Promoting Sustainable Mining Projects in Peru

Community members celebrate the construction of a storage system/Ilabaya District Municipality, Tacna

 

Many Latin American countries have developed oil, gas, and mining resources in recent years as a means to create jobs, generate revenue, and support needed social services. But managing a tax windfall can be a challenge for governments and communities in areas around mines or energy projects as they seek to secure benefits from extractives.

Over the past decade, as part of our commitment to help develop oil, gas, and mining projects in a sustainable manner, IFC has been working with local communities, local and regional governments, and companies operating in Peru to support social development initiatives and ensure that stakeholders to extractive industries projects are heard and empowered.

Here are some highlights of this work program:

- IFC helped Peru LNG strengthen the environmental and social aspects of its $4 billion natural gas project. This work included helping three local municipalities manage and allocate $5.2 million in royalties, supporting a program that helped small and medium local enterprises increase their revenues by $6.6 million and create hundreds of jobs; and launching a Community Participatory Monitoring Program.

- IFC has helped Minera Yanacocha with social development initiatives including a small enterprise program to support local economic development in the region of Cajamarca. We also supported a program to improve royalty management by local governments in the area surrounding the gold mine and provided advice to help set up Minera Yanacocha’s foundation, ALAC.

- With BPZ Energy, an oil company operating in the north of Peru, IFC sought to engage and support regional and local authorities to make more efficient use of royalties, and to provide advice on best industry practices related to community engagement.

-  Rio Tinto engaged IFC for assistance related to its La Granja copper project in northeast Peru. IFC helped support local governments with revenue management and provided Rio Tinto with advice on the governance structure of the La Granja Social Trust Fund.

- In partnership with the Government of Canada, IFC provided training to government officials from 30 municipalities across Peru to increase their capacity to manage extractives-related tax revenues, and also worked to foster dialogue on good governance and the use of royalties. IFC has also been working to provide journalists and local leaders in Peru with information about these projects and their benefits.

- IFC and the Government of Canada are currently working on new programs in the region of Apurimac related to royalty management and local development, including enhancing the livelihoods of rural farmers.

For more information, please see www.commdev.org