On November 15, 1532, in the northern Peruvian city of Cajamarca, Spanish conquistadors led by Francisco Pizarro slaughtered 7,000 Inca nobles and warriors. Pizarro and his force of 160 mounted soldiers, armed with superior firepower, armor and swords, tricked and then seized Atahualpa, leader of the Inca Empire. Pizarro offered to release the Inca king if his surviving followers would fill a room with gold, and twice more with silver. The Incas complied with the ransom demand, but upon receipt of the gold and silver, Pizarro ordered Atahualpa killed in the city square. Pizarro offered to spare the king from burning at the stake if he would proclaim his acceptance of Christ. After Atahualpa complied, he was strangled to death as a purportedly more benign form of execution.
The destruction of the Inca Empire followed, and the plundered gold and silver became treasured ballast in the holds of Pizarro’s Europe-bound ships. Almost five centuries after the conquest of Cajamarca by Pizarro, the quest for gold and silver by foreign interests continues.
Yanacocha Mining Company is Peru’s largest gold mining conglomerate. Its majority interest (51%) is owned by the U.S.-based Newmont Mining Company. Newmont is the world’s largest gold mining company with extensive international holdings and a burgeoning stock portfolio. The Companía de Minas Buenaventura, a Peruvian mining company, owns a 44% interest in the company and the World Bank’s International Finance Corporation (IFC) holds 5%.
The Yanacocha mine in Cajamarca is the largest gold mine in Latin America and the second-largest in the world (the biggest is in Tanzania). Yet the Yanacocha mine has brought prosperity to only a handful of the city’s 111,000 residents. The mine employs about 8,000 workers, many of them migrants from other parts of Peru or foreign countries. Since Yanacocha established operations in 1992, Cajamarca’s population has grown by more than 80,000. Another by-product of the gold mine is the extensive over-use of finite freshwater resources and the use of toxic chemicals including cyanide. The extractive process itself produces other toxins, including chromium, mercury, lead and arsenic, all of which have to be removed and transported through unprotected communities.
The health and environmental risks of gold mining came tragically into focus on June 2, 2000, when an estimated 1,200 campesinos were exposed to over 300 pounds of mercury spilled along 25 miles of highway adjacent to the nearby town of Choropampa. The mercury spilled in transit from a damaged container carried on a truck under contract to Yanacocha.
The mercury spill occurred in sweltering afternoon heat that had climbed over 100° F. Toxic liquid mercury sheets broke into puddles and pellets that were collected by children and adults who believed the silvery metallic toxin to be a valuable treasure trove. Residents carried the mercury to their homes by hand or in containers. Curious children sipped the shiny liquid with straws. Initially, neither Yanacocha nor the government offered any emergency decontamination services to the residents or removal of the mercury. A week passed before Yanacocha dispatched a comprehensive response team—public health and decontamination experts—to communities along the spill route.
In fact, days after the spill, Yanacocha offered to pay residents of the impoverished communities to collect the mercury on the highway for deposit in containers. The Choropampa citizens conducted this “recovery process” without protective clothing, gloves or respirators. The company and government’s dereliction may well have exacerbated the victims’ skin contact and their exposure to toxic mercury vapors.
Over 200 of the exposure victims required hospitalization. Others continue to suffer from fatigue, skin rashes, chronic headaches and the psychological aftermath of the mass exposure. The extent of long-term health and environmental impacts is unknown. Company officials have offered a maximum of five years medical care to the victims, but coordination of health providers has proven problematic. The company maintains control of the medical records, making systematic epidemiological studies impossible.
According to Juana Martínez, president of the Choropampa Defense Front, a local group that represents the victims, the community suffers from severe economic detriments as well. Truck drivers no longer stop in what is believed to be a contaminated village, and three restaurants have had to close their doors. In addition, neighboring villages are reluctant to purchase food products grown in Choropampa. Martínez and her co-workers argue that Yanacocha has ignored the economic impact of the spill in its offers to pay compensation to victims.
