US embassy cable - 05LIMA3609

UNCLAS SECTION 01 OF 03 LIMA 003609 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR WHA/AND, EB/TPP BMANOGUE 
COMMERCE FOR 4331/MAC/WH/MCAMERON 
USTR FOR BHARMAN 
 
E.O. 12958: N/A 
TAGS: EMIN, ETRD, SNAR, PTER, ECON, EINV, PGOV, PE 
SUBJECT: MINING COMPANIES WORRIED ABOUT SECURITY 
 
REF: A) LIMA 3571, B) 04 LIMA 5874, C) LIMA 3105 
 
1. (SBU) Summary: The U.S. and Canadian Ambassadors hosted a 
meeting on August 11 for representatives of international 
mining companies to review their operating difficulties in 
Peru and to coordinate efforts to improve the investment 
climate.  Consensus among the companies is that radical 
forces (Communist Party-Patria Roja, drug traffickers and 
rural defense committees--ronderos) are increasingly active 
in rural communities, seeking to target mining operations 
throughout the country.  Because of the electoral campaign, 
the companies do not expect the government to take a 
proactive role enhancing security in mining areas over the 
next 18 months.  Ambassador Struble requested that each 
company develop a comprehensive list of their community 
projects (e.g., roads, schools, clinics, wells) to better 
publicize the positive impact of mining projects in Peru. 
End Summary. 
 
2. (U) The U.S. and Canadian Ambassadors jointly hosted a 
meeting on August 11 to coordinate efforts with 
representatives from several international mining companies 
in Peru: Antamina, Newmont (Minera Yanacocha), Minera 
Quellaveco, Barrick, BHP Billiton (Tintaya mine).  The Swiss 
Charge, the new Australian Consul General, and the British 
Embassy Trade and Investment official also participated.  A 
representative from the South African Embassy, which forms 
part of this diplomatic mining group, was unable to attend. 
The Ambassadors sought the companies' views on initiatives 
each side could undertake to help improve the investment 
climate and security conditions in mining communities.  The 
meeting took place shortly after the violence against 
British firm Majaz's exploration in Northern Peru (Ref A). 
 
Bolder Opposition to Mining Operations 
-------------------------------------- 
 
3. (SBU) Carlos Santa Cruz, Director of Minera Yanacocha 
(South America's largest gold mine) noted that conditions 
have changed since the last meeting hosted by the Canadian 
Ambassador (Ref B).  Santa Cruz observed that NGOs have 
taken a backseat in the campaign against multinational 
mining companies since the outbreak of violence against the 
Anglo-Australian owned, BHP-Tintaya copper mine (Ref C), a 
model mining project near Cusco.  He opined that radical 
groups, i.e., local politicians and fringe political groups 
such as Patria Roja, have now taken on this role.  Santa 
Cruz believes that the objective of these groups is to 
create serious problems by attacking the industry and 
economic system.  Most of the company General Managers 
lamented they are focused on improving security rather than 
enhancing production. 
 
4. (SBU) Felipe Cantuarias, Vice President of Commercial and 
Corporate Affairs for Minera Antamina (copper and zinc 
producer), remarked that the companies are dealing with a 
new phenomenon: local politicians that promote violence and 
have ties to ronderos and coca growers.  He stated that 
there is no solution in the short term; the GOP does not 
have the tools or desire to confront these radical 
politicians.  To minimize future disruptions, Cantuarias 
indicated that the companies would have to take on more 
social responsibilities in the communities, providing jobs 
or visible infrastructure projects. 
 
5. (SBU) Cantuarias contends that the recent disruptions are 
well-organized efforts to stop responsible mining companies 
from operating in Peru and Ecuador, much like the national 
anti-hydrocarbons movement that succeeded in Bolivia.  While 
recent anti-mining efforts have focused on companies in the 
north (Quillish and Majaz), the Antamina executive noted 
there are indications that Dodge Phelps' Cerro Verde project 
(copper mine) near Arequipa in the south or the isolated Las 
Bambas (copper deposit near Cusco) could become future 
targets. 
 
