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 Shortly after congress rescinded them, President Alan Garcia delivered a speech in which he said that his government should have included indigenous people in discussions about the decrees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.
]]>These, and many more lives and livelihoods are at risk unless urgent action is taken to protect poor people from the triple threat of the economic crisis, rising food prices and climate change. Sub-Saharan Africa alone is expected to lose $245 billion this year as a result of the global slump but will receive only about $5 billion in additional aid.
Yet rather than delivering on his own aid promises and encouraging other countries to meet theirs, Silvio Berlusconi, G8 chair and Italian president, is attempting to wriggle out of his commitments to the world's poorest. He has cut aid and pushed the G8 to adopt a new "whole of country" approach that would use creative accounting to hide broken promises.
Max Lawson, Oxfam senior policy advisor, said: "Like a modern day Nero, Berlusconi is fiddling while Africa burns. G8 leaders must get serious and ensure this summit delivers a concrete plan to get aid promises back on track, and to protect poor people from the triple threat of the economic, food and climate crises."
According to the OECD, G8 leaders will fall short by as much as $23 billion in their 2005 promise to increase annual aid by $50 billion over five years. Oxfam calculates this money could be used to pay for HIV treatment for 500,000, services for mothers and newborns that would save a further 2.5 million, child health services that would save a further 600,000 lives.
On average, rich countries outside the G8 give more than twice as much of their national income in overseas aid (0.54 percent), as G8 members (0.23 percent).
Farida Bena, Oxfam International Italian spokesperson said: "It is time that G8 countries paid their fair share of aid to reduce poverty in Africa and elsewhere. Why can other rich countries put their hands in their pocket whilst most of the G8 refuses to do so? A G8 that refuses to keep its word, a G8 that fails to meet the unprecedented challenges facing the world's poor—that is a G8 in crisis."
Far from showing leadership in its role as G8 chair, Italy is cutting its aid to poor countries. Last year Italy cut its aid through the Foreign Affairs Ministry by a staggering 56 percent. France too has barely increased aid despite promises to do so, and other countries are not bringing the ambition needed to the table this year—when it is most needed.
The "whole of country approach" promoted by Berlusconi could allow countries to count money charities, philanthropists, companies and trade links deliver to developing countries as part of their assistance to poor countries. Adding these disparate elements to produce a large cash figure of little value would allow countries like Italy and France to deflect attention from their lamentable performance on aid.
Instead of muddying the waters with creative accounting, Oxfam is calling on the G8 to agree an emergency plan to get their aid commitments back on track ahead of the 2010 deadline. The need for increased aid is shown by the $245 billion economic black hole facing Africa as a result of a reduction in expected growth from 6.7 percent to 1 percent. By contrast, aid will only increase by $4.6 billion this year. IMF special drawing rights and other measures agreed at the G20 add only another $16 billion. This falls way short of what is needed.
Lawson said: "The world has a triple crisis on it hands. The economic crisis is destroying jobs, reducing remittances and forcing cuts in health and education services for some of the world's poorest people. Africa is set to lose $245 billion this year alone yet the response from rich countries remains pitifully small.
"The food crisis has pushed another 200 million people into hunger. More than one in six of the world's people now do not have enough to eat. The climate crisis contributes to severe weather that forces people from their homes and destroys their livelihoods every day."
Bena said: "Over the next few days, the G8 must show the leadership the world needs. There won't be any second chances to save these 3 million people later. The G8 cannot turn their back on the poorest people now. This must be a week of bold action."
]]>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.
]]>In the arid north of the country, where the government has prioritized copper mining, farmers and copper mines struggle to co-exist. Both need water, but the major copper mines, with support from the government and plenty of capital, are buying up the water rights. Farmers, many poor and without powerful friends in the government, are seeing their rivers and streams dry up—or worse, become so polluted they can't use the water.
In 2004, the 2,000 residents of Caimanes, a remote town in Chile's IV Region, faced an additional challenge: a massive tailings dam Pelambres Mining Company built on their doorstep. The dam, which collects waste rock from dissolved copper, would allow the Las Pelambres mine to continue operating for an additional 28 years. And the new tailings dam, when full, will hold 1.7 billion tons of waste.
