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EJOLT Fact sheet The Yanacocha Mine Case 043
1. Introduction: The Yanacocha Ore & building materials extraction mine
The Yanacocha gold mine is located in Northern Peru, at an altitude between 3500 and 4000m, near the city of Keywords Cajamarca (35 km). It is considered to > Gold mine be one of the largest and most profitable > Congo project in the world, and the largest and most profitable in Latin America. 1 It is > Yanacocha operated by Minera Yanacocha, S.R.L. © Michael Swerdlyk –The Yanacocha gold mine > Newmont Mining (MYSRL), a company controlled by three Corporation main shareholders: Compañía de Minas According to information published by Buenaventura —a Peruvian company— The New York Times , the takeover was (43.65%), International Finance only made possible by pressure brought Corporation (IFC) —a member of World to bear by Peruvian officials, such as the Bank Group, promoting investment former intelligence chief Vladimiro projects in developing countries— (5%); Montesinos. 6 and Newmont Mining Corporation, which is the principal partner (51.35%). 2 The Newmont has a new project in this latter is one of the world’s largest region: the Conga project. It is a large producers of gold, located in Denver copper-gold porphyry located 24 (Colorado, USA) and operating through kilometers northeast of Newmont’s different companies in different countries Yanacocha gold mine. According to the around the world. 3 company, Conga is part of Newmont’s strategic plan to reach 7 million ounces It has been said of MYSRL that it of gold and 400 Mlbs of copper by the “accounts for almost half of Peru’s year 2017 while developing a diverse annual gold production”. Almost all of South American asset base. But Yanacocha’s numbers are gigantic. For Newmont halted their work at Conga example, its production increased from Project in November 2011 because of 81,000 ounces in 1993 to 3 million strong protests. ounces in 2003. It is also of an 1 See S. Langdon, “Peru’s Yanacocha Gold Mine: The IFC’s Midas touch?”, 2000 enormous size: the land under ‹http://www.ciel.org/Publications/IFCCSPe concession is approximately 1,572 ru.pdf›, at 1. square kilometers, “including four major T2. Various aspects of the case 2 See C. Kamphuis, “Derecho y la watersheds and the Andean continental convergencia del poder público y el poder 2.1. The property/cultural aspect empresarial: la desposesión campesina y divide”; the current mining district spans la coerción privatizada en el Perú”, about 160km 2 with five open pit mines. 4 of the case Revista Latinoamericana de Derecho Social , 15, 2012, at 2; Report of the The mine began to operate at the Independen t Evaluation of the Mesa de The Yanacocha project has involved a Dialogo y Consenso CAO-Cajamarca , beginning of the 1990s. It was controlled considerable amount of land transfer Compliance Advisor Ombudsman, 2005, by Buenaventura and a French state- at 3. from the original proprietors to the owned company, Bureau de Recherches company. This has been done through 3 See
7 See R. E. Chacón, “El caso Yanacocha: deception, menaces and false promises, crónica de la lucha contra una as can be seen in a letter addressed by contaminación minera inevitable”, Ecología Política , 26, 2003, at 51; Langdon, supra note 1, at 2.
