Extractives: new policies

31 December 1969

The Kuczynski government has come up with a number of novel initiatives in a range of areas in relation to the extractives sector, in an effort to change the terms of engagement with mining companies. The cooperation of investors in this sector is viewed as fundamental to the economic success of the regime.

In a Reuters interview last week, Elsa Galarza, the new environment minister, argued that previous administrations have tended to mistrust companies who now need help to navigate a morass of confusing environmental rules. “Since the regulations are so profuse many companies don’t know they’re breaking them” she said, “we don’t want to fine companies, we want to keep them from doing environmental harm”.

In the interview, Galarza held back from proposing changes in air and water standards, perhaps since the argument from the company side that Peru’s air standards are unduly high is disputed by experts.

A second potentially important initiative was the proposed National Social Conflict Prevention System, which is consistent with the accent now being placed on prevention. ‘Social Pre-payment’ is in the same vein, but as yet it is unclear quite what this will mean. Infrastructure projects relating to health, energy, water and sanitation, it seems, are to be undertaken before the development of extractives projects, at least according to the deputy minister of mines, Guillermo Shino. But will this be at the expense of investments elsewhere, and will it solely be undertaken with a view to smoothing the way for companies? This sounds problematic to say the very least.

Shino has also announced a new programme to ‘formalise’ informal mining. Known as ‘Oro Limpio’, this will be for miners working in permitted areas and will streamline bureaucratic procedures for granting mining permits http://www.andina.com.pe/ingles/noticia-peru-mining-projects-worth-2000-billion-are-unblockable-630568.aspx

A state-owned bank will buy gold from artisanal miners, thus replacing the shady informal market in which they currently sell their production. http://www.reuters.com/article/peru-gold-idUSL1N1BJ1J6

However, we have yet to see the same sort of creativity relating to communities’ difficulties and the crucial role of dialogue tables (mesas de diálogo). Still, as we reported last week, the presence of no less than three deputy ministers at the newly-resumed dialogue at Las Bambas is an encouraging sign.

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