Conga: Emerging socio-environmental conflicts & environmental politics in Humala’s Peru

NorLARNet analysis, 23 April 2012

Jorge Balarezo, Lawyer from the The Pontifical Catholic University of Peru; Master in Public

International Law from University of Oslo; Researcher on equality and sustainability issues

1. Introduction The Peruvian ombudsman has announced that there were 126 socio-environmental conflicts in Peru during 2011. The majority of those conflicts involved the executive power of the national government in its relationship with local governments and populations. The majority of those conflicts were also concentrated in those areas where mining activities are rather intensive.1 Conga is one of those conflicts, but it has special importance because it is strongly challenging the current government presided over by Ollanta Humala. He won the last election promising a new relationship between the state and the mining sector. This new relationship would put the resources of the nation into the service of the poorest and create a more inclusive society. Even more, he promised that water and life have to be prioritized over mining. However, the government’s management of this conflict has questioned Humala’s real commitments to life and nature. In fact, this conflict is strongly testing the governability of the country, and it has the potential to show whether Humala’s roadmap could be implemented in practice or not. This picture clearly shows that the exercise of power from the executive branch is eliciting reactions from local authorities and populations. It also reveals deficiencies to identify, manage, and reduce these conflicts, most of them related to extractive activities. In fact, the solution to socio-environmental conflict in Peru goes beyond political willingness to prioritize life and nature. It requires structural reforms in order to allow local populations to be part of deciding and defining what kind of development is wanted. This paper suggests that “the big change” promised by Humala during his campaign should first be ensured by a structural change. It requires the reformulation of the legal framework for development in Peru. Recent governments have been influenced by the small oligopolistic industry. This relationship has achieved some goals in reducing poverty, but has failed in granting equal opportunities for all. Under this scenario, local populations and indigenous peoples’ organizations have created a very active network with other social actors. They have increased awareness on social and environmental

1Puno and Ancash are at the top of the list with 21 conflicts each; Cajamarca and Cuzco follow with 17 and 16 respectively.

http://www.defensoria.gob.pe/conflictos-sociales/

issues. They have also been able to stop unsustainable development projects and to establish a clear counterweight against development attempts that do not consider social rights. Moreover, the last presidential election in Peru has sent a clear call for social inclusion. Humala has answered this demand early by implementing the right to prior consultation recognized in the ILO Convention 169 on indigenous and tribal peoples’ rights. However, the biggest challenges of this structural change are still pending and the management of the conflict around Conga could help to accelerate or stop this process.

2. The Conga project: A clash between local and central government Conga is a mining project where a reservoir of gold and copper was found. This project and its environmental impact assessment (EIA) were approved during the government of the preceding president, Alan Garcia.2 The project is located at the headwaters of five micro-watersheds which flow into the provinces of Cajamarca and Celendín, and into the districts of Huasmín, Sorochuco, and La Encalada.3 This area alone constitutes 18% of the mining investment portfolio of Peru. This project has the potential to generate substantial income from taxes, and the central government has much interest in developing this project.4 The clash came about when the government stated that the project would be developed, despite the local population expressing their concerns for the project, particularly because it will compromise water provision and quality. This last December, the regional government of Cajamarca, presided over by Gregorio Santos, issued a Regional Ordinance5 declaring as a “regional public interest” the conservation, protection, and inviolability of the headwaters of rivers in the whole jurisdiction of Cajamarca, in harmony with national and regional sustainable development. This ordinance, therefore, declared the Conga project unviable. The central government reacted to this decision, and the national prosecutor filed a constitutional claim against the Regional Ordinance.6 This last January, the Constitutional Court granted the admissibility of the constitutional claim,7 and the case will be resolved in the coming weeks.8 In many previous socio-environmental conflicts the intervention of the Ombudsman, the Congress, or the executive branch, through ad hoc committees, has favored a political solution for situations of tension and escalating violence. In this case, it is a Regional Ordinance issued by the Regional Government of Cajamarca which declared the infeasibility of a development project. This is a new aspect that is important to highlight. In essence, this ordinance questions the role and distribution of powers between different levels of government. As mentioned previously, this ordinance has been challenged by the executive branch before the Constitutional Tribune. It is likely that the judgment of this court could also lead to a political solution to release this legal and institutional gridlock. However, this requires a structural change and a broad national debate about the distribution of powers between levels of government.

