Guest Roast: Building an inclusive model around extractive industries in Peru

Photo - Ricardo Morel_2By Ricardo Morel Berendson

The mining boom in Peru during the 1990s attracted private investment that led to current economic growth. However, this did not translate into sustainable development of the mining activities. The government has been absent in remote mining areas and, thus, corporations have been targeted as being responsible for attending to local communities’ demands and providing assistance. As a result, mining companies developed only short-term and interest-driven ‘socially responsible’ plans to continue operating. Not surprisingly, social conflict has been especially prevalent in the field of extractive industries. A shift from an extractive model to a more inclusive, participatory one—where governments and private companies work together with local communities—could create a virtuous circle of sustainable social development.

Peru has positioned itself as one of the most important markets in Latin America for extractive industries. According to the latest figures by the Central Reserve Bank of Peru, mining currently makes up 57 percent of the country’s entire exports. The taxes and royalties the government collects from this activity are a key source of funding for its development and social protection programs to fight poverty and reduce inequality.

Mineral resources in Peru are located in remote mountainous areas where poor and marginalized communities are settled. Therefore, as documented by  Clark University‘s Higgins Professor of Environment and Society, Anthony Bebbington, in his 2007 book “Mining, Social Movements and Peasant Responses”, mining operations do not occur in empty territories but in lands that are the source of livelihoods for local communities and that carry deep historical and cultural meanings for the people who live there.

The government’s role as a privatizing agent—together with its historical absence in remote rural areas, lack of wealth distribution policies, unconcern for local and indigenous rights, and a weak legal framework on environmental and social issues—defined the context in which transnational mining companies started to operate in Peru in the early 1990s. The transition is well documented in two 2009 books: “Mining and Social Conflict” by a team including the former Environment Vice-Minister José De Echave, who quit his position amist mining protests in 2011; and Aldo Panfichi’s and Omar Coronel’s “Social Conflict in Peru 2004-2009: Causes, Characteristics and Possbilities.”

As De Echave et al reported in a 2004 article, local communities were not approached by public authorities to be informed or consulted about land concessions or extractive operations, and lack of reliable institutional channels or spaces of participation made difficult any communication with the central government. In this new scenario, mining companies soon created wealth enclaves in poor areas. Brand new land cruisers started to circulate among barefooted farmers, new buildings with electricity and water supply rose next to adobe-made houses, and foreigners in high-visibility jackets and yellow helmets were seen next to indigenous peoples wearing colorful hand-weaved ponchos and chullos. This abrupt change led to increasing economic and power equalities.

Not seeing the direct benefit of the country’s economic growth, local communities felt extracted from the development model. In the absence of the government, they settled in areas of mining influence and addressed their claims to the companies. As a result, anthropologists Bruno Revesz and Alejandro Diez from the Institute of Peruvian Studies (IEP), a Lima-based think-tank, state that mining companies built bilateral short-term relationships with local actors to avoid protests or road-blocks that would jeopardize their investment and operations. This situation pushed mining companies to play the government’s role by delivering public services and goods, such as building schools, paving roads, electrification, and providing medicines to health centers. Soon enough, boundaries between companies and government’s responsibilities became unclear.

Not surprisingly, social conflict has been especially prevalent in the field of extractive industries. According to the Office of the Ombudsperson (or Defensoría del Pueblo in Spanish), in February 2013, two thirds of all conflict cases reported nationwide were socio-environmental.

The common ‘socially responsible’ practices among extractive industries aim at keeping communities content so operations can continue rather than realizing the potential of those living in vulnerable situations. This strategy has proved to be unsustainable. Communities are even more detached from the central government, while mining companies are overwhelmed with (public) responsibilities that lay beyond their knowledge, expertise, and capacity; and real and positive social change is not happening.

That structure needs to change into a more inclusive and sustainable model, which mining companies can kick-off by making an effort to attract the government to those local scenarios where most of the country’s wealth is produced and listen to the communities. Development and good change will come with inclusive political and economic institutions. Therefore, the government must strengthen its role at the local level.

The idea is to put development at the core of the model. Mining companies should be just another actor in contributing to the wellbeing of local communities, together with international organizations, NGOs, universities, civil society organizations, and, certainly, the government. Being an essential agent for economic development, the government should be fully represented by its national, regional, and local layers. This new approach has been drawing attention of different key actors in the development field, such as policy makers, opinion leaders, and even some mining companies.

