Challenges of corporate social responsibility : as a governance tool in a Peruvian mining conflict

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Challenges of