Document/Essai - Stéphanie Rousseau and François Meloche - Gold and Land: Democratic Development at Stake. Report of the Observation Mission of the Tambogrande Municipal Consultation Process in Peru

Rights & Democracy is a Canadian institution mandated by the Canadian parliament to oversee respect of international human rights standards and to promote democratic development. It has supported Peruvian civil society organizations for many years, in the fields of human rights education, the rights of indigenous peoples, and recently, the work of the Truth Commission. Rights & Democracy also participated in the joint electoral observation mission with the International Federation of Human Rights (FIDH) during the 2000 general elections in Peru.

The Rights & Democracy mission considered the interests of the various parties involved: those of the citizens of Tambogrande, those of the State of Peru- the issuing authority for mining licences, and those of the Manhattan Sechura Companía Minera S.A., (3) the principal owner of the mining concessions in Tambogrande. In addition, the proposals and activities of numerous Peruvian, Canadian and international non-governmental organizations involved, and those of the principal organization opposing the mining activity, the Tambogrande Defence Front (Frente de Defensa del Valle de San Lorenzo y Tambogrande) also provided the mission with information. In order to preserve its impartiality, Rights & Democracy sent a mission using its own financial resources, in accordance with the independence that characterizes its mandate.

The objective of the mission was to gather the points of view and opinions of the parties involved and factual information from them, in order to analyze the different sides of the conflict and to observe the municipal consultation process, taking into account the current socio-political context in Peru. The municipal consultation, as a vehicle for citizen participation at the local level, constituted the central point around which the mission structured its work. However, this report does not present a detailed analysis of the observation of the consultation.

The mission was comprised of the two authors of this report, and it travelled to Peru between May 27 and June 6, 2002. On May 27 and 28, the mission met the staff of the political, business and cooperation sections of the Canadian Embassy in Lima; Mr. César Polo, Deputy Minister of Mines, of the Department of Energy and Mines (Ministerio de Energía y Minas, MEM); Mr. Roberto Obradovich, Executive President of Manhattan Sechura; the representatives of the Tambogrande Technical Support Committee (Mesa Técnica de Apoyo a Tambogrande), made up of several Peruvian non-governmental organizations; Mr. William Postigo and Mr. Gerardo Távara of the Office of the Ombudsman (Defensoría del Pueblo); and Mr. Fredy Giraldo Rivera, consultant on electoral issues and principal advisor hired by the municipality of Tambogrande to organize the municipal consultation.

From May 29 to June 3, the mission stayed in Piura and Tambogrande. In addition to many informal meetings with the citizens of Tambogrande, the mission members met with the Archbishop Oscar Cantuarias Pastor of Piura-Tumbes; the mayor of the municipality of the Tambogrande district, Mr. Alfredo Rengifo Navarrete; the deputy mayor and the municipal counsellors; the president of the Tambogrande Defence Front, Mr. Francisco Ojeda Riofrio and the delegates of the Front's leadership council; and the representative of the Office of the Ombudsman in Piura, Ms. Eugenia Fernán Zegarra. The mission also met with the electoral committee, an authority comprised of four Piura citizens and constituted to ensure that the consultation process in Tambogrande respected the voting regulations, and to oversee the many employees and volunteers responsible for the consultation's logistics and the training of citizens who would act as electoral officers at the polling stations.

On June 2, day of the vote, the two members of the mission observed the opening of the polling stations, the actual voting, closing of the polls and counting of the ballots, the taking of the results and electoral material to the vote compilation centre, entry of partial results into the computer system and the official proclamation by the electoral committee of the final results of the municipal consultation.

On June 5, the mission had a second meeting with the Deputy Minister of Mines, and then with the executive president of Manhattan Sechura, who was, this time, accompanied by the president of Manhattan Minerals Corporation, Mr. Charles Smith. It also met with Mr. Martín Beaumont of the Peru office of Oxfam Great Britain. Finally, it met with the Canadian ambassador to Peru, Mr. Hughes Réal Rousseau. The meetings gave us the opportunity to present the mission's observations and to formulate preliminary recommendations.

This report first summarizes the political context in which the conflict surrounding the Tambogrande mining project began. It then discusses the place of mining industry in the history of contemporary Peru, the role and jurisdiction of the Peruvian state in the mining sector, and the project presented by the Manhattan Sechura Company since the beginning of its exploration activities in the district of Tambogrande. A summary of the arguments and activities of promoters and opponents of mining activity in Tambogrande, including that of the Peruvian State, will also help to better understand the issues involved in the conflict. The context and various points of view expressed with respect to the municipal consultation are also discussed, as are the central points of the observation of the process of this participatory exercise. Finally, the report sets forth its conclusions and recommendations in light of the history of the conflict in Tambogrande and the municipal consultation of June 2, 2002.

Introduction

The desire to develop mining activity in the region of Tambogrande dates from 1978, when the Peruvian state issued order no. 22672, which declared the district of Tambogrande a national reserve in which development of mining resources was in the national interest of the country. The French company, Bureau de Recherches Géologiques et Minières (BRGM), was authorized to carry out a pre-feasibility prospecting study in Tambogrande. The efforts of the government to establish a mine in Tambogrande in the 1980s failed largely because there was already opposition from the local population.

The issue resurfaced at the end of the 1990s, when the regime of President Alberto Fujimori published supreme decree 014-99-EM on May 6, 1999, in which the State declared the public necessity of private investment in mining activity and allowed the Canadian company, Manhattan Minerals Corporation, to acquire ten mining concession rights covering a territory of 10,000 hectares in Tambogrande, which includes an urban area and an area slated for urban expansion. On May 14 of the same year, supreme decree 015-99-EM incorporated the Tambogrande mining project formed of Manhattan Minerals Corporation and Minero Perú, a government corporation. Manhattan Minerals Corp. purchased the concession rights and preliminary studies from BRGM and the Peruvian State granted Manhattan Minerals Corp. exploration rights over 10,000 hectares for a period of four years as of May 6, 1999.

