S OCIAL MANAGEMENT OF MINING DEVELOPMENT : K EY ISSUES FROM THE P ERUVIAN EXPERIENCE Gerardo Castillo Reversing the resource curse – Accra, Ghana of August 2013

Contemporary Context: Mining in Peru  Mining investment boom since 1990s.  Significant expansion to non-traditional extractive areas.  Simultaneous increase in social conflicts. 2 Creando conocimiento, promoviendo mejores entornos sociales

Content  In this context, what are the main challenges for managing the social effects of mining development? 1.Environmental regulation. 2.Distribution of benefits. 3.Country strategy. 4.Transparency. 5.Management of social impacts. 3 Creando conocimiento, promoviendo mejores entornos sociales

Environmental regulation  1 st challenge: build an environmental authority that is able to ensure mining will not adversely affect the environment.  Strong public perceptions of negative impact given history and legacy of poor mining.  Capacity, independence and legitimacy of environmental authority. 4 Creando conocimiento, promoviendo mejores entornos sociales

Distribution of benefits  2 nd challenge: reach an efficient distribution of the benefits which is perceived as fair.  Institutional design: who distributes?, how is distribution made?, how much to be distributed?, for what purpose?  Balance between the benefit of local populations and central governments. 5 Creando conocimiento, promoviendo mejores entornos sociales

Country strategy  3 rd challenge: ensure that resources generated through mining are translated into social sustainable development.  Minimum consensus: what is the desired outcome?, in what timeframe?, with which resources?, who is responsible and who is involved?, what are the monitoring and evaluation mechanisms? 6 Creando conocimiento, promoviendo mejores entornos sociales

Transparency  4 th challenge: good governance and transparent management of resources: reduce corruption and improve accountability.  Transparency at national level: revenue and taxes of the EI sector: EITI, Publish What You Pay, RWI, etc.  Transparency at regional and local level: monitoring of investments and legal agreements. 7 Creando conocimiento, promoviendo mejores entornos sociales

Management of social impacts  5 th challenge: minimize negative impacts and maximize positive ones.  Improve identification and management of impacts: complex and mixed experiences.  Gender and vulnerable groups approaches. 8 Creando conocimiento, promoviendo mejores entornos sociales

Management of social impacts  Conflict (negotiation among diverse interests and positions) do not disappear and is not necessarily negative: could lead to better agreements.  6 th challenge: avoid escalation of conflict into violence that affects social and economic development. 9 Creando conocimiento, promoviendo mejores entornos sociales

Management of social impacts  Redefinition of shared roles among actors:  State: mechanisms of citizen consultation, ombudsman, spaces for conflict management, overseer of agreements.  RSE: international standards (ICMM, IFC, Ecuador Principles), local content, recognition and alignment with FPIC and social license principles, approaches of sustainable development, gender and human rights, development of business case.  Civil society: institutional capacity building and training, mediation (dialogue tables: i.e. Oxfam in Tintaya mine), independent and continue monitoring. 10 Creando conocimiento, promoviendo mejores entornos sociales

Recommendations  Environmental regulator independent from promoting entity (i.e. Ministry of Mines).  Creation of a balanced tax regime is not enough. Also important to design an institutional framework for distribution.  Define country strategy for short, middle and long term outcomes.  Transparency at macro level (revenue and taxes of the sector) and micro level (monitoring of local investment and legal agreements). 11 Creando conocimiento, promoviendo mejores entornos sociales

Recommendations  Improve identification and management of social impacts, including gender-sensible and vulnerable groups approach.  Create institutional spaces for conflict management.  Define standards and complementary management actions for State, industry, and civil society.  The development of sustainable mining is an opportunity to introduce positive changes in the whole society. 12 Creando conocimiento, promoviendo mejores entornos sociales

Thanks 13 Creando conocimiento, promoviendo mejores entornos sociales