2 http://www.minem.gob.pe/minem/archivos/file/Mineria/INVERSION/2011/PROY%2012-11.pdf

3 http://www.maplandia.com/peru/cajamarca/cajamarca/cajamarca/

http://gogeometry.com/mining/conga_gold_copper_mine_camp_celendin_map_news.html 4 Yanacocha, the biggest gold mine in Peru, is located 27 km from Conga. Yanacocha produces 1.2 million ounces of gold

per year. In comparison, Conga will produce 650,000 ounces of gold and 800,000 tons of copper. 5 Regional Ordinance 036-2011-GR.CAJ. See: http://www.regioncajamarca.gob.pe/ordenanzas_regionales

6 The complaint was filed by the Prosecutor's Office under the direction of Jose Pelaez Bardales, for violating Articles 189,

190, and 191 among other articles of the Constitution. 7 http://elcomercio.pe/economia/1365165/noticia-tc-admitio-demanda-contra-ordenanza-que-declara-inviable-proyecto-

conga 8 At the end of the edition of this paper, the constitutional court decided that the regional government of Cajamarca had

overstepped its powers by declaring the project unviable. See: http://www.tc.gob.pe/notas_prensa/nota_2012_048.html

3. Between Water and Gold?

The future provisions of water for the city of Cajamarca and water for agricultural use come from Conga. As mentioned before, there are many concerns coming from the local population in Cajamarca about the provision of water and water quality. In relation to water quantity, the National Water Authority (ANA) has published that there are different sources of water in the Cajamarca region that could amount to a total of 10,460 million cubic meters, but only 2,113 million are used. According to ANA, mining uses only 1.78% of the available water in the region of Cajamarca. However, households in the city of Cajamarca only use 0.2%, and people feel the shortage. In fact, there is strong seasonal water rationing in the city of Cajamarca. ANA has developed a technical file for the construction of a dam, the Chonta dam, to provide drinking water to the population.9 However, ANA is not considering the rapid rate of deglaciation in the Chonta mountains caused by global warming.10 In addition, different levels of government have a serious incapacity to coordinate between themselves in order to finance and provide basic resources for local populations, most of which are living in poverty. In consequence, it is a joint failure of local, regional, and national governments that the population in Cajamarca is currently suffering from water shortages. In relation to water quality, the population of Cajamarca had experienced negative effects from the huge Yanacocha goldmine and its water use. The efforts of the El Milagro treatment plant to provide drinking water to Cajamarca is a good example that shows the real dimension and the potential threat to water provision and quality coming from Conga. El Milagro was built in 1980 and is currently processing water coming from Rio Grande, the main water resource for the city of Cajamarca. However, the Yanacocha goldmine has used this river to dump its wastewater. Mining operations in Yanacocha have removed mountains with bulldozers and explosives, and have changed the source of the river. Now there are four tubes that dump processed water into the river. What is more, gold production in Yanacocha uses mercury and a cyanide solution to recover the metal in big pools of lixiviation.11 A circuit allows the Yanacocha goldmine to recover part of the water used in that process. However, the rest of the water is processed with lime and chlorine, then, dumped into the Rio Grande. This raises the level of alkalinity of the water. It also produces ammonium-nitrogen and trihalomethane, which are highly carcinogenic agents. Despite the fact that El Milagro was not designed to control these kinds of pollutants, this treatment plant is making efforts to control those agents, but only since 2011 because of an order from the regulatory agency ANA. However, the Yanacocha goldmine has been operating in the area for more than 10 years and its annual volume of dumping is 9,486,000 m3.12 In consequence, local concerns about water security are based on serious current and potential harms to life and health. However, those claims are also grounded on a systematic deprivation of basic human needs.

