Farmers in Cusco are reporting irregular rains and intense heat. This is affecting their potato and corn crops: in recent years, production has fallen by at least half. The Peruvian Ministry of the Environment corroborated this information in its 2009 National Environmental Study, which revealed that 80,000 hectares (about 195,000 acres) of potato and 60,000 hectares (148,000 acres) of white corn have been lost in the last 12 crop years due to climate change. Livestock farmers also report that new diseases are affecting their animals.
Cirilo Quispe Latorre, mayor and resident of the district of Cachimayo. “Eighty percent of the farmland is seasonal. In other words, if there is rain, we plant. If there isn’t enough rain, we can’t keep planting. I’m a native of this region. When I was a child, there was quite a lot of water in this region. There were toads and frogs that you don’t see any more. It’s a big worry. And if I go up to the mountains around Urubamba, I see that they’re almost black now. I worry and tell my children that those mountains used to be white with snow. Now that I’m a bit older, they’re black. What’s happening? A big change is taking place on our planet. I don’t know who’s going to come and sort out this situation. It’s worrying. The rains used to start in October, and we would plant broad beans, wheat, and potatoes. Now the rains begin around mid-December, and we lose more than a month and a half of growing time. Now, by the end of March the rains are over. It used to rain throughout most of April, with the dry season only starting in May. So, the rain has decreased at the beginning and the end.”
Teresa Rocca Mismi, communal farmer in the community of Chacacurqu. “I have potato and corn crops. There isn’t as much rain. The hail that’s fallen (we don’t normally see hail in this region) is what’s affected us. It hailed in mid-February. For example, the potatoes that should be big by now are just seeds. I don’t know why we’ve had hail this year. The rain used to start in October, now it’s December. This has been happening for five years. We want the authorities to help us.”
Local residents in rural Piura report that changing rainfall patterns are damaging their mango and cassava crops. They also have noticed public’s health problems, specifically the emergence of diseases such as dengue fever (spread my mosquitos) and leishmaniasis (spread by sand fleas). A Ministry of Health employee corroborated this information, confirming the appearance of dengue in populations where the transmitting agent (the Aedes aegypti mosquito) never had existed previously.
Marco Sandoval García, president of the Santa Catalina Peasants’ Association. “When I was a lad, I remember that there would be two harvests a year in the lower rice-growing area. Now there’s only one. I also remember that in my community, we had drinking water 24 hours a day. Now it’s just two or three hours, depending on the rain. All the drinking water for Patachaco used to come from a single spring. Now we have to take it from two springs... There’s a shortage of water... The springs aren’t the same any more. Some of them are drying up. The elders say that the cassava never used to rot and could be harvested throughout the year. Last year, no one harvested cassava because it all rotted. My orange tree was full of blossoms, but then we had a sharp frost and all the flowers fell off. There’s instability. The climate is strange. For example, although it’s winter, we’ve just had seven days of strong sun. Some farmers think this is because there’s been a lot of deforestation of the hills. They don’t know that climate change is affecting the whole world. We’ve caused so much damage ourselves, with deforestation and pollution.”
Katerine Rosillo Quispe, Ministry of Health employee in charge of Health Center 1 in La Huaquilla (Morropón, Piura). “We’ve got high numbers of dengue transmitting agents in the region, which hadn’t been seen before. Those dengue mosquitoes are new for us. In La Huaquilla, the whole population is exposed: children, adults, the elderly. Climate change greatly affects health, especially as other types of pathologies appear, such as diarrhea, respiratory infections, but above all, the dengue mosquito.”
]]>Newmont, the largest US-based mining company, agreed to the review in 2007 following allegations of serious rights abuses by police and private security forces hired to protect the mine. Among other recommendations, the review calls on the company to more rigorously investigate human rights abuses, disclose contracts with police forces, consider severing ties with a private security contractor, and promote greater dialogue with local communities.
"This report contains a number of important recommendations for addressing ongoing human rights problems at Yanacocha," said Raymond C. Offenheiser, president of Oxfam America. "Given the current tensions around mining projects in Peru, we urge Newmont to take immediate action to implement these recommendations."
