Peru rolling back indigenous law in win for mining sector – by Mitra Taj and Teresa Cespedes (Reuters India – May 1, 2013)

LIMA – (Reuters) – Peru’s mining minister is winning a crucial cabinet battle by swaying President Ollanta Humala to water down a law that gives indigenous groups more say over new mines and oil projects – and a deputy minister will likely resign in protest.

According to half a dozen people with direct knowledge of the internal tug-of-war, Mines and Energy Minister Jorge Merino has prevailed in excluding Quechua-speaking communities in the mineral-rich Andes from being covered by the law.

Sources said he fears applying the law throughout the highlands – as the government once said it planned to do – would delay a pipeline of mining investments worth $50 billion. Several people in Merino’s office declined repeated requests by phone and email for comment.

The tussle underscores a quandary facing Peru, one of Latin America’ fastest-growing economies: how to develop its vast mineral wealth while also addressing a legacy of inequality from its colonial past.

The “prior consultation law,” which Humala touted during his 2011 campaign as a salve for widespread conflicts over natural resources, requires companies to negotiate agreements with indigenous communities before building new mines or oil wells around their lands.

It does not give the communities the power to veto a project, but miners have said it could snarl approvals for new mines for everything from gold to lead.

“Merino has realized that with this law the government was shooting itself in the foot,” an industry source said.

Eva Arias, the head of the country’s association of mining firms, was more diplomatic.

“We hope the law isn’t politicized. It could be a tool to forge consensus and development … otherwise it could slow investments,” she told reporters.

Foreign investment in mining has traditionally powered Peru’s fast-growing economy. Sources from the private sector and government said the debate over how to apply the new law has pitted the mining and finance ministries against the ministries of culture, environment and social inclusion.

Ivan Lanegra, a deputy minister for culture charged with implementing the law, plans to quit over the changes as soon as this week, two well-placed sources said.

“Merino seems to have won,” said a former cabinet chief close to the controversy, adding the changes might worsen the tensions between towns and firms the law aimed to prevent.

“I think this is a big mistake and we will all pay at the end of the day,” the source said. “When these communities get angry they are going to attack the mines under their noses.”

Humala has reshuffled his cabinet twice since taking office after anti-mining protests turned violent.

Quechua – the language of the Incan empire – is spoken by an estimated 3 million to 5 million people in Peru. The Quechua are the most numerous and widespread of about 50 indigenous groups in Peru.


Lanegra maintains the law should cover Andean Quechua-speaking communities because they are “indigenous” – with a unique language and culture, and shared use of land.

Merino’s position is that the Quechua should not be considered “indigenous” under the law because they mixed with Spanish colonizers centuries ago, often have formal town assemblies, and are less isolated than Amazon tribes.

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