9 The work is designed to attract 40 million cubic meters of water and will benefit 61,785 people. This project will cost 344

million soles (130 million US dollars). 10

Since 1970, this mountain chain has lost 92% of its glacial surface. Recursos Hídricos en el Perú. ANA (2012) http://www.calameo.com/read/001271945bf2b446e3de7 See also: http://elcomercio.pe/peru/1368045/noticia-region-cajamarca-solo-usa-20-agua-que-posee_1 11

Leaching, the process of separating a soluble substance from one that is insoluble by washing with some solvent, such as water. 12

Caretas, December 15, 2011. p.23-25

4. The march for water resources and the right to water In February of this year, many delegations from different provinces and districts of Cajamarca met in various lagoons in Celendín, where the Conga project will operate. From there they began to march up to the city of Cajamarca, and continued from there to Lima. This march was an important mobilization which had the main purpose of challenging Humala’s government and demanding a clear position for social rights and ecological sustainability. During the journey, people settled along the road joined in solidarity with the marchers. Many other delegations arrived from various parts of the country and joined the march. In general, this march was successful in its mission to raise the general awareness in the country about care of water resources. However, the march was also successful in putting three important issues/proposals on the political agenda: First: to prohibit mining activities at the headwaters of the watershed The essence of this proposal is a clear prioritization of ecological factors and interconnected basic social rights over economic aims. It has an intrinsic relation with zoning and territorial planning. It also requires modification of the legal and institutional frameworks for the regulation of mining in the country and the current water resources act. However, a proposal of this dimension also has political effects and could hardly be achieved without clear support from the population. This highlights the importance of the march because it was aimed to engage the population on ecological commitments. Second: to prohibit cyanide and mercury in mining activities This initiative has had important advances in the European Union which has banned this type of mining. The United Nations Environment Program (UNEP) has also called for a partnership between governments and other stakeholders in order to reduce the risk to human health and the environment from the release of mercury.13 This proposal is meaningful in the Peruvian context where large-scale mining next to small informal mining are the common feature in the highlands. It is precisely the use of mercury from gold mining activities that is at the center of local concerns, but even more so in Cajamarca where the population has already suffered a spill of mercury in the town of Choropampa. This spill, which happened 11 years ago, was caused by the Yanacocha goldmine itself, and many are still suffering from the consequences of pollution. Third: to declare water as a human right in the Constitution This initiative is the most relevant for local people in Cajamarca because water and sanitation are both essential for their life, health, dignity, empowerment, and prosperity. However, it is important to elaborate the real content of this proposal. Water and sanitation have been formally recognized by the UN General Assembly as human rights, as they are indispensable for the full enjoyment of the right to life, the right to health, and the right to dignity.14 Following this recognition, a Human Rights Council resolution was affirmed through consensus, confirming that the right to water and sanitation already exists in international law. 15 The UN General Assembly has also mentioned in the Vienna Declaration16 that human rights include all those rights essential for human survival, physical security, liberty, and development with dignity. They include the right to an adequate standard of living for health and well-being, the right to

13http://www.unep.org/hazardoussubstances/Mercury/MercuryPublications/GlobalAtmosphericMercuryAssessmentSourc

esEm/tabid/3618/language/en-US/Default.aspx 14

The UN GA Resolution 64/ 292 http://www.un.org/News/Press/docs/2010/ga10967.doc.htm 15

Human Rights Council Resolution 7/22. Human rights and access to safe drinking water and sanitation http://ap.ohchr.org/documents/E/HRC/resolutions/A_HRC_RES_7_22.pdf 16

http://www.unhcr.org/refworld/docid/3ae6b39ec.html

education, the right to the highest attainable standard of physical and mental health, and the right to a healthy environment.17 All human rights have been affirmed as indivisible, interdependent, and interrelated. The UN Committee on Economic, Social and Cultural Rights has mentioned that the human right to water is indispensable for leading a life with human dignity. But it is also a prerequisite for the realization of other human rights. The Committee mentioned that it has been continually confronted with the widespread denial of the right to water in developing as well as developed countries. Over 1 billion people lack access to a basic water supply, while several billion do not have access to adequate sanitation, which is the primary cause of water contamination and diseases linked to water. Continuing contamination, depletion, and unequal distribution of water is exacerbating existing poverty. In consequence, there is a need for states to adopt effective measures to realize, without discrimination, the right to water, as set out in General Comment 15.18 A human rights framework to grant access to safe drinking water and sanitation encompasses a broad spectrum from the rights-based approach on the one side to the legal right to water on the other. The rights-based approach promotes participation in and information about people’s access to decision-making forums that affect their access to water, sanitation, and hygiene services. The legal-right approach promotes national and international justifiable approaches that promote accountability and transparency. This also provides mechanisms to progressively realizing an increase in people’s access to water and sanitation. However, this legal-right approach excludes a conception and operationalization of the right to water as an individual right. The International Covenant on Economic, Social and Cultural Rights requires States Parties to formally recognize these rights within their national legislation, to provide laws and regulations to progressively fulfil these essential human rights. In consequence, the recognition of the right to water in the Constitution has the aim to set clear duties on the state to grant access to safe drinking water and sanitation. However, this third proposal attempts to go further and establish the right to water as an individual right. Water is a limited natural resource and a public good fundamental for life and health. This proposal is coherent with what was recommended by an independent expert on the issue of human rights obligations related to access to safe drinking water and sanitation: “…there is a process underway to recognize water and sanitation as individual rights. The protection and fulfilment of the rights to water and sanitation requires specific measures, and therefore should be fully recognized as autonomous human rights.”19 Recognizing the individual right to water and sanitation domestically is intrinsic to fulfilling the right. It entitles individuals to demand it politically, administratively, and judicially. As a result of constitutional recognition, development and interpretation of legislation and policies must be in accordance with the constitutional right.