The report is the result of a two-year mediation process between Newmont and Oxfam America under the auspices of the Voluntary Principles on Security and Human Rights, a global initiative bringing together mining and oil companies, governments, and nongovernmental groups. Newmont and Oxfam entered the mediation after Oxfam filed a complaint over abuses by security forces at Yanacocha in three separate incidents throughout 2006-2007. These included the fatal shooting of a local farmer involved in protests at the mine and the surveillance and harassment of members of a local human rights and environmental group.
Peru has been hit by a recent wave of protests around mining and oil projects. According to government estimates, there are more than 70 active conflicts at mine sites in various parts of the country, some of which have turned violent. Tensions reached a boiling point in early June when actions by the national police to quell protests by indigenous peoples in the Peruvian Amazon, who were protesting government decrees designed to open up more land to mining and oil operations, resulted in a tragic loss of lives and a large number of wounded police officers and indigenous peoples.
"Newmont can help reduce the level conflict in Peru by implementing these recommendations," said Keith Slack, extractive industries program manager at Oxfam America. "Doing so would be an important confidence building measure among local community members affected by mining operations."
The report recommends that Newmont more vigorously implement the Voluntary Principles on Security and Human Rights, which include ensuring that security forces employed by companies do not have a history of human rights abuse. The report further calls on the company to review the results of psychological examinations of all security personnel before employing them at the mine.
"This is a critical first test of the complaints mechanism of the voluntary principles," noted Slack. "Newmont's compliance with these recommendations is important for the continued credibility of the initiative."
This report follows a previous independent review of Newmont's community relationship management practices, the results of which were released in March. Oxfam encourages Newmont to continue taking leadership in this type of review process and to fully implement the resulting recommendations to improve relationships with local communities near mining projects.
]]>At least 30 people have been killed in recent weeks in violent confrontations between indigenous protestors and police. The overturn of these decrees now sets the stage for dialogue. Shortly after congress rescinded them, President Alan Garcia delivered a speech in which he said that his government should have included indigenous people in discussions about the decrees before he issued them.
The government of Peru is now initiating a commission to start a dialogue with indigenous people, and will include Oxfam's partner AIDESEP, which represents a highly diverse group of indigenous organizations from all over the Amazon region.
"Oxfam hopes this dialogue initiative will be an important first step toward lasting solutions based on indigenous peoples rights and ensuring strong environmental regulation of extractive activities in the Amazon," said Frank Boeren, Oxfam America's Deputy Director in South America.
]]>Demonstrations in the northern Peruvian town of Bagua began in late April, when indigenous organizations began protesting over the content of a set of legislative decrees justified by the Peruvian government as part of the United States-Peru Free Trade Agreement (US-Peru FTA). The national police's action to quell the protests resulted in a tragic loss of lives and a large number of wounded police officers and indigenous peoples.
Indigenous federations and many civil society organizations claim the new legislative decrees could have detrimental consequences for the Amazon rainforest and indigenous land rights, and were passed without transparency or genuine consultation with indigenous communities. This is an apparent contradiction to US-Peru FTA commitments as well as a direct violation of ILO Convention 169. This convention, ratified by the Peruvian government in 1993, grants indigenous communities the right to be consulted on issues affecting them.
"Oxfam calls on the Peruvian government and indigenous organizations to end the use of violence," said Raymond C. Offenheiser, president of Oxfam America. "By clarifying that concerns raised by indigenous communities do no conflict with Peru's obligations under the US-Peru FTA, the US government can help foster a mutually beneficial resolution."
On June 10, the Peruvian Congress temporarily suspended two of these legislative decrees, numbers 1090 and 1064.
"The Peruvian Congress has taken an important first step by suspending these decrees, but much more needs to be done to bring an end to this conflict. The US government can help by fostering a solution through dialogue, not force," said Offenheiser.
With the most recent tragic events and the possibility of more violence—especially now that the Peruvian government has communicated its intention to clear protesters in other areas of the Amazon—the US government must act quickly to work with Peru to address the concerns about these legislative decrees, and to clarify what relation, if any, these decrees have to compliance with US-Peru FTA.
"We strongly urge the US government to help bring an end to this crisis by supporting a dialogue that includes views of indigenous communities and protects the human rights of these citizens as guaranteed by national and international law," said Offenheiser.
]]>With some champions in Congress and support from the White House, we're hoping to see domestic legislation that not only fines companies who pollute, but also uses some of these funds to help affected communities build their resilience. If we are successful domestically, we can lay the groundwork for a global deal at the UN Climate Change Conference this December—an agreement that will create a more hospitable climate for us all.
