Lima, 19 July 2017
In our capacity as members of the United Nations Working Group on Business and Human Rights, we have today ended our visit (10-19 July) to review efforts to implement the UN Guiding Principles on Business and Human Rights in Peru.
During our visit, we met with Government officials from the Presidency of the Council of Ministers, including the Vice Ministry of Territorial Governance, the Secretariat for Social Management and Dialogue, and the Sub-Secretariat for the Management of Conflicts; the Ministries of Foreign Affairs; Interior; Justice and Human Rights; Women's Affairs and Vulnerable Populations; Development and Social Inclusion; Culture, including its Directorate-Generals for Intercultural Citizenship and for the Rights of Indigenous Peoples; Environment; Energy and Mines; Labour; as well as Economy and Finance. We also met with representatives the regional Governments of Loreto, Cajamarca, Cuzco and Apurimac, as well as members of parliament (Commissions dealing with indigenous peoples and with energy and mines), and representatives of the Supreme Court and the Ombudsman’s Office.
In addition, we met with representatives of indigenous peoples, local communities, civil society organizations, trade unions, academia, the United Nations system, the diplomatic community, as well as business associations (the National Confederation of Private Business Associations (CONFIEP), which also coordinates the Peruvian United Nations Global Compact Network, and the National Society of Mining, Oil and Energy), the Peruvian Stock Exchange, and individual business enterprises, both State-owned and private, including the National Fund for the Financing of the Public Sector Companies (FONAFE), Perupetro S.A, Petróleos del Perú (Petroperu S.A.), and the companies operating the mining operations Yanacocha and Las Bambas.
We thank all the people we met with for making themselves available to share their experiences with the Working Group during meetings held in Lima, Iquitos, Cajamarca, Chalhuahuacho, and Cuzco. We appreciate the positive and constructive disposition to engage in open dialogue, and the effort made many who travelled long distances to meet with us.
In our statement, we would outline some initial observations from our visit. We will present a final report on the visit, with further observations and recommendations, to Human Rights Council at its 38th session in June 2018.
1. General Context
Peru has experienced important improvements in economic and social indicators over the past decade, during which income poverty was reduced by half, from 42.4 % in 2007 to 20.7 % in 2016. Yet, regional disparities remain between regions and urban and rural populations, and much remains to be done to achieve the objectives of inclusive, sustainable development, where no one is left behind.
Over the same period, successive Governments have promoted foreign direct investment as a main policy objective, and the country experienced a boom in concessions for mining and oil extraction. As the human (rights) costs of some of these investments are becoming apparent, there is a growing awareness that the promotion of investment needs to be recalibrated with respect for human rights as a precondition for sustainable development.
As the county aspires to become a full member of the OECD, new benchmarks are being set for policies and regulatory frameworks (including in areas such as investment, environment, labour, public procurement). The Guiding Principles on Business and Human Rights are being integrated into all OECD frameworks, and we welcome the commitment expressed by the Government to implement the Guiding Principles in public policy. As Peru becomes a full member of the OECD, institutions will continue to be strengthened and smart public policies will be able to transit more easily from one administration to another.
2 Social conflicts & human rights due diligence
When looking at business and human rights landscape in Peru, one feature that stands out is the high number of social conflicts related to large-scale business operations. Over the period 2012-2016, these conflicts have resulted in 70 deaths (65 civilians and 5 police officers). As documented by the Ombudsman’s Office, the large majority of these cases are related to protests by local communities against adverse impacts caused by business operations in the mining, hydrocarbon, and energy sectors (respectively 64.3 %, 13.2 % and 8.5 % of the 129 active social conflicts recorded during the month of June 2017). We also learned that unresolved land-demarcation and uncertainty about land-rights were other elements contributed to social conflicts.
The high number of social protests suggests a failure of existing strategies to prevent and mitigate adverse human rights impacts related to foreign direct investment.
Across the country, we heard testimonies from community members affected by large business operations in different sectors. The information presented to us was also discussed with representatives of the Government (at the national, regional and municipal level) and the business sector. A general picture emerged of some of the recurrent human rights concerns.
During our visit, we learned about human rights concerns related to mining operations in different regions of the country. We observed the limited presence of state institutions in the areas of mining operations, undermining governance and the rule of law, hampering dialogue with communities and contributing to an environment of mistrust, discontent and social unrest.
