social risk in peruvian mining

SOCIAL RISK AND SOCIAL MANAGEMENT MEASURES IN PERUVIAN MINING DEVELOPMENT

Societas - Social Analysis ConsultantsSeptember 2012

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Current panorama of Peruvian mining

Mining investment boom since 1990s.

Enormous expansion to non-traditional extractive areas.

The country has witnessed a major increase in social conflicts.

Creating knowledge, producing better social environments

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Content

Social conflict overview. Social management measures: from

the State and the mining industry. Successful case: Anglo American´s

copper project. Lessons to be learned.

Creating knowledge, producing better social environments

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How frequent are social conflicts in mining regions?

Creating knowledge, producing better social environments

Environmental conflicts in Peru

In February 2012, from 228 registered conflicts, 129 (57%) were related with socio-environmental issues.

The regions with the highest number of conflicts are Puno (21), Ancash (21), Cajamarca (17) and Cuzco (16), all of them major mining regions.

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Why are there social conflicts around mining?

Conflicts are multi-causal:

Land-use and ownership. Environmental damage, especially with water

quality and access. Changes in local livelihoods. Struggle over benefits (increasing expectations). Political power.

Creating knowledge, producing better social environments

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Which actors are involved in the conflicts?

Local populations.Local and regional governments.Local and international ONGs.Political parties and regional movements.Mining companies and contractors.The central government.

Creating knowledge, producing better social environments

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Why is important to obtain and secure social license?

Social license is a critical factor for the development of mining projects.

Social license has consistently appeared as of one the six risks that face the mining industry worldwide.

Creating knowledge, producing better social environments

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Which are the management measures implement from the State?

Attempt to distribute mining wealth.

Seeking environmental independence and legitimacy.

Setting environmental standards and a new regulatory framework.

Creating knowledge, producing better social environments

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Which are the management measures implement from the State?

Creating knowledge, producing better social environments

Environmental passives are a major cause of local mistrust

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Which are the management measures implement from the State?

Securing local participation and consultation.

Restructuring of State conflict management system.

Land and regional planning.Creating knowledge, producing better social environments

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Which are the management measures implement from the industry?

Creation of community relations teams.

Implementation of CSR programs.Establishing ways for sharing

benefits.Creating knowledge, producing better social environments

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Successful case: Anglo American – Quellaveco

Quellaveco is one of the most important copper projects in LA with more than 220 thousand MT of reserves and an estimated investment of 3 thousand millions of US$.

Exploration works began in 1992 and the EIA was approved in 2,000.

Local populations raised important concerns about the impacts over water-quality and water-quantity for agriculture.

Anglo decided to obtain a broad social license before the beginning of any engineering works.

Creating knowledge, producing better social environments

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The Regional Dialogue Table was instrumental for reaching agreements

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Social license agreements

The agreement includes:

New project design to avoid the use of subterranean and superficial water (use of residual water).

Securing water for human and agriculture purposes (construction of a dam and a pump system).

Local content and capacitation compromise. Implementation of a local trust.Establishment of three commissions to supervise the

agreements (including the environmental ones).Creating knowledge, producing better social environments

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What lessons could be we learn?

Analysis

Planning

Dialogue and Engagement

Building Credibility

Monitoring and Adaptation

Creating knowledge, producing better social environments

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What lessons could be we learn?

Move from legal fulfillment to acquiring and maintaining social license.

Creating knowledge, producing better social environments

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Thanks

Creating knowledge, producing better social environments

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