Alfonso Carrasco along with his wife and their three young daughters were poisoned by the mercury. After the spill, Alfonso began working with the Association for the Defense of Education and the Environment (ADEA). Since his involvement with the organization, which is seen as an organizer of community protest against Yanacocha, Alfonso has been unable to secure employment as a carpenter with former municipal employers that he believes are beholden to the Yanacocha Company. Despite their personal setbacks, the Carrascos remain resolute in their dedication to seek justice for the people of Choropampa and protect the region from further ecological damage.
Close to 1,000 of the Choropampa victims have filed a suit for damages in U.S. federal court in Denver, Colorado, where Newmont Mining Company maintains its corporate headquarters. Newmont’s lawyers have countered that the case can only be tried in Peruvian courts. The plaintiffs, represented by the law firm of Engstrom, Lipscomb & Lack (the firm made famous by the film Erin Brockovich), have argued against removal, presenting evidence of a corrupt Peruvian court system. As proof, the plaintiffs’ lawyers submitted a sworn deposition by Peru’s notoriously corrupt former security chief Vladimiro Montesinos in which he admits accepting a $4 million bribe from Newmont to fix a 1998 Peruvian Supreme Court decision. In that case, the high court ruled in favor of Newmont to prevent the French Mining Bureau from selling its stake in Yanacocha. The 4-3 decision awarded Newmont the French company’s share, making Newmont the majority shareholder of Yanacocha.
Evidence shows the political jockeying that ensured the tie-breaking vote in the Supreme Court possibly goes as far as the U.S. State Department. A motion submitted by the plaintiffs’ firm cites testimony by Montesinos, who said that Peter Romero, President Clinton’s Secretary of State for Latin America at the time, and John Hamilton, U.S. Ambassador to Peru, asked then-President Alberto Fujimori to intervene in the case on Newmont’s behalf. Hamilton and Romero say they did nothing illegal and were merely fulfilling their duties as representatives of the U.S. State Department by lobbying for the company to get a fair trial. After his stint in the Clinton Administration, Romero became a private consultant to Newmont.
In a related yanacocha mining venture, the Peruvian government granted the company gold exploration rights in Cerro Quilish near Cajamarca. The cerro (mountain) is the source of a watershed that serves Cajamarca farmers and provides drinking water to the rapidly growing population. The unresolved Choropampa poisoning, fears of water contamination and general environmental degradation have provoked a popular movement in opposition to Yanacocha’s most recent bid for expansion.
A department-wide general strike and work stoppage declared September 15 brought Yanacocha’s mining operations to a halt. The broad-based stoppage included municipal leaders, transportation workers, campesinos and students. The police responded with tear gas, rubber bullets and ruthless attacks on campesino road blockades that had been fortified with large boulders and protestors’ bodies. Peruvian media reported the participation of tens of thousands of demonstrators.
Although the Ministry of Energy and Mining (MEM) denounced both the work stoppage and its supporters within the municipal leadership, in September 2004 the ministry suspended Yanacocha’s permit to explore Cerro Quilish pending further environmental impact studies.
Two days into the strike, community leaders in Cajamarca signed a declaration agreeing to suspend the stoppage and called for a “Roundtable Dialogue” with representatives of the company and the government. The declaration calls for community involvement in the review and analysis of independent environmental impact reports, particularly those regarding the potential for water contamination, to determine whether Cerro Quilish operations should be allowed.
The Lima-based Buenaventura Company, Yanacocha’s second-largest shareholder, issued a statement on September 16 saying: “The only responsible and prudent decision is for [Yanacocha] to begin scaling back its operations so that the company can increase its focus on safety and environmental protection.” Newmont spokesperson Doug Hock added, “We’ll continue to dialogue and we’re hopeful some kind of agreement can be reached.”
Local parish priest Marco Arana has galvanized efforts to seek a negotiated or mediated settlement of the Quilish dispute. A strong advocate for human rights and environmental protection, the popular priest leads a nongovernmental organization that advocates sustainable development in the region. Despite his function as a mediator between the community and the company, Arana is resolute in his respect for the community’s right to have a role in decision-making about any future mining operations.
When questioned about his views on foreign direct investment by a reporter from the Peruvian daily El Comercio, Marco replied, “Private investments are welcome, but it is also necessary to respect human rights. In the same manner, it is necessary to look carefully at the sites where they (Yanacocha) are going to operate. They cannot ignore and forget the rights of the local population.”
