Multinational Mining Companies and the Local Political Economy of Violence in Peru
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CORPORATE SECURITY GOVERNANCE: MULTINATIONAL MINING COMPANIES AND THE LOCAL POLITICAL ECONOMY OF VIOLENCE IN PERU by JONATHAN KISHEN GAMU A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY in THE FACULTY OF GRADUATE AND POSTDOCTORAL STUDIES (Political Science) THE UNIVERSITY OF BRITISH COLUMBIA (Vancouver) December 2016 © Jonathan Kishen Gamu, 2016 ii Abstract Multinational corporations (MNCs) from the global mining industry have become increasingly active in security governance in areas of limited statehood. Since 2000 they have used dialogue and development activities to mitigate security risks associated with their operations. However, despite a proliferation of community engagement initiatives, violent protest in relation to industrial mining has risen globally. Accordingly, I analyze the efficacy of MNCs as security governors within the context of Peru’s mining sector. Over the past fifteen years this country has experienced a dramatic increase in mining- related social conflict, yet industrial mining has had heterogeneous effects locally. Using the subnational comparative method, I examine four cases that exhibit variation in conflict intensity in order to analyze the factors influencing MNCs’ impact on security. I argue that MNCs’ ability to mitigate violent social conflict is best explained using an analytical framework that accounts for the political economy of contention within which firms are embedded, and the intra-firm politics that determine their behaviour vis-à-vis civil society. The political economy of contention exogenous to firms establishes a local security baseline, predicting generic social conflict risks and patterns of violence likely to emerge during specific protest episodes. Given this external milieu, the organizational politics of the firm will determine its marginal effect. Firms that marginalize the voice of their community relations subunit are more likely to utilize coercion and cooptation alongside dialogue and development. However, heterogeneity in their security outputs undermines MNCs’ legitimacy as socially responsible agents, and hence the ability of community engagement to peacefully manage social conflict. This study constitutes one of the first systematic efforts to theorize and empirically iii evaluate the efficacy of MNCs’ local level security governing activities, a subject that has been understudied within the global governance literature. I find that while some MNCs have made modest short-term contributions to security, most have failed to construct conditions for sustainable, positive peace. The evidence presented challenges the prevailing conceptualization of MNCs as agents imbued with capacity-based governing authority, a form of governing legitimacy that is said to derive from their financial resources and perceived efficacy at achieving objectives. iv Preface This dissertation is an independent, original, and unpublished work by the author, Jonathan Kishen Gamu. The fieldwork reported in Chapters 4-6 was covered by a UBC Ethics Certificate of Approval (# H13-03001). v Table of Contents Abstract……………………………………………………………………………………ii Preface ……………………………………………………………………………………iv Table of Contents………………………………………………………………………….v List of Tables……………………………………………………………………………..vii List of Figures …………………………………………………………………………..viii List of Abbreviations….………………………………………………………………......ix Acknowledgements……………………………………………………………………….xi Dedication……………………………………………………………………………….xiii Chapter 1: The Puzzle of Corporate Security Governance in the Socially Responsible Mining Era...…...………………………………………………………………….1 Chapter 2: Analyzing the Efficacy of Corporate Security Governance………………….32 Chapter 3: Selective Absence, Decentralization, and Peru’s Neoliberal Extractive Economy.………………………………………………………………………...63 Chapter 4: Blood, Gold, and Minera Yanacocha’s Traditional Approach to Security Governance….…………………………………………………………………...87 Chapter 5: A Benign Approach to Gold Mining? Minera Barrick Misquichilca and Proactive Engagement………………………………………………………….120 Chapter 6: BHP-Billiton, GlencoreXstrata, and the Ebb and Flow of the Tintaya Conflict…………...…………………………………………………………….146 Chapter 7: Conclusions and Critical Reflections on the Efficacy of Corporate Security Governance and the Implications of MNCs as Governing Agents…….