5. Why an international Environmental Impact Assessment?

17 Balarezo, Jorge. The right to a healthy environment and the principle of sustainability, Oslo (2010)

http://www.duo.uio.no/sok/work.html?WORKID=109178 18

Committee on Economic, Social and Cultural Rights, General Comment 15 http://www.unhcr.org/refworld/pdfid/4538838d11.pdf 19

Catarina de Albuquerque, Independent Expert on the issue of human rights obligations related to access to safe drinking water and sanitation. http://www.righttowater.info/independent-expert-on-the-issue-of-human-rights-obligations-related-to-access-to-safe-drinking-water-and-sanitation/

According to Newmont Mining, Buenaventura’s partner in Conga, it has performed many hydrological assessments during 10 years in the area. An EIA has been undertaken, and the 17,000 pages document supports the Conga project. However, after weeks of protests, strikes, and the change of the cabinet of ministers, the government has announced that the EIA will be subject to a new revision by international experts. This revision is a unilateral decision of the government in a conflict with two parts. It also goes beyond the legal framework. Thus, it is important to analyze why the government relies on an illegitimate and illegal decision? In the last years, but even more in Garcia's government, the association between the state and large-scale mining has generated a policy of authoritarianism. This policy has enabled the approval of projects of exploration and exploitation of natural resources without proper oversight of environmental standards and without public participation. This situation has generated a deep mistrust within the local population about mining activities, but also regarding the state's role as a protector of rights. This has manifested in protest and radical reactions from local populations. In the case of Conga, the protest has been expressed with the phrase: “Conga no va” (Conga won't go further). In this context, the reason behind the decision to have the Conga’s EIA reviewed by international experts would be the government’s need to build confidence among the local population. However, it is neither the company nor the state which guarantees the protection of rights and basic environmental standards. In this case, the government is using an ad hoc third party to repair its deteriorated reputation as the protector of public interest, but the local population has no assurance that this governmental decision aims to protect rights and guarantee basic environmental standards. In consequence, the expression “Conga no va” has been accused of being extreme or extremist to the point that it has the intention of preventing any and all mining activity within the Peruvian territory. However, “Conga no va” basically expresses a protest on two interconnected issues. First: A protest against a specific project which has particular problems. To open a pit-mining area in the Cajamarca highlands is highly problematic. In Cajamarca, as in most of the northern highlands of Peru, water is produced by capturing moisture from the native vegetation of the Andean moorlands and by retention of rainwater in the lagoon systems. The water is not formed by glaciation because there is no ice there. The surface of this land is linked to the process of water production and these moors are the main reservoir of water. Furthermore, gold is not concentrated, but dispersed in the subsoil. To access the gold, it is necessary to move tons of earth, in which case the water security is compromised. In consequence, "Conga no va" is not a philosophical "not;" it is a specific "not." This necessarily requires making a decision between water and gold. Second: "Conga no va" is also a protest against continuing under the institutional framework inherited by Humala from the three previous presidents: Alberto Fujimori, Alejandro Toledo and Alan Garcia. This framework is characterized by its prioritization and promotion of investment over any other environmental or social considerations. Under this system, the Ministry of Energy and Mines (MINEM) makes all its decisions in favor of mining concessions, including the assessment and approval of the EIA. Here the Ministry of Environment is not competent to question the decisions of MINEM. In the same way, regional and local governments have no legal authority to challenge decisions of the executive branch. Based on this, the population has resorted to protest seeking a political solution.20

