1. Presented by Andrs Recalde CIM Toronto Chapter November 17,
2011
2. Presentation OverviewKnowledge sharing goals:1. Rationale for
using CSR as a tool redistribution of mining wealth2. Evolution of
government policies appealing to CSR to redistribute mining
wealth3. Current case of large project in conflict 3. PART
IRationale for using CSR as toolfor mining incomedistribution 4.
Peru: Mining since ancient times 5. Economic Importance of Mining
in Peru Mining sector is key to countrys macroeconomicmanagement
Average 6-7% of GDP in recent years 50% of foreign currency is
generated by mineralexports In 2005, mining accounted for 55% of
all exports Between 2001 and 2003 accounted for 37% of FDI 6.
Traditional Use of Land 7. Drastic Change of Landscape 8. Core of
Mining SustainabilityRelationshipState must create mechanisms and
ensure that thetransformation of a depletable asset (mineral
ore)results in a sustainable one (social and humancapital) 9. CSR
and the Mining Sustainability RelationshipWhen this transformation
is not evidentThenThere are concerns about livelihood security,
environmental degradation, and the perception that well-being has
not increased in proportion to the profits of mining companies (CSR
topic) 10. Perceptions of Mining in Rural AreasIn rural Latin
America the large % of population isbelow the poverty lineMain
manifestations: no formal access to property (customary) low level
of education access to information only by cultural
appropriatemeans Respond to charismatic style of
politicalleadership 11. Perceptions of mining in rural areas
Mineral resources rarely represent a benefit torural communities ;
instead mines represent a riskto community land and water
(historicalemotional legacies) Preconceived concept (perception) of
mining =negative Plus remnants of leftist ideology Plus
environmentalists advocates 12. Record of Environmental LegacyLa
Oroya smelter and itssurrounding area, recentlyidentified as one of
theworlds ten mostcontaminated places in theworld. The Blacksmith
Institute, 2007 13. Research Conclusion about Mining Social Legacy
in PeruIndeed, it is hard - arguably impossible - for the
miningsector to point to any locality in Peru where theexpansion of
mining has led to significant humandevelopment for the local
populationWhile this does not necessarily imply that future
miningwill have the same effects, it makes the marketing ofnew
projects problematic.Anthony Bebbington, British anthropologist 14.
From Research to ActivismIt also gives activists who are sceptical
of mining a widerange of examples to chose from when they want
tosuggest to others that mining may not be a panacea forlocal
developmentAnthony Bebbington, British anthropologist 15. Case with
Concession System 16. Case with Concession System 17. Case with
Concession System 18. Case with Artisanal Mining 19. PART
IIEvolution of government policies appealing to CSR to redistribute
mining wealth 20. Intense Research on Social Aspects 21. Government
Efforts to Regulate CSR inthe Mining Sector In 2003 Ministry of
Energy and Mines decreed all newprojects should contribute to
environmental care andsocial development in influence areas (D. S.
042-2003-EM) Established contributions criteria and reportingsystem
via internet Established new Department in Ministry to overseethese
activities 22. Government Efforts to Regulate CSR inthe Mining
Sector In 2007 Ministry of Energy and Mines created aSolidarity
Mining Fund 35 companies voluntarily joined the fund Contributions
to promote development programs inthe areas of influence of
companies participants Companies decide about projects; Ministry
superviseexecution and reporting 23. Reporting via Ministrys
Intranet 24. Reporting Form using Intranet 25. Peru CSR &
Government Role 26. Role of Government MEM/OGGS 27. PART IIICurrent
case for acceptance of large project 28. Yanacochas Expansion:
Minas Conga 29. Investment At Stake Total Investment$4.8b Taxes and
Royalties $4.1b Jobs Creation 6,000 during construction 30.
Resources at Stake Deposit One : 344 Mt ore Deposit Two:160 Mt ore
Grades: Cu 0.28% Au 0.72 g/t 31. Project Main Actors/Issues 32.
Contentious Issue 33. Reasons for opposition Four lakes need to be
drained Four artificial reservoirs will replace it with
doublecapacity than original ones 34. Perspective from each side
Communities:Dont want to risk existing natural sources ofwater;
dont trust company for water quality Company:More water will be
available and technology usedfollows rigorous standards Central
Governmenturged Yanacocha to find a way to keep the lakesintact;
will revise Congas EIA already approved 35. Stakeholders in
Opposition 36. Poverty Level in Communities OpposedAccording to
National Institute of Statistics(in 2008) Comm 1: 88,3% poor with
50% extreme poverty Comm 2: 79,1% poor with 46,3% in extreme
poverty. Comm 3: 78,5% poor with 44,3% in extreme poverty 37.
Research Conclusion Becomes a Reality for this ProjectIndeed, it is
hard - arguably impossible - for the miningsector to point to any
locality in Peru where theexpansion of mining has led to
significant humandevelopment for the local populationWhile this
does not necessarily imply that future miningwill have the same
effects, it makes the marketing ofnew projects problematic.Anthony
Bebbington, British anthropologist 38. Regional Leadership 39.
Statements Regional President "We want no more mining in Cajamarca
Cajamarca has been overexploited by mining and we are already tired
of being the dumping ground for transnationals [mining] wealth
comes out clean and garbage remains. Gold comes out clean and
poverty stays 40. National Leadership 41. Commitment to ContractsWe
are going to respect everything signed by thestate, whether we like
it or not. If there are somemisunderstandings then we are going to
work them out," President Humala in a televised interview, in
response to a question about anongoing dispute involving the Minas
Conga 42. Appealing to CSR for a SocialArrangement Perus Prime
Minister statement:"We are working on a very important social
fundso that the communities that are impacted by thisproject are
compensated," "The authoritiesinvolved in this project have agreed
to develop thefund." 43. Influencing Public Opinion 44. Possible
Future Scenarios Implementation of Public Consultation law Complete
overhaul of mining concessions systemtransferring decision process
to regional governments EIA approval process from Mining Ministry
toEnvironmental Ministry More technical rigorous process to
preparedevelopment plans in mining areas Sociology Before Geology
45. Thanks! [email protected]/in/arecalde