Also in this issue: A force of peace in Peru; Rebuilding in Bangladesh; Oxfam America's new role in Darfur.
]]>Last month, Newmont released the results of an independent review, which provides information about the company's community relationships and important recommendations for improving operations on the ground. The review, the first of its kind by a major mining company, came at the request of shareholders, led by New York-based Christian Brothers Investment Services, concerned about protests and environmental problems at Newmont's mining projects around the world. The company will formally present the results of the report to shareholders at the annual meeting.
"We commend Newmont for conducting a critical assessment of their community relationships. As shareholders gather this week, plans for urgent action to improve relations with the communities living near its operations should be at the top of the agenda," said Raymond C. Offenheiser, president of Oxfam America.
Recommendations from the report include handling community conflicts at an earlier stage, holding management accountable for community relations, and establishing effective grievance processes at all sites. The report indentifies problems with Newmont's community interaction at several locations, including sites in Ghana and Peru.
Nearly 10,000 villagers, mainly poor farmers, were displaced by the Newmont's Ahafo mine in Ghana. The report identified the long-term success of the resettlement as one of the greatest risks confronting the project and called on Newmont to actively monitor the implementation of resettlement. Newmont and the World Bank (IFC) will be conducting an audit of the resettlement program this year. Oxfam urges Newmont to make the audit process transparent and participatory.
Newmont's Yanacocha mine in Peru has been the site of repeated protests and violence in recent years. In 2007, local mining activists were the targets of harassments and death threats.
"The report identified an atmosphere of fear and intimidation among local residents at the Yanacocha mine, who worry about speaking out against the company out of fear of harassment by the mine's security forces," said Offenheiser. "It is very troubling that people are afraid to peacefully express their concerns. Newmont must address this situation immediately."
Communities affected by mining projects should have a role in decision-making about how the project will affect their lands and livelihoods. The report recommends an action plan that includes clarification of Newmont's commitment to the principle of free, prior and informed consent for communities.
"Newmont's endorsement of the principle of free, prior and informed consent for communities would be an important step forward," said Offenheiser. "The key now is to engage with local communities and apply this principle to company practice. We are pleased that Newmont's board of directors has accepted the report's analysis and recommendations and directed management to engage with affected communities on the report's findings."
The Newmont report also highlighted community concern about lack of access to information about the revenues the company pays to local and national governments, leaving communities unable to hold their governments accountable for how mining revenues are used.
"Newmont has been a leader in committing to greater transparency and can help address community concerns about revenue sharing by recommitting to disclose all payments made to host governments," said Offenheiser. "Endorsing mandatory public disclosure policies like the Extractive Industries Transparency Disclosure Act would be an important first step."
Oxfam advocated passage of the Extractive Industries Transparency Disclosure Act, legislation that would require all mining, oil, and gas companies registered with the Securities and Exchange Commission to disclose the payments made to foreign governments. The bill, which was introduced by House Financial Services Committee Chairman Barney Frank (D-MA) in the 110th Congress, is expected to be reintroduced shortly.
]]>There are about 200 indigenous Ashaninka people living in this area, but most of them, like 29-year-old Dante Cheresente, are not making much money and therefore can't pay for things like doctor visits when family members fall ill or education for their children. They live off of the fruits and vegetables they grow in their small plots, but these are mostly for their own consumption. "We grow yucca, plantains, lemons, oranges, and tangerines," Cheresente says. "But we just eat most of it and feed it to our animals, because prices are so low it is not worth selling."
To tap into the opportunities of the market economy and make some money, Cheresente and his father, who is the village chief, and others in their community are collaborating with a local rural organization known as SEPAR, Oxfam America's partner in this central jungle region of Peru, to carry out an experiment: growing the ancient Sacha Inchi plant, which yields a nut that is rich in nutritious omega-3 and omega-6 oils.
"There is demand in Peru for Sacha Inchi oil for cooking, but also as a health supplement internationally," says Raul Ho, Oxfam America's program officer in South America. "It is well known now, and the supply is lower than demand, both in Peru and abroad. To meet this demand, we will help indigenous farmers find the right Sacha Inchi variety for their lands and help them grow, process, and sell it in the fair trade market."
