Tourism, the extractive industry and social conflict in Peru
Mining companies in Peru, facing local opposition to their activities on account of the environmental damage they are causing, have turned to tourism to clean up their image. Rodrigo Ruiz Rubio explains this incestuous relationship between two unlikely partners.
EVEN as the economies of the developed world face trying times, the Peruvian economy is experiencing continued expansion; Peru is forecast to lead economic growth in Latin America in 2015. At least 20 more years of economic expansion is predicted,1 sustained by the demand for natural resources worldwide.
Within this favourable outlook for investment, the mining sector accounts for about 60% of total exports. Adding the oil and fishing sectors into the picture gives an average share of 80% of all exports by companies based in the country, defining the Peruvian economy as a primary export economy.
In this sense, Peru has become an attractive destination for mining investment, given the vast natural resources and favourable conditions for foreign investors. In the decade from 1999 to 2009, the Peruvian economy received $14.4 billion in investment in the development of mining operations from several of the world's largest mining companies.2 To draw such investments, there has since the 1990s been a series of political and economic reforms that favour investments in the extractive industry.
First, a process of privatisation of public enterprises was set in motion, which, among other things, involved large job layoffs and led to the virtual disappearance of miners' trade unions. Then progressively until today various labour, tax, administrative and environmental regulations and regimes of land ownership were created and modified.
At present, the outlook remains expectant despite the vagaries of the global economy. The development of the mining industry in Peru has placed this country among the top producers of precious metals, being the third largest producer of copper, silver, tin and zinc worldwide and the leading gold producer in Latin America.3 Mining exports have increased nine times in the last 10 years, with China (copper), Switzerland (gold) and the United States (silver) being the major markets.
Tourism has played a significant role in many developing economies like Peru, although the history of this economic activity is much shorter compared to that of other sectors.
In 1946, the Peruvian government created a specialised agency called the National Tourism Corporation, which, over two decades later, was renamed the National Company for Tourism, tasked with establishing and promoting the hotel infrastructure in major cities. In 1969 the COPESCO Plan was drawn up, the first initiative to promote tourism through the preservation of cultural heritage, developing and implementing tourism plans in impoverished areas. One of the first measures taken, financed by the Peruvian state and the Inter-American Development Bank, was to create a pole of tourism development between Cusco with Machu Picchu as its main attraction with Puno and Lake Titicaca as the axis.
In the 1970s the private sector National Chamber of Tourism, which represents all tourist associations in the country, was established. Over the years it has progressively grown in presence and influence over public policies in the sector.
In 1981 the Vice Ministry of Tourism under the Ministry of Industry, Tourism, Integration and Trade Negotiations (MITINCI), which assumed management of the sector, was created. Despite measures to promote tourism applied during that period, the industry stagnated between 1980 and 1990 due to political instability and civil war that ravaged the country.
With the decline of political violence and the defeat of subversive movements, and in the context of structural reforms promoted by the International Monetary Fund and the World Bank, the early 1990s brought with it new expectations for tourism. As in other productive sectors, all state tourism companies, including 25 strategic hotels and the train service to Machu Picchu, were privatised. However, it is only from 2000 that important initiatives which define the current model of tourism development and the gradual increase in tourist arrivals and international investment in the sector came about.
The Commission for the Promotion of Private Investment (COPRI), currently called ProInversi¢n, was empowered to undertake processes of privatisation and concession of state assets, and, through the Special Commission for the Promotion of Investment in Tourism (CEPRI-Tourism), is responsible for identifying, evaluating and promoting tourism projects concessionable to the private sector. This body has identified 45 new projects with the possibility of being transferred to the private sector, almost all of which are related to the country's cultural and natural heritage.4
CEPRI-Tourism started out by trying to push through two projects in parallel: the Northern Beaches Hotel Complex and the provision of infrastructure for tourism services in the archaeological complex of Kuelap. In the first case, the project required the imposition of restrictions on the use of the land and sea by hundreds of farmers and fishermen, and called for the state to make up the amount paid by the investor for the concession or privatisation through public works to benefit the project. Both this and the Kuelap project triggered social mobilisation by the local population who organised to prevent violation of their rights.