20 http://noticiasser.pe/02/03/2012/nacional/carlos-monge-%E2%80%9Cse-debe-cambiar-de-esquema-

minero%E2%80%9D

Peru initiated its legal and institutional framework for environmental protection in 1991, in tandem with Fujimori’s efforts to promote foreign investment. However, environmental protection was perceived as a serious obstacle to encouraging foreign investment and this mistaken perception undermined its further development. As a result, the main features of this system are its centralism and the so called "Sectoralizacion" (Sectionalization) of environmental management. This means that each minister would be responsible for regulating, licensing, and controlling environmental matters. In practice, each minister is judge and jury at the same time. In this system, each minister checks the EIA and also approves the license. Alongside this process, decentralization followed its own course. This decentralization was established by Fujimori's Constitution of 1993. However, local and regional governments did not receive funds until this process was boosted by Toledo's government in 2001. What is more, since the decentralization process began, the energy and mining sector has not been decentralized. All that has been transferred to regional governments are powers over small-scale mining operations, but the approval of large-scale mining projects is still being overseen by MINEM. In 2008, the Ministry of Environment was created, but no competence was given to this ministry regarding energy and mining matters. The approval of the EIA in the case of Conga was not an exception. ANA was the only institution who was consulted by MINEM in this process. Neither the Ministry of the Environment nor local governments were consulted. Consequently, the institutional framework created by Fujimori, maintained by Toledo, and taken to the extreme by Garcia has led to the collapse of the system. An example that is hard to forget is the escalation of violence caused by the authoritarian government of Garcia in “El Baguazo”.21 Given this scenario, Humala does not have much room for action, and he cannot be blamed because he has inherited the consequences of this system. However, Humala’s government could be analysed in relation to those necessary structural changes that his government could undertake in order to protect local populations’ rights and guarantee basic environmental standards. From that perspective, the decision of Humala to review Conga’s EIA by using international experts also has the function of circumventing the system. It aims to give a technical-political outlet for the continuation of the project. Thus, this sui generis solution has a political and economic aim which does not distinguish Humala’s government from previous governments. This doesn't really reflect “the big change,” which was Humala’s motto during his election campaign.

6. From “the big change” to a structural change “The big change” aims to achieve greater social inclusion in Peru.22 However, it is also necessary to protect local people’s rights and guarantee basic environmental standards to achieve this aim. Both aspects have crucial importance in order to reduce conflicts and enable economic growth in Peru. Only by economic growth can social inclusion be funded. Paradoxically, it is the very legal framework for development which is preventing economic growth in Peru. In consequence, “the big change” should be initially ensured by a structural change. It is necessary to reformulate the legal framework for development in Peru. In particular, the General Mining Law, the Organic Law of the Energy and Mining Sector, and the Organic Law of Local and Regional Governments. The revision of this latter law is essential to better defining roles and competences in

21 Balarezo, Jorge. Protest in the Peruvian Amazon: Domestic problem or global concern? NorLARnet webpage (2009)

http://www.norlarnet.uio.no/pdf/behind-the-news/englis/protests_in_the_peruvian_amazon.pdf 22

La Gran Transformación – Humala’s government plan 2011-2016 http://partidonacionalistaperuano.net/propuestas/plan-de-gobierno-gana-peru-2011-2016.html

