There are several successful examples of forward-looking mining investments and work in Peru, including the Antamina and Quellaveco projects. While there are still challenges and their examples are not immediately replicable, they still offer lessons. As Chatham House’s conversations with multiple stakeholders have shown, those lessons apply far beyond the private sector, from national, regional and municipal governments, community groups and civil society, to multilateral development banks and national and local universities. Those lessons can be drawn on not just for the benefit of individual, mine-specific investments but for efforts to craft a national dialogue and model for understanding across multiple sectors of Peruvian society. They can also support a broader ESG agenda based on principles of transparency, inclusiveness, sustainability, communication and accountability. Despite being used as empty ‘buzzwords’ in certain contexts in recent times, these ideas remain fundamental principles and have been lacking in Peru’s history of mining. These principles must be embraced and adopted if the country is to become a global leader in critical minerals.
The first of these lessons is the need to frame mining investments in the broader context of the territory in which they will operate. This framing is essential to build greater solidarity among communities, government and investors around a set of principles for fair mining – not just related to individual projects, but also to mining’s place in, and contribution to, Peru’s development. Mining is just one of the activities that occur in these regions, albeit often with an outsized impact. Broader issues of socio-economic development, economic integration, and relations between communities and the state need to be included. A positive example was Anglo-American’s creation of the ‘Moquegua Crece’ alliance around the Quellaveco project. That multi-sectoral dialogue formed an institutional space among local communities for wide-ranging discussion of plans for the region’s integral development. In creating the alliance, Anglo-American demonstrated a commitment to the territory, and to engaging citizens in the participation and planning of the territory’s growth and development. By balancing responsibilities and obligations among the participants, the dialogue has also involved the state and reinforced both its presence and capacity to deliver development at the local level through mining investments.
The second lesson is that discussions must be substantive and sustained over a longer period. Efforts to engage on community participation, investment, distribution of resources and shared commitments over socio-economic development, the environment and labour rights should begin early in any investment process, by initiating the consultation and dialogue from the outset of a mining project. Chatham House’s interviews and discussions with international and Peruvian stakeholders revealed that dialogue and discussion often happen either too late in the investment process or, worse still, after conflict has already erupted. Not only has that failure led to an ad hoc proliferation of dialogues, it has also cheapened the concept of dialogue itself. As several sources expressed, each time a problem erupts, the solution is often to initiate another dialogue, usually disconnected with previous efforts and commitments, and separate from the wider issues around mining and its place within the territories. Consistent, permanent processes of dialogue need to be established early and to be institutionalized as spaces for meaningful discussion among stakeholders, rather than as mere reactions to potential crises.
A third lesson is the need to institutionally integrate the national and local governments into the discussions, in ways that clearly delineate responsibilities. As discussed, there are questions of overlapping and fragmented responsibilities over mining, environmental compliance, previous and informed consent (as per ILO Convention 169), and tracking and monitoring the fulfilment of obligations on the investment of tax resources derived from mining. Clarification and consolidation of those roles and responsibilities are essential. While site-by-site discussion will not accomplish this alone, such efforts can help to build local and national momentum for wider uptake. Several stakeholders interviewed for this paper advocated the consolidation of these roles within the PCM, including an enhanced responsibility for the PCM in both monitoring and responding to potential conflict. Concerns have been expressed about the PCM’s capacity and commitment the Peruvian state’s coordination over matters of mining conflict. Explicitly defining and carving out a role for the PCM’s authority and resources to respond to individual cases of mining-related social conflicts can help define and reinforce its importance in one of the most common aspects of social upheaval and conflict in Peru.
A fourth – though, potentially contentious – lesson is the need to involve the local and national political community in discussions and dialogue. This is particularly pertinent for local officials. Ultimately, defining and shaping Peru’s relationship with the primary driver of its economic development depends on a national dialogue and, even, consensus around mining’s place in Peru. Despite the country’s currently fractured, polarized politics, such a dialogue and the outlines of any consensus will need to be a political discussion, one of shared objectives and vision. While there are many questions about the nature of Peru’s aggressive 2002 decentralization, its introduction is a fact. That de-concentration of policy responsibilities has in turn splintered political leadership and organization. Beginning to address the fractured state of Peru’s political party system and wider political culture requires building consensus through dialogue over concrete issues of investment, development and a common vision around those issues from the ground up.
Fifth, there is a need to expand the inclusion of affected communities to those beyond mining areas. As scattered community protests along the country’s mining corridors have demonstrated, the industry’s negative effects (such as debris, noise, traffic, pollution and water scarcity) extend to places beyond the immediate mining sites. Peruvian stakeholders interviewed by Chatham House argued for a change in government policy in favour of consulting and reimbursing a wider spread of communities.
Sixth, while independent civil society groups may convene multi-sectoral regional discussions over mining, it must be the role of the state to guarantee, monitor and maintain those discussions, as well as any ensuing commitments. Public distrust of the government and some mining companies may mean that an independent broker is needed to bring groups together in a neutral forum. But ultimately, the outcomes of such dialogues and the responsibility to sustain them, arbitrate, and meet any expectations and obligations that come out of them should reside with the Peruvian state. Answering the question of how responsibilities should be balanced across the national, regional and local governments is a priority issue for Peru’s mining economy and state development.
Finally, all of this work requires time, patience and humility. In the mining industry, where timelines are already extended further than investors and governments would like and commercial pressures are high, those things may be difficult to find. The examples of Antamina or Quellaveco may not be replicable for these reasons. But given the rising worldwide demand for Peru’s critical minerals, private sector investors will need to take a long view of their relationship with the country’s politics and society. One of the most powerful ways of accomplishing this would be to set out clear, measurable standards and regulations for ESG-focused investment in mining.
