Transnational mining in Espinar – Structural problems and the presence of Glencore

Introduction

2020 has been a year in which the world’s economy and populations have been paralysed in many ways. However mining activity and socio-environmental conflicts have not stopped, at least not in Peru. Between July and August the province of Espinar, in Cusco, was the scene of a new conflict between the population and the Glencore mining company (operator of the Antapaccay mine), and the Peruvian State.

The conflict arose due to the refusal of the company to cooperate in handing out an economic bond of 1000 soles (around $280) which was demanded by the local population to alleviate the impacts of the emergency caused by Covid19. It was proposed that the funds to finance the bond come from the so-called Framework Agreement – an agreement signed in 2003 between the mining company and the municipality of Espinar, whereby the company allocates 3% of its annual income to the municipality. After several weeks of indefinite strike and police repression, the mobilizations finally achieved the delivery of multipurpose spending cards worth 1000 soles to purchase products in authorized stores.

However, the problem doesn’t end there. This conflict has been yet another link in a long chain that has gone unresolved for almost two decades, with peaks in 2005, 2012 and 2020. There are structural problems related to the environment and health that have not been addressed in a timely manner by the authorities, as well as demands to reformulate the Framework Agreement.

In September of this year the organization Human Rights without Borders – DHSF in Cusco organized a virtual discussion entitled “Reformulation of the framework agreement: Learning and Challenges“. Oscar Mollohuanca (former mayor of Espinar) and José Antonio Romero (DHSF member sociologist and expert in mining conflicts) both provided a very complete historical overview of the structural problems and pending agenda in Espinar, in relation to Glencore’s mining presence in the area.

Here we seek to summarize the key points from their interventions, which we’ve organised thematically, alongside textual citations, as well as with some additional commentary of our own.

This issue is very important because on November 29 Switzerland is holding a referendum on a Corporate Responsibility initiative. If the proposal is approved, Swiss-based companies will be legally bound to take responsibility for what happens in their supply chains. Glencore, as a Swiss company (although it is listed on the London stock exchange), would have to be more responsible for its actions in territories such as Espinar – Peru, and in other regions.

Update: The proposal to make companies liable for their activities abroad was rejected in the November 29th referendum. In the Swiss system a referendum can only pass with a majority in the popular vote and the in the ‘cantonal’ (regional areas) vote. It was unusual in this instance that there was a majority popular vote in favour, but it didn’t carry because the cantonal vote was lost.

(To learn more about the latest conflict, visit: A Giant in Espinar – Glencore and the patterns of corporate power in the South of Peru)

 

Mina Antapaccay – Glencore

José Antonio Romero opened his intervention with key information about the Antapaccay mine. Between 2013 and 2019, the mine produced an annual average of 193,228 tons of copper, an amount that represents 10% of the national production of the mineral in Peru. This places Antapaccay in an important position, along with other mining projects and operations – such as las Bambas, Cotabambas, Constancia, Cerro Verde, Cuajone, Quellaveco and others, all located in Peru’s southern Andean region. This area, according to Romero, represents “approximately 60 to 70% of copper production [in Peru]”, and contains a “strategic economic geo-corridor”, due to the presence of important mining operations and routes through which the mineral is transported to Pacific ports for export.

Antapaccay is a polymetallic deposit which also produces gold and silver. Between 2013 and 2019 the mine produced an annual average of 3,289,291 fine grams of gold. These levels of production have generated significant income for Antapaccay. In 2016, according to data provided by Romero, the mine had revenues of over 3.69 billion soles – more than $1 billion.

The social, economic and environmental situation in Espinar

Despite the production and income levels generated at Antapaccay, Romero pointed out that “paradoxically in Espinar there is widespread poverty.” According to official data, 70% of the population of Espinar lives in poverty or extreme poverty. This is a pattern that is repeated in other mining and oil contexts in Peru and is typical of these “processes of accumulation”, where there is a favorable climate for mining investments and where wealth is concentrated in the hands of companies. “In a sea of wealth, there is a sea of poverty,” Romero said. He also affirmed that, according to international research, for every 10 dollars produced in Peru’s mining sector, $1 stays and the rest leaves the country: “This shows that deep down there is a very strong level of appropriation and accumulation on the part of the transnational sectors, mainly mining.”