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some farmers to the Human Rights complex litigations aiming to put an end Coordinator (CNDDHH), a local NGO, in to the communal ownership of the June 1997. 8 Yanacocha area and facilitate the mining activity. One example is that of the community of San Andrés de Negritos, very affected First of all, in 1991, the property rights by the mine. According to the Peruvian over part of the communal area were agrarian law, this community was granted to individual commoners and the entitled to a ceOrdntain amount of land rest was declared a ‘reserved area’— (14,375ha), after a complex process that owned directly by the state and open to was initiated by the Agrarian Reform Act a further distribution in the future—by a (1969) and finished with the official decision of the Peruvian government. registering of the property in 1991. 9 This The goal was to suppress communal property has been systematically eroded ownership in San Andrés de Negritos by since the starting of the mining project in opening the door to individual Yanacocha. agreements between Yanacocha and the new proprietors of the land. The In 1990, Alberto Fujimori was elected members of the community consented to president of Peru. Almost immediately the decision, but it has been alleged that he started a comprehensive program of this consent was obtained through economic reforms which particularly deception and distortion of the affected agrarian legislation. One of his 12 consequences of the decision. The first actions was to amend this legislation largest part of the ‘reserved area’ was by the Act of Promotion of Investments attributed in 1995 to individual in the Agrarian Sector (1991), which commoners, almost suppressing the focused on the individual property of legal status of the community on the land. Afterwards the Constitution was land. Even the very legal existence of also amended and, in this case, the the community was suppressed. communal property of land was given less legal protection. With this Moreover, in 1992 and 1994, Yanacocha constitutional amendment a new Land requested the compulsory purchase of Act (1995) was made possible, allowing part of the land of San Andrés de transfers of land from peasant Negritos to build various facilities communities to private investors. 10 associated with mining activity, and the constitution of an inevitable obligation Peruvian law distinguishes between the associated with other parts of the land to property of mineral resources in the allow the company’s on-the-spot subsoil and the property of the land operations. A group of commoners, where these resources are located. The allegedly representing the whole former is attributed to the Peruvian community, negotiated with the company government, as is the case in several to set the compensation—the final sum countries in the region. 11 Permission to was almost ridiculous—and it was mine these resources can be granted to decided to use the former communal private investors. The Yanacocha mine 13 land. is partly located on land that is the property of the Negritos community. In 1995, the original titleholder of the Therefore, although the Peruvian land—the community—was suppressed, government granted the Yanacocha the land was re-distributed among company permission to extract the gold individual ex-commoners, and large 8 See I. Ormachea Choque, “Utilización from the Yanacocha mine, the Company parts of the land were assigned to de Medios Alternativos para la was not allowed to use the surface Yanacocha so that it could carry out its Resolución de Conflictos Socioambientales: dos casos para because it was the property of the activities. All this was done at minimal reflexionar”, 1999 communal area of San Andrés de cost for the company, thus making the
9 compensation was given to the local See Kamphuis, supra note 2, at 6-8. population. Then, the company took 10 Op. cit., at 10. advantage of the situation by purchasing 11 See Peruvian Constitution, Article 66. 12 See Kamphuis, supra note 2, at 14. 13 Op cit., at 16-18. August 05, 2015 - Page 3
pieces of land from the new individual case since the beginning of the project, owners at a very low price. This meant when Minera Yanacocha concealed from that almost a third of the former IFC the fact that the people living there communal land had been transferred to were indigenous. Given IFC’s very high the company. A significant part of the standards, this would have involved a community’s territory had been taken considerable amount of tact in setting up away and its very survival as a the mining operation because, according community was threatened. to Peruvian law, if a people regard themselves as indigenous, they are. 16 As the members of the community were becoming progressively aware of the Given that the World Bank had consequences of the convoluted legal dramatically changed its attitude to © Michael Swerdlyk –The Yanacocha process which had led to this situation of indigenous peoples with the passing of gold mine dispossession, they began to organize the Operation Policy (OP) and Bank acts of protest against the company. The Procedure (BP) 4.10, this was by no community tried to act as such, and means a minor issue. 17 As a asked the company to get the consequence, the legal process by community’s consent for its on-the-spot which the lands were acquired is operations. MYSRL, however, did not debatable from the point of view of take the community’s demands into respecting the indigenous legal account and proceeded as if the institutions, and particularly the common community no longer existed as a legal property of land. The Yanacocha case entity. shows that large, alleged development, projects (as is often the case in the Parallel to this, in 2004 a local court mining sector) can have a considerable assigned the rest of the ‘reserved area’ 14 impact on the traditional economic and Earthworks, A brief overview of to people who did not belong to the community concerns at Newmont social structures of communities in operations and investments in Peru, community. These newcomers used Ghana, Indonesia, the United States, and developing countries, particularly when their formally acquired rights on part of 18 Romania , 2007 they are indigenous.