In 2008 a national law for the development of tourism services in cultural heritage areas was enacted. The aim was to target investments that can meet a minimum four-star hotel classification. The regulation opened up the possibility for investors to enjoy a monopoly on providing services in the country's historical heritage areas, with possible effects on the management and conservation of the sites in light of an inefficient and weak state in matters of heritage protection and control over the operations of private capital.5 This law was rejected by the population of Cusco and a massive protest led to minor modifications to the standard along with a claim of unconstitutionality. The claim was eventually rejected by the Constitutional Court and the law remains in force.
Conditions have become quite conducive for the development of tourism in Peru, which is attracting growing investment and tourists to its diverse cultural and natural heritage sites as well as for its increasingly renowned cuisine. For example, Machu Picchu, the country's major tourist landmark, has been considered by many specialised publications as the best tourist destination in the world for several consecutive years. The World Travel Awards also deemed Peru as the world's best culinary destination in 2014 and various Peruvian restaurants have been ranked among the best in the globe.
Bringing together mining and tourism for sustainable development?
The Peruvian territory is considered one of the six cradles of civilisation, and cultural development has taken place over more than 5,000 years. Throughout the territory there are important vestiges of the different cultures that existed in the coastal, mountain and jungle regions, which define the current cultural diversity. In terms of natural heritage, Peru is one of the world's 'megadiverse' countries, with 84 of the 117 life zones and 28 of the 32 climates on the planet.6 The Andes mountain range and the Amazon, the river which is the largest in the world and which gives its name to the Amazon rainforest, pass through Peruvian territory.
From the perspective of tourism, this spectacular cultural and natural environment has great potential to be promoted, and many attractions are already being exploited. Tourist arrivals numbered more than 3 million in 2014 and $2.5 billion in investment in hotels is projected in the coming years.
Meanwhile the mining potential is scattered throughout the country, mainly on the coast and in the mountains, over a total area that makes up 20.4% of national territory, encompassing different ecosystems, regions and rural and urban areas.7
In the specific case of indigenous and peasant communities, these occupy about 27% of the country. Family farming is the main economic activity that contributes 70% of national food security,8 and collective land management continues to be quite widely practised. It is largely these indigenous and peasant lands, or their adjacent areas, which possess tourism and mining potential, and which in many cases are also home to the country's poorest communities.
The government's main development strategy in these regions is to promote large mining investments, resulting in mining concessions in 45% of the communal territory,9 which is generating growing social conflicts nationwide.
This juxtaposition of territories and activities has sparked much debate and conflict, and defines the economic and political landscape. According to the Office of the Public Defender of Peru, a government agency which tracks social conflicts, from March 2015 there have been 141 environmental conflicts, 94 of which were related to the mining sector, followed by the hydrocarbon sector with 22 conflicts. Such a scenario can trigger serious situations of confrontation involving the state, populations and businesses.
This state of affairs becomes clear if we look at the situation in the two most important tourist circuits in the country: the southern circuit, which includes the regions of Arequipa, Cusco and Puno; and the northern circuit, which brings together the regions of Ancash, La Libertad, Lambayeque, Cajamarca and Amazonas (Table 1).
Source: Coperacción – The Office of the Public Defender of Peru
As an indicator of the extent of conflict, from 2006 to May 2015 there were 258 dead and 2,247 injured,10 most of them after repression by the authorities against strikes and protests called on environmental grounds. Added to that, in the mining sector there have been 8,618 cases involving serious environmental liabilities11 damaging the health and natural resources of hundreds of rural communities, according to official reports.
According to the Office of the Public Defender, the main causes behind communities' rejection of the presence of mining investments are:12
- environmental problems, the feeling of uncertainty and fear of contamination
- social problems: exclusion, inequality and discrimination
- violation of human rights
- the partiality of state enterprises: management problems that are sources of public distrust towards the state
- negative environmental externalities and their impact on different extractive economic activities
- negative performance of companies in the environmental conflicts.