SEPAR is working with farmers like Cheresente all over the central Amazon to plant experimental plots of Sacha Inchi. In San Ramon de Pangoa, they are growing two different varieties, one from the northern Amazon and one from the southern region, to determine which will perform best in the soil and altitude found in their village. "This is being done with indigenous farmers every step of the way," says Ho. "We will help them enter this market with the right seeds and production technology, and the farmers will know the best practices for growing Sacha Inchi." The goal is to produce a high-grade, organic Sacha Inchi, for which the farmers will get the best possible price.
In San Ramon de Pangoa, the rows of Sacha Inchi plants are interspersed with corn, soy beans, potatoes, and other food crops to determine which growing patterns work best. Frank Mendoza, a tropical agriculture expert advising SEPAR, says the Sacha Inchi crop could be quite lucrative. "If we can help these farmers grow Sacha Inchi as just one of their crops, it will increase the income of the farmers considerably," he says. Cheresente and his father, for example, say if they can make decent money from Sacha Inchi, they could devote five of their eight hectares—about 12 of their nearly 20 acres—to growing the plant. Ho and Mendoza estimate that with luck, in their first year they could get as much as 500 kilos of Sacha Inchi per hectare and sell the unprocessed nuts at about seven Peruvian soles (about $2) per kilo. This could mean a gross return of as much as $5,000 per harvest. With the right variety and improved production techniques, farmers like the Cheresentes could eventually produce nearly 1,000 kilos per hectare, which would bring in over $10,000 for unprocessed Sacha Inchi nuts on their five hectares, a huge income boost in a very poor region of Peru.
Cultivating a valuable cash crop like Sacha Inchi can help the indigenous Ashaninka people in villages like San Ramon de Pangoa to connect with local and international markets on their own terms: to earn money and preserve their culture and way of life. Preserving community and the Ashaninka's legacy occupy Cheresente's mind quite a bit these days: he and his wife, Laura, have a two-month-old son, Jason Fritz Cheresente. While his father talks with visitors, Jason Fritz lays in a hammock, quietly sleeping. Attached to the hammock is a string, which his grandmother pulls gently to rock the baby as she talks with friends. She and her generation have witnessed the wholesale occupation of this central jungle region by settlers from the highlands escaping the guerilla war of the 1980s and seeking land and opportunity. The government encouraged this exodus, believing the land was unoccupied, as it ignored the indigenous inhabitants. The result is that the Ashaninka have been squeezed into smaller and smaller areas and can no longer hunt and fish. They are now settled and trying to become part of the larger economy while preserving their culture. Despite these pressures, Cheresente is optimistic that growing Sacha Inchi will help them. "We expect to increase our income, so we can support the elderly people in the community, as they were the ones who worked to get this land. We also want to improve the level of nutrition and education for children here."
Growing Sacha Inchi is just part of this economic integration for the Ashaninka. Others in the village are getting help in producing and marketing handicrafts such as woven bags and traditional garments, as well as souvenirs for tourists. Cheresente's wife even got a grant from SEPAR to open a store, where she sells food, soap, and other consumer goods. Small enterprises like this will help people earn cash they can use to pay for health care and other services. And more small enterprises will help start to move cash through the rural economy.
Growing Sacha Inchi and other money-making ventures in these indigenous communities will help people prosper and maintain their communities. Cheresente and his neighbors have worked hard to get the research plots growing despite a serious drought that set in just after planting last year. They watered the Sacha Inchi plants from a small stream near the village and tended the plots three entire days per week.
Antonio Cheresente, Dante's father, says they are looking to Sacha Inchi for their future. "We know this research will help us improve our farms," he says.
]]>Since 2006, Peru has seen an impressive annual economic growth rate of more than six percent. Mining has been the main driver of this impressive growth with copper production doubling and gold production up 30 percent over the past five years. Peru's mineral wealth has attracted investment from a wide range of foreign mining companies, including 13 of 17 members of the International Council on Mining and Metals (ICMM). Mining exports surpassed $17 billion in 2007, amounting to 62 percent of the country's total exports.
"In the midst of this economic windfall, Peru's regulatory infrastructure remains weak and under-resourced," said Raymond C. Offenheiser, President of Oxfam America. "Forty percent of all Peruvians remain in poverty; in the mineral-rich Andes region, poverty rates exceed 70 percent."