small town of Choropampa, and the worse and prompted people to mobilize municipalities of San Juan and against mining in Yanacocha. As we will Magdalena. 19 Seemingly, the local see, this has led to some incidents people in Choropampa were not affecting human rights and the security informed about the dangers of the of local activists. Nevertheless, it is true substance that had been spilled either that the company offered some by the local authorities or the mine compensation. Individually, it is alleged personnel. They collected it up, thinking that MYSRL compensated 749 local it to be valuable, and kept it in their people for the damages suffered with an homes. Consequently, symptoms of overall amount of 5,350,000 nuevos mercury poisoning appeared affecting soles (the Peruvian currency). many people, some of whom were Collectively, the company funded children. 20 various activities for the benefit of the local communities, such as the The investigation into the facts of the improvement of schools, water works, case has shown that the truck was 24 19 medical facilities, etc. Mercury (Hg) is a harmful substance, neither closed nor equipped with the the use of which will be regulated through a legally binding instrument at special handbarrow required for the international level if the process propelled transport of mercury. In fact, it seems by the Governing C ouncil of the UNEP in b) Water pollution 2009 succeed. See information about at that at that moment the normal
24 See Comisión de Pueblos Andinos, effects on their health. In fact, eight noon, they become clearer]”, said Reina Amazónicos y Afroperuanos, supra note years after the incident local people Llanos, who assures that the quantity of 22, at 9. 25 were still suffering consequences to their water has decreased as well, causing a An independent investigation h as 23 determined that fecal coliforms and health. decrease in the milk production in her copper are, respectively, 160,000 times cattle. and 10 to 20 times higher than WHO Obviously, this did nothing to improve standards. “The acidity of the water is the reputation of Minera Yanacocha At the beginning of August 2006 the also extremely high with a PH of 3.3 as compared to 6.5, which is the highest among local people. In fact, it made it local people in Combayo protested acidity considered drink able” (see because a dam was being built near Langdon, supra note 1, at 2).
26 See Chacón, supra note 8, at 51; Langdon, supra note 1, at 2. 27 See Identificación y cuantificación de impactos medioambientales generados por MYSRL , 2006
their village. They set up a road Arana acted as mediator and managed blockade and there were clashes to get the company to withdraw from the between the farmers, and policemen and controversial area. This was a significant Yanacocha security guards. In these boost to the prestige of Grufides among clashes the farmer Isidro Llanos the communities. Finally the company Chavarría was killed. 28 After the murder, itself “requested that the Peruvian the local people blockaded the traffic on Ministry of Energy and Mines annul the the Cajamarca-Bambarca road and the company’s exploration permit for Cerro Peruvian government were obliged to Quilish.” 30 send a commission to mediate between The Cerro Quilish conflict seemed to the company and the farmers. MYSRL http://www.elciudadano.cl – A protest represent a turning point in the way agreed to improve the quality of the 29 MYSRL viewed its social responsibilities. against the Conga project. water. The killing of Isidro Llanos, like Executives of the company have stated that of Edmundo Becerra previously (see that they became conscious that above), leads us to the human rights “although it may have been operating question. legally, it was not operating legitimately in the eyes of the community 31 2.3. The human rights aspect of members.” Nevertheless, subsequent the case cases of the alleged violation of human rights shed doubt on these statements. The local opposition to the Yanacocha Grufides investigated some of the facts mine allegedly triggered the repression of the Negritos, Choropampa and and persecution of activists, which Combayo incidents, particularly with bordered or even went beyond the regard to the killings and the support bounds of the violation of human rights. provided to the families of the people This can be seen in the consequences killed or injured by the violent situations of the involvement of Grufides in the within the mining conflict in Cajamarca. Choropampa incident and the further This involvement has allegedly led to mobilization of local communities against some harassment of Grufides activists, the mining company. Grufides is a local and particularly Father Marco Arana and organization that was created in Mirtha Vasquez, who reportedly received Cajamarca in 2001, as a direct result of several death threats. They alleged that the Choropampa mercury spill in 2000. It they were followed and filmed by was formed mainly by university personnel of the company Forza, a students, led by Marco Arana, a Catholic private security agency connected with priest, responsible for the parish where WYSRL and former Peruvian the University is located. It has been intelligence and military officials. 28