relation to development decisions between central, regional, and local governments; but it is even more essential in order to define a certain level of coordination between them. Avoiding conflictive decisions between different levels of government also avoids overlapping decisions, and it could instead take advantage of those synergies created by concerted decisions. However, this would not be sufficient without a comprehensive system of citizen participation. Here, law production in general, but particularly zoning and land-use planning, should be a product of participation and consensus. This requires thinking about the implementation of the right of consultation as one element among many others in order to systematically incorporate deep participation in Peru. It is also important to achieve development as a result of consensus through a system of coordination between different levels of government. Only from this base and by mixing an environmental certificate with proper consultation, may conflicts be reduced and development made possible. In this way, when a project takes place, it has to pass through the filter of the land-zoning legislation, being part of the development plan in the area, and then it must obtain the social license through a real process of consultation in which the information obtained in the EIA has been previously and properly certified. Only then, the grant may be awarded. In this case, the grant should become a negotiation of a serious project which involves the improving of local people’s living conditions without compromising a basic environmental standard. Technically, Humala’s political decision goes beyond the current legal framework. This decision has somehow admitted that the system has collapsed, and therefore the government has to adopt a sui generis decision to go through with the project. But what is really behind all of this? Based on the way the government has managed the conflict and other governmental statements,23 it appears that the government has already decided that the Conga project will go forward anyway. The international review will cost a quarter of a million dollars and three experts will review in 40 days an EIA which took years to be ready and contains 17,000 pages. Then, the company has to implement the recommendations of the experts and analyze what the cost of these changes will be. However, the government also insists that the project will start in the coming months. Conga is one project among 29 other mining projects. Conga and the other 40 billion dollars in mining investments are crucially important for the government because it will finance social inclusion. The funding of social inclusion has already been negotiated with the mining sector through a new tax system with higher royalties to make available an additional 3 billion soles per year.24 In addition, the government has committed to a loan of 3 billion soles from the World Bank to finance social inclusion.25 In consequence, it appears that Conga and the other 40 billion dollars in mining investments ensure “the big change.” For the government, it is very difficult to renounce this project. Thus, it will go forward anyway. This, once again, does not distinguish Humala’s government from previous governments. The problem is that the government is not facing the need for structural changes of the legal framework for development in Peru. This then gives rise to the question of the international review as a political alibi of the government in order to continue with the project.26

23 For example, Prime Minister Valdez has claimed that the international review will help to dispel the doubts of the

population. http://elcomercio.pe/politica/1364727/noticia-valdes-afirmo-que-peritaje-congaesclarecera-duda-poblacion 24

http://elcomercio.pe/politica/1037453/noticia-gobierno-mineras-acordaron-cambio-sistema-pago-regalias http://elcomercio.pe/economia/1302391/noticia-ejecutivo-aprobo-tres-proyectos-ley-viabilizar-aporte-minero http://elcomercio.pe/politica/1306942/noticia-modificacion-impuestos-mineria-divide-congresistas 25

http://elcomercio.pe/politica/1323402/noticia-banco-mundial-pone-disposicion-peru-us3-mil-mlls-inclusion-social 26

http://www.noticiasser.pe/08/02/2012/entrevista/%E2%80%9Cel-peritaje-es-una-coartada-politica%E2%80%9D

7. How Conga influences Humala’s government?

Last December, during the protest against the Conga project in Cajamarca, Humala decided to undertake a deep renovation of the cabinet of ministers. The prime minister, Salomon Lerner, and other ministers were removed from their charges. In his place, Oscar Valdez was appointed as new prime minister. In his few months in charge, Lerner had somehow brought relative stability to the government.27 Lerner had learned the lesson from the previous governments. He started an open dialogue with local populations and governments. Lerner believed that promoting an appropriate and open dialogue could take more time, but the effort would reap benefits and stability. However, it seems that the Peruvian government has returned to authoritarianism with Valdez in charge, at least temporarily. Two events precipitated the disagreement between Lerner and Humala: 1) The preventive detention of the leader Wilfredo Saavedra, the president of the environmental defence front of Cajamarca, and 2) the freezing of the accounts of the Regional Government of Cajamarca. In neither of these decisions was Lerner consulted despite that he was officially in charge. Instead, in both decisions the influence of Valdez was crucial.28 After a few months in office, the concerns about the authoritarianism of Valdez are more than confirmed. Valdes has not only demonstrated a huge inability to conduct dialogue, but he has issued statements on various topics that have sounded closer to the Fujimori regime than to Humala's "roadmap." Valdes has also shown that he has little affection for democracy, tolerance, and respect for human rights.29 This does not mean that Humala has ultimately opted for an authoritarian project, but the possibility remains as long as the prime minister remains in office and Humala continues endorsing Valdez with his usual silence. Humala mentioned that his decision was in accordance with the need to redirect their policies toward the aim of social inclusion and to gain internal consistency within the government. The choice of Valdez could be interpreted in line with this statement. However, the way Lerner was managing the conflict in Cajamarca was determinant. By promoting an open dialogue with the local population, local authorities, and civil society organizations, Lerner was opening a dialogue about an issue that the government had already compromised. The negotiation of the new system of royalties and taxes for mining is intrinsically connected with the continuation of the Conga project. The government will receive an additional 3 billion soles per year from the new tax system for mining activities. Humala mentioned that this new system was negotiated by the government in order to obtain more funds to finance social inclusion. However, this system was also negotiated in exchange for the continuation and expanding of mining activities. Here, Conga is only one project among many others. In consequence, the main issue behind the international revision of the Conga EIA is not to