Since large scale resource extraction generates relatively few jobs, mining benefits must trickle down to communities through government programs that redistribute revenues. In Peru, this redistribution process has proven highly problematic because of limited governmental capacity to regulate the industry. Currently, the Ministry of Energy and Mines is tasked with both promoting mining investment and enforcing social and environmental regulations—a problematic conflict of interest. The new Ministry of the Environment should assume this role to regulate mining and strengthen the independence of this ministry.
"There is a justifiable sense of frustration among the Peruvian people impacted by mining who have not reaped the benefits of resource wealth generated from their lands," said Offenheiser. "They have not seen these revenues translate into health services, education, or infrastructure to improve their everyday lives."
In many areas around large-scale mining operations, this frustration has lead to conflict and violence. The Peruvian government's public defender's office, Defensoria del Pueblo, recently counted more than 70 active conflicts around mining operations spread across the country.
"Communities do not trust the government to address their concerns and protect them from pollution and other harms that mining can cause," said Offenheiser. "They're left believing organized protesting is the only option for making their voices heard."
The Peruvian government has cracked down on social protests and criminalized activities defined "anti-mining" for fear that local protests could potentially disrupt foreign investment in mining. To make matters worse, some mining companies have exacerbated social tensions by using private security forces that have been accused of violating human rights.
Several steps, outlined in a new paper from Oxfam America, need to be taken by government, mining companies, international donors and civil society groups to reduce conflict and preserve the long term viability of the mining sector in Peru. These include recognizing the right of community consent; condemnation of all threats and harassment; strengthening government capacity and independence; and full disclosure of information on the social, environmental and economic impacts of mining.
At a minimum, mining companies should actively participate in Peru's Extractive Industries Transparency Initiative (EITI) process, a global initiative designed to promote disclosure of revenue payments by oil, gas and mining companies. Members of the US Congress can help take this a step further by supporting legislation to make revenue disclosure mandatory. The Extractive Industry Transparency Disclosure (EITD) bill was introduced in the House and Senate in 2008. This legislation, expected for reintroduction in 2009, would require all oil, gas, and mining companies registered with the SEC to disclose their payments to host countries and extend transparency as a truly global standard for company operations.
"By publishing what they pay to the government, mining companies could help communities hold the government accountable for ensuring local economic development," said Offenheiser.
International donors, like the International Finance Corporation, can support these efforts by insisting on transparency, backing government efforts to strengthen capacity, supporting civil society efforts to hold mining companies accountable for compliance with human rights and environmental standards, and helping the Peruvian government diversify its economy in order to the reduce the country's dependence on resource extraction.
"Acting with full transparency and involving affected communities in the process from the start will go a long way to address the underlying cause of conflict," said Offenheiser. "This would open lines of communication that could foster the long term viability of the industry and the ability of mining to contribute to the development in Peru."
]]>Oxfam America is joining other groups in Peru in calling for a complete investigation of these events, and for the individuals responsible for these crimes to be brought to justice.
"We are requesting that the Public Ministry [public prosecutor] and the police carry out an investigation," said Javier Aroca, coordinator of Oxfam International's extractive industries program. "It is essential that these accusations be investigated and that those responsible are punished to ensure that the laws of our country are enforced and that the fundamental rights of our citizens are protected. In the future, we must be able to attain peaceful solutions to social conflicts."
In January 2009 the National Human Rights Coordinator released a report alleging that 28 community members, who were concerned that mining exploration was being carried out on community farm land without their permission, were kidnapped and detained for three days. They had been marching to the mine site, where the Majaz Mining company (now known as Rio Blanco Copper) was exploring for copper deposits. The community members came from Segunda y Cajas and Yanta in Piura, and Jaén, and San Ignacio in the neighboring department of Cajamarca. According to the report, the march was peaceful—no participants carried any weapons apart from the machetes and whips customarily used when traveling by foot in the rough Huancabamba mountains. According to local leaders, they intended to go and speak with the representatives of the mining company, since other attempts to discuss their concerns had failed.