On occasion, support can be seen for the presence of mining investments, motivated by the prospect of immediate direct benefit. Such is the case with La Oroya, which is considered the fifth most polluted city in the world, a situation brought about by the presence of a US mining company called Doe Run.13 Despite this terrible situation that seriously affects the health of the population, there are those who come to protest to protect their jobs and defend the interests of the company so that it can continue to operate without meeting environmental standards set by the government. This demonstrates the precarious socioeconomic position of a population that is prepared to prioritise jobs over health.
It is quite common in such situations to put forward, as an alternative to mining expansion, other economic activities that are seen as having much less negative impact and are considered as truly sustainable. In this perspective, tourism is repeatedly proposed as an alternative to extractive mining activities.
Taking advantage of this positive view of tourism, the mining companies have in recent years been financing several studies and tourism projects in their areas of operation. In 2005 the president of the National Society of Mining, Petroleum and Energy (SNMPE) stated: 'The tourism sector and the mining sector have obvious similarities, they are very dynamic sectors, decentralised and main foreign exchange earners. The mining [sector] ... now stands to support the development of tourism.'
The statement was made in the context of the signing of an agreement between SNMPE and the Peruvian Export and Tourism Promotion Board (Promperu) seeking cooperation in four areas: raising awareness about good treatment and tourist services; working on infrastructure projects; allowing the derivation of the surplus generated by mining activity, that is, identifying tourism development projects that will involve regional and local governments and access mechanisms generated by the mining industry; and developing tax exemptions for tourism projects.
The SNMPE-Promperu agreement aims to present the mining sector as one of the main drivers of the tourism sector. This clever proposal is designed to leverage on recommendations for impoverished rural populations to develop tourism as an activity that would help raise their living standards. From this perspective, this need for tourism development would be met by the mining corporations. The companies can then improve their image among the local populations and reduce opposition to their presence in the community or adjacent territories. They would thus be able to minimise losses due to strikes and protests, and, on top of that, enjoy tax exemptions in return for investments in the tourism sector.
Many mining companies that are the source of serious environmental conflicts and corruption and that promote repressive policies are undertaking programmes and investments for local tourism development. This policy is implemented through foundations or associations created by the mining companies under their corporate social responsibility programmes that channel private funds for the development of tourism projects in their areas of operation.
'We are a democratic society where the rule of law prevails and in which all people have a high quality of life and equal opportunities to develop their full potential as human beings ... Poverty and extreme poverty have been eradicated, redistributive mechanisms exist to achieve social equity, and natural resources are used sustainably, maintaining good environmental quality.'14
The above quotation is from the national vision in the 'Strategic National Development Plan by 2021' document that must guide the various public policies emanating from the central government. In the case of sectoral policy formulated by the Ministry of Energy and Mines, one of its four objectives is to 'promote the preservation and conservation of the environment by companies in the energy and mining sector in the development of different sectoral activities fostering social inclusion and the harmonious relations of companies in the energy and mining sector and civil society'. With regard to tourism, the guiding document is the National Tourism Strategic Plan 2008-2018, which holds as its mission 'organise, promote and guide the sustainable and competitive development of tourism in Peru by integrators, concerted and decentralised processes, promoting economic and social development, creating decent jobs that improve the quality of life of the population and ensuring the assessment and conservation of historical, natural and cultural heritage'.
The various quotes above evoke altruistic, democratic, redistributive and even ecological principles within the overall vision of sustainable development that should inform sectoral policies which define the conditions and development of productive activities in the country. If we were to undertake a concrete analysis of the current Peruvian reality, however, we will see a clear contradiction between the rhetoric and practice of public policy. But from the perspective of the central government and the private sector, there would be no inconsistency between discourse and practice, and between productive activities that at first glance appear incompatible, as the discursive mantle of 'sustainable development' and appeal to technological advances would make coexistence possible. In this respect, 'sustainable' tourism is conceived and developed as any other economic activity within the capitalist development model where genuine environmental and social sustainability considerations are subordinate to the supreme goal of economic growth.