have been followed and the discrepancies in the company’s waste consequences they have had before management and emergency discussing the conclusions of the case, procedures. This investigation led to a which are obviously provisional given the comprehensive understanding of the complexity of the Yanacocha mine magnitude and seriousness of the effects on the local people in Cajamarca. incident. 34 Subsequently, in December 2000, the Frente de Defensa de
Choropampa lodged a complaint with 3.1. The involvement of IFC in a CAO on behalf of the citizens affected by controversial project and the the mercury spill. 35 claim before the CAO In response to the complaint, CAO First of all, the involvement of the World conducted meetings with all the relevant Bank Group in the mining project must an Independent Health Evaluation (IHE) be taken into account because it shows process would be adequate. According the importance of the Yanacocha mine the official version of the CAO, it for local development. Indeed, the “continued to help implement effects of the Yanacocha project— recommendations derived from the IHE where, as seen, economic, for over two and half years, despite environmental and human rights issues encountering various hurdles posed by are intertwined—are made even more the Ministry of Health and civil society complex by the involvement of IFC, an organizations. CAO decided against institution of the World Bank Group, pursuing a health study due to a lack of institutional and social support and which claims to support sustainable 36 development projects in developing closed the case in November 2003.” countries. One way or another, the CAO action led The IFC has been involved in order “to to the constitution of a forum for dialogue support a project promising to generate between the community and MYSRL. A substantial revenue, employment and roundtable ( Mesa de Diálogo y foreign currency flows” in Cajamarca, Consenso ) was formed, which was which, as has been said, is one of the involved above all in monitoring water poorest departments in Peru. 33 However, quality in the four basins affected by the it seems that the project has significantly Yanacocha mine activity, but there was no significant result regarding the worsened the quality of life of the local 37 people, altering their traditional Choropampa mercury spill. This action economic and social practices on the was derived from the complaint filed by land, generating important the Federación de Rondas Campesinas Femeninas del Norte del Perú environmental damages and putting at 38 risk the life of some people who were (FEROCAFENOP) in March 2001. publicly against the project. According to CAO, “[s]ince the Mesa It has been argued that the IFC has began in 2001, the CAO has sought been wrongly informed about such ways for the Mesa to become an important facts as the condition of the organic, fully Cajamarcan entity. The indigenous local people or the behaviour CAO has supported the Mesa financially of the company in the Choropampa and technically since 2001. The CAO has agreed to support the water 33 See Langdon, supra note 1, at 1. incident. But it seems that the IFC was not careful enough in checking the monitoring program of the Mesa until 34 See Compliance Advisor Ombudsman, supra note 22, at 1. project in its initial stages, and it did not February 2006, after which it will no longer be involved in the process. 35 See Compliance Advisor Ombudsman, monitor it appropriately once it was Exit report regarding two complaints filed underway. Through training, local hiring, and with the CAO in relation to Minera coordination with local universities, the Yanacocha (Cajamarca, Peru) , 2006, at The Choropampa incident is illustrative. 1-2. After the spill, in July 2000, the IFC’s 36
38 Ibid. August 05, 2015 - Page 7
© 2009 Michael Swerdlyk
CAO has sought to ensure that the Mesa Giovanna Angélica Quiroz and her two can continue sustainably.” 39 However, children. the Mesa did not have enough appeal After the Choropampa incident, the for local NGO’s and did not gain enough company tried to reach agreements with credibility with local stakeholders. 40 the people affected by the incident for Therefore, besides the poor results of small economic compensations so that the CAO in the Choropampa incident, they could avoid further legal action the Mesa did little to alleviate concern before the courts. This was the case of about water pollution in Cajamarca, as Ms. Quiroz, who received $14,000 to the facts about Combayo show. In fact, it settle her claims against the company. has been alleged that it was incapable of Afterwards, when she realised that the being an adequate forum for new issues compensation was ridiculous compared (such as the Combayo dam), and not with the damage caused, Ms. Quiroz even very useful in the management of claimed a higher quantity before the mine-related conflicts. 41 Peruvian courts. This led to a controversial journey through the courts,