“Aside from the very characteristic poverty in Espinar, there is a situation of increasing and intense impacts,” says Romero. Already in 2013, the National Center for Occupational Health and Environmental Protection for Health (CENSOPAS) carried out a study of 180 people which revealed the presence of arsenic, cadmium, lead, magnesium, mercury, thallium, etc. in their bodies: “You don’t have to be very learned to know that these are metals which have a direct effect on people who contain them in their bodies.” In terms of pollution, he says that “there are studies from certain competent institutions, but also additional complementary studies from other institutions – and the local people themselves – who say that the Cañipía and Salao rivers, impacted by mining operations, are dead rivers. Before there were batrachians [frogs and toads] there, there were trout, a diversity of species that one can no longer find.”

According to the sociologist, “a pattern has been repeated in Espinar for many years” in relation to these impacts, which includes: “death and malformation of animals, reduced productivity, dust generated by mining activity, dead rivers, people with toxic metals in general and damage to health”. To these impacts we must add the increased cost of living: “Living in a mining district is more expensive. The food, the lodging, ends up being more expensive than anywhere else. Paradoxically, instead of generating greater wealth for the local population, it ends up impoverishing them. The inflationary level and the impact on the economy…is impressive”, he says.

All these impacts can undoubtedly be considered “externalities” that mining companies do not consider when carrying out their Environmental Impact Assessment (EIA). The degree to which ecosystems and other forms of life are devalued in the different territories in which companies operate is evident.

Mining in Espinar provides a good example of what is known as “accumulation by dispossession” (Harvey, 2005): the dispossession of territory, and the commercialization and privatization of common goods, for example when land is seized, leading to the expulsion of indigenous and peasant populations. This appropriation and expulsion also supposes the elimination of the various types of (collective) property, followed by a decomposition of the social fabric – of which there are many examples in Latin America.

Coexistence with Mining and the Framework Agreement in Espinar

Don Oscar Mollohuanca sees the Framework Agreement as key in the relationship between the population and the mining operation: “The framework agreement is an instrument that regulates, or that seeks to regulate, the coexistence between the province of Espinar and the mining company, in the different aspects that impact it.” The framework agreement has its origin in popular mobilization and struggle, not in the good will of the company: “It is the product of a whole historical struggle, of mobilization. Rights in the world and in Peru have been won through struggles,” he points out.

Mollohuanca recounts that the Agreement was raised by the municipality and social organizations of Espinar between 1999 and 2000, when he was serving as Mayor of the province. Economic considerations were core to the proposal, but environmental, social and cultural impacts were also taken into account: “It was there that the idea of ​​what in the future would be called the framework agreement began to germinate.” He reports that in 2001, in a context of strike and conflict, the signing of the Agreement was finally formally proposed. The province and the company negotiated and reached an agreement in mid-2002, although for various reasons the agreement was only signed in September 2003, under a new municipal management no longer in Mollohuanca’s charge.

For José Antonio Romero, the Framework Agreement is an instrument for Espinar’s development, but it also provides control mechanisms – guaranteeing rights so that water, the environment, etc. are not polluted. Mining unions and companies consider it a “bad practice”, due to the risk that other populations may seek to imitate it. Framework Agreements are not, incidentally, covered by any legal framework.

Shortcomings and reformulation of the Framework agreement

Oscar Mollohuanca says that, in spite of the Framework Agreement having been in force for 17 years, it is often seen only as an economic agreement – something which he calls “a very serious error…I want to emphasize here that the framework agreement is not synonymous with the 3% contribution [by the company to the municipality]; the framework agreement is a comprehensive instrument that covers different social aspects: the environment, training, work, opportunities for the sustainable development of the affected communities, business opportunities, technological cooperation, tourism, human rights, etc.” He affirms that following the conflicts in 2012, 70% of the 18 months of dialogue was given over to addressing problems related to the environment and water.

Among some of the shortcomings of the Framework Convention is the problem of applicability. For Mollohuanca, “The labour clauses for the population of Espinar – in the contracts for local companies in the areas of mineral transportation, transportation of supplies, fuel, passengers, personnel, etc. – they have not been implemented, because the agreement does not establish mechanisms for their compliance. The agreement provides for the signing of specific agreements for each clause, but they have not been carried out. These are the biggest shortcomings that have occurred during these 17 years and that is why the reformulation is justified, understood as the establishment of mechanisms for the implementation of all the clauses, not just the economic clauses.”

The former mayor also points out that the 3% of funds provided by the agreement are not being invested in sustainable projects of importance for Espinar: “These funds should have been used to promote impact projects, large-scale projects. Only small works have been done for communities and allocation of small budgets for the education sector, transportation, the agricultural sector, etc. There are no important works of impact…We want it to really serve to promote the development of Espinar, under a concept and approach towards sustainability that until now has not materialized,” he says.

