Private sector engagement in natural resource extraction in Peru is not monolithic. In the mining sector alone, investors from Australia, Canada, Chile, China, the UK and the US have a presence, as well as large domestic companies. Many of these outside investors are engaged in joint ventures with Peruvian counterparts. Some of those joint venture companies are listed on stock exchanges and therefore accountable to stockholders in Peru and abroad. Many are also signatories to formal and informal commitments on corporate practice and responsibility, such as the Extractive Industries Transparency Initiative (EITI) and the OECD principles and guidelines on responsible mining and supply chains. Those obligations to shareholders – as well as broader international norms and practices – give the companies involved a powerful incentive for greater engagement with the Peruvian government and community groups in matters of dialogue, environmental, social and governance (ESG) standards, and sharing and collaboration on innovative practices.
At the same time, the private sector is engaged in different or multiple aspects of industry related to mining. These activities reflect the diverse components of mining, from early investment and exploration to the operation of mines and transportation and refining of products. Involvement across so many aspects of the industry leads to multiple perspectives on the industry and conditions for investment and operation, and on relations with the state and local communities. Some investments are long-standing. Others consist of reopened areas that have passed from one investor to another. Others still are greenfield investments. In all cases, though, global demand and rising prices for metals and minerals (such as copper and lithium) that are essential for the transition to a greener global economy have created an opportunity for expanded investment in Peru. Investor appetite brings a unique opportunity for improved investment practices and operations that strengthen social inclusion, environmental practice and state capacity in the delivery of public goods and protection of local communities.
The social upheavals of 2022 and 2023 demonstrated the need for the private and public sectors to be more engaged, not only early in the investment process, but consistently throughout the project cycle.
The social upheavals of 2022 and 2023 demonstrated the need for the private and public sectors to be more engaged, not only early in the investment process, but consistently throughout the project cycle. Stockholder accountability and ESG trends can reinforce that momentum, while also adding the incentive and potential for engagement across a range of crucial issues on the global agenda – such as the carbon footprint of operations, workers’ rights and corporate governance. Among international and domestic groups and the Peruvian state, the goal should be to create a shared commitment to sustainability, human rights, socio-economic development, inclusion and social peace – following the examples of the UN Sustainable Development Goals (SDGs) and common ESG objectives.
Across Peru, there are different models of how this can be done – some successful, some less so. But even the less-than-successful cases provide useful general lessons. To approach the delicate, historically fraught topic of mining, it is necessary first to establish and maintain the multi-stakeholder commitment of state, communities, NGOs – including community groups, labour unions, professional associations and research institutions – regional and local universities, and the private sector. This is especially true when existing or new investors are faced with the legacy of past practices or the failure of other actors to follow through on their responsibilities. In large part, the success of such initiatives also hinges on the need to demonstrate the immediate and long-term benefits of sustainable, responsible mining not just for affected communities but for Peru as a whole.