In his 2013 article “El Adelanto Minero: una propuesta para hacer viables los proyectos mineros”, for example, Pablo Kuczynski proposes an inclusive strategy to bring the government and local communities closer by establishing multi-actor spaces through Dialogue and Development Round-Tables. Based in areas where the central government has traditionally been absent, mining companies can facilitate these development spaces. Unlike previous experiences, the mining companies should participate at the same level as any other actor and not above. Furthermore, the government should participate fully, that is, inviting different ministries according to the topic of debate, and not just centralizing all demands in the Presidency of the Council of Ministries[1], as has been done in the last decade or so.

In order to create these spaces, key stakeholders in the area should be mapped and invited to participate, local communities’ perceptions must be known and understood, the socio-political situation has to be analyzed and risk assessed, and impact needs to be evaluated.

There are, certainly, important challenges to make this inclusive development spaces happen. First, the government must quickly show its willingness to play an important role; otherwise, the multi-actor dynamics will go back to the ‘traditional’ bilateralism between companies and communities. Once the government is actively engaged, a major challenge will be to achieve the first step to sustainability: impact in the short-term in order to build credibility in the model. Another challenge to make this model sustainable is shaping the way of thinking of some actors that see dialogue tables as spaces opened and closed merely to resolve disputes. However, in this case, dialogue should be about development and not conflict resolution, and these spaces, therefore, should remain permanently open.

In a bid to solve current social conflicts in the extractive industries and pave the path towards sustainability in the sector, Peru’s government should design an inclusive development plan, bringing all mentioned actors together, and create a national fund to respond to the expectations and needs of those living in areas of mining influence.

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Ricardo is a social researcher specialized in impact evaluation of global development projects. Currently, he works at BRAC leading an experimental study to assess the impact of microfinance and agriculture in Uganda. Previously, he has conducted research with a range of development agencies and think tanks in East Africa, South America and Europe on topics such as financial inclusion, behavioral economics, agriculture, education, human rights, and media use. With a Bachelor’s in Sociology, he holds an M.A. in Development Studies from the Institute of Development Studies (IDS) in the U.K.

For your reference:

Bebbington, Anthony, 2007. Elementos para una economía política de los movimientos sociales y el desarrollo territorial en zonas mineras. In Anthony Bebbington (ed.) Minería, movimientos Sociales y respuestas campesinas: Una ecología política de transformaciones territoriales. Lima: IEP, CEPES: 23-46.

Central Reserve Bank of Peru, 2013. Statistics. <>

Damonte, Gerardo, 2007. Minería y política: la recreación de luchas campesinas en dos comunidades andinas. In  Anthony Bebbington (ed.) Minería, movimientos sociales y respuestas campesinas: Una ecología política de transformaciones territoriales. Lima: IEP, CEPES, Ch. 4, pp. 117 – 162.

De Echave, José; Alejandro Diez, Ludwig Huber, Bruno Revesz, Xavier Ricard Lanata and Martín Tanaka, 2009. Minería y conflicto social. Lima: IEP, CIPCA, CBC, CIES.

De Echave, José, Karyn Keenan, María Kathia Romero and Ángela Tapia, 2004. Dialogue and management of conflicts on community lands: The case of the Tintaya mine in Peru. Lima: Cooperacción. <>

El Peruano, 2007. Ley Orgánica del Poder Ejecutivo Nº 29158. <>

Kuczynski, Pedro Pablo (2013) El Adelanto Minero: una propuesta para hacer viables los proyectos mineros. Conexión Esan. <>

Office of the Ombudsperson, 2013. Report on Social Conflict (Report No. 108) [Online] Peru : Office of the Ombudsperson (Published February 2013). <>

Panfichi, Aldo and Omar Coronel, 2009. Conflictos sociales en el Perú 2004 – 2009: Causas, características y posibilidades. Lima: Pontificia Universidad Católica del Perú.

Revesz, Bruno and Alejandro Diez, 2006. El triángulo sin cúpula (o los actores desregulados de los conflictos mineros) In Perú Hoy. Nuevos rostros en la escena nacional. Lima: Desco: 49-88

Further reading

Defensoría del Pueblo [Office of the Ombudsperson]. <>

Grupo de Diálogo de Minería y Desarrollo Sostenible (Mining and Sustainable Development Dialogue Group). <>

PNUD, Proyecto de Prevención del conflictos en el uso de los recursos naturales (UNDP, Project on Conflict Prevention)  <>


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