The conflict in Tambogrande escalated during a period of great political upheaval in Peru. Between the granting of the mining concession rights in 1999 and the municipal consultation in June 2002, there have been three governments. The government of President Fujimori was democratically elected in 1990, but his presidency was significantly marked by authoritarianism, as demonstrated by the dismantling of democratic institutions in 1992, contested elections in 1995 and 2000, the manipulation of the rule of law to stay in power unconstitutionally, the control of the main media, growing centralization and generalized corruption, until his fall in September 2000. The transitional government of President Valentin Paniagua led the country to new elections in April 2001, while initiating the process of reforms and legal investigations into the abuses of the Fujimori regime.

Since July 2001, the democratic government of Alejandro Toledo has been faced with many social and political demands. He has nevertheless continued to pursue a process of institutional and economic reform, of which the main challenges are decentralization of political and administrative power, reform of the judiciary, the purging of the civil service and rationalization of public institutions, and economic renewal based on more privatization and the promotion of foreign investment. The weaknesses of the Peruvian political system, the gravity of the economic crisis and the legacy of the Fujimori regime, in terms of State corruption and a crisis of confidence with respect to public institutions, affect current-day Peru and constitute the background over which the future of the population of Tambogrande and the mining project that concerns them is being played.

The mining project is situated in the department of Piura, where agriculture is the main economic activity. Before the 1950s, the San Lorenzo Valley, in which the district of Tambogrande is situated, was a sparsely populated and almost desert region. Between 1949 and 1959, an irrigation project financed in part by the Peruvian government and the World Bank at a cost of US$45 million, led to the development of agriculture and brought about significant population growth in the valley. Limes, mangos, rice, carob, and other foodstuffs for local and national consumption and for export are produced there. Today, the region supplies 40% of the national production of limes and mangos. Most of the active population of the district of Tambogrande is employed directly or indirectly in agricultural activities. Income obtained by agricultural producers in Tambogrande for limes is estimated at US$12.5 million and US$83.5 million for mangos, and almost US$41 million (limes) and US$106.5 million (mangos) are generated in export revenues for the national economy. (4)

In November 1998, the Manhattan Minerals Corp. participated in a trade mission to Peru organized by Canada's Department of Natural Resources. Six months later, it obtained the mining concessions in Tambogrande. However, its presence in the region goes back to 1997, according to the municipal authorities we met with, who told the mission that the company had already begun to carry out studies in Locuto, a hamlet in the district of Tambogrande.

In 1999, when exploratory drilling in the urban area began, a larger number of citizens found themselves more closely involved in the company's activities. The opposition to mining that had traditionally existed for years began to mobilize again and grew significantly, much of it under the leadership of the Tambogrande Defence Front, a grassroots organization present in every zone of the district. Manifestations of this opposition took various forms, from opinions expressed in the meetings organized by the company to explain its activities, to demonstrations in Tambogrande, Piura and Lima. The support of numerous social and non-governmental organizations in Piura, Lima and internationally enabled the public opposition in Tambogrande to be heard and led to the organization of the June 2, 2002 municipal consultation.

The Mining Industry in Peru

The mining industry is extremely important to the Peruvian economy. It represented 47.5% of export revenues in 2000. (8) Gold is Peru's main export product, representing US$1,166 million in 2001. The mining sector employs 60,000 people and small-scale mines employ between 20,000 and 30,000 people. (9) For many, this industry is one of the avenues, if not the main one, for the country's development. In fact, mineral ore exports alone (copper, zinc, gold, tin and silver) generated US$3,000 million in 1999. In comparison, petroleum and its derivatives represented US$250 million, agricultural products, US$280 million, and fish products, US$600 million (10). At least 45 mining ventures are operating in Peru, of which over 15 are foreign companies exploring or operating a mine.

Most of the mines in operation were nationalized under the military regime of President Velasco between 1968 and 1974. The mining industry progressed little between the 1970s and 1990, when Alberto Fujimori came to power. He implemented a far-reaching policy of economic liberalization and modernization, including privatization of the mining sector and the promotion of foreign investment. In 1990, the state controlled 50% of mining production. By 1997, it controlled 15%. (11) The current government of President Alejandro Toledo has pursued this strategy of development of the mining sector

Mines represent a significant proportion of Peru's tax revenues. The Yanacocha mine alone contributed US$56 million in taxes to the Peruvian State in 2000. (12)

The State's Role and Jurisdiction in the Mining Sector

Concessions and Approval of Mining Permits

The Department of Energy and Mines (MEM) is responsible for managing mining concessions, the approval of mining exploration and operations, and the application of environmental regulations concerning mining activities. A mining concession is an exploration right over a given territory and the operation of a mine within respect of certain conditions provided for under law, including the approval of an environmental impact assessment (EIA). A concession may be purchased from a private owner who had acquired rights over a given territory, or from the State, if it authorizes the creation of a mining concession and puts it up for sale. The possession of a concession requires the annual payment of mineral rights, which are calculated according to the size of the concession.

Before undertaking the exploration of a concession, a mining company must receive authorization from the owners or municipal authorities, depending on the area in which the drilling is to take place (private property, rural or urban area). Before undertaking the development and operational phase of the mine, the company must provide an EIA, carried out by a third party. An evaluation of potential social impact is suggested but not required under Peruvian legislation. From the date of publication of an EIA, the MEM has 45 days to render its decision regarding approval of the operations. During this period, the INRENA (Instituto Nacional de Recursos Naturales), an agency of the Department of Agriculture, reviews the EIA and issues a recommendation that is not binding on the MEM, except when it is a project within or near a protected area. The MEM then holds public hearings to present the EIA and a summary of it is distributed to interested citizens and groups. The latter can express their views on it at the hearing or by writing to the MEM within two weeks after the hearing. When an EIA is rejected, the company may carry out modifications to it and submit it again following the same procedure. Note that, of the environmental impact assessments submitted in the past to the MEM, very few have been rejected.

The Mine Project in Tambogrande

The Tambogrande district, with a population of approximately 70,000, is situated in the department of Piura in northern Peru. The town of Tambogrande, under which are located the main deposits explored by Manhattan Sechura, has a population of about 16,000.