The conflict in Cajamarca is characteristic of Peru’s long history of struggle between foreign mining operations and local communities. It is also indicative of the nation’s current debate on foreign direct investment. Proponents contend that improving Peru’s economy and development capabilities is dependent on foreign direct investment. Civil society representatives do not entirely disagree, but they contend that unregulated investment will result in more adverse environmental and health effects because foreign interests in exploiting gold and silver deposits almost always trump concerns for local communities.
Peru receives about half of its $7.1 billion in export revenues from mining operations. According to the World Bank, Peru’s 2001 copper exports alone totaled $987 million, and the country has $8.9 billion in gold reserves. Yet more than half the population lives below the poverty line.
Negotiations between affected communities, government officials and foreign companies have proven complex and contentious in the past. Still, proponents of community involvement in the development process point out that such cross-sectoral dialogue is critical to the democratization of Peru’s future. This is not only because power has long been centralized in Lima, but also because indigenous communities have suffered the brunt of political violence, economic exploitation and political disenfranchisement.
Tambogrande, also in northern Peru, presents another striking example of a community’s successful resistance to a potentially devastating mining venture. The town of 18,000 residents relies on fruit cultivation, especially lemons—a key ingredient in Peru’s treasured national drink, pisco sour—for its economic livelihood. After the government approved a gold exploration project by Manhattan Minerals of Vancouver, Canada, fruit growers launched a popular opposition movement. Municipal leaders joined forces with the growers, campesinos and NGOs to block the Manhattan mining project, specifically because the mining operations threatened the quality and safety of water used to irrigate the valley. The community has blocked the mining project as of this writing, but it is unclear what Manhattan Minerals’ future plans may be. The case is currently in arbitration.
A major role in the fight against the mining company in Tambogrande was played by the Community Defense Front, a local group whose leader, Godofredo García, was gunned down in 2001 by unknown assailants, underscoring the potentially violent reaction to such organizing. The community, however, seems resolute in carrying on the struggle. García’s successor in the organization was later elected mayor of Tambogrande, as further evidence of mainstream opposition to the proposed mining project.
For those struggling in Cajamarca and Tambogrande, the Tintaya copper mining project in the southern department of Cusco gave rise to a negotiation process between local stakeholders and the mining company. The process known as the Roundtable Dialogue—the same process demanded in Cajamarca—may offer a viable model for other communities facing foreign interests’ control over mining projects.
Indigenous and peasant communities affected by mining activities organized the Regional Coordinator of Communities Affected by Mining (CORECAMI-Cusco) in 1999. Less than two years later, the organization demanded that the Australian-British corporation BHP-Billiton “open up a transparent process of negotiation.” CORECAMI, with the direct involvement of municipal leaders and other NGOs, secured a commitment from BHP-Billiton to participate in open dialogue with the communities.
Key issues in the dialogues, which began in February 2002, include review of land acquisition policies, environmental contamination affecting communities around the mine and reparations for human rights violations. The Roundtable has convened at least five times and has established four issue-specific commissions: on the environment, sustainable development, land claims and human rights. The Tintaya Roundtable Dialogue is heralded by effected communities, NGOs, the company and the Peruvian government as an example of how an open, democratic process can be pursued to maximize the benefits of foreign direct investment while minimizing or eliminating adverse affects.
The situation in Tintaya is indeed a hopeful one, but in most other cases proposals for transparent and inclusive dialogue among stakeholders await implementation. Yet the advent of open and transparent dialogue featuring the democratic participation of local stakeholders, mine owners and government officials offers a ray of hope in an otherwise dismal landscape. A Lima taxi driver eloquently summarized that landscape during a discussion about the Cajamarca work stoppage: “The people who live closest to the gold have always been the poorest. Why is that?”
About the Author
William W. Monning is a lawyer, mediator and professor of negotiation and conflict resolution at the Monterey Institute of International Studies. He is currently a Fulbright scholar and visiting professor at the Universidad de Lima in Peru. Institutional affiliations are listed for identification purposes only.
