Rio Blanco: Communities vote 'no' in referendum

Update 123. 30 September 2007

On Sunday September 16th 2007, the three districts in the region of Piura that would be most affected by Minera Majaz's Rio Blanco mining project held a public referendum. Majaz is a wholly-owned subsidiary of Monterrico Metals, a UK company which sold the majority of its shares to Chinese consortium Zijin in April of this year. Thousands of voters travelled many hours from remote areas to participate in the voluntary referendum that had been called by the mayors of Carmen de la Frontera, Pacaipampa and Ayabaca. They were asked whether or not they agreed with the development of mining activities in their district. Over 90% of people who cast their vote did so against mining. The result was a resounding 'No'.

The PSG was present at the polling centre in Sapalache, the district capital of one of the potentially affected areas, Carmen de la Frontera. The referendum here (the smallest of the polling centres) was quite well attended, very peaceful with no problems at all. From when the polls opened at 8 a.m long queues formed and people waited patiently to cast their vote. People at the other two centres say the situation was the same.

The government and company have focused on the turnout figures which averaged 60%, although if these are compared to other voluntary votes, for example the last UK general elections (59.38% and 61.36% in 2001 and 2005, respectively), they fair favourably. Of the people the PSG spoke to in Sapalache, the 'urban' population didn't seem to have as much interest in voting, in contrast to the rural population who had walked several hours to cast their vote.

"Participation has been successful and voluntary," said Fernando Romero, coordinator for Oxfam International. The referendum has drawn attention to the issues at the heart of the Majaz case at a national level. Firstly, the weak or nonexistent state apparatus in Peru for dealing with such issues, which highlights the need for an environmental authority able to regulate and supervise corporate conduct. Secondly, there is an urgent need for a land-use plan that would identify sites suitable for mining projects.

After explaining that this is a non-binding referendum that would not translate into law, Romero went on to say that "this is a call for attention and a reminder that these communities are part of the country and should participate when decisions are made that affect their way of life and their future".

Coincidentally, a spontaneous parallel referendum was called on the same day by the authorities in the cities of Piura, Talara and Sullana (the event wasn't made public until the day itself) and was interpreted as some as an attempt to draw attention away from the referendum in the other three districts. The mayor of Talara said that it was unacceptable for three districts to decide the future of the entire region.

Leading up to the referendum

In the weeks leading up to the referendum, tensions were running high between the government and mayors from the three districts. The verbal aggression of President Alan García and Prime Minister Jorge del Castillo before, during and immediately after the referendum contrasted with the peaceful and conciliatory manner in which it was eventually carried out.

The Peruvian government has fiercely defended the project and in August government representatives signed stability agreements with the company recognising Monterrico's investment in Peru, through its subsidiary Minera Majaz, and fixing favourable tax and labour conditions for a 10 year period. The government also openly challenged the legality of the referendum process. There has been a lot of talk from the government, amongst others, about lack of information about the project in the communities, and/or about people being misinformed. This is an area that was clearly highlighted by the PSG-sponsored delegation's report last year (available from PSG on request).

Days before the referendum, a Jesuit-run and founded radio in Piura, Cutivalú, decided not to broadcast a message from the Ministry of Energy and Mines regarding the referendum. As the director of the radio station, Rodolfo Aquino, explained this was because they believed the message contained false information regarding the referendum, but claimed he had explained to the Council of Ministers that the message would be broadcast if these mistakes were corrected. Prime Minister del Castillo claimed this was a violation of the freedom of speech.

The National Jury of Elections (JNE) also joined the dissenting voices stating that the referendum wasn't official and was also illegal as it was not being exercised, in its eyes, by an official electoral body.

The company, Minera Majaz, was noticeable in its lack of comment prior to the referendum, particularly following the rejection at the end of August by the communities of its US$80 million private fund proposal for them within the area of influence of the Rio Blanco Project. The fund would be accumulated over the 20 year mine life.

However, the Peruvian Ombudsman's office (Defensoria del Pueblo) stated in mid-September that they considered dialogue to be the only viable option to resolve the Majaz 'conflict'. The referendum is just one part of a deliberation process where all actors (executive powers, mayors, communities, ronderos and the company) must have the chance to express their views.

Interestingly, the referendum took place days after a mining convention, entitled 'Mining: Working together towards the development of Peru', was held in Arequipa. Among the conclusions of the conference were that mining projects should start at the level of the communities to be affected, in order to create a framework of confidence, dialogue and conflict resolution.

Majaz statement

In a television interview given following the referendum, Minera Majaz's head of operations Andrew Bristow admitted that the company had made past errors in terms of its social policy, but had learnt from those mistakes over the last few months and they would serve as lessons for the future.

When asked what significance the referendum had for the company and what its opinion was as regards the overwhelming result in favour of 'no' to the project, Bristow reiterated that it was a useful way for people to express their opinion and to be heard, yet it reflected the divisions within the population on the subject. He said that many people he had talked to now believed, following the referendum, that the time is right to sit down and open a dialogue. For this to be successful such a dialogue must contain certain components: commitment from all sides to participate; respect from all sides; and commitment from all sides to listen.

Government Reaction

Less than a week after the referendum, the Ministry of Energy and Mines submitted a bill (No. 1614/2007-PE) to Congress which would facilitate the advancement of and accelerate investments into the 20 mining exploration and development projects it has identified as 'Projects of National Importance'. These projects include Minera Majaz.

What next?

As the PSG has previously reported, this project has been particularly problematic, due in part to the lack of dialogue between all actors involved, namely the Peruvian State, the company, and the communities. All sides now seem to take the view that dialogue is a key part of the process. However, the difficulty will be in breaking the polarised debate. It seems that the Chinese consortium that bought the majority of Monterrico's shares is in no hurry to get the project underway, and this was reflected in the conciliatory tone of the television interview given by Minera Majaz's Andrew Bristow following the referendum. However, this may be at odds with the government's wishes.

At the time of writing, a third attempt since the referendum was made at opening a dialogue between the government and the mayors and campesino leaders of the districts opposed to the mining project. In a statement made by Prime Minister del Castillo, he said that the next meeting would take place in Piura at the end of October, emphasizing that "it will be an open and respectful dialogue with the aim of facilitating the conditions for conversation".

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