According to the report published by the National Human Rights Coordinator and FEDAPAZ, the community delegation of approximately 400 people was camped out the night before their planned arrival at the mine site when they were attacked by helicopters shooting tear gas. Soon after, police entered their camp and burned their equipment, food, and medicine. The next day the group was attacked again when it arrived at the Majaz mining camp, one person was killed, 40 were injured, and 28 were kidnapped and detained inside the mining camp. The National Human Rights Coordinator report says the detained individuals were subjected to "diverse forms of physical and psychological torture. As well as being savagely beaten…they were kept hooded, sprayed with tear gas and blindfolded, with no warm clothes in spite of the low temperatures." They were released after three days.
The kidnapped community members made formal legal complaints, but the public prosecutor in the region did not conduct an investigation. Instead, the government accused these individuals of terrorism, and they have been under police investigation. In June of 2008 the Human Rights Coordinator and FEDAPAZ filed a legal case in Piura against the police officers and employees of the security firm Forza who were working for the mine company. The suit also included the public prosecutor and medical examiner, who are alleged to have been aware of the kidnapping and torture, and failed to take proper legal action against the perpetrators.
In January of 2009 the national Human Rights Coordinator received photos taken during the three days in 2005 when the community members were detained at the mine site. The organization says the photographs, submitted anonymously, clearly verify the accounts of the detained individuals and have shocked many in the country.
The Prime Minister and Minister of Justice have issued statements urging a thorough investigation of the incidents in 2005. However the police still have not identified any of the officers involved.
"People living in a democracy should not be kidnapped, tortured, and persecuted just for expressing their opinion and raising their concerns," says Oxfam's Javier Aroca. "We need our institutions to create avenues for dialogue so we can avoid conflict and ensure our laws are respected."
]]>The Yanacocha gold mine is currently operating on 26,000 hectares (about 63,700 acres), high above the city of Cajamarca in the Andes mountains of Peru. But that is just a small area: The government conceded a total of 282,000 hectares (690,000 acres, slightly , larger than the state of Rhode Island) to Minera Yanacocha, a company comprised of majority owners Newmont Mining of the United States and Minera Buenaventura of Peru. Yanacocha continues to be a significant part of Newmont Mining's global production, contributing about a quarter of the 5.3 million ounces of gold Newmont sold in 2007.
Minera Yanacocha is working aggressively to expand the mine. In 2004, the mine began exploring for gold on Cerro Quilish, a small mountain that comprises the top of the watershed supplying the city of Cajamarca and the rest of the valley. Dairy and potato farmers in the area and many others opposed to mining Quilish blocked the road to the mountain in 2004. There were weeks of violent confrontation between police and protesters. In the end, Minera Yanacocha stated publicly that it had underestimated the concerns of local people and asked the Ministry of Energy and Mines to revoke its permit to explore for minerals on Cerro Quilish.
The mountain remains in the mine's concession area. Many of the Quechua-speaking indigenous people in the area consider Quilish their apu, a mountain spirit, and a sacred place. "When the clouds gather above Quilish, we know it will rain," says Nelida Chilon, a 24-year old from Bajo Porcón, midway between the city and the mountain. "We want to protect Quilish, our source of water. The [mining] engineers tell us there is water, and no pollution, but we know the land does not produce as it used to, and there is less water than ever."
Local governments representing communities opposed to mining on Quilish also adopted laws to designate it a protected natural area. Other communities where the mine intends to expand have taken similar measures. Oxfam America's partner GRUFIDES is supporting efforts by local communities to protect their land, and provides training and other support to local people eager to learn about and defend their human rights and protect their water sources. With help from Oxfam America, GRUFIDES is also working with the regional government's environmental management agency to create a land use plan that would clearly designate areas for agriculture, human settlement, mining, and other activities.
Minera Yanacocha is disputing 12 local ordinances that prohibit mining, and plans to expand mining exploitation to these and other areas, including La Zanja, where one person was killed by police during a demonstration in 2004. The environmentally fragile high altitude wetlands of El Solitario, where there are 240 ponds and lakes, is another area of proposed expansion.
Minera Yanacocha is claiming jurisdiction in Lima where the company is officially located and where judges are not familiar with these local areas. Communities are hard pressed to be properly represented in the proceedings due to costs and distance (375 miles). "With that kind of trial you know who is going to win," says Marco Arana, one of the founders of GRUFIDES, Oxfam America's partner in Cajamarca. He added that when legal and institutional roads are closed to citizens, it leads to confrontation, and "adds to the social exclusion and asymmetry of power in Peru."