In 1978, the French state-owned company BRGM discovered mineral ore deposits in the subsoil beside and under the town of Tambogrande. After BRGM abandoned the project, Manhattan Minerals Corporation acquired its feasibility studies and 10,000 hectares of mining concessions (currently, 90,800 hectares of concessions have been granted to various companies in the region as a whole). Manhattan Minerals Corp. undertook geophysical studies in 1997 and carried out exploratory drilling during the summer of 1999 (416 holes were drilled in nine regions). The results of exploration confirmed the existence of significant gold and silver deposits under part of the town of Tambogrande. In addition, other deposits were discovered one km and thirteen km south of Tambogrande.

Manhattan Minerals Corporation is a Canadian mining company headquartered in Vancouver. It is qualified by many as a >junior' company. Manhattan Minerals Corp. has only operated one mine since its creation in 1990 (this mine, situated in Mexico, was sold in 2001) and it has been present in Peru since 1993. Manhattan Minerals Corp. is a publicly traded company whose main shareholders are Canadian and American investment funds, including TD Asset Management, State Street Global Advisors and AGF Management. (13)

The Peruvian government set certain conditions for operating a mine in Tambogrande. The agreement signed in May 1999 between the Peruvian state and Manhattan Minerals Corporation stipulates that a new company, Empresa Minera Tambo Grande, be created to operate the mine if the conditions imposed by the government are respected. Manhattan Minerals Corp. would own 75% of the company and the other 25% would be owned by Minero Perú, a state-owned company. One condition is that Manhattan Minerals Corp., alone or with a partner, must hold assets of US$100 million and that the average processing capacity of the mine be 10,000 tonnes of rock per day. Another condition stipulates that the company promise to use methods and technologies that will not affect the infrastructure of the town of Tambogrande, or harm the population. Tailings must be put in areas that will not cause damage to the surrounding agricultural areas.

The cost of the project is estimated at US$240 million. Manhattan Minerals Corp. has spent almost $58 million to date to explore and to acquire BRGM's feasibility studies and the concession rights in Tambogrande. The company had a $40 million deficit in 2001. (14)

The "Tambo Grande" (TG1 and TG3) project as presented by Manhattan Minerals Corporation contains the following elements:

As required by law, an environmental impact assessment study prepared by Klohn Crippen Consultants Ltd. is to be submitted by Manhattan Minerals Corp. to the Peruvian State. According to the company's directors, the study would respect the environmental and social standards established by the World Bank's Multilateral Investments Guarantee Agency (MIGA). While the mission was in Peru, the company and the government anticipated that the EIA would be completed by the beginning of July 2002. We then learned that submission of the study would be delayed until the beginning of August because the company wished to have it reviewed by experts from the World Bank responsible for applying the MIGA standards.

Manhattan Minerals Corp. believes that the mine will provide the following benefits to the Peruvian population and state:

Community Relations Initiatives carried out by Manhattan Minerals Corp.

Manhattan Minerals Corporation's socio-economic policy commits the company to participating "in the social, economic and institutional development of the communities surrounding the project" and ensuring "full community participation and involvement in the financing and implementation of community initiatives." Manhattan Minerals Corp. undertook several community relations and project promotion initiatives throughout the period in which exploration work and the environmental impact assessment study were being carried out. According to a report that the company sent us, they have already spent a total of US$1,457,849 for some 50 socio-economic projects in Tambogrande and Piura, ranging from literacy campaigns to the construction of wells, the purchase of a satellite dish and equipment for the Tambogrande television station and funding of pre-university preparatory courses for hundreds of students in the region. Out of that total amount, over US$800,000 was paid as salary for manual labour carried out by residents of Tambogrande in Manhattan Minerals Corp.'s exploration phases.

Taking as an example the case of Antamina, the largest mine currently in operation in Peru, Manhattan Minerals Corporation's EIA should indicate the amounts and timetable of investments in long-term economic and social development for the region. In fact, Antamina's EIA, submitted in 1998, included a commitment to invest US$6.3 million over three years in local social and economic development. Moreover, the EIA should also contain clear proposals respecting modalities and amounts of money earmarked for the purchase of land and property necessary to set up the mine, in addition to financial and material compensation provided to the citizens of Tambogrande who will be directly and indirectly affected by mining operations.

What follows is a chronology of the main undertakings carried out by Manhattan Minerals Corp. with the community, besides the resources allocated for social development:

Opposition to the Project

The growing grassroots opposition in Tambogrande in the past years is situated on two levels: opposition to mining activity in general, and opposition to Manhattan Sechura's presence and its practices, which have led to so much tension that the company had to close its offices in Tambogrande.

It should be noted that there were irregularities in how mining concessions were granted to Manhattan Minerals Corp. by government authorities, particularly concerning concessions in the urban area and in the urban expansion area. The obligation to consult the provincial municipality and the district municipality on the viability of exploration activities in these zones is a prerequisite provided for in Bill 27015, which regulated mining concessions in urban and urban expansion zones at the time they were conceded to Manhattan Minerals Corp. This step was not respected before concessions were granted through a supreme presidential decree in May 1999. However, the administrative procedures of identification of urban and urban expansion zones had not been completed by the municipal authorities in Tambogrande before the concessions were granted.

One of the central issues to opposition in Tambogrande is the question of decision-making mechanisms and the powers the local population have to participate in the decision on (a) the granting of mining concessions in an area that is inhabited, under cultivation and consisting of many different private landholdings; (b) the law and modalities for carrying out exploration work in the zone; (c) the right to carry out mining activities, including the construction of a mine and the other facilities necessary for mining.

Opponents perceive this project as an instrument to change the development model of the region from agriculture to mining. This is denied by the company, which states that agriculture can coexist with mining activities. In addition to the direct and indirect consequences of mining activities on agriculture, opponents express their fear of the emergence of serious social problems such as those found in many mining zones in Peru, the risk of contamination of natural resources, and few tangible economic benefits for the local population in the short and long term.

Main Criticisms Formulated by Project Opponents

The main fear observed is that the region will be transformed into a mining and industrial zone to the detriment of agriculture, and that Manhattan Minerals Corporation's 'Tambo Grande' project is only the beginning of a vast transformation of Tambogrande and even the entire department of Piura.

