Are Canadians the new political kingmakers in Peru?
A leading candidate for president in Peru’s April election “took his campaign” to Vancouver, reported the city’s leading daily. Earlier this month Alejandro Toledo — who served a previous term as president — met mining officials, investment bankers and journalists, telling them his government would improve the climate for mineral exploration and mine development.
“One of the reasons why I have interrupted my campaign,” Toledo told the press, “is that I wanted to transmit the message to potential investors — investors who are already involved in Peru, and who are potential investors, that we are interested in their investments.”
For some, Peru is a Canadian success story. Before 1990, no Canadian mining company operated in Peru. Now Canadian corporations dominate the country’s mining sector, operating a number of major projects. According to Bloomberg, “more than 200 junior mining exploration companies, mostly Canadian, are searching for reserves of crude oil, natural gas and other resources across the country.”
As an illustration of the size of Canadian mining investment in Peru, in late 2006 ScotiaBank announced plans to expand its operations in the country to do more business with mining clients. The Toronto-based bank is the third largest in Peru and only a small part of the $5 billion Canadian companies have invested in the country.
Where some see Canadian success, others see problems, at least for many Peruvians. “In Peru,” noted McGill University professor, Daviken Stuenicki Gizbert, “40 percent of conflicts involving local communities are over mining. The majority of the mining sector in Peru is Canadian.” In a short period in 2008 Canadian resource companies in Peru were responsible for a number of socially damaging events; an oil and gas company entered an area inhabited by a nomadic tribe that refused contact with the outside world; a mine destroyed pre-Columbian carvings; the government declared a state of emergency over fears that arsenic, lead and cadmium from a mine near Lima could pollute the capital’s main water supply.
In October 2008, Zuniga, the president of the Achuar indigenous group FENAP, told a local radio: “We, as indigenous people, reject the Canadian company Talisman. We do not want them working in our territory. We want the Peruvian state to respect us and the armed forces to stop helping the company.” In the Spring Achuar leaders traveled to Calgary to tell Talisman to stop drilling in their territory because it caused ecological harm and social conflict.
The world’s largest gold miner, Toronto-based Barrick, has also been embroiled in a number of conflicts in Peru. “Violent conflict at Barrick Gold’s Tierina in North Central Peru,” blared a 2005 Canadian newspaper headline, as the story reported two protesters killed. A year earlier Reuters reported “thousands of protesters angry at a court decision to waive a $141 million tax payment levied on Canadian miner Barrick Gold Inc. clashed with riot police in Peru’s central Andes on Monday, the latest in a run of anti-mining protests in the mineral-rich nation.”
The most high profile mining conflict in Peru took place earlier in the decade at Vancouver-based Manhattan Minerals $240 million project in Tambogrande, a small town in the north of the country. This open pit gold mine would have forced half of the town’s 16,000 residents to relocate while creating only a few hundred jobs. Godofredo Garcia Baca, a leader of the anti-mining opposition movement, was shot and killed under suspicious circumstances.
The federal government has supported many individual mining projects in the country and has worked to provide the industry with a profitable investment climate. Manhattan Minerals obtained its concession in Tambogrande six months after participating in a Department of Natural Resources trade mission to Peru and the Canadian International Development Agency (CIDA) partnered with Barrick on a reforestation project near the company’s Lagunas Norte mine. In 2002 CIDA began a six-year $9.6 million Mineral Resources Reform Project to provide technical assistance and technological support to the country’s Ministry of Energy and Mines. At the end of 2008 CIDA added $4 million to the project and the agreement was extended until 2012. The official goal of the Mineral Resources Reform Project is “development of activities oriented to the consolidation of the institutional capacity of the sector, which means the services provided by the Ministry of Mines and Energy, and to contribute to the generation of greater confidence in the Ministry and its regional offices.”
CIDA’s push to improve the prospects for Canadian miners through the Mineral Resources Reform Project warranted a visit in early 2008 by the minister of international cooperation. Embassy magazine reported: “Ms. [Bev Oda] … arrived in Peru meeting with the Latin American nation’s energy and mines minister, as well as Canadian and Peruvian mining companies and NGOs to discuss mining sector reform.”
Last year CIDA chose Peru as a “country of focus” and the federal government signed a trade agreement with Peru largely designed to improve the prospects for Canadian investors. According to Foreign Affairs, “an investment chapter in the Canada-Peru FTA [free-trade agreement] locks in market access for Canadian investors in Peru and provides greater stability, transparency and protection for their investments.”
In truth, the FTA — with environmental and labour safeguards that are “even weaker than NAFTA’s” — might be better characterized as subverting meaningful democracy. The FTA is designed to remove any future Peruvian government’s ability to change mining regulations or expropriate properties of Canadian companies.
For Canadian officials pushing the interests of mining companies Toledo’s visit to Vancouver was definitely a sign of success. But many Canadians may disagree. Instead of “success” they may see imperialism and Canada following in the U.S.’ footsteps.