Report Seeks to Demonstrate the Evolution of Chinese FDI Practices
Total Page:16
File Type:pdf, Size:1020Kb
Acknowledgments First and foremost, we would like to thank our helpful and patient professor and research partner, Dr. Judith Shapiro of American University. Dr. Shapiro’s guidance and expertise were indispensable throughout the course of this investigation. We are also incredibly grateful for the opportunity to work with the World Resources Institute (WRI) on this project, and particularly with Denise Leung of WRI’s Sustainable Finance Team, whose advice was integral to our research process. Our team is also indebted to the following individuals: Victoria Chonn Ching, Universidad del Pacífico Kim Claes, Belgian Development Agency Dr. Ken Conca, American University Luis Gonzales, The Nature Conservancy Dr. Barbara Kotschwar, Peterson Institute for International Economics Dr. Stephen MacAvoy, American University Dr. Carlos Monge, Revenue Watch Institute Margaret Myers, Inter-American Dialogue Rachel Nadelman, American University Alejandro Neyra, Peruvian Ministry of Foreign Affairs Dr. Cynthia Sanborn, Universidad del Pacífico Michael Shifter, Inter-American Dialogue Sijin Xian, American University Shougang Case Study Acknowledgments: Departamento del Medio Ambiente de la Municipalidad de Marcona María De Los Angeles Zapata Rodriguez, Pontificia Universidad Católica del Perú Sindicato de Obreros Mineros de Shougang Hierro Peru, S.A.A. Chinalco Case Study Acknowledgments: Ing. Juan Aste Daffós, Adviser to Congresswoman Verónika Mendoza (Cusco) Julio Casas, Social Capital Group Ing. Marlene Cerrón Ruiz, Regional Government of Junin Paul Chachi, Social Capital Group Arq. Pedro Montoya Torres, Regional Government of Junin Ing. Rosi Rojas Cruzatti, Regional Government of Junin Dr. Luis Alberto Salgado Jorge Sanchez, Social Capital Group Mario Villavicensio, Knight Piésold Consulting Jinzhao Case Study Acknowledgments: Xiaohuan Tang, General Manager, Jinzhao Mining Peru SA Catherine Cardich, Deutsche Gesellschaft für Internationale Zusammenarbeit Dr. Oswald Eppers, Deutsche Gesellschaft für Internationale Zusammenarbeit Gladys Marquez, Autoridad Regional Ambiental Arequipa Anibal Pinto, LABOR Associación Civil Karina Sabogal Olivos, Jinzhao Mining Peru SA Cover Photo Credit: Yanacocha Gold Mine (Peru), Should-Know Blog (http://www.should-know.com/) 2 Table of Contents Executive Summary .......................................................................................................................................... 5 Index of Acronyms and Abbreviations ...................................................................................................... 6 Introduction ............................................................................................................................................ 7 I. Methodology ................................................................................................................................................................ 7 II. Peruvian Economic and Governmental Trends........................................................................................... 8 III. International Mining Standards and Guidelines .................................................................................... 10 IV. Peru’s Legal Framework .................................................................................................................................... 11 V. Risks to Environment, Human Health, and Livelihoods ....................................................................... 14 VI. Civil Society Context ........................................................................................................................................... 16 References ........................................................................................................................................................ 18 Appendix A: International Standards Organizations ........................................................................ 23 Case Study: Shougang Corporation ............................................................................................... 24 I. Introduction ................................................................................................................................................. 24 II. Methods and Sources ............................................................................................................................... 25 III. Background ............................................................................................................................................... 26 Regional Background ................................................................................................................................................ 26 Mine Background ........................................................................................................................................................ 31 Current Status ............................................................................................................................................................... 34 IV. Impacts ........................................................................................................................................................ 35 Environmental Issues and Mitigation Efforts .................................................................................................. 35 Social Governance Issues and Mitigation Efforts ........................................................................................... 38 V. Laws, Regulations, and Policies ........................................................................................................... 42 Peruvian Standards .................................................................................................................................................... 42 International Certifications and Standards ...................................................................................................... 45 Industry Comparison ................................................................................................................................................. 46 VI. Lessons Learned and Recommendations ....................................................................................... 46 Lessons Learned .......................................................................................................................................................... 46 Recommendations ...................................................................................................................................................... 47 VII. Conclusion ................................................................................................................................................ 51 References ........................................................................................................................................................ 54 Appendix A – Map of San Juan de Marcona ........................................................................................... 61 Appendix B – Shougang Hierro Peru Timeline .................................................................................... 62 Case Study: Chinalco Toromocho Mine........................................................................................ 62 I. Introduction ................................................................................................................................................. 63 II. Research Methods and Sources ........................................................................................................... 64 III. Background ............................................................................................................................................... 65 Regional Background ................................................................................................................................................ 65 Mine Background ........................................................................................................................................................ 67 IV. Impacts ........................................................................................................................................................ 69 Social Impacts ............................................................................................................................................................... 69 Environmental Impacts ............................................................................................................................................ 76 V. Laws, Regulations, and Policies ........................................................................................................... 81 Chinalco’s Environmental, Social, and Corporate Policies ......................................................................... 81 Role of the Regional Government ......................................................................................................................... 81 VI. Lessons Learned and Recommendations ....................................................................................... 82 3 Lessons Learned .......................................................................................................................................................... 82 Recommendations .....................................................................................................................................................