The Peruvian Mining Sector: Exploring Issues Related To Social License, Corruption and The Trans-Pacific Partnership Treaty

Peru has a vibrant mining industry and is one of the top producers of copper, gold and silver. The Peruvian government has pursued reasonable monetary and fiscal policy, but economic reliance on export commodities, the potential for corruption, and imperfect social policies around the mining industry can unwind all the good that has occurred. Peru’s indigenous population is large and sensitive to the effects mining has on their cultural territory and the environment. In consultation with indigenous communities and the mining industry, the Ministry of Culture is responsible for implementing the Prior Consultation Law, an attenuated version of prior formal consent.

Building on spring 2015 Capstone project, which identified specific areas of concern in terms of the mining industry’s social impact, spring 2016 project focused on corruption, social license, and the Trans-Pacific Partnership (TPP) trade agreement. To address corruption, the team identified vulnerable spots in the mining supply chain and contract negotiation process. Within social license, the team created a workable written framework that strengthens the current consultation law.  Lastly, within the TPP, the team identified pitfalls in the agreement itself, particularly as it governs the power relationship between the government and foreign investors.  The final product provides targeted and specific recommendations to limit corruption and maintain fairness between all parties.