Last month UK-based company Monterrico Metals agreed to an out-of-court settlement to 33 Peruvian farmers over claims of abuse during protests in Rio Blanco in northern Peru in 2005. As incoming President Ollanta Humala lines up his cabinet, there are still many questions hanging over the exploitation of Amazon territory and the treatment of indigenous communities.
As with many other Latin American countries, Peru is no stranger to protests over mineral exploitation or other energy-related projects. Yet as a country which has some of the most sought after mineral resources in the world, the recent case with Monterrico has exposed the ugly side of foreign investment in Peru. In August 2005, 33 farmers were taking part in a protest over human rights when they were detained and tortured at a copper mine owned by Monterrico in Rio Blanco. Five protestors were shot and two female protestors were sexually abused in the attack. Although the exact amount of compensation has not been disclosed, the settlement marks a significant milestone in accountability and corporate social responsibility for mining companies in the country. Richard Meeran, a partner at UK firm Leigh Day & Company that represented the farmers, said "This constitutes a salutary lesson for multinationals operating in developing countries."
And this isn't the only recent example of protests turning nasty in Peru. In 2009, a 10-week peaceful protest was brought to a dramatic halt when police started shooting at some 2,000 protestors in a demonstration organised by the Asociacion Interetnica de Desarrollo de la Selva Peruana (Aidesep) at a road blockade in Bagua, northern Peru. There were fatalities and casualties on both sides, with an estimated 30 people killed and hundreds more injured.
The protest arose as a result of legislative decrees signed by the Peruvian government that gave foreign companies the right to access large areas of Amazonian territory without the need to gain prior consent from local communities. Although mounting pressure persuaded the erstwhile President García to overturn the decree, he later blocked legislation which would require the government to consult indigenous groups prior to passing laws affecting their territories.
The heat was turned up again this year in the run-up to the presidential elections and culminated in five people being killed and more than 30 injured in clashes between police and protestors in southern Peru. Although Peru has experienced great economic growth over the past decade, the clashes symbolised that the benefits of this growth have not infiltrated down to the poor and the failure of outgoing President Alan García's to deal with these issues effectively. As an indication of the scale of the problem, of 260 social conflicts reported in January 2010 by the Peruvian ombudsman, almost half were related to social and environmental problems.
As President Ollanta Humala was sworn in at the end of July, it is yet to be seen whether he will be able to improve relations between the government and indigenous communities. García faced much criticism for always seeming to take the side of the companies rather than indigenous communities. He didn't help matters by vocally denouncing them, having once compared the latter to Aesop's dog in a manger, earned him much resentment. Humala therefore has much to do to restore the faith of indigenous communities in the government.
There are early indications that plans to raise taxes and royalties on mining profits will help provide financial and environmental greater support to communities occupying exploited land. However, other issues such as wildcat mining pose yet another challenge to Humala's government. According to a report by Conservation International, an estimated 16 tonnes of gold is extracted illegally in Peru every year. Although so far Humala has proved an exceptionally popular figure in areas inhabited by indigenous communities, it remains to be seen whether his polices will truly have their interests at heart.