ICSID finds against Peru on Santa Ana

10 December 2017

A long-awaited finding has been reached by the International Center for the Settlement of Investment Disputes (ICSID) in the case of the Santa Ana silver project in the Chucuito province of Puno. The arbitrators have found against Peru and in favour of the Canadian company Bear Creek Mining Corporation. The award is US$30.4 million plus interest and arbitration costs.

The case goes back to the protests over the proposal to develop the mine back in 2011. Local communities argued that the mine would contaminate Lake Titicaca, while the company argued that the mine was in a separate drainage basin and was based on a zero-discharge design. The dispute became violent in June of that year when a 60-year old woman died when hit by a tear gas canister. On 24 June, several protesters marching on Juliaca airport were killed by police. In a dangerous situation of mounting tension, the García government withdrew the company's licence on 25 June.

The company has argued through numerous hearings that this amounted to indirect expropriation with a serious effect on its earnings. The Peruvian state's case has been based on the company's failure to consult adequately with the communities affected. The company has argued that it has complied with all legal requirements regarding its outreach activities.

The good news for Peru in this is that the award is far below what the company claimed. Peru's counsel, Marinn Carlson, of Sidley Austin LLP, noted that the court awarded just 3% of the sum originally claimed. "While Peru had looked for a different outcome, it seems clear that the tribunal recognised that Peru was responding to a very serious situation and it declined to give Bear Creek a windfall for a project that might never have progressed at all," Carlson said.

All news

  • PSG Aims

    The Peru Support Group exists to promote social inclusion, sustainable development and the observance of human rights in Peru. To that end the PSG highlights shortcomings in observance of established norms, whether international or local in nature, in its research, advocacy and publications. In so doing, it underscores the relationships that exist within the political system, how institutions work, and the effectiveness of policies that aim to reduce poverty and inequality within the context of sustainable development.

  • Historical Overview

    Over the past century Peru has suffered a series of autocratic governments and a civil war in which nearly 70,000 people died. Many of the country's ongoing political and social problems are a legacy of its somewhat turbulent past. 

  • Human Rights

    Human rights violations were widespread during the twenty years after the initiation of armed conflict in 1980. Efforts to convict perpetrators since the war's end have made only limited progress. Today, concerns remain over the treatment of those engaged in social protest, particularly against strategically important investment projects.

  • Why join the PSG?

    • Keep up to date with latest news and developments in Peru
    • Learn about key issues of poverty, development and human rights in Peru
    • Support the work of the Peru Support Group

    Become a member