which ended with an extraordinary 3. 2. The Yanacocha case before decision by the Peruvian Supreme Peruvian courts Court, where for the first time it decided on an appeal of cassation in plenary Despite the (not very successful) session, given the conflict between the involvement of the CAO in the various two courtrooms that had been involved consequences of the Yanacocha mining in the proceedings. This decision of operations, the Choropampa mercury 2008 was the first to use the rules on spill has been taken before the Peruvian cassation established by the Procedure courts. Lawsuits relating to the Code of 1993. In this decision, the Choropampa incident were filed against Supreme Court upheld the validity of the Yanacocha in the local courts of settlement agreement reached by the Cajamarca in May 2002 by over 900 plaintiff and the company. Subsequently, Peruvian citizens, most of whom entered the Supreme Court reached the same into settlement agreements with decisions for other people from Yanacocha. The most significant 39 Choropampa in the same situation, but Op. cit., at 3. proceedings on the matter concern by the start of 2010 Newmont reported 40 See Report cit. , supra note 2, at 28. that claims of approximately 200 Moreover , the image of the Mesa for the community has been tarnished because plaintiffs still remain unsettled. of the perception that it is not entirely independent of Yanacocha. This was The Quiroz decision was controversial. stated by CAO (ibid.). The majority of the Supreme Court 41 Ibid. decided that the extrajudicial settlement
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between Ms. Quiroz and MYSRL was right and there was no reason for further 4. Concluding remarks judicial control. 42 However, a significant minority of the court opposed the Despite the compensation for the decision. For them, the settlement had Choropampa mercury spill obtained by been reached by an error of the plaintiff, some farmers through the settlements and this error had been induced by approved by US Courts, the various deception. So the minority—in the aspects of the Yanacocha mine case Quiroz decision and in the other show that environmental injustice is decisions on settlements between linked with the exploitation of natural Yanacocha and the people affected by resources in developing countries. the mercury spill in 2000—considered that the extrajudicial settlement was (i) First, as we have seen, the void. 43 exploitation of natural resources has a significant social and economic impact on the traditional organisation of local 3.3. The Yanacocha case before communities: their land is put on the US courts market, it is turned into a commodity, and it is allowed to be purchased by Some people affected by the multinational corporations so that Choropampa mercury spill tried to bring resources can be obtained at lower the matter before the US Courts, given prices. All this is done with no significant the fact that the majority shareholder of improvement in the standard of living of Yanacocha was (is) Newmont, a local people, as the HDI statistics in Denver-based corporation. Newmont Peru shows in the case of Cajamarca lost the fight to keep the lawsuit out of after the opening of the Yanacocha the US courts and in 2004 offered the mine. possibility of settling the demands of the (ii) National governments are often people affected before two retired interested in investments and land Colorado judges. The Peruvian plaintiffs acquisitions by international companies, were unsatisfied with the mediation talks because they obtain financial revenues, and went ahead with their lawsuits which have no direct effect on local before the federal courts in Colorado. people, as the case of the Negritos Approximately 1,100 Peruvian citizens community shows dramatically. It is filed lawsuits before the Denver District obvious that the economic rewards of Court for the State of Colorado. These mining in Yanacocha are not going to actions aimed to obtain compensation the Cajamarca people but elsewhere in 44 42 Supreme Court of Peru, Decision on for the damages caused by the mercury Peru and abroad. Cassation Appeal 1465-2007 spill. Finally, in October 2007, the parties (Cajamarca). (iii) This type of activity often generates entered a court-approved settlement 43 severe environmental and health Ibid. For the minority, “ las agreement, and most of the cases were transacciones extrajudiciales celebradas hazards because national standards are resolved. At the present time, it seems entre la empresa minera demandada y la often relaxed in order to attract parte demandante son también altamente that the lawsuits filed in US courts on the cuestionables desde la perspectiva de los international investments. The incident have all been resolved in this derechos fundamentales y las monitoring of water quality in the basins limitaciones al principio de la autonomía way. de la voluntad en un Estado affected by Yanacocha activity shows Constitucional de Derecho [the this. extrajudicial settlements between the mining company and the plaintiff are (iv)The failure of local governments to highly dubious from the point of view of human rights and the limitations on the protect human rights in developing freedom of contract within a constitutional countries (if they are not involved in state]”. violating them) means that it is easy for 44 See Wellams, supra note 31, at 24. threats to be made on the lives of
