Las Bambas conflict presents PPK with a huge opportunity

In the Las Bambas copper mine, acquired in 2012 by China Minmetals Group (MMG) for a total cost of US$7 billion, new Peruvian president Pedro Pablo Kuczynski (known as PPK) has a major challenge on his hands. Las Bambas is one of nine mining concessions owned by Chinese companies in Peru and probably the most controversial because of late changes made to its social and environmental impact assessment (ESIA). In contrast to some other projects franchised by Chinese companies, local communities do not oppose Las Bambas outright. Instead, they demand that the ESIA be updated and that MMG take urgent action to prevent and mitigate impacts, implement meaningful consultation processes and act with transparency and in good faith. With this is mind, the China-Latin America Sustainable Investment Initiative (IISCAL) last month held a workshop with local NGOs CooperAcción and the Front for the Defence of Cotabambas entitled: Chinese Investments in Mining: The case of Las Bambas. Participants discussed strategies for getting MMG to consider the social and environmental dimensions of the project. Revising the ESIA should not be a sticking point for a leading global entity known for their sustainability policies. MMG has adopted the social responsibility guidelines of the Chinese Chamber of Commerce of Metals, Minerals and Chemical Importers and Exporters (CCCMC) and has also signed up to the International Council of Mining and Metals’ (ICMM) performance standards. Both instruments suggest that Chinese companies operating abroad must respect the right of communities to free, prior and informed consent on extractive projects that affect them. Sadly, the reality of Las Bambas and that of the Peruvian mining sector is that it is heading in a different direction. Late last year, protests against the mining project which left three people dead and several injured, resulted in a Supreme Decree announcing a State of Emergency in Cotabambas, Grau, Andahuaylas, Chincheros, Espinar and Chumbivilcas. In response, stakeholders established a Roundtable for Development, as opposed to a more inclusive Roundtable for Dialogue, as the communities requested. The tripartite dialogue, which involved representatives from MMG, the government and the local community, began in early April this year. However, workshop participants said the lack of effective responses from the state and MMG, along with the irregular nature of the project, have undermined the confidence of the community organisations. To address such problems, the communities have proposed formalising mechanisms to ensure efficiency in the tripartite dialogue and to tackle the disproportionate power they say the roundtable gives to the establishment. They also requested a document detailing agreements, progress and commitments, as well as an implementation schedule to be carried out together with officials from the new Kuczynski government. But impasses continue on several fronts. One of the most serious aspects is the relocation plan. Four hundred families from nearby town Fuerabamba have been relocated to a new settlement known as Nueva Fuerabamba, a cheap construction complex with houses strung closely together, and with no character whatsoever. While this housing complex is a source of pride for the company, for the people of Nueva Fuerabamba, it is cause for anxiety. Residents of the complex who asked not to be identified out of fear of reprisals from the company, said: “Our elderly people have not stopped crying. They do not want to use the bathrooms or the kitchens as they are frightened. They get lost as all the houses and streets are the same. We seek solace in alcohol, and we will soon go crazy.” The rammed-earth walls are high and children do not venture out into the streets, residents said. There are no plants, or animals, and people have painted designs on the walls of their houses in order to recognise them. According to residents, MMG has not handed over the property titles for their new homes, but rather has compensated them with 3,800 hectares of rocky terrain on which to carry out agricultural activities. Some residents argue that they need the company to give them work as the land is unsuitable for agriculture and if there are no animals they cannot eat unless they frequent village restaurants. Residents also complain that everything has become more expensive since the company arrived. In addition to cable, water and light bills, they are also responsible for maintaining vehicles given to them by MMG. “As we speak, the list of expenses grows longer,” a resident said, adding; “while some villagers have received significant amounts of money from MMG, something more valuable has been taken away from us.” Fundamental change is needed in Las Bambas, and within Peru’s mining and hydrocarbons sectors. Over 70% of the conflicts in Peru originate from environmental problems, according to information supplied by the Ombudsman. Tripartite discussions count on the participation of the leaders of the Cotabambas Defence Front, with CooperAcción offering high level technical advice and MMG, who have promised to comply with the international mining industry’s best environmental and social practices. Peru’s multiple mining conflicts present Kuzcynski’s government with a rare opportunity and with the will to change his new government can make a huge difference. For the first time in Peru and probably in Latin America, a president has under his control a mining operation whose mandate focuses is genuinely sustainable development and social responsibility. He must replace corporate and state patronage with strict compliance with high quality environmental and social standards.