A preliminary EIA of the Tambo Grande project made public by Manhattan Minerals Corp. in July 2000 was evaluated by geologist Robert Moran in May 2001, (17)Mr. Moran's study was funded by Oxfam America, the Mineral Policy Center and the Environmental Mining Council of British Columbia. Mr. Moran noted several weaknesses in the preliminary study. He also demonstrated that the proposed mine could cause a drop in levels of the surface and underground water necessary for agriculture, contaminate ground water because of acid runoff from the mine and risk ecological disaster related to El Niño, which generates torrential rains in the region every three or four years.

Environmental fears have a direct economic dimension given the importance of agriculture to Tambogrande. The projections as presented by the company would not bring about a net gain in employment for the local population, since a large number of agricultural jobs would be directly affected by the establishment of a mine, and an unknown number could be eliminated in the medium to long term because of the risks of contamination and erosion.

At the national level, agricultural production covers only 2.9% of Peruvian territory (3,730,000 hectares, and agricultural potential is seven million hectares, according to the Instituto Nacional de Recursos Naturales). Agricultural GDP has increased by 19% between 1980 and 1990. According to several experts, the few existing experiments in other parts of the world where agriculture and mining activity coexist in the same region (among others, the Martha Hill mine in New Zealand) are too rare and too recent to adequately draw conclusions as to their long-term viability.

Moreover, State revenues that would be directly reinvested in the Tambogrande region, through the regional government of Piura, hold little attraction for the population of Tambogrande, given the examples of some other mining regions in Peru, where poverty has increased instead of decreased in the past years.

Main Events in the Conflict

The Tambogrande Defence Front is a grassroots organization with a pyramidal structure composed of delegates elected by consensus in ten zones of the Tambogrande district, which includes 180 hamlets (caseríos), and delegates from the urban area. The assembly of leaders of the Front is elected annually, and the president is elected in a general public meeting, made up of the entire population of Tambogrande. According to the leaders of the Front with whom we met, the granting of the mining concession and exploration rights to Manhattan Minerals Corp. was not debated in Tambogrande and it was with surprise that the leaders learned of the company's presence. The Front reproaches the mayor of Tambogrande, Mr. Rengifo, for having signed the municipal order allowing the company to explore within the town of Tambogrande without consulting the population. In 1999, the Front decided to organize resistance to the mining project.

The main criticisms formulated by the Front with respect to Manhattan Minerals Corp. indicate that the company failed to honour some of its oral and written commitments to the community. They criticize it for not having requested authorization from community authorities before going into the hamlets and beginning their work. They are also critical that some of the company's promises to invest in the community (e.g., building a sports centre) were not kept or changed as time went on.

One serious problem concerns the issue of relocating people who were to be moved for construction of the mine. The leaders of the front reproach the company for not having presented a clear and detailed plan to the community, which led to uncertainty. The construction of model homes by the company to show one of the forms of compensation for the relocation aroused anger instead of interest in many residents.

As well, over three years have passed since the beginning of exploration, and the EIA has still not been submitted. This has led to speculation, fear and distrust concerning the material, environmental, social and economic consequences of Manhattan Sechura's project.

During the same period, the Front held many meetings with company representatives, including one with the then president, Mr. Graham Clow, on June 12, 2000. At this meeting, a document was signed in which the Company recognized the Front as a "natural and legitimate representative," and committed itself to "respecting the decisions of the population that result from the process of dialogue that should continue from this time onward." The company also agreed to withdraw the pending legal proceedings against some leaders of the Front.

At the beginning of 2001, because of the concerns of a large number of his fellow citizens, the mayor changed his position and gathered the signatures of approximately 28,000 citizens (75% of voters) of Tambogrande demanding the termination of activities related to mining in the region and the withdrawal of Manhattan Minerals Corp.. This petition was presented to the Peruvian Congress and several public institutions, but did not receive any attention from the State.

The situation had polarized considerably by February 2001. On February 16, the municipal council agreed, through resolution number 006-2001-MDT-CM, to "respect the will of the residents to oppose the government's wish to grant authorization to the mining project in the district of Tambogrande" ("hacer cumplir la voluntad de inconformidad de los pobladores en torno a las pretensiones del Gobierno Central de autorizar la explotacion minera en el Distrito de Tambogrande"). A few days later, on February 27 and 28, 2001, thousands of Tambogrande residents took part in a demonstration organized by the Front to demand that Manhattan Minerals Corp. leave the region.

In the urban area of the district, the demonstration degenerated into a confrontation with the 300 police officers posted to protect the company's facilities. Fifteen residents and 25 police officers were injured and many residents were arrested. Afterward, in the night, unidentified individuals burned down the model homes constructed by Manhattan Minerals Corp., vandalized the offices of the company and one of its subcontractors, and destroyed some of its equipment and material. Damages were in the range of US$600,000. The leaders of the Front face charges of intellectual responsibility for the damage. (18)

Given the impossibility of ensuring the safety of its offices and equipment, the company acquiesced to the request of the Peruvian government to move out of the Tambogrande district. However, the company did not abandon its plans to pursue its mining development project.

On March 16, 2001, one month after the resolution of the municipal council had been passed and two weeks after the violent events, the mayor of Tambogrande signed a decree in which he rescinded the decree that he had signed in 1999 authorizing Manhattan Minerals Corp. to carry out exploratory drilling within the urban and urban expansion zones of Tambogrande.

The assassination of a community leader, Godofredo García Baca, on March 31, 2001, increased the climate of tension and distrust on the part of Tambogrande inhabitants. The reasons for the murder are not clear, mainly because of the escape of the main suspect. Mr. García Baca had spoken out against the mining project many times during public assemblies and in meetings with representatives of the mining company. After his assassination, the Defence Front transformed him into a symbolic figure of its struggle against the mining company.

After the February 2001 events, Archbishop Oscar Cantuarias of Piura, publicly stated that he was against the mining project and called on the people to respect public order and the right of citizens to live in peace. Since then, there have been no more acts of violence, and the Defence Front even organized a peaceful march on November 28, 2001, in the town of Piura, in which approximately 5000 people participated.