From that perspective, tourism is not contradictory to activities that have a strong environmental impact, are environmentally destructive and upset the socioeconomic dynamics and local culture. In the case of environmental conflicts and violations of human rights, the conflict is seen as an opportunity to encourage mining companies to finance tourism as a strategy of containment against local social rejection.
In this case, as in many others, we see that tourism practices do not necessarily contribute positively to the natural and social environments in which they take place. Unfortunately in the Peruvian context, the practices in the tourism sector can contribute instead to strengthening public policies that run contrary to real sustainable development and respect for human rights.
Rodrigo Ruiz Rubio is a Peruvian anthropologist who has worked on issues of sustainable development, tourism, community involvement, cultural heritage, public health, social-environmental conflicts, indigenous people and climate change.
1 Statement by the Director of the Central Reserve Bank of Peru, Gustavo Yamada, 2014. See: http://laprensa.peru.com/economia/noticia-peru-tiene-20-anos-mas-seguir-creciendo-segun-bcr-29143
2 However, it is important to note that in the latter half of the decade, from 2005 to 2009, only five mining companies obtained net profits of $19.535 million.
3 In 2010 Peru exported 150 tons of gold illegally, which, added to the 180 tons produced legally, makes the country the second largest gold producer in the world. Much of this illegal gold is bought by companies linked to the London Bullion Market Association, the guild securing the international price of gold. See: http://ojo-publico.com/oro-sucio-la-pista-detras-del-london-bullion-market/
4 Fernández, R. and Ruiz, R. (2010). Politicas públicas, beneficios privados: Mecanismos, politicas y actuaciones públicas para la globalización del turismo. Madrid: Foro de Turismo Responsable.
5 In the energy and mining sector over a thousand environmental monitoring reports only on hydrocarbons and electricity were filed in the last three administrations, thus avoiding penalties for offending companies. Likewise, the government enacted law No. 30230 initially exonerated 40 mining companies and reduced the fines for violating environmental standards during the mining process. See:http://convoca.pe/investigaciones
6 Ministry of Environment of Peru (2009). National Environmental Policy. Available at: http://www.minam.gob.pe/wp-content/uploads/2013/08/Pol%C3%ADtica-Nacional-del-Ambiente.pdf
7 Considering overlay data concessions. Available at: http://cooperaccion.org.pe/main/mapas/nacional.
8 Instituto del Bien Común (2014). Informe 2014. La seguridad Territorial en el Limbo. El estado de las comunidades indigenas en el Perú. Available at: http://americalatina.landcoalition.org/sites/default/files/Informe_SEGURIDAD_TERRITORIAL_2014.pdf
11 A call to remediation: Advances and pending in state management to environmental liabilities mining and hydrocarbons. Office of the Public Defender of Peru. Report No. 171. June 2015.
12 Special Report. Conflict Socioambientales for Extractive Activities in Peru. Available at: http://www2.congreso.gob.pe/sicr/cendocbib/con2_uibd.nsf/83FF3D60EB998C34052575C80075DAA9/$FILE/info.pdf
14 CEPLAN (2011). Plan Bicentenario Visión Compartida De Futuro Para El Siglo XXI. Available at: http://www.ceplan.gob.pe/sites/default/files/plan_bicentenario/PLAN_BICENTENARIO_CEPLAN.pdf
CEPLAN (2011). Plan Bicentenario Visión Compartida De Futuro Para El Siglo XXI. http://www.ceplan.gob.pe/sites/default/files/plan_bicentenario/PLAN_BICENTENARIO_CEPLAN.pdf
Fernández, R. and Ruiz, R. (2010). Politicas públicas, beneficios privados: Mecanismos, politicas y actuaciones públicas para la globalización del turismo. Madrid: Foro de Turismo Responsable.
Instituto del Bien Común (2014). Informe 2014. La seguridad Territorial en el Limbo. El estado de las comunidades ind¡genas en el Perú. http://americalatina.landcoalition.org/sites/default/files/Informe_SEGURIDAD_TERRITORIAL_2014.pdf
Ministry of Environment of Peru (2009). National Environmental Policy. http://www.minam.gob.pe/wp-content/uploads/2013/08/Pol%C3%ADtica-Nacional-del-Ambiente.pdf