President Alan Garcia announced he would do his best “to rescue” Doe Run Peru, an American mining corporation... with Peruvians taxpayers money. Was this really about to happen? Yes it was.
The mineral smelter location in the downtown area makes La Oroya into a dangerous place. Pollutants that are emitted from the factory stack and from outside the plant, become a powder that is deposited in the soil. Local people complain of stinging eyes and sore throat.Well, some Peruvians love to imitate everything that comes from other countries. For instance, is comical to see the youth of the rich parts of Lima acting ridiculously frantic when an old American music group is coming to town. But that's another story.
This is Peru, the country with the lowest taxation and royalties’ rates in Latin America, collected by a corrupted State from foreign mining corporations taking natural resources away.
The Doe Run crisis was clearly not an accident, but a corrupted move from Doe Run owners taking advantage of the current global crisis along with its Peruvian partners, many of whom are high rank officials of the government with close ties with the multimillion private mining industry. This is Peru, the Andean country where half of the population live in poverty.
Most of Peruvian mines are owned by American, European and Asian corporations and very few rich Peruvian partners. For instance, Doe Run is owned by Ira Rennert a New Jersey billionaire ranked #400 by US Forbes. Rennert has taken good advantage of the Peruvian generosity, especially during the Alejandro Toledo government when he made several threats of shutting down the mining plant it runs in La Oroya, if more benefits were not offered by the Peruvian government.
Doe Run owns La Oroya, a smelter and mining processing town located in the middle of the Andes mountains, which produces extreme high levels of lead and other chemicals pollution in the air, enough to poison 35,000 Peruvians -including 12,000 Indigenous children- living in the area. By doing this, this American corporation is violating not only Peruvian laws, but international treaties on permissible human levels of pollution.
Peru’s president Alan Garcia had already become one of the worst Peruvian presidents of history but now he has the worst record in environmental protection. Garcia was a strong advocate of the environmentally destructive Free Trade Agreement with the United States, and has recently created the Ministry of Environment -perhaps copying the polluting corporations advocate Richard Nixon who created the U.S. Environmental Protection Agency- at a time when he already has sold or leased about 73% of the Peruvian Amazon forest to foreign oil and gas corporations, with Indigenous peoples communities included.
To complete the environmental scam, Garcia has appointed Antonio Brack-Egg as the government’s first ever Minister of Environment. Brack used to work for a mining company in northern Peru (Majaz) that is polluting rivers and mountains that caused social revolts and human casualties, something that the current minister Brack has denied falsely.
When Alan Garcia proposed the Doe Run bailout, he stated that over 3,000 thousand Peruvian miners would lose their jobs otherwise. But some members of the Peruvian Congress released a statement opposing the move:
Doe Run Peru is an irresponsible private company that did not deserve to be saved by Peruvian people […]Doe Run Peru is a private company that has an environmental debt and a history of not keeping promises and between 2005 and 2008, the company made large profits, which it sent to its headquarters [in the U.S.]” The Congress members requested that the government should not release funds “until after the company was audited and until an environmental study had been done.”The crisis of Doe Run has been excused as a result of the global financial crisis and the reduction of worldwide demand for minerals, which is affecting the top producers worldwide including Peru. By the end of March, Reuters reported:
Doe Run Peru has halted work at 95 percent of its La Oroya metals smelter because of financial trouble, and Peru's finance minister said on Wednesday he wants the private sector to solve the company's problems. Banks have cut credit lines, strangling the company's ability to buy concentrates in Peru, where miners are struggling as global metals prices have plunged. Doe Run Peru, which produces lead, zinc, silver and copper, relying almost entirely on other miners for concentrate, said the risk of a full stop was "imminent."La Oroya – located 108 miles (174 km) east of Lima- has been included among the ten most polluted regions in the planet. And to save such a wonderful place, finally on April 2, Reuters posted that Doe Run Peru got a $175 million credit from private mining investors in Peru. In other words, the same mining companies that use the La Oroya smelter came to its rescue - not to save the thousands of low paid local jobs, but to guarantee their production:
Juan Felipe Isasi, the vice minister for mining, told Reuters “The government wants to find a solution because the issue is delicate and grave," Local reports have said Doe Run Peru needs a $75 million credit facility, and that it has unpaid bills to suppliers of $100 million. La Oroya is a hub for dozens of Peruvian mining companies and thousands of people rely on it for work.
Peru's mining ministry says Doe Run produced 53,831 tones of copper, 114,259 tones of lead, 43,440 tones of zinc, and 1.07 million kilograms of fine silver last year. Peru is the world's top producer of silver, and metals account for more than half of total exports and are the government's largest source of revenue.
Doe Run Peru was pulled back from the brink of collapse on Thursday as a group of miners offered to extend it two new credit lines, worth $175 million, said company and government officials.So far, the government of Peru didn’t have to spend a penny –apparently and until now- but it did make a strong case defending a company that has created so much damage to the local population and the environment.
The company has offered the government a 100 percent stake to guarantee it will complete an environmental clean-up program at La Oroya, a factory town often ranked one of the world's 10 most polluted places, said Peru's finance minister.
Former Prime Minister Jorge Del Castillo has written an article where he announces an apocalyptic scenario in case La Oroya is ever shut down. Del Castillo is a corrupted advocate of foreign mining corporations in Peru, and he had to step down after a phone recording exposed the corruption of his officials selling leases and contracts to European oil companies in the Amazon.
One thing we have clear after this scandal, is that the efforts of the Garcia administration on promoting the obsolete and destructive mining industry in Peru, are motivated by greediness, corruption and a willingness to destroy our environment for profit. This is not about the future of Peruvians nor the economy of Peru. This is another sign of the lack of decency and human dignity from the current Peruvian government.
Most importantly, we can see the fragile nature of a failed development model -promoted by rich nations like the U.S. in poor areas like Peru- which is based on the exportation of commodities, the use of cheap labor, and the destruction of the environment by foreign companies that have no interest in a better future for locals, nor in the respect of life and the planet. Something must be done to stop mining industries from continuing poisoning innocent people, and from destroying the only planet we have to live.
Photos by Lara Shipley
Descriptions by Marina Walker Guevara for Adelante Missouri
The metallurgical complex of La Oroya has run the fate of this city for 83 years. The mountains surrounding the plant have been left dry and deforested by toxic emissions.
Mishell Barzola coughs while his sister Rosario Puchoc Ccanto helps her get her shoes. Mishell is six years old but she only is 3 feet tall and weighs a little more than her 18 months old brother. Lack of corporal growth and loss of appetite are common symptoms of lead poisoning.
A view of the interior at the lead refinery, where the metal reaches a purity level of 99 percent. Doe Run sells lead, zinc, copper, gold and silver to the United States, Europe and Brazil, among other places.
Mishell Barzola plays with a doll that the company Doe Run gave her. The girl has four times more lead in her blood than the acceptable level for children in the U.S. and the six members of her family live in a small rented room. Mishell's mother is concerned about the health of her daughter, but she said that without the smelter the town would disappear.