The leaders of the Front have faced many attacks on their reputations, acts of defamation and accusations in the Piura press since the beginning of their opposition to Manhattan Minerals Corp.. What the Front describes as "a campaign to tarnish their reputations" has been mounted to convince people that there is a link between the front and terrorist organizations, or simply to denounce alleged intimidation of the population of Tambogrande. (19)For his part, the president of the Defence Front, Mr. Francisco Ojeda Riofrio, has denounced the threats that have been made toward his daughter by people who have clearly alluded to his role in the campaign opposing the mining project.

Support to the Tambogrande Defence Front: Toward a Municipal Consultation

The support of numerous social and non-governmental organizations from the region of Piura and others based in Lima or internationally has provided those opposed to the mining development with valuable tools to back their critique of the Tambogrande mining project as proposed by Manhattan Sechura. From the beginning of 2000, the following organizations formed the Tambogrande Technical Support Committee: Comisión Episcopal de Acción Social (CEAS), Sociedad Peruana de Derecho Ambiental (SPDA), Labor, Eco, Fedepaz, Asociación pro derechos humanos (APRODEH), Coordinadora nacional de derechos humanos del Perú (CNDDHH), Cooperacción, CEPES, and Diaconía para la Justicia y la Paz del Arzobispado de Piura. The CONACAMI (Coordinadora Nacional de Communidades Afectadas por la Minería), a young Peruvian coalition of groups representing the communities affected by mining activities, also supports the Tambogrande Defence Front.

Some of these non-governmental national organizations are among the most respected in Peru, and the efforts they have invested in supporting the Tambogrande Defence Fund stems from their desire to emphasize the importance of citizen participation in decisions affecting the development of their community. Moreover, the objectives of several of these organizations include ensuring a review of the prescriptive and administrative framework surrounding the investments and the use of natural resources, and denouncing human rights violations.

With the financial support of some international non-governmental organizations, primarily Oxfam Great Britain and Oxfam America, expert Robert Moran's environmental impact assessment was written and published in August 2001. It provides scientific and technical arguments demonstrating the risks that mining operations would represent. Other awareness and education activities were carried out by member organizations of the Technical Committee, in particular the campaign for the'NO' in the context of the municipal consultation. These activities included printing of posters and promotional material, advertising spots, public meetings and mobilization, lobbying of opinion leaders in Tambogrande, Piura and Lima, and coordination with international support networks.

Both the mayor of Tambogrande and the leaders of the Defence Front assert that they were the first to launch the idea of holding a municipal consultation to gather the opinion of the population of Tambogrande on mining development in their region. The proposal, which took shape during the second half of 2001 and then in 2002, responded to the urgency of finding a mechanism in which the very strong opposition of a good portion of the population could be expressed peacefully.

Municipal order number 012-2001-MDT-C and municipal council agreement no. 020-2001-MDT-CM of October 11, 2001 created the consulta vecinal as a mechanism for citizen participation in the district of Tambogrande. The following legislation is among that referred to in support of the legitimacy and legality of municipal consultation:

The municipal organic law (Ley orgánica de municipalidades), which establishes the responsibility of the municipal authority in development planning (Articles 62 and 64) and the competency of the municipal authority to promote and define the mechanisms of public participation in community development (Articles 10 and 79);
The Act respecting rights of participation and control by citizens (Ley de los derechos de participación y control ciudadanos no. 26300), which provides for, without defining them, the mechanisms of citizen participation at the municipal level.

The municipal council resolution of October 11, 2001, stated that citizens were to respond, negatively or affirmatively, by secret ballot, to the following question: "Do you agree with the development of mining activities in the urban, urban expansion, agricultural, and agricultural expansion zones in the district of Tambogrande?" The resolution also called on the Peruvian national electoral agency, the ONPE (Oficina Nacional de Procesos Electorales), to organize the municipal consultation.

The Tambogrande municipal consultation is the first time in Peru that the public has been given the means to express its opinion on the development of mining activity in its own region.

Reaction of the State and its Initiative for Dialogue

As soon as the decision was made by the municipality to hold a consultation, the new government of Alejandro Toledo acted by setting up an initiative for dialogue under the aegis of the Office of the Ombudsman, directed by Mr. Walter Albán Peralta. The Office of the Ombudsman is an institution that enjoys a high level of credibility with the Peruvian public because of its integrity and independence. On October 15, 2001, the Office of the Ombudsman's representative in Piura, Ms. Eugenia Fernán Zegarra, invited 18 representatives of various sectors of Tambogrande, including the mayor and three leaders from the Defence Front, to a meeting with the Minister of Energy and Mines, Mr. Jaime Quijandría Salmón, and the Minister of Agriculture, Mr. Alvaro Quijandría Salmón.

The meeting took place on October 21, 2001 and lasted six hours. During the discussion, the government formulated a proposal that it presented afterward to the public through a letter to the Ombudsman on October 25, 2001. In its letter, the government (a) recognized the importance of maintaining a space for dialogue between civil society in Tambogrande and the government, in order to arrive at a consensus for the good of the region, Piura and the country in general; (b) reaffirmed its position respecting the need to receive the EIA in order to have detailed technical information and thus complete its evaluation of the impact of the Tambo Grande project on the environment and local communities. It stated that fieldwork necessary to complete the EIA was estimated at approximately four months; (c) proposed the hiring of a group of national and international specialists or a consultancy firm selected by the people of Piura to independently review and analyze the EIA, in parallel with the government's evaluation.

The government stated that on the basis of this technical information and analyses the public of Tambogrande could come to a decision, using the same criteria as that provided for under current legislation, which requires public hearings to be held in the scope of the EIA review. The government also pointed out that its proposal echoed that of the recommendations formulated by Robert Moran in his August 2001 report. After reading the recommendations of the Moran report, we find that only one of them was integrated into the government's proposal, the one in which the public and competent authorities must take cognizance of the EIA before making a decision. In fact, with respect to the necessity of providing the local population with the means to carry out an independent impact evaluation, as recommended by Mr. Moran, the government instead opted for an independent review of the EIA that is to be submitted by the consultancy firm hired by Manhattan Sechura.

