Chinese Projects in Peru Fuel Tensions with Local Residents

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China’s investments in Latin America and the Caribbean (LAC) are increasingly moving away from large infrastructure projects backed by massive state lending and towards smaller projects in electric vehicles and high-tech projects led by Chinese companies. But massive projects in the extractive industries remain a cornerstone of China’s relationship with the region: China now purchases 34 percent of LAC’s mineral exports, accounting for about half of the global trade in unprocessed lithium carbonate and copper ores. These projects continue to take a toll on local residents, particularly in Peru. In 2013, Chinese mining company Chinalco relocated the entire Peruvian town of Morococha in order to make way for the Toromocho open pit copper mine. The mine, one of the largest in the world, was the first greenfield copper mine developed by a Chinese corporation abroad. Gabriela Mesones Rojo and Alicia Chen profiled the project for Global Voices last week and demonstrated how, over a decade later, the relocation has become a “tragedy” for local residents who are now struggling to survive:

Jaime Borda, a Peruvian activist with Red Muqui, a local network advocating for the rights of communities impacted by mining projects, told Global Voices: “Currently, the district of Morococha is in a situation of poverty and extreme poverty. Many families have had to migrate to other towns in search of better opportunities since the new town of Morococha does not guarantee a decent life or economic movement.”

Instead, Chinalco has relied on subcontracting and outsourcing labor, leading to low wages, according to Borda.

Since 2013, 96 percent of the residents in Old Morococha have been compelled to relocate to a flood-prone wetland area, which is also isolated from the central highway. The situation is even worse for some 20 families who have refused to resettle.

“The remaining families in Old Morococha are facing daily harassment from the Chinese mining company Chinalco,” Borda said. “Every day, they are destroying the few houses of the settlers, until the last brick disappears.”

According to him, these families are cut off from electricity and clean water, living in conditions “like in the times of the cavemen.” They have also been blocked from key access routes, restricting their ability to meet basic needs like work, food, and healthcare. China Digital Times

Las Bambas copper mine, another high-profile mine in Peru, was acquired for $5.85 billion by a consortium of Chinese companies in 2014, which at the time marked the largest overseas acquisition of mining assets by any Chinese entity. This July, 11 people were injured in clashes between police and members of the Huancuire community, who were pushed off land that was designated for the construction of a copper pit by the mining consortium. The Peruvian government responded to the conflict by extending a state of emergency in the Apurimac region, where the mine is located. Over several years, local communities have pressed the Chinese consortium for a greater share in the benefits of the project, periodically blocking key transport routes near the mine in order to improve their bargaining power.

Tensions between Chinese companies and local residents are also evident in other high-profile projects in Peru. In Chancay, a $3.5 billion megaport controlled by China’s COSCO Shipping is set to be inaugurated this year and potentially host Xi Jinping. Part of the Belt and Road Initiative, the port is intended to be South America’s largest hub for the transport of goods. Amanda Chaparro, Guillaume Gosalbes, and Josh Vardey at France24 published a video report last month highlighting local residents’ concerns about the impact of the port on their health and livelihoods:

Samuel David Ortiz, resident of Chancay: “It’s going to have an impact on us because they’re going to build a big port and they’re going to close off access so that no one can come here. This whole area, everything around it will no longer be accessible. How are we going to sell and what’s going to be left to eat after that?”

[…] Ugo Fernando, fisherman: “They’re putting explosives in the hill and blowing it up. It scares the fish, that’s for sure, because when we go fishing, there’s nothing left. We have to go out fishing at night, all night long. During the day, it’s no longer possible. The younger people are starting to look for other work, because it’s getting too complicated.”

[…] Miriam Arce, Chancay resident: “Here, 100% of the houses next to the project are completely cracked and damaged. On top of the material damage, there’s also the psychological problems. Every explosion is traumatic for the children. It’s a psychological stress. And there are impacts on our health that haven’t been taken into account, that they [the Chinese developers] don’t want to take into account.” China Digital Times

As these local accounts demonstrate, the fruits of Peru’s economic development brought about by an influx of Chinese investment have not always been fairly distributed among all stakeholders involved. In a report for the United States Institute of Peace over the summer, Juan Pablo Cardenal analyzed this issue across a range of projects and countries in the region and highlighted the “unspoken costs of an unequal relationship” between Peru and China:

Throughout Latin America, one can see “a pattern of noncompliance by the Chinese state with international human rights and environmental standards,” according to a report produced by 60 Latin American NGOs that evaluates 26 Chinese projects in the region, including the four mentioned in this report: Marcona, Las Bambas, Río Blanco, and Toromocho. The report also highlights the recurrent refusal of Chinese authorities to interact with local civil society to address problems or improve Chinese companies’ poor reputation for corporate social responsibility.

In sectors such as the fishing industry, mining, and construction of infrastructure, many Chinese companies in Peru do not prioritize, and even disregard, the negative side effects of their operations. Some companies from other countries may be guilty of a similar approach, but the problem with Chinese companies is compounded by the absence of checks and balances in China and the inability or reluctance of the Peruvian state to perform its own scrutiny, which together stifle moves to avoid or mitigate those side effects. In addition, most Peruvian analyses of the bilateral relationship continue to be entangled in a rhetoric of optimism.

Peru’s relationship with China is and will continue to be important to Peru, but its benefits should be more equally distributed between the two countries. To achieve a more equitable balance, Peru needs to disentangle win-win rhetoric from reality, hold Chinese companies accountable for their social and environmental impacts, and take seriously the geopolitical risks posed by growing Chinese influence within Peruvian institutions and by the development of projects such as the Chancay megaport. China Digital Times

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