Despite this huge new source of pollution to their water sources, local people had few outlets to defend their rights. Chile has no provisions in its laws on mining that require any citizen participation in approving or authorizing any expansion of existing mining operations.
But farmers in Caimanes and several other villages continued to voice their concerns that the dam would destroy an entire valley and cut off their supply of water. They said that acid will drain out of the dam, polluting what water that remains, and endangering the one stream that provides their town with water. Tailings dams are also usually a source of dust particles containing heavy metals—these can blow into town and poison people and their animals.
Caimanes is in the poorest region of Chile. Farmers there are concerned about their ability to continue to earn a living, but are also aware that a major earthquake could collapse the dam. This has happened before: In 1965 an earthquake spilled 10 million cubic meters (350 million cubic feet) of mine waste out of a similar holding area and killed 200 people.
In 2004 community members in Caimanes began working with the Environmental Oversight Office (the Fiscalía del Medio Ambiente or FIMA, a Chilean NGO). They gathered signatures on petitions and filed them in legal courts and requested an injunction to halt construction of the tailings dam. In 2005 the Caimanes community group representing farmers in the area alleged that the permit process for the dam had not been followed properly and that there were archeological sites that were being damaged in the construction. In 2007 a local court in the nearby city of Los Vilos ordered that the mine company halt construction of the tailings dam.
The Las Pelambres mine company appealed the 2007 court order, and the decision put responsibility on a government water commission. This commission had already approved a permit for the construction of the tailings dam, with limited participation from local farmers, so it allowed construction to continue. In 2008 the Chile's supreme court ruled that the right to water for the farmers affected by the tailings dam was being violated, and awarded each of the farmers $40,000. In December 2008 the company announced that it had finished the tailings dam.
Oxfam America provided grant funding for FIMA to help the citizens of Caimanes to defend their rights in court, and raise awareness about their situation among people in Chile. FIMA advocated for a hearing at the Latin American Water Tribunal in 2007, which issued a statement calling for the dam construction to be stopped and the citizens compensated. FIMA has also published reports about the situation in Caimanes and prompted considerable coverage of this case in the international media.
Although the citizens of Caimanes did win compensation and a favorable judgment in court, they did not succeed in blocking the dam construction. "Unfortunately for the people, there are no winners," says a report published by FIMA, The Battle for Water in the Pupío Valley. "This compensation will not make up for the destruction of the quality of life in the valley." FIMA says in the report that the people achieved a "legal and economic victory, but a social and environmental defeat."
Nevertheless, the case sets an important precedent and provides an example to the global mining industry of how responsible companies should not operate.
]]>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."
]]>CEJIS went on to say that the attack was similar to others inflicted recently on four other civil society organizations in the area, all of which have been working in the region for many years in defense of the rights of indigenous peoples and peasant communities in Santa Cruz.
Oxfam America's South America regional office expressed concern and sympathy regarding the attack. "CEJIS has been working with Oxfam America in Bolivia for several years now," declared Raul Ho, Oxfam America's coordinator for sustainable livelihoods and environmental programs. "CEJIS has played a key role in obtaining land titling for the Chiquitano indigenous peoples," said Ho.
CEJIS has 30 years of experience working on the deepening of democracy, social justice, human rights, and the democratic freedoms of indigenous people, peasants, and civil society. The organization reaffirmed its commitment to continue working on development of the region and throughout Bolivia despite such attacks and intimidation. This is the second firebomb attack on CEJIS' office since November 2007.
This attack occurred two days before an indigenous peoples' celebration of the historic March for Territory and Dignity held in Beni on August 15, 1990. This march marked an opening of the pathway to justice and equality, as new agrarian reform laws have allowed the Chiquitano people of Santa Cruz and other indigenous groups to claim their right to communal lands in Bolivia.
"Oxfam America expresses its solidarity with CEJIS" added Raul Ho, "and conveys its concern in regards to acts of violence and disrespect for this social organization and its headquarters. We also trust that the authorities will prosecute and punish those responsible as required under Bolivian law," he said.
]]>"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.
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