On December 28, 2001, the Ombudsman informed the Minister of Energy and Mines that the majority of representatives of Tambogrande taking part in the dialogue told him, after examining the government's proposal, that they preferred carrying out the municipal consultation first and foremost. All the stakeholders at the table, with the exception of the Defence Front representatives, were ready to continue the dialogue with the government. The Defence Front officially withdrew from the dialogue process on January 8, 2002, stating that the ultimate aim of the dialogue process was the completion and evaluation of the EIA, signifying that the mining project would continue to exist, while the Front's objectives were to the contrary.

The government then sent two high-level bureaucrats to Piura, one from the National Institute of Natural Resources (INRENA), Department of Agriculture, and the other from the Office of Environmental Issues, Department of Energy and Mines, to provide more details on its initial proposal. The announcement of February 13, 2002 made the following clarifications: (a) an international firm recognized and accepted by civil society in Piura would be hired to supervise the finalization process of the EIA, evaluate its content, and issue a report that would be submitted and explained to the citizens of Tambogrande and Piura at meetings and workshops before public hearings were held; (b) civil society representatives would participate as observers of information-gathering activities carried out to complete the EIA; (c) three public hearings would be organized in the department of Piura and the government would then inform the public of the responses of the mining company to observations concerning the EIA made by citizens and sectoral authorities.

The government also stated that the mining company is obliged to provide satisfactory responses to all observations made during the public hearings by sectoral authorities and citizens. In addition, the terms of reference of the EIA required of Manhattan Minerals Corp., as set forth by the Departments of Energy and Mines and Agriculture, include the contribution of mining activities to regional development, the direct benefits to other economic activities in the region, forms of citizen participation, and compensation and measures to mitigate the impacts of mining activity on the public and the environment.

Finally, the government clearly manifested its opposition to the municipality of the district of Tambogrande holding a municipal consultation, stating that it was not a legal mechanism provided for under the applicable legislative framework for approval or rejection of a mining project. In addition, according to the government, it was not the appropriate mechanism for such a process. Some declarations made by the government later inferred that the municipal consultation would not be a democratic process because the population of Tambogrande did not have access to all the technical and scientific information that would allow it to weigh the advantages and disadvantages related to the project as presented. As the municipal consultation has no legal force, it would not lead to the resolution of the conflict surrounding the Tambogrande mining project.

Municipal Consultation: Context and Observations

The government's proposals did not stop municipal authorities from planning the consultation, and it therefore took place, on June 2, 2002, in a tense politicized context. The municipal authorities of Tambogrande invoked their responsibility, in matters of development planning, to consult the population on whether or not they wanted a mine to be set up in their region. They also noted that, for mining activity to take place, it was necessary to verify whether public opinion was favourable.

In conversations with authorities and the public in Tambogrande, it was clear that the municipal consultation was perceived as the only legitimate and credible means for the public as a whole to express their views peacefully and in a transparent manner.

It was on this basis that the international non-governmental development organization, Oxfam Great Britain, decided to provide financial support of US$20,000 to hold the referendum. After unsuccessfully approaching the national electoral agency, the ONPE, and the principal non-governmental electoral observation organization, Transparencia, for the technical and logistical organization of the municipal consultation, the municipality hired Mr. Fredy Giraldo Rivera, an electoral consultant with solid experience in the field through working with both Transparencia and the ONPE. (20)

The question asked on the ballot was the same as that laid out in the municipal council's resolution. Its formulation reflected the municipal council's intent to generate a clear opinion - either rejection or acceptance of mining activity in general in the entire district- as there was only one question applying to all the zones in the district.

Structure Set up to Organize the Consultation

The electoral regulations were drafted by Mr. Giraldo, approved by the Tambogrande municipal council, and implemented under the surveillance of an electoral committee formed of four citizens from the town of Piura. This committee, created to ensure respect for the regulations of the municipal council of Tambogrande, was the ultimate authority on electoral procedures, reception of complaints, and publication of final results of the consultation. Mr. Giraldo took care in choosing these four citizens, out of over a hundred that he interviewed. To make his choice, he used the following criteria: the members of the committee had to have an above-average educational level, and if possible, be professionals; have no personal or business link in Tambogrande; and have never publicly spoken about the mining project in Tambogrande.

In addition to Mr. Giraldo and the electoral committee, the structure implemented included electoral training and information coordinators, who were students from the University of Piura. They were to train the electoral officers responsible for the polling stations, who had also served as electoral officers during the 2001 general elections. The coordinators were also to be responsible for the six polling stations. In the period before voting day, the coordinators were to carry out various activities with the public of Tambogrande to inform them about the rules and procedures of the municipal consultation.

Mr. Giraldo was responsible for the production of electoral material, which, in general, corresponded to the standards of Peruvian national elections. The official electoral list was used, enabling all citizens registered for the 2001 elections to exercise their right to vote in the consultation. The rules for the polling stations corresponded for the most part with those of the general elections of 2000 and 2001.

The electoral regulations allowed for the constitution of two groups to promote the two options citizens were to vote on, the YES option and the NO option. The regulations made no mention about financial resources deployed by the two campaigns. Campaigning was allowed up to 48 hours before the polling stations opened. Publicity for the YES and NO campaigns was forbidden in public institutions.

Only the NO campaign was officially registered with the electoral committee, as no individual or group asked for the right to campaign for the YES side. The NO campaign was primarily organized by the Defence Front, with the support of member organizations from the Technical Committee, including the financial support of Oxfam GB. The Manhattan Sechura Co. was informed by Mr. Giraldo, during a meeting between the Executive President and himself, of the modalities of the municipal consultation, but he declined the invitation to participate by representing the YES option. The arguments of the company were to the effect that, as the public did not yet have the information contained in the EIA, it could be manipulated by political or ideological interests instead of making a decision on the basis of technical information. The company representatives also alleged that the public had been misinformed by certain leaders who stated that a victory for the NO side in the consultation would lead to termination of the mining project, while from a legal point of view, the consultation had no validity.