……….179 Bibliography……………………………………………………………………………210 Appendices……………………………………………………………………………...227 Appendix #1: Deaths involving socially responsible firms in Peru……………...227 Appendix #2: Distribution of socio-environmental conflicts within Peru………230 vi Appendix #3: Main categories of causal factors involved in social conflict…...231 Appendix #4: Major episodes of environmental malfeasance………………….232 Appendix #5: MYSA-PNP service provision contract…………………………234 vii List of Tables Table 1.1: Case values……………………………………………………………………27 Table 4.1: Political fragmentation in Cajamarca………………………………………….97 Table 5.1: Political fragmentation in Ancash……………………………………………128 Table 6.1: Political fragmentation in Cusco……………………………………………..150 viii List of Figures Figure 1.1: Mining conflict and death trends globally…………………………….……...16 Figure 1.2: Distribution of social conflicts in 2006……………………………………….20 Figure 1.3: Distribution of social conflicts in 2013……………………………………….20 Figure 1.4: Distribution of socio-environmental conflicts in 2013……………………….21 Figure 2.1: Areas of influence……………………………………………………………53 Figure 3.1: Total mining investments in Peru 2004-2014……………………………..….66 Figure 3.2: Total territory under concession 1991-2013………….………………………67 Figure 3.3: Total canon minero transfers to regions………………………………………83 Figure 4.1: Location of Yanacocha and Conga operations within Cajamarca region……..89 Figure 4.2: Social conflict trends in Cajamarca region…………………………………...91 Figure 4.3: Top provincial recipients of canon minero……..…………………………….93 Figure 4.4: Top district recipients of canon minero…….………………………………...93 Figure 4.5: Bureaucratic effectiveness in Cajamarca……………………………………..95 Figure 5.1: Location of Pierina mine within Ancash region……………………………122 Figure 5.2: Social conflict trends in Ancash region……………………………………..123 Figure 5.3: Top provincial recipients of canon minero……..…………………………...125 Figure 5.4: Top district recipients of canon minero……………………………...……..125 Figure 5.5: Bureaucratic effectiveness in Ancash……………………………………….127 Figure 5.1: Location of Tintaya operation within Cusco region…………………………147 Figure 6.2: Social conflict trends in Cusco region………………………………………148 Figure 6.3: Top provincial recipients of canon minero…….……………………………151 Figure 6.4: Top district recipients of canon minero……………………………………..152 Figure 6.5: Bureaucratic effectiveness in Cusco………………………………………...153 ix List of Abbreviations ALAC The Andean Association of Cajamarca BCRP Peruvian Central Reserve Bank BHPB BHP-Billiton CONACAMI National Federation of Peruvian Communities Affected by Mining CSG Corporate Security Governance CSR Corporate Social Responsibility EIA Environmental Impact Assessment EJOLT Environmental Justice Organizations, Liabilities and Trade ENP Effective Number of Parties FDI Foreign Direct Investment FUDIE Defense Front of Espinar GDP Gross Domestic Product GRUFIDES Training and Intervention Group for Sustainable Development GX GlencoreXstrata ICMM International Council on Mining and Metals IFC International Finance Corporation IFI International Financial Institution IGO Intergovernmental Organization ILO International Labour Organization INEI National Institute for Statistics and Informatics IMF International Monetary Fund LON London Stock Exchange x MASL Meters Above Sea Level MBM Minera Barrick Misquichilca MEF Ministry of Economy and Finance MINEM Ministry of Energy and Mines MINAM Ministry of Environment MNC Multinational Corporation MYSA Minera Yanacocha S.A. NGO Non-governmental Organization NYSE New York Stock Exchange OCMAL Latin American Observatory of Mining Conflicts OECD Organization for Economic Cooperation and Development ONPE National Office of Electoral Processes PNP Peruvian National Police PMC Private Military Company SNMPE National Society for Mining, Petroleum, and Energy TAN Transnational Advocacy Network TSE Toronto Stock Exchange UNDP United Nations Development Programme xi Acknowledgements As every graduate student is well-aware, designing, researching, and writing a dissertation often feels like an overwhelming and solitary struggle. Through all the ups and downs that accompany scholarly work I’ve been pleasantly reminded that knowledge production is driven by continuous engagement with colleagues and friends. This project would not have been possible without the generous support of several people. First and foremost, I would like to thank my committee supervisor, Dr. Peter Dauvergne, for all of the wonderful insight and encouragement he has given me throughout my time as a graduate student at UBC. From the classroom to the field, Peter has challenged me to think critically, share and defend my ideas, and appreciate the complexity and nuance of our political world. I could not be more grateful for his mentorship and friendship. I am also greatly indebted to my two committee members, Dr. Maxwell Cameron and Dr. Arjun Chowdhury, for the innumerable methodological and analytical contributions they have made at each stage of this project, and for always keeping their doors open to entertain questions and provide guidance. Lastly, I would like to thank my three external reviewers Dr. Virginia Haufler (University of Maryland), Dr. Brian