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Peru extends EITI reporting to social and environmental impacts

Peru extends EITI reporting to social and environmental impacts

27 March 2018

Country uses the process to address key community concerns.

On Wednesday 21 March 2018, Pedro Pablo Kuczynski resigned the presidency of Peru over a vote-buying scandal. This was a culmination of corruption scandals and political instability in the country in recent years.

In this context, Peru’s implementation of the EITI is important. In 2017 and 2018, the EITI multi-stakeholder group, with support from government industry and civil society organisations, has extended EITI reporting to address community demands for more transparency and accountability on social and environmental issues. The MSG also has ambitious plans to provide more detail on the distribution and use of extractive industry revenues by local authorities.

Minister launch EITI Report

The sixth EITI Report, now called the “National Transparency Report”, was launched in Lima on 13 March 2018 by the Minister of Mines, Ángela Grossheim and the Vice-minister of Mines, Ricardo Labó.

The Minister said:

“EITI helps us in building trust with our people. Now we need to disseminate all this information”.

Vanessa Cueto, a civil society representative, celebrated the inclusion of environmental and social aspects and emphasised that EITI Peru should strengthen its impact.

Carlos Aranda, industry’s representative and member of the EITI Board, pointed out:

“EITI must continue to be promoted at the national level because it represents a light within the tough situation our country is going through”.

The response to the report has been positive. Click here to watch a short video of the Minister’s speech.   

Peru is the second largest producer of copper and zinc in the world. The report highlighted that copper production has more than doubled in the past two years. There appears to be a clear shift away from fossil fuels and towards metals useable in batteries such as copper. This is expected to continue.

Data on social and environmental activities and conflicts

The rapid expansion of the oil, gas and mining sectors in Peru has yielded almost 50 billion USD in government revenues within 13 years, between 2004 and 2016. This has helped the government achieve important improvements in social and development indicators and enhanced economic growth and stability. However, the negative impacts of the extractive industries are a major challenge. For the first time, the 2015-2016 EITI Report provides extensive reporting on social and environmental issues.

First, the report provides a detailed description of the social and environmental legal framework, including the roles of government agencies related to hydrocarbon and mining activities.

Second, the report discloses the total number of environmental inspections (2,488 in 2015 and 2,687 in 2016), environmental sanctions (27 in 2015 and 18 in 2016) and administrative procedures (325 in 2015 and 480 in 2016), and provides a link to information on social and environmental expenses incurred by mining companies.

Third, the report discloses the total number of prior consultations with indigenous communities (six each year), providing lists of these processes conducted around hydrocarbon and mining activities during 2015 and 2016.

Fourth, the report discloses the number of social conflicts in 2015 (1,385) and 2016 (1,383) and reveals that more than 80% of total environmental/social conflicts were related to the mining sector.

Finally, the report provides a link (Social Conflicts) to reports by the Ombudsman Office, including further details of active and social conflicts.

EITI in the regions: acting where transparency changes people's lives

In February 2018, an EITI process was established in the region of Apurímac, which accounts for around 20% of the copper produced in the country. Along with Moquegua, Piura and Arequipa, this is the fourth region to adopt an EITI process, with the goal to improve transparency and accountability in the use of the revenues flowing from the mining activity to the regions, municipalities and universities. EITI Peru is now exploring and proposing a deeper analysis of revenue management related to selected investment projects within the regions.

This represents a key opportunity to build trust and dialogue in conflict-prone settings.