One could bemoan the fact that there was no official campaign for the YES, as the presentation of the two options would have been better. The climate of polarization was such that even Archbishop Cantuarias of Piura found it difficult to moderate the debate that he had organized, between the general manager of Manhattan Sechura, Mr. Américo Villafuerte, and a biologist from Piura known for his opposition to the mine project. Held less than two weeks before the vote, the debate, which took place in the town of Tambogrande, was marked by high tension and a raucous show of disapproval by many of those present. The mission was able to observe that the climate of tension was such that it was not easy for any citizens of Tambogrande who may have wanted to manifest their opinion in favour of the mining project to do so, because of the force of the opposition.

The National Mine, Petroleum and Energy Society (Sociedad Nacional de Minería, Petroleo y Energía), which represents mining companies in Peru, issued a press release the day before the municipal consultation in which it denounced the manner in which the promoters of the NO side portrayed agriculture and mining activities as irreconcilably opposed. It also denounced the manipulation and intimidation, which, in its opinion, was influencing opinions and the vote of the population of Tambogrande. In addition, it demanded that the State guarantee the respect of the legal framework that governs private investment.

A type of campaign for the YES side-or against the NO side-nevertheless did take place, without its promoters being identifiable. Some advertising alluding to the YES side was published anonymously in the El Correo newspaper in Piura; an anonymous tract was distributed, in which some leaders of the NO campaign were slandered; a fake ballot appeared, calling on the public to vote 'I don't know,' an option that did not appear on the official ballot. Suspicions about the identity of the promoters heightened opposition to the mining company, which was the first to be suspected of financing these anonymous advertisements, although no evidence of this was found.

The NO campaign was supported by many posters and spontaneous or organized demonstrations. The NO promoters also organized a team for voting day, including representatives to oversee the process in each polling station, as permitted by the electoral regulation.

Observation of Voting Day (21)

Voting day proceeded normally and peacefully. Eight observers from Transparencia-Piura, three from the Instituto de Estudios Electorales, and about ten international observers were present and observed the voting process. The 200 polling stations were all set up and operated without interruption until closing of the polls and counting of the ballots. The physical organization of the polling booths was unsatisfactory in about a dozen polling stations, as they did not allow complete respect for secrecy of the vote. However, based on observers' comments, those responsible for the stations carried out the necessary corrections in most cases. Some people presented themselves as representatives of the YES option to observe the process in some polling stations, while official registration for representative status had ended the day before. They were therefore not provided access.

A few cases of advertising for the NO side were found in the town on voting day, in violation of the electoral regulation. Generally, the electoral officers carried out their task in an exemplary manner, given the standards observed during past national elections. The personnel who coordinated the smooth running of the process in each voting centre showed proof of good supervision and satisfactory efficiency, given their limited numbers.

The transfer of partial results to the compilation centre was late in some cases, but generally proceeded smoothly and in the presence of observers. International observers were not allowed to watch the verification of the sheets of partial results that was carried out before information was entered into the computer. Only Transparencia-Piura was present, because for some unexplained reason, the police denied the other observers entrance to the auditorium. After several minutes of discussion between the police and the international observers, they were able to enter the auditorium and observe the process of entering partial results into the computer and the proclamation of final results by the electoral committee.

Official results of the consultation are as follows: out of a total population of 36,937 registered voters, 27,015 ballots were issued, a participation rate of 73.14%. The NO side won with 25,381 votes, or 93.95% of the vote, taking into account spoiled or blank ballots. The YES side obtained 347 votes, or 1.28% of total ballots. There were 398 blank ballots or 1.47%, and 889 spoiled ballots, or 3.29%. Taking into account only the ballots for the YES and the NO side, the NO side won with 98.65%. The abstention rate was 26.8%, a very honourable percentage, given that voting was not compulsory-contrary to the situation prevailing during official elections-and that the abstention rate in the 2001 general elections was 15% in the district.

The Peruvian government reacted to the announcement of these results with great reserve, that is to say, it first and foremost regards the mechanism provided by legislation, i.e., submission of the EIA and the public hearings of the INRENA, as the preliminary steps to making a decision concerning the future of the Manhattan Sechura project in Tambogrande. The Minister of Energy and Mines, Mr. Jaime Quijandría Salmón, repeated that the municipal consultation had no legal validity. However, in a meeting with the members of the mission, the Deputy Minister of Mines, Mr. César Polo, acknowledged that the result of the vote revealed such massive opposition to mining activity that the government could not ignore the consultation.

The results triggered very critical, even intolerant reactions from some sectors and certain media in Peru. A campaign to show that the population of Tambogrande had been manipulated by national, but especially international, radical groups and organizations, contrasted with the desire of the promoters of the consultation to demonstrate the validity and strength of the results of the vote. The mission deplores the fact that Oxfam UK was even gratuitously accused in the pages of the respected magazine Caretas of being infiltrated by terrorist groups or representing forces seeking to block Peru's economic development.

Conclusions

Our mission was witness to the peaceful and civic nature of the consultation process that took place on June 2, 2002 in Tambogrande. The meeting held the day after the consultation with the Office of the Ombudsman enabled us to confirm that no complaints or incidents were reported. We also observed that the national police who were sent to ensure order and safety in the polling stations and in the transfer of electoral material carried out their job in an exemplary manner and in a spirit of civic cooperation.

In our opinion, the municipal consultation in Tambogrande took place in a free, democratic and transparent manner, allowing citizens the opportunity to express their opinion through secret ballot with the effective guarantee that the votes would be counted correctly. The procedures and standards used were more or less identical to those of a Peruvian general election. The high voter turnout and the massive number of NO votes lead us to affirm that most of the population of Tambogrande is opposed to mining development in their region in the current context, based on the information that it had when it voted.

In light of the facts analyzed in this report, it is important to summarize the two totally distinct points of view on the significance of the consultation that we observed.

1) On the one hand, the population and the local authorities perceived a need to create a mechanism to allow the public to express its opinion on mining activities in the region. A large majority felt that after three years of experience and reflection on the question, including a long period of company presence in the town, the public was able to take a position. This mechanism for popular expression, absent from current legislation as a way to take into account local opinion when decisions are made regarding mining concessions or permits to operate a mine, sought to address the following:

2) For the Peruvian government and State, the municipal consultation of June 2, 2002, could not stop the mining project in Tambogrande, because the formal framework provides for an evaluation of the EIA as a preliminary condition for the appropriate authorities to come to a decision.