Also of importance in relation to the economic aspect is the demand for “autonomous management” of resources, which are currently administered by the same mining company through the Tintaya foundation it created. “Why autonomization? Because throughout the years it has been seen, has been experienced, how the mining company has accumulated power through the management of these resources through the Tintaya foundation. It has become an entity of pressure, of subordination, of political manipulation by the mining company towards Espinar society,” declares Mollohuanca.

The demand for reformulation of the framework agreement has been present in all the conflicts in Espinar, although so far it has not been successful. However, it is interesting to note how these “Agreements” are part of a negotiation and conflict management strategy. It is an agreement that, although it covers a range of issues, as Mollohuanca explains, often focuses on so-called “development plans” and economic factors, which receive more attention than environmental or health concerns. These economic plans, in addition to not benefiting the entire population, demonstrate the paternalistic nature of the companies, who do not allow funds for local development to be administered and managed directly by the communities, thus generating a dependent client-based relationship.

Permanent conflict, role of the State and mining power in Espinar

José Antonio Romero highlights the high level of conflict that arises in mining contexts in Peru. “Where there are mining projects, conflict increases dramatically – between communities, between sectors, between families, between districts. In other words, the conflict spreads and deepens. The presence of the mining company generates tensions and conflicts.”

It is undeniable that, of all the extractive activities in Latin America, the most questioned is undoubtedly large-scale metal mining (Svampa, 2019). There is no Latin American country with mining projects that does not have social conflicts which pit mining companies and the government against communities. According to the Observatory of Mining Conflicts of Latin America (OCMAL), in 2010 there were 120 mining conflicts affecting 150 communities; in 2012 these amounted to 161 conflicts, which included 173 projects and 212 affected communities. In February 2014, the number of conflicts was 198, with 297 communities affected and 207 projects involved. In January 2017, there were 217 conflicts, involving 227 projects and 331 communities. Without a doubt, one of the countries with the highest number of conflicts is Peru (Svampa, 2019).

“The conflicts in Espinar do not come out of thin air,” says Romero. “It is not that there is an irrational moment in which people turn against a mining project”, but rather that “there are a series of effects on rights, on people’s lives, on their economies. These effects have a history and what results is a state of permanent conflict.” In Espinar there is a “pending agenda”, he suggests – an agenda that has emerged at different times of intense conflict, particularly in 2005, 2012 and 2020.

Romero says that “the State has many deficiencies in terms of being able to solve the problems that give rise to conflicts” in Espinar. In many situations, processes of dialogue have been installed, but they do not solve the underlying problems. The different governments do not give priority or necessary importance to the issue. Romero indicates that “populations get held back…and receive an ineffective response from the state.”

Conflicts also generate other consequences: “They fragment organizations, criminalize populations – while the companies operate free of major exigencies.” The conflicts in Espinar have a dynamic that begins with the intention of the population to open spaces for dialogue to make their demands heard, but when they are not successful they mobilize. The government then represses them, and only at that point does it create a space for negotiation. “It is a perverse circle,” says Romero, “mobilization is the only way for the population to make its voice heard.”

For Romero, conflicts occur in a “context in which there is a strong predominance of mining power…a hegemonic power.” He points out that “processes of dialogue take place in a setting where power relations are present” and where “the state plays very much a partial role.” In his opinion the ministry of energy and mines is a highly biased sector: “If you look at who the ministers have been in recent periods, we see people who come from the mining sector, or who come on the recommendation of the mining sector. It is a clearly pro-mining investment institution.” He also believes that in the end, “conflicts end up being good business for companies…because other projects begin in their wake.” Romero refers to the “Coroccohuayco” project, a new copper mine that Glencore expects to operate in Espinar and which is still in process, despite the many conflicts and pending demands from the population.

In general these conflicts involve a dispute with hegemonic mining power that “ends up generating a situation of violence and repression,” says Romero. The 2012 conflict, for example, left 3 people dead and several leaders criminalized, among them Óscar Mollohuanca, whose judicial process still continues after 8 years. What is more, in the post-conflict period, “the actors are weakened, and the power of the company is reconstituted.”

Oscar Mollohuanca believes that “when the people of Espinar are standing up in struggle, in movement and in territorial displacement, it is the moment of equilibrium – it is the moment in which the social force equates to the political and police force expressed by the company in alliance with the government. At that moment important things happen.” However, after making some progress in their demands, the ability to draw attention to their problems is significantly reduced and there is a “situation of asymmetry”, since the communities do not have the financial or technical-legal resources to continue.

