Regulation, not deregulation in the mining sector

07 October 2017

With mineral prices showing signs of recovery, the Kuczynski government is keen to push ahead with the quest for new investment in the mining sector. In this it sings from the same hymn sheet as the industry itself and its lobbyists. In a recent interview reported by Bloomberg, Energy and Mines Minister Lucia Cayetana Aljovín described the country’s three-pronged plan: 

  • to reduce regulations and the number of permits required to operate a mine;

  • to create a single government department where companies can request all the required mining permits at once; and

  • to create a fund the government can use to invest in social programs in areas that may be affected by mining.

So far, it is the first that has been most in evidence; indeed it cannot be disregarded given that, as the minister says, mining companies operating in Peru need to abide by 265 different rules and regulations, compared with only twelve in 2001.

But the policy of deregulation is fraught with danger. The new norm prepared by the ministry (MINAM) appears to be an alarming example of such. It exempts certain types of projects from the need to furnish an Environmental Impact Assessment (EIA). Exemption will be granted if the project involves less than 20 platforms and/or less than an area of 10 hectares of land is disturbed, provided that the project is not within 50 metres of a body of water, 100 metres of a glacier or body of snow, nor within a specially protected area or an area covered by some special legal provision.

A trenchant analysis by Vanessa Schaeffer points out that there is no justification given of the form of such rules, nor of how they can possibly apply with safety in a country with such diverse natural conditions. Exploration projects appear not to be included (while they are in the original legislation on EIAs) and, most serious of all, a project sited on community land does not automatically require an evaluation. 

The SEIA, or Sistema de Evaluación del Impacto Ambiental, has been bedevilled by the lack of resources for the monitoring agency and prone to long delays and very cursory evaluations. But the system needs to be treasured and strengthened, not overturned.

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