Watching the NGOs 
----------------- 
 
6. (SBU) Eduardo Rubio, Director of Minera Quellaveco, laid 
much of the blame on Oxfam America and Friends of the Earth, 
stating the two international NGOs are fomenting anti-mining 
attitudes, exploiting low levels of education and weak 
institutions in rural areas of Peru.  (Note: Oxfam America 
played a key role in mediating the conflict during the 
Tintaya crisis, Ref C.  End Note.)  The Ambassador stated 
that NGOs are entitled to express their views; nevertheless, 
he encouraged the companies to bring to his and the other 
Ambassadors' attention NGO-funded groups or individuals that 
advocate violence.  He requested, for example, public 
statements, newspaper reports or radio spots that encourage 
violence.  Armed with this information, Ambassadors would be 
able to confront any NGOs from their respective countries 
about such dangerous activities. 
 
7. (SBU) The Canadian Ambassador recounted her recent visit 
to one of the country's top polling institutions and left 
impressed that NGOs, such as Oxfam UK, regularly consult the 
public opinion surveyors to obtain a feel for what issues 
and concerns motivate communities.  She noted that the NGOs 
appeared to be well ahead of the companies in determining 
how and what messages to convey in rural mining regions. 
 
Next Steps 
---------- 
 
8. (SBU) Ambassador Struble noted that security problems in 
mining communities affect the interests of several 
countries.  He recommended that the Embassies as a group 
(U.S., Canada, U.K., Australia, Switzerland, and South 
Africa) highlight the billions of dollars invested in Peru 
by international mining companies.  The Ambassador stated 
that diplomats often have opportunities to remind Peruvian 
officials and the public of the benefits of modern mining 
and the higher salaries paid by mining-related jobs in Peru, 
but they need details.  The Ambassador requested that the 
companies compile a list of all civic actions implemented by 
the international companies (roads, wells, schools, clinics) 
in mining communities to better publicize the benefits of 
mining projects throughout the country. 
 
9. (U) The Antamina Executive recommended that the diplomats 
meet as a group with the Education Ministry to encourage a 
rotation of teachers -- often members of the radical SUTEP 
teachers union and Patria Roja -- in conflictive mining 
communities.  He also suggested that the Embassies urge the 
Catholic Church to rotate bishops operating in these 
regions.  The Ambassadors agreed to consider this, but 
needed specific examples of anti-mining teachers and 
priests, who engage in inappropriate activities. 
 
10. (SBU) The executives expressed concern that none of the 
political party leaders had spoken against the anti-mining 
violence.  Santa Cruz emphasized that it is crucial to stop 
the impunity for those who damage private property and block 
roads.  There is a law pending approval in Congress that 
would give the GOP the legal framework to enhance security 
in mining communities.  All too often, the police will 
arrest instigators of anti-mining violence, but the local 
prosecutors release them under pressure from the community. 
The pending law would permit the police to move a detainee 
to a different jurisdiction, thereby reducing the likelihood 
of prosecutors bowing to local demands.  The Ambassadors 
agreed to evaluate when a meeting with the chiefs of the 
political parties would be most effective. 
 
Comment: PPK Will be Instrumental 
--------------------------------- 
 
11. (SBU) Pending key information from the mining companies, 
a core group of country representatives (U.S., Canada, U.K., 
Australia, Switzerland, South Africa) are ready to meet as a 
group with the GOP, Catholic Church and political party 
leaders.  With the appointment of new Prime Minister Pedro 
Pablo Kuczynski, we have an influential government ally in a 
position that is willing to tackle the lawlessness issue in 
mining communities.  His recent statements about putting the 
GOP's house in order, establishing control of the roadways 
where commerce transits, are encouraging. 
 
STRUBLE