We received a large number of allegations from people potentially affected by mining activities, such as water contamination, depletion of surface and ground water and the presence of heavy metals in the blood of mine workers and local inhabitants, without having been duly and transparently diagnosed, nor provided an appropriate medical treatment, such as in La Oroya, Junin Region, in Cerro de Pasco, Pasco region and Chumbilvilca and Espinar in Cusco, among others. In June 2017, the Ministry of Health declared a 90-day public health emergency in districts of Chaupimarca and Simón Bolívar in Pasco in response to contamination (lead and other heavy metals) from mining operations. The fact that young children are particularly susceptible to lead, which can cause irreparable cognitive impairment, is a cause of particular concern. The impacts of mining activities on health and environmental should be transparently assessed, mitigated and repaired, with an inclusive participation of the affected individuals and groups.
Mining operations have also been associated with conflicts over land, and concerns about land acquisitions though coercion or deception. In one case which has attracted international attention, the mining company Yanacocha initiated several legal cases, civil and criminal, against Maxima Acuna de Chaupe and her family. The criminal case was settled by the Supreme Court on 3 May 2017, ruling that the family did not commit any crime. Maxima Acuna is reported to have been subjected to repeated intimidation, threats and harassment, leading the Inter-American Commission on Human Rights to request that protective measures be adopted to protect her and her family. We recognize steps taken by the company to establish an independent fact finding mission about this land dispute and we encourage the company to learn from these findings for their current and future business activities.
We also received information about adverse human rights impacts of illegal mining activities, notably in the regions of Madre de Dios and San Martin, where workers suffer extreme health and safety conditions, forced labour, child labour and other forms of exploitation, including sexual and labor trafficking.
Oil and gas sector
The Northern Peruvian Amazonian rainforest has for more than 45 years been subject to a large-scale oil exploitation activities, by private and state-owned companies. We heard many concerns related to environmental and heath damages, including a large number of oil spills caused by leakages of the oil pipeline managed by the state-owned company, Petroperu. We were informed that there had been some 99 spills over the past 40 years, with 13 spills recorded in 2016, which have caused serious health and environmental damages, such as in the Cuninico river in Loreto. The reparative measures and actions to address this situation have reportedly been inadequate. We heard allegations that the oil spills had been intentionally provoked, ostensibly with the objective of gaining employment as part of subsequent clear-up operations. However, officials of the regional Government considered that the majority of spills were caused by inadequate maintenance. State owned enterprises should lead by example and not fall short in their effort to act with due diligence regarding human rights (see Working Group report on this subject: A/HRC/32/45).
In another case, concerns were raised that the Argentinean/Dutch company Pluspetrol had left its operations in block 192 in 2015 without cleaning up, nor providing remedies for previous oil spills. The UN Special Rapporteurs on the rights of indigenous people and on toxic wastes, have called on Peru to suspend negotiations for relicensing block 192 with the Canadian firm Pacific Stratus Energy, in order not to perpetuate and exacerbate violations of human rights of indigenous peoples, including their right to health, food and water and to free, prior and informed consultation. Unfortunately, a meeting with company representatives was cancelled at last minute, but we look forward to being in contact with the company to learn more about its experience as we prepare the final report on our visit. For this reason, this report does not include Pluspetrol perspective on the case. We also note that the Fourth Constitutional Court of Lima, in march 2017, ordered the annulment of a contract for oil exploration and exploitation in block 116 (located in Cenepa), for violation of the right to prior consultation of the native communities.
We also received information concerning the adverse consequence of large palm oil and cocoa plantations on human rights in the regions of Ucayali, Pucallpa and Loreto, including the destruction of more than 30 000 thousands hectares of original forest since 2014, mostly inhabited by native and indigenous people and the use of coercion and deception to buy the lands from local people. Another concern is that under current Peruvian law, there is no requirement for a prior social and environmental impact assessment for land used for agricultural purposes, irrespective of the size of the operation. We encourage the State to ensure that licenses for the plantations are issued with a strict respect of environmental and forestry standards and in light of social and environment assessment studies.
3. Environmental and social impact assessments
One main concern fuelling social conflict relate to the contamination of soils and water sources, adversely affecting a range of human rights, including the rights to life, to food, to water, and to health. Concerns were raised about the ability of the current system of environmental impact assessments to prevent and mitigate such adverse human rights impacts.
The public health emergency in Pasco related to industrial pollution should serve as a wake-up call to strengthen human rights due diligence in the form of solid environment impact assessments and oversight. It underlines the need to factor in the longer term costs of low environmental safeguards.