27 Lerner had played the role of arranger or mediator between the local population in Cajamarca and the central

government. He was the entrepreneur who calmed the capital and reached out to the political actors from the left. 28

http://elcomercio.pe/politica/1336618/noticia-lerner-sobre-proyecto-conga-hora-elaborar-plan-concertado Saavedra was also linked to the MRTA http://elcomercio.pe/peru/1344609/noticia-dirigente-cajamarquino-ex-mrta-fue-liberado-10-horas-dircote . See also: Caretas, December 15, 2011. p.23-25 29

Valdez has expressed his admiration for Fujimori's dictatorial regime. He has also questioned the testimony of those who were victims of terrorist violence with his allusion to the "theatricality" of the work of the Commission of Truth and Reconciliation. Here, Valdez forgot that Humala himself offered to comply with the recommendations of this commission. http://www.cverdad.org.pe/ingles/ifinal/index.php

grant social rights and grant basic environmental standards. The main interest for the government behind this initiative is how to make possible the continuation of the project anyway.30 Funding helps but it is not going to solve the problem of inequalities in Peru. In fact, it is far from clear how Humala intends to deal with structural barriers to grant social inclusion. The small but powerful oligarchy in Peru prefers to maintain the status quo more than work for social inclusion. The government’s challenges require not only a political willingness for an open dialogue with different actors, but a clear understanding of the socio-economic and political barriers to achieve a more inclusive society in Peru. Humala’s governmental plan31 has exhibited a reflective interpretation of this challenge, but it fails to show how it could be achieved. The government also fails in practice by maintaining Valdez as prime minister when he has shown, in short time, that he is not suitable to lead “the big change.” The appointment of Valdez has also created more instability in the government than it has strengthened it. Until the appointment of Valdez as prime minister, the ex-president, Alejandro Toledo, and his party, Peru Posible, were the main allies of Humala in Congress. It was important for Humala to maintain this alliance because it ensured majority in Congress and it enabled governability. However, after the appointment, Toledo declined his collaboration with the government because, as he declared, “This appointment signified the undemocratic militarization of the government.” Here, Toledo was referring to the military background of Valdez. Notwithstanding, the real reason to withdraw his support was the unwillingness of Peru Posible to share the political responsibility of that decision. This break with Toledo was not the only political consequence. Parties and leaders from the left-wing have also expressed their disagreement, and they have initiated a process of criticism. They demand consistency with the aim for social inclusion that has been established in “the roadmap.” Rosa Mavila, elected representative from the left-wing, has mentioned: “During campaign, Humala offered that water and life were prioritized over mining. Now, Conga cannot be imposed, and should be discussed. It is not enough the international revision of the EIA. Valdes neither expresses the commitments of Gana Peru nor of the roadmap. He represents closeness with Fujimori’s regime. Valdez is going for economic continuity, maintaining the model and not working for change.”32 Conversely, the center and right-wing factions have shown their approval of the cabinet change. The need to reduce social and economic differences was the main aspect that defined Humala’s political triumph. However, it seems that Humala trusts the government’s main policies to persons, such as Valdez, instead of coming with the whole strength of the inclusive discourse he used in his campaign. Humala has a deep admiration and respect for Valdez because he was his instructor in military school. Acting according to this admiration could cost for the government the very necessary cohesion of the ruling party and the governability of the country.

