Mesas de Diálogo Social Conflict and Community Engagement in the Mining Sector of Peru Presented at IFC Sustainability Exchange 2015 Washington, DC. May 20, 2015 For internal discussion. Do not cite or circulate

Overview 1. Background: Mining and Conflict in Peru 2. Institutional Responses to Conflict 3. A new multi-stakeholder approach: Dialogue Tables 4. The Tintaya/Espinar & Quellaveco study 5. Lessons learned and Recommendations

 Peru is the World’s second largest producer of copper and silver, and has other major reserves  Mining has become the main driver of its fast- growing economy  Peru has the highest number of social conflicts associated to mining in LAC, together with Chile  The social and economic costs of conflict have increasingly put questions of equity, fairness, and sustainability on the national agenda 1. Background: Mining and Conflict in Peru # of conflicts % associated to Mining Source: Peruvian Ombudsman and Central Bank

2. Institutional responses to conflict National Office of Dialogue Ombudsman Regional governments Ministry of Mining  Traditionally, many government institutions have been involved in the prevention and management of social conflicts in Peru  Unclear distribution of competences among them  Different approaches and capacities  Not always direct engagement with relevant stakeholders at the local level

3. Dialogue Tables  Examples: Quellaveco and Tintaya dialogue tables Dialogue Tables in Peru Innovative response of dialogue over resource extraction (not only during the conflict) Multi-stakeholder and convened at different levels: national, regional and local Address community concerns & aspirations through direct engagement Diffuse tension & enable conflict transformation: voice to excluded stakeholders Facilitated by a trusted individual

4. The Tintaya & Quellaveco study 1. By comparing 2 large-scale copper mining projects in different contexts, the study aims to obtain:  Key observations and lessons for addressing future processes of dialogue  A set of policy recommendations that encourage the direct engagement of citizens in mining areas 2. This is a result of a multi-stakeholder combined effort:  Systematization of Quellaveco experience: CCPM (coordinated by The World Bank)  Systematization of Tintaya/Espinar: Societas/CooperAcción (coordinated by Oxfam)  Comparative analysis: Shift Group (Harvard University) and CSRM (U. of Queensland)  Workshop with stakeholders, Lima, July 2014: Futuro Sostenible

4. The Tintaya & Quellaveco study COMPARATIVE ANALYSIS (1/2) QUELLAVECOTINTAYA/ESPINAR Time2011. The DT* was active for 18 months2002 (DT of Espinar) and (DT Tintaya) Ownership A single owner: Anglo AmericanNumerous corporate owners over 15 years. Current owner: Xtrata Drivers DT established in response to company- community conflict with reputational risk for the company DT established in response to company- community conflict with reputational risk for the companies Issues Water scarcity Contamination of water and legacy issues relating to land expropriation Local context Higher level of literacy. Urbanised context. Access and quality to health & education was a priority Higher levels of poverty. The province became urbanised over time. Priorities for the communities: basic infrastructure and social services PrinciplesDecision-making by consensus. Principles and rules established prior to dealing with substantive issues *DT= Dialogue Table

COMPARATIVE ANALYSIS (2/2) QUELLAVECOTINTAYA/ESPINAR Scope The DT of Moquegua included regional concerns The DT of Tintaya process was focused on affected communities Structure Plenary and sub-working groups/committees. Regional government initiated and facilitated the DT, with national government support. Plenary and sub-working groups/committees. Presence of third party factilitator (Oxfam). No government involvement in the first phase (2002); national and regional involvement in the second DT ( ). Parties DT of Quellaveco was open and conducted with full transparency DT of Tintaya was closed to participants only, while allowing community representatives time to consult with their constituencies Company Process led by Anglo American Peru, but required corporate-level involvement in the initial stages Process led by Xtrata Peru, but required corporate-level involvement in the initial stages OutcomesFinal reports and 26 agreementsFinal reports and agreements in both DT (2002 and ) 4. The Tintaya & Quellaveco study

Well-functioning dialogue tables can be an operational- level asset for companies Capacity building can help address power asymmetries The involvement of third party facilitators can be central to success A constructive, even leading, role for government is ideal Regulation can play an important role (attention to its interpretation and implementation) Dialogue tables provide an opportunity to enhance social inclusion New forms of ‘dialogue tables’ appear to be emerging 5. Lessons learned and Recommendations 1. Lessons learned

Build a coherent regulatory framework for community engagement Focus on the enabling role of government Recognize value in meaningful dialogue Continue to build knowledge 5. Lessons learned and Recommendations 2. Recommendations + Regulatory frameworks require the consent of all stakeholders. Unilateral implementations are difficult and politically costly More coordination among private sector players to improve their engagement with local communities and agree on common E&S standards and practices

Germán Freire & Sergi Pérez Social Development (GPSURR)