In response to the concerns of the people of Tambogrande, and to political pressure from the Defence Front and its allies in Peruvian civil society, the current government has made several meaningful proposals to allow increased citizens' participation as well as an independent review of the EIA. Analysis of the conflict shows that these overtures occurred within a context in which many sectors of Tambogrande questioned the State's impartiality (as a potential stakeholder of 25% of shares in the mine) and saw the public hearings simply as a tactic by promoters to justify the project, instead of as a consultation to provide the public with true political input into the decision-making process.

The responsibility of municipal authorities and the participation of civil society in development planning have emerged as a basic issue in the municipal consultation initiative. Current practice in Peru, in the case of other mining projects, is the subordination of local and regional development to mining activity and to the goodwill of private enterprise to contribute financially to socio-economic projects. In other words, no institutional framework defines the process and criteria for public participation in negotiations surrounding the implementation of mining activities in a given region.

Nevertheless, the transition to democracy initiated in November 2000 and pursued by the current government is opening the door to the participation of civil society and joint action among political, economic and social stakeholders, as is demonstrated by the current process of national dialogue that should lead to the signing of agreements on the country's priorities.

The municipal consultation of June 2, 2002, has illustrated the need for the Peruvian government to proceed with a thorough review of the planning and approval mechanisms for development projects, in the mining sector or elsewhere, so that local communities can express their needs and priorities. In addition, the use of territory and exploitation of natural resources should be linked to a process of joint action and planning under the shared responsibility of the central government and regional governments. Peru is currently involved in a national and legislative debate on the issue of decentralization, a priority for the government and a large majority of social and political stakeholders. Regional governments will be elected by universal suffrage for the first time in November 2002, and many voices are calling for the constitutional reform process, also underway, to free the resources necessary for their increased responsibilities.

As regards the more immediate issue of the Tambogrande mining project, the mission notes that the Manhattan Minerals Corp. has not yet submitted the EIA for the Tambo Grande project, thus further prolonging the uncertainty surrounding the direction development of the region will take. The company has until May 2003 to exercise its right to table a mining project. However, the review of the EIA will require several months. The postponement several times of the release of the EIA can be attributed not only to the company's difficulties with community relations, as illustrated by the violent events of February 2001, but also to the decision of municipal authorities in October 2001 to hold the municipal consultation.

The Peruvian government and the Manhattan Minerals Corp. say that they recognize that implementing the project requires the consent of the local residents. The need to obtain social licence from the community affected is increasingly recognized in the mining sector and other natural resource exploitation activities as an essential prerequisite to ensure the stability and prosperity of the projects established, as well as to ensure that they respect the rights of local communities.

Based on the analysis presented in this report, the following recommendations have been formulated by Rights & Democracy for consideration by the following:

Endnotes

1.-- Stéphanie Rousseau (srousseau@ichrdd.ca) ) is interim coordinator of Rights & Democracy's Democratic Development Programme. François Meloche (fmeloche@investissementresponsable.com) is an analyst with Groupe Investissement Responsable, a division of Demers Conseil, headquartered in Montréal, Canada. The authors wish to thank Guillermo Salas (salas.g@pucp.edu.pe ou guillesalas@yahoo.com), Peruvian anthropologist, who accompanied the mission and contributed to the analysis presented in this report. Return

2.-- The Peruvian expression consulta vecinal translates literally as 'neighbourhood consultation', but we are using the expression 'municipal consultation' in this report, as it better reflects the character of the exercise, which was a referendum organized by the municipality and included a secret vote of all the citizens of Tambogrande registered on the national voters' list. Return

3.-- Manhattan Sechura is a subsidiary of Manhattan Minerals Corp., headquartered in Vancouver, British Columbia, Canada. Return

4.-- Juan Aste Daffos, ECO, May 2001, quoted in a supplement to the El Tiempo newspaper, Piura, Sunday August 19, 2001. Return

8.-- Manuel Pulgar Vidal, "Recursos naturales y lucha contra la pobreza: Una articulación posible?", paper presented in Puno, Peru at the SEPIA IX seminar, October 22-24, 2001, p. 16. Return

9.-- Grupo de Analisis para el Desarrollo (GRADE), document presented at the 2nd meeting of the "Grupo Asesor, Coordinadores y Observadores" of the MMSD South America Project, Lima, September 24 and 25, 2001. Return

16.-- Breaking New Ground: Mining, Minerals, and Sustainable Development, May 2002, report drafted by the International Institute for Environment and Development for the Mines, Minerals and Sustainable Development (MMSD) project. Its sponsors include Alcan, Alcoa, Barrick Gold, BHP Billiton, De Beers, Freeport-McMoran, Noranda, Placer Dome, Rio Tinto, Teck Cominco. For more information: www.iied.org/mmsd Return

17.-- Robert Moran, Una mirada alternativa a la propuesta de minería en Tambogrande, Perú, Oxfam America-Mineral Policy Center-Environmental Mining Council of British Columbia, August 2001, 25 p. Return

18.-- Ideele, "La bronca de Tambogrande", Lima: IDL, March 2001, p.88. Legal procedures are still pending against several of the Front's leaders. Return

19.-- It is important to point out that none of these accusations have been accompanied by substantial evidence. Return

20.-- In its resolution no. 020-2002-J/ONPE, of January 17, 2002, the ONPE explained that it had no legal obligation ensuing from the desire of the municipality of Tambogrande to hold a municipal consultation. However, the ONPE decided, in the same resolution, to provide support in the form of technical advice to the municipality of Tambogrande. One month before the referendum date, however, the ONPE published resolution no.137-2002-J/ONPE, in which it reversed its decision to provide technical advice and to lend electoral material, stating a lack of financial resources. Return

21.-- The reports submitted by Transparencia-Piuria and by the Instituto de Estudios Electorales, two Peruvian non-governmental electoral observation organizations present in Tambogrande on June 2, 2002, provide more details about observation of voting day. Return


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Gold and Land: Democratic Development at Stake

Report of the Observation Mission of the Tambogrande Municipal Consultation Process in Peru

by Stéphanie Rousseau and François Meloche (1)