8. Final considerations The socio-environmental conflict in Conga is strongly challenging the government of Humala. It has the potential to show whether Humala’s roadmap could be implemented in practice or not. In general, it seems that the government is moving away from the initial "roadmap" more than aligning

30 This has been confirmed in recent days. After receiving the report from the international experts, Humala announced the

continuation of the Conga project. See: http://elcomercio.pe/politica/1404279/noticia-lea-aqui-mensaje-presidente-humala-sobre-proyecto-conga 31

La Gran Transformación – Plan de Gobierno 2011-2016 http://partidonacionalistaperuano.net/propuestas/plan-de-gobierno-gana-peru-2011-2016.html 32

http://elcomercio.pe/politica/1370608/noticia-rosa-mavila-oscar-valdes-no-representa-hoja-ruta

to it. In consequence, there is a need for consistency in the Peruvian government, but not just any consistency and not at any price. The consistency has to be based around the aim and the need for social inclusion. There are specific measures that can ensure a future aligned with that aim. A development plan that is the product of consensus with local populations is required. The Peruvian government has never had a plan for the sustainable use of natural resources. What is more, there is no development plan that is the result of consensus with the population within a participatory and democratic system. The majority of the population delivers a mandate to the president every five years, at which time the presidential management is approved or disapproved by voting against it.33 A change in state policies that allows the reformulation of the fight against poverty and a clear policy for inclusion is necessary. In fact, the level of inequality between the poorest and richest sectors in Peru is preventing long-term economic growth, and the population has sent a clear message: "Unequal economic growth is unsustainable in the long term."34 Institutions and the legal framework in Peru are directed to promote foreign investment, but not to protect social rights or grant basic environmental standards. Local populations remain unprotected when extractive activities affect their basic rights, such as water security and quality. In this situation, the government is called upon to play a proactive role in terms of properly regulating extractive activities in order to ensure the social and environmental responsibility of mining companies. The government is also called upon to use its position in negotiating investments to fight against poverty, but without denying the possibility of minorities or locals to be part of the development process. Finally, the state is called upon to defend and guarantee locals’ rights when they see their interests threatened. On the other hand, although regulations and more initiatives to increase the coordination between different levels of governance are still pending, investment should be encouraged in order to reduce poverty in the country. Here, the right of prior consultation is an important tool to clarify unclear borders between the mandate of the government to promote development in the country and locals’ rights.35 However, this right should be considered as only one necessary aspect among many others in order to promote participation and the rule of law in Peru. In fact, participation is not part of institutional development in Peru. It has not been developed in such a way that it enables continuous participation of the population within a participatory decision-making process that goes beyond the election of the president or local authorities. This determines that the gap between legitimacy and legality is still large within the Peruvian democracy. Development decisions are centralized in the national government and local populations do not have power to influence those decisions. So protest has been used to replace a lack of legal power in order to stop decisions that affect local rights. In those circumstances, it is extremely difficult to build sustainable development in Peru.

33 Peruvian Constitution, Article 112. The presidential term is five years, there is no immediate reelection. After another

minimum period of office, the former president may run again, subject to the same conditions. (*) (*) This article was amended by Law No. 27,365, published on November 5, 2000. Before the reform, this article stated the following: "Article 112. The presidential term is five years. The President may be re-elected for one term. After another minimum period of office, the former president may run again, subject to the same conditions." 34

Ligorria, Julio. La Desigualdad en el Perú determino el triunfo de Humala. El Comercio. Jun 7th

2011. Available at: http://elcomercio.pe/politica/772558/noticia-desigualdad-peru-determino-triunfo-ollanta-humala [Visited: 07.06.11] 35

The right of prior consultation granted in the ILO Convention No. 169, which was ratified by Peru in 1994, and according to the Fourth Final and Transitory Provision of the Constitution of Peru, it is part of domestic legislation with constitutional range. This right should also be implemented and applied in accordance with the Universal Declaration of Human Rights and Article 1, paragraph 19 of the Peruvian Constitution which recognizes multi-ethnicity in Peru.

In consequence, a call for institutional development and an inclusive process of decision making within a democratic system are imperative for economic and social reasons. It seems that claims of minority groups could stop policies and development measures that could benefit the majority. However, when fundamental rights are affected, the state is called upon to grant effective protection. The interests of local populations should be properly considered in a national development project. Unfulfilled basic needs of local populations cannot be justified for the benefit of the majority. Here, political, economic, and social structures in Peruvian society could tend to benefit patterns of systematic discrimination of local populations. More assistance programs could alleviate, but not solve, the deep problems of inequality in Peru. Policies to reduce poverty should be based on policies with universal perspective. In other words, these policies should ensure the provision of basic public services for the whole population, services such as primary education, health services, water, and sanitation. It is the only way to ensure equal opportunities for all Peruvians.