Oxfam America is supporting the work of GRUFIDES to help local communities defend their rights and create an appropriate land use plan for the region. Oxfam is calling on Minera Yanacocha to:
"While Peru's macroeconomic indicators are improving, individuals feel frustrated because they do not perceive their income to be increasing as a result of the country's economic growth," Baca said. "Grupo Propuesta Ciudadana recommends that the government implement policies that increase the benefits of economic growth to excluded populations, improve the efficiency of social programs, and improve the quality of education and health services."
Baca spoke at a panel discussion at Oxfam America's headquarters in Washington titled "Peru's Windfall—The Challenge of Harnessing Extractive Industries Revenues for Poverty Reduction." He said that while the extractive industries such as gold and silver mines and natural gas pipelines are leading Peru's booming economy and contributing more than $2 billion per year to government accounts, half the country still lives in poverty, and Peru is not converting its resource wealth into benefits for its poorest citizens.
One example is the municipality of Echarate, in the Urubamba River valley in the department of Cusco. This area has recently seen rapid development of the Camisea gas pipeline, which is expected to bring Peru $10.8 billion over the 30-year life of the project. The pipeline is being run by an international consortium, and partly funded by $135 million from the Inter-American Development Bank.
Research by Baca and Grupo Propuesta Ciudadana shows that while Echarate's budget for infrastructure projects was less than $700,000 in 2003, by 2007 it was more than $65 million as a result of Camisea royalties. Although the municipality has constructed a new office building, indigenous people in outlying villages report limited presence of government representatives in their communities.
"While indigenous communities have suffered from the negative effects of the gas project—including pipeline spills, decline in fish populations and environmental degradation—they have not significantly benefited from this municipal government windfall nor do they have adequate influence in determining how this money should be spent," says Emily Greenspan, policy advisor for Oxfam America in Washington, who recently returned from a visit to the Camisea project zone in the Peruvian Amazon.
Citizens of Peru already have the right to ask for information about revenues and spending, and companies are required to publish this information. But there is no government office overseeing the information requests, and companies do not always divulge the information requested, says Javier Aroca, an attorney who is Oxfam America's advisor on extractive industries in South America.
Aroca says lack of transparency makes it impossible to determine what companies are contributing to local and national governments. "All transactions related to extractive industries must be clearly defined and described, so that all the information is included in the national budget," he says. "National and international companies must meet international standards of accounting, audit, and publication of accounts. The management and final use of the funds must be published, especially at the regional and local levels. This would help increase trust in public institutions and ensure there is no corruption."
Baca made a number of recommendations about reformulating the laws governing distribution of mining and hydrocarbon revenues. He also recommended systems for fair allocation of the revenues to both producing and non-producing areas, and creating a system that is more transparent, predictable, and equitable.
One way to increase the transparency of extractive industry revenues would be to implement the Extractive Industry Transparency Initiative (EITI), an international agreement that requires companies to disclose payments to governments so that citizens are aware of what their country's natural resources are worth and where the money is being used. In Peru, the national association for the oil, gas, and mining industry (Sociedad Nacional de Mineria Petroleo y Energia, or SNMPE) has succeeded in having all royalty and gas payments to be published as a lump sum (including all companies together), instead of by each individual company. That makes it hard for people to know how much a specific company is contributing to the government and what portion of that should be coming to the communities that are producing minerals and hydrocarbons.
Complying with the highest standard under EITI would require each company to disclose its tax and royalty payments. Oxfam America is calling on the SNMPE to encourage its member companies and the Ministry of Energy and Mines to support a company-by-company, rather than aggregate, reporting standard for royalty and tax payments as a means to increase transparency of Peru's revenues.
]]>This report explores the basic concepts of Corporate Social Responsibility (CSR), and explores key social issues the mining industry must face in Peru. It includes a summary of the main national and international regulations, standards, and guidelines that will help Peru’s mining sector implement essential aspects of a good CSR program.
The report also recommends that the government, mining industry, and civil society jointly develop reference guides for employment, land acquisition and voluntary resettlement, public consultation, participatory monitoring, and social investments.
Corporate Social Responsibility in the Mining Sector in Peru seeks to take a first step towards meaningful dialogue about CSR among the different actors involved to help civil society obtain the highest benefits from CSR policies and actions implemented by government and corporations.
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