Raúl Zibechi (2019) suggests that mining must be understood as a “model of power” that reproduces and perpetuates colonial relations, based on the installation of a cultural logic and a form of occupation and control of space that reflects the power of the center versus the regions, the power of the city vis-à-vis indigenous-peasant populations, and the power of private investment vis-à-vis collective institutions.

Some final recommendations

José Antonio Romero believes the processes of dialogue in Espinar must have a “development horizon … It is not a question of money, it is more comprehensive,” he says. At the same time, “there are a series of minimum guarantees of law that must be given in the territory. And if there are impacts, there must also be some kind of repair or compensation…If you look at the 38 years of mining in Espinar and look at the indicators in general, the improvements are not qualitatively or quantitatively significant.” Although some works have been carried out, and a certain sector linked to the mining activity obtains benefits, “the vast majority continue to be in a situation of poverty and historical exclusion.” In addition, there is a kind of relaxation of the institutional framework in favor of mining investment: “the institutionalization for the minimum requirement of rights in environmental matters, permissible limits, environmental quality standards, etc. has been relaxed, under the argument that it is necessary to create conditions for investment. In general, the institutional framework does not lean towards the guaranteeing of rights, but rather towards improving conditions for mining investment,” says Romero.

He also sees the importance of social actors having an articulated strategy: “We cannot think of entering into a negotiation process if organisations are fragmented. There are a series of differences between actors, and so instead of generating a block with common objectives these distances get in the way of having a shared set of aims – fundamental in any process of negotiation and dialogue,” he points out.

Romero says that processes of dialogue must ensure mechanisms and forms of participation and compliance with the agreements: “You have to look not only at the arena for dialogue, but also at implementation – which is slow…The state has to have institutional mechanisms that give a quick response to the agreements made around the table. For example, of all the human rights violations that have occurred, so far there has been no response from the state to recognise the violations and take action so it doesn’t all go unpunished.”

On health issues, Romero points out that these will not be resolved through the framework agreement, being a government responsibility: “The framework agreement is an agreement fundamentally between the town of Espinar and the mining company. The impact on health is a direct competence of the state.”

Listening to José Antonio Romero and Óscar Mollohuanca, it is clear that the state is responsible in many ways for the conflicts in Espinar. In the first place, it does not adequately attend to the demands of the Espinar population, including their health and environmental concerns. On the other hand, it represses and criminalizes social protest when people do mobilise to demand their rights. And the one who gains most from this situation is the mining company, which – despite all the years of conflict and negative impacts from mining in Espinar – continues to develop its operations unscathed and with public protection, even during the Covid 19 pandemic.

Glencore assumes no responsibility for the historical problems in Espinar and transfers the entire burden to the state and the local population. In its code of conduct, the company declares its commitment ‘to support and defend human rights, including those of the communities located in its sphere of influence’. However, it does not cooperate in investigations into human rights violations in conflicts such as the one that occurred between July and August of this year, and that have been widely documented by the National Coordinator of Human Rights in Peru (CNDDHH). Despite the fact that Glencore is a subscriber to the Voluntary Principles on Security and Human Rights, the CNDDHH says it makes no contribution to ‘access to justice and reparation for the victims and their families.’ On the contrary, the company stands accused of being institutionally linked and ‘providing logistical support and a base of operations’ to the Police and the Army, both with serious antecedents of human rights violations in situations of social protest in Espinar. The CNDDHH states that to date, “There is no evidence that the company has honored any of its commitments, either currently or in relation to the three deceased protesters, and citizens tortured within their camp in 2012.”

 

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USEFUL LINKS

THE RESPONSIBLE BUSINESS INITIATIVE – Protecting human rights and the environment: https://corporatejustice.ch/

Swiss to vote on holding multinationals responsible for supply chains: http://www.industriall-union.org/swiss-to-vote-on-holding-multinationals-responsible-for-supply-chains

“We’ve simply been forgotten” – Fatal accidents, underage workers, environmental destruction: in the Porco mine run by Glencore in the Bolivian highlands, cooperatives mine zinc, lead and silver in inhumane conditions. Glencore turns a blind eye – while purchasing a large portion of the ore produced by the cooperatives. It is a story of organised irresponsibility that demonstrates how important it is for the Responsible Business Initiative to be adopted: https://stories.publiceye.ch/glencorebolivia/

 

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