a recent study of the University of Texas made by researchers Kenneth Young, Blanca León and Julio Postigo confirmed their worries, when it found that a mine with an open pit of 1,000 hectares (2,450 acres) would cause alarming degrees of destruction because "it would cut connections among eco-systems (biological corridors), transcending impacts of local dimensions," and endangering species already threatened like the oso de anteojos or Andean spectacled bear and the altitude tapir. Majaz has not yet presented its Environmental Impact Study (EIS), which makes it difficult to know what plans they have to diminish these potential impacts.

But besides these environmental worries, another social problem that has legal implications must be added: Majaz never obtained the communities consent, required by law, to start the explorations in their territories. As it has been confirmed by the report N° 001-2006/ASPMA-MA of the Peruvian Ombudsman, the firm has not obtained the authorization of two thirds of the members of the communities found in the mining concession area. Recently, Andrew Bristow, operations manager for Majaz mine, has admitted that even if the firm had a document signed by leaders of both communities in 2002 authorizing the exploration activities, Majaz did not comply with the above mentioned legal requirement. It is not surprising then that the firm, after six years operating in the zone, has not obtained the social license required to operate a mine project. This fact was recognized even by Bristow, who has declared that the Río Blanco mining project "could be delayed if a social agreement with the communities where it operates is not obtained."

The social conflict reached its most critical moments in 2004 and 2005, when two demonstrations of thousands of community members coming from several miles around confronted police forces. Several peasants were injured in violent confrontations—some of them severely. Two died and more than 200 had lawsuits brought against them for taking part in the protests.

Referendum and hostility

A few days from the referendum, hostilities have started again. "The referendum is being politically manipulated. "...mayors from outside of Piura and international NGOs are involved," declared Bristow. And the government, which in almost all other similar social conflicts has supported the mining investors, has ignored communities concerns. The Prime Minister Jorge Del Castillo, who traveled to Piura on Monday September 3rd with Monsignor Luis Bambarén, bishop of nearby Chimbote, said that "a referendum cannot be used to veto an economic activity...because natural resources are the property of all Peruvians and do not belong to a district, community, or province." The minister of Energy and Mining, Juan Valdivia, said that "the interests of other countries are behind these entities [NGOs] that intend to delay the country's development." On the same note, the National Jury of Elections (JNE) has delcared this referendum illegal, and that it will start the legal actions against those who should be held responsible for "acts against the legal order."

The Ombudsman office and the National Council for Human Rights of the Ministry of Justice have expressed a different opinion, recognizing this is not an illegal procedure. The Ombudsman in particular said that these kinds of mechanisms are useful if they are oriented to "start processes that will build consensus which enrich the decisions of the state authorities."

Dialogue

Answering the JNE statements, the mayors of the zone have said that they are holding the referendum because the government will not engage in a dialogue with them. According to Javier Jahncke, from the Technical Table for the support of Majaz, "since January 2006 there were several initiatives for dialogue, but this year, with the authorities of the new government, it definitely stopped. That is why this referendum was conceived."

At the time of this report, the mayors of Carmen de la Frontera, Ayabaca, and Pacaipampa are determine to hold the referendum in their towns and reestablish some type of dialogue afterwards. The mining company has reiterated that the offer they made last August 15th of giving US$ 80 million as a fund for social projects and infrastructure in the communities, "is still standing." Prime Minister Del Castillo expressed his wish to build bridges when he declared in a press conference that the president of Zijin "has no intention of exploiting the mineral resources in the zone if they do not reach an agreement with the population."

Being so close to the referendum, the political and media pressure on the organizers will be, no doubt, very strong during these days. Above all, it is expected that the action will take place in calm and with transparency.

Legal problems

From a legal point of view, the most important aspect of the conflict between Minera Majaz and the communities is the lack of consent from the communities, required by law, authorizing mining explorations in their territories. In its report N° 001-2006/ASPMA-MA, released in November 2006, the Peruvian Ombudsman declares that the Law of Peasant and Native Communities states that all use of lands for mining activities, including exploration, must have the authorization of the communities who own the surface property, granted in general assembly and registered in an act signed but two thirds of the accredited members. If the community authorization is not obtained, the firm must wait until the state carries out a "serving procedure," in which the government of Peru gives the authorization and pays compensation to the community. According to the Ombudsman, this legal requirement has not been completed, because Majaz has not obtained the authorization of two thirds of the members of the communities over whose territories the concession is located.

As for the legal status of the referendum, the Nacional Jury of Elections (JNE), in a communiqué dated August 15th, stated that the referendum has no official character, and is also illegal because "no person, sector of the population, or organization, including a city hall, can arrogate the exercise of exclusive and non transferable faculties that constitutionally belong to the electoral bodies."

The Peruvian Ombudsman has declared that, even though these mechanisms do not have legal implications, meaning that the State is not forced to accept its results, the referendum is allowed under constitutional law and is not illegal.

Anthony Bebbington, an academic from the Environmental and Development School of the University of Manchester and main author of the study "Mining and development in Peru, with special reference to the Río Blanco Project, Piura,"" has observed that the deep discrepancy among the central government and the local authorities about which are the adequate ways to solve the conflict could be a sign that the democratic practice is failing. As Bebbington says, "it seems that there are no institutions that permit a point of a balance among local wishes and concerns, on the one side, and national wishes and concerns, on the other."