Several legislative changes since 2013 have served to weaken environmental regulations and oversight. Notably, Law No. 30320 of 2014 prevented the Agency for Environmental Assessment and Enforcement (OEFA) from sanctioning polluting companies for a period of three years, and resulted in a reduction of funds available for OEFA to carry out inspections. We welcome the decision of the Congress, in April 2017, to repeal the relevant article of Law No. 30230 to restore OEFA’s power to impose fines.
At the same time, a number of measures have also been taken to restore public trust in Government oversight of environmental impacts. Importantly, in December 2015, a new technical organ, SENACE, was set up under the Ministry of the Environment to review and approve environmental impact assessments, a function which has previously been carried out by the Ministry of Mining and Energy. We were positively impressed by SENACE representatives’ understanding of gaps and opportunities for improving social and environmental assessment processes.
SENACE has prepared a number of guidance tools on EIAs in different sectors, and informed us that the agency is introducing a stronger emphasis on social aspects of EIAs. An adequately resourced SENACE, with a clear mandate to integrate social and human rights aspects, could play an important role in ensuring human rights due diligence around major development projects.
Companies should also take a more active role in addressing concerns about social and environmental impacts of their operations. For example, one main grievance which led communities to protest against the Las Bambas mine was an amendment to the EIA without public consultation. Under the amended EIA, copper concentrate would be transported by trucks, rather than via a mineral duct pipeline as had been indicated in the original EIA. Under current legislation the company was under no legal obligation to conduct additional consultations even if the amendments resulted in 300 trucks daily transporting copper concentrate and chemicals over a distance of nearly 500 km by unpaved roads through remote rural communities, causing trembling, clouds of dusts and endangering livestock. While the company has implemented mitigating strategies, such as watering of the road surface and training drivers to be sensitive to local communities, it would have been sensible for it to have carried out consultations about the amendments to the EIA as a matter of its corporate responsibility to exercise human rights due diligence. We appreciate the openness from the company executive team to engage in an on-site conversation about lessons learned and opportunities to improve the relationships with affected communities.
4. Prior consultation and other forms of public participation
The lack of meaningful participation and consultation with communities affected by business operations is another main source of social conflict. In this regard, we recall that meaningful, prior, informed consultation with communities affected by business operations, is a central aspect of human rights due diligence, to identify early on concerns and grievances.
While there are some requirements of public participation related to EIAs and related to the granting of concessions for mining operations, these have in the past tended to be mere notifications, rather than genuine meaningful, prior and informed consultations. The fact that consultation processes have generally been initiated late in the process, at a time when significant investments have already been made, have undermined trust in such processes. We recommend that any kind of consultation and engagement should take place at the earliest planning stage of a project, and including all phases such as prospection, implementation and closing.
Indigenous people are particularly vulnerable to adverse impacts business activities, and one significant development was the adoption in 2011 of Law No. 29785 on the right of indigenous or original peoples to prior consultation, based on ILO Convention 169. The consultations are supported by the Vice Ministry for Interculturalism, under the Ministry of Culture, and are organized in seven stages over a period of four to five months. We were informed that there were currently 14 consultation processes ongoing, of which 10 were related to development projects in the mining sector.
The Working Group was informed that Peruvian business associations were initially against this law, arguing that it would be an obstacle to investment. However, perceptions may be changing as experience with the first consultation processes show that they have helped reduce social conflict and the high economic costs for companies of such conflicts, both in terms of the economic cost of operations that are stalled and damage to a company’s reputation. In our meeting with CONFIEP; the National Society of Mining, Oil and Energy; and the Lima Stock Exchange, we were pleased to hear that due diligence on human rights was considered part of normal good business practice, and we encourage this approach to be fully turned into practice.
Concern has also been raised about the way indigenous peoples are being identified for the purpose of Law No. 29785, and a number of self-identified indigenous people informed us that they have been denied the exercise of the right to prior consultation. In this regard, it would be important that the data base of indigenous people, managed by the Vice Ministry of Interculturalism of the Ministry of Culture, be updated on a regular basis with the participation of the indigenous people, taking into account the criterion of self-identification.
One of the lessons learned from the consultations processes conducted so far under Law No. 29785, as also highlighted in recent World Bank study, is the need dedicate adequate resources to facilitate the informed participation of indigenous peoples in such processes, including through adequate legal and technical assistance. Special attention must be given to the inclusion of women, who may otherwise be excluded from such consultation processes.
Different from other dialogue roundtables conducted as part of EIAs or initiated to address specific social conflicts, the agreements reached under the Law on prior consultation are binding on the parties. However, one problem is that the Law does not establish specific deadlines nor sanctions in case of non-compliance. Another concern raised, is that currently consultation processes are carried out by the relevant line ministry. That is, the Ministry of Mines and Energy is responsible for carrying out consultations related to mining projects, which is seen to create a conflict of interest. In this regard, we would suggest that it would be preferably if a dedicated body/institution would be responsible for the implementation of consultations with indigenous peoples.
Also, we consider that it would be important to replicate of a structured consultation process also for non-indigenous peoples and communities, as way of identifying and mitigating adverse human rights impacts, in line with the Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector.
5. Human rights defenders and civic space
The Guiding Principles underline the importance of civic space for critical voices to be expressed, enabling companies to understand concerns and human rights risks related to their operations. Listening to critical voices is the essence of a culture of continuous improvement.
People who had participated in social protests against business-related human rights impacts, explained how they faced criminal charges, and how they had been subjected to various forms of intimidation and were being stigmatized as terrorists who are against development.
We found that there was broad agreement amongst all stakeholders that social conflicts and protests were generally caused by legitimate grievances related to inadequate prior consultation, corruption of local officials and a lack of implementation of promised measures to mitigate adverse human rights impacts. At the same time, protests have repeatedly been responded to by heavy-handed policing and criminalization.
Several of the community leaders we met with faced criminal charges of ‘extortion’, which, as specified in Decree No. 982 (2007), covers acts disrupting the normal functioning of public services or the executions of works that have been legally authorized. Several amendments to the penal code over the past decade have made it easier to criminalize social protest and imposed heavier sanctions for crimes such as “obstructing the normal functioning of public services”.
Social protests have in several cases resulted in violent clashes with the police and resulted in deaths, mainly of civilians, but also of police officers. While no such act of violence can be justified, the high number of civilian deaths suggests a disproportionate use of force. Also, criminalization of protest does not help to bring peace, and additional efforts should rather be made to improve conditions for dialogue.
We met with several family members of community members who had been killed by the police in the course of demonstrations and protests. They are peasants living in deep poverty, left behind in absolute despair. Consistently their main demand was for those responsible to be brought to justice, a demand which remained unfulfilled.
We welcome steps taken by the Government to step up efforts to prevent social conflict, through dialogue tables with aggrieved communities. Thus, a national office for dialogue and sustainability was established in 2012 under the Council of Ministers (PMC), with a specific mandate to prevent social conflict. As we learned, these efforts include promoting a new approach to policing with a focus on establishing community relations rather than repression.
We also note that there are currently no specific mechanisms to provide protection to human rights defenders, and we encourage the Ministry of Justice and Human Rights as well as the Ombudsman’s Office to give attention to this issue. In this regard, we were pleased to learn that a working group on human rights defenders, with the participation of civil society, was going to be set up as part of the process of developing a new National Action Plan on Human Rights.
According to the Legislative Decrees No. 1148 (Peruvian National Police Law) and No. 1267, police personnel are allowed to provide extraordinary polices services to private and public companies in situations that may affect public order and citizen security. In practice, this is materialized through the presence of policemen, wearing the police uniform and carrying police arms of the police, who are paid by the company for providing security services. We
consider that such a scheme creates confusion over the role of the National Police to protect the population (article 44 of the Constitution) and reinforce mistrust in the national police.
Moreover, we are concerned that in situations of social unrest or peaceful demonstrations, military have been deployed, following the frequent impositions of states of emergency or just when the capacity of the police is exceeded or there is a danger of this happening.
We welcome the adoption of Law (Legislative Decree) n°1186 repealing provisions that gave police officers immunity for injuries and deaths caused in carrying out duty or other means of defense (law 30.151 and Legislative Decree 982). However, we note that investigations and judicial proceeding against police and armed forces have as yet not resulted in any criminal charges.
6. Labour rights
We welcome the measures taken by the Government to address the high rate of informality (72.4%); to close the gender participation and wage gap (average income for women in 2012 was 66.6% of the income of men); to combat child labour; and to promote the labour inclusion of people with disabilities.
We received information about forced labour and labour trafficking in illegal and legal small-scale mining in Madres de Dios and San Martin. There is an urgent need to step up efforts to address this problem. In this regard, we welcome the adoption of the law N°1323 (of January 2017), which introduces the penalization of forced labor in the Criminal Code.
We also received information about specific labour regimes that could limit the effective enjoyment of labour rights. For example, the law on Non Traditional Export n° 22342, permitting unlimited consecutive renewal of short-term contracts, could restrict workers’ right to freedom of association.
We have been informed that since the adoption of a new procedural labor law, judicial processes with respect to labor cases have been expedited. We encourage the State to take additional measures to further enforce the observance of labour laws, including providing more resources to the labor inspections authorities. Considering the size and landscape of the country, we were pleased to learn that SUNAFIL is taking steps to improve grievance mechanisms, to better target inspections and incentivize compliance with law.
With regards to the right of freedom of association and collective bargaining, we were informed that there is a very low number of unionized workers in the private and public sectors (6% of the formal workers in the private sector and 15.9% of the public sector). This situation could be indicative of practices of dismissals and sanctions against workers who unionize, and the high rate of people hired on short-term contracts, according to the allegations received. As recommended by ILO CEAC on C.98 in 2015, the Government should engage in dialogue on the subject of protection against anti-union discrimination against workers with fixed-term contracts with the workers’ and employers’ organizations concerned.
We note that, in June 2017, Peru was elected to the Governing Body of the ILO for the period 2017-20, and will serve as Government vice-Chairperson.
7. Access to remedy
It was notable from our meetings with civil society groups and local communities across the country that the formal judicial system was generally presented as being on the side of the more powerful. For example, in the context of the criminalization of social conflict, poor community members repeatedly noted how they had to travel long distances to appear in court. At the same time, there have been notable cases of courts protecting the rights of vulnerable people. We encourage the Government to consider how to overcome well-known barriers in access to judicial remedies and to implement the recommendations provided by the OHCHR in this regard (A/HRC/32/19).
Office of the Human Rights Ombudsman
The Office of the Ombudsman (Defensoría del Pueblo) was established as an independent national human rights institution in the 1993 Constitution. It has 38 offices across the country and can receive complaints about cases of human rights violations. It elaborates reports and recommendations to the authorities, but has not powers to impose sanctions. We learned about several focus areas of the Office, of direct relevance to the business and human rights agenda, including anti-corruption, monitoring of social conflicts, and a recent report on deforestation. We welcome the fact that Ombudsman can receive complaints against business operations. Their staff in all regions of Peru should strengthen their capacity regarding business and human rights, and the Ombudsman could play a key role in the process of developing a National Action Plan on Business and Human Rights, and in monitoring its implementation.
As a signatory to the OECD Guidelines on Multinational Enterprises, Peru has established a National Contact Point. To date, it has mainly focused on raising awareness about the OECD Guidelines, which contains a chapter on human rights aligned with the Guiding Principles. The NCP is located within the government body PROINVERSION, under the Ministry of Economy and Finance, which has as its main mandate the promotion of private investment. The NCP was not mention by any civil society actor we met with, and remains largely unknown. It is expected to also serve as a grievance mechanism, and the Peruvian NCP should be strengthened, following the good practice example of NCPs in other countries. In order to avoid perceptions of conflict of interest, the NCP should be made more independent, have the capacity to initiate investigations and include a multi-stakeholder component to gain legitimacy by all sectors of society.
8. National Action Plan
We were pleased to learn that the Government has committed to developing a National Action Plan in Business and Human Rights. As a first step, there would be a chapter on business and human rights in the general National Action Plan on Human Rights, which would be followed by a full stand-alone National Action Plan on Business and Human Rights.
The Working Group supports and actively encourages the decision to elaborate a NAP and urge the government to develop this plan though and inclusive, multi-stakeholder, and transparent processes, following the Guidance on NAPs prepared by the Working Group. In our meeting with the multi-stakeholder Working Group on the Voluntary Principles on Security and Human Rights, we encouraged them to actively engage in the NAP process. We also invite the government to draw lessons from good practice of other countries that have launched their policy frameworks on business and human rights.
While the focus of our visit has been on large-scale projects, it would be important for the NAP baseline analysis to take a broader view, looking into the aggregated impacts of industries, the role of small and medium-sized enterprises, and the informal economy.
We look forward to following the process, which we hope will help promote a culture of dialogue across States, business and civil society.