Many of the lessons for more constructive, less conflictive mining–community–government relations hinge not just on the will of the stakeholders involved – private sector, community and government – to commit to sustained dialogue, but also on state capacity to initiate, maintain and follow up on the inherent complexity of meaningful dialogue. This lack of capacity stems from a variety of sources: municipal and regional governments stretched thin by administration and budget limits; local and regional corruption; the rapid turnover of ministers and personnel in national government offices charged with multiple aspects of mining investment; operating and compliance practices in Peru; and the fragmentation of those responsibilities and offices across national government.
According to ERM, at least seven different offices in the national government have some portfolio or commitment related to natural resource extraction and social conflict. These include the obvious ministries of mining and energy and the human rights ombudsman, but also the Ministry of Culture, the Ministry of Environment and the PCM – plus various offices within them. This dispersion of responsibility has led to a diffusion of accountability. It has weakened national and local state capacity to monitor, predict and react consistently to social conflicts. Among the central recommendations of the ERM study are the creation of a national policy for prevention, management and follow-up in relation to mining-related conflicts; and the transfer of responsibilities for monitoring and fulfilling agreements and human rights compliance to an independent body with a separate budget and a clear mandate. The 2021 World Bank report similarly finds that a lack of coordination among different agencies has led to many of the laws and regulations governing mining and community relations not being applied.
The dispersal of responsibilities has created conflicting mandates and has complicated efforts to achieve sustained, coherent responses both nationally and locally.
National government fragmentation is replicated at the local level. It also reflects the path dependency caused by Peru’s colonial centralization and imperfect attempts to create territories and administrative units in the interior. The country’s 2002 decentralization reforms attempted to address this, but have been criticized for creating greater complexity, incentivizing a patchwork of regional and local movements and parties, and failing to establish effective accountability for regional and municipal authorities. The dispersal of responsibilities has created conflicting mandates and has complicated efforts to achieve sustained, coherent responses both nationally and locally. The devolution of responsibilities, elected authority and administration to weak regional and local governments has also slowed the momentum for an organic national discussion on the expectations and policy – and ultimately politics – around mining.
This fragmentation creates confusion for stakeholders in terms of consultations, commitments and responsibilities. For one thing, the menu of offices and requirements remains unclear. Remits and obligations on matters of pre-investment consultation with local communities (required under the International Labour Organization’s Convention 169, to which Peru is a signatory), environmental impact assessments and other commitments remain confusing and could be consolidated. Aside from the costs for stakeholders (including but not limited to investors) associated with compliance, there are broader problems of follow-up and trust in those processes, including for the community groups that have ostensibly been consulted and received promises from governmental and private sector stakeholders.
Streamlining and clarifying that process is also important to investors. The historic lack of state presence in many regions where mining occurs – whether in the south of Peru, in the mountainous areas or in the Amazon Basin – has often left private companies as the de facto state representatives in many of these regions. Whether through previous commitments established in consultations or through dialogues, the private sector’s responsibility has often extended beyond being a generator of employment and tax revenue. At times, the operating company becomes the default provider of public goods and services, acting well beyond its responsibilities to meet and respect community demands and its obligations concerning tax and royalties. The dispersion of responsibility horizontally across the national government ministries and offices, and vertically from the national government to regional and municipal governments, has only reinforced this tendency.
Consolidating the responsibilities of government offices from the national to the municipal levels, and ensuring that guarantees are met, requires a commitment from a specific, identifiable national office, to ensure that consultation has meaning and consequence.