This document should be cited as:
Jaria i Manzano, J. (CEDAT, Universitat Rovira i Virgili) 2012. The Yanacocha Mine Case , EJOLT Factsheet No. 43, 9 p. August 05, 2015 - Page 9
activists in environmental and social References conflicts linked to mining activity. C. E. Aramburú, M. Bustinza Nalvarte, Cajamarca: el Normally economic interests aim to proceso demográfico, Asociación Los Andes de maximize benefits derived from the Cajamarca, Cajamarca, 2006 exploitation of natural resources in these www.losandes.org.pe/downloads/2006/libros/01.pdf countries and are not very sensitive to M. Arana-Zegarra, “El caso del derrame de mercurio human rights. en Choropampa y los daños a la salud en la población rural expuesta”, Revista Peruana de (v) Mining activity in developing Medicina Experimental y Salud Publica, 26(1), 2009 countries often causes damage to the ―, Informe de la verdad sobre el desastre ambiental environment and health, because of the en Choropampa, ECOVIDA, Cajamarca, 2000 much greater lack of control and R. E. Chacón, “El caso Yanacocha: crónica de la assessment compared with developed lucha contra una contaminación minera inevitable”, countries. In this situation, and given the Ecología Política, 26, 2003 weakness of local institutions, the only Comisión de Pueblos Andinos, Amazónicos y option is to obtain some compensation Afroperuanos, Ambiente y Ecología del Congreso de through proceedings before foreign la República del Perú, Informe del grupo de trabajo encargado de levantar informacion sobre la situación courts, thus reinforcing the neo-colonial ambiental y estado de salud de los afectados por el structures of the global economy. The derrame de mercurio en las localidades de San Juan, Choropampa incident is a good example Choropampa y Magdalena, departamento de Cajamarca en junio del año 2000, Lima, 2008 of this. Compliance Advisor Ombudsman, Exit report (vi) These minimal compensations for regarding two complaints filed with the CAO in real damages do not cover the real relation to Minera Yanacocha (Cajamarca,), 2006 impact of the extractive activities of ― Report of the Independent Evaluation of the Mesa foreign companies in developing de Dialogo y Consenso CAO-Cajamarca, 2005 countries, and to some extent conceal ― Investigación del derrame de mercurio del 2 de the real situation of injustice in terms of junio de 2000 en las cercanías de San Juan, the loss of assets and the breaking up of Choropampa y Magdalena, Perú, Washington DC, 2000 consolidated social structures. The impact of Yanacocha on the life of the Earthworks, A brief overview of community concerns at Newmont operations and investments in Peru, people of Cajamarca shows how Ghana, Indonesia, the United States, and Romania, insufficiently the local people are 2007 rewarded by the mining activity. www.earthworksaction.org/files/publications/Newmont AGMbackgrounder.pdf?pubs/NewmontAGMbackgrou nder.pdf P. Hecht, “Peasants in Peru near showdown on mercury spill”, 2005 www.minesandcommunities.org/article.php?a=1384
C. Kamphuis, “Derecho y la convergencia del poder público y el poder empresarial: la desposesión campesina y la coerción privatizada en el Perú”, Revista Latinoamericana de Derecho Social, 15, 2012
S. Langdon, “Peru’s Yanacocha Gold Mine: The IFC’s Midas touch?”, 2000 www.ciel.org/Publications/IFCCSPeru.pdf
J.D. Oliva Martínez, “Políticas de Estado en cooperación internacional para la promoción del This publication was developed desarrollo de los pueblos indígenas”, in M. Berraondo as a part of the project More on this case (ed.), Pueblos indígenas y derechos humanos, Environmental Justice Bilbao, Universidad de Deusto, 2006 Organisations, Liabilities and • http://www.foxbusiness.com/markets/2011/11/09/n Trade (EJOLT) (FP7-Science in Á. Páez, “‘The New York Times’ revive el caso ewmont-halts-work-at-perus-conga-project-due- Society-2010-1). EJOLT aims to Yanacocha”, La República, November 22, 2011 improve policy responses to and protests/#ixzz1nUCUA04P www.larepublica.pe/26-10-2005/new-york-times- support collaborative research revive-el-caso-yanacocha and action on environmental M. Salazar, “El oro se va con el agua”, 2006, conflicts through capacity www.ipsnoticias.net/nota.asp?idnews=38759 building of environmental justice groups arou nd the world. Visit M. Wellams, The Role of CSR in Development: A our free resource library and Case Study Involving the Mining Industry in South database at www.ejolt.org or America, Masters Thesis, Saint Mary’s University, follow tweets (@EnvJustice) to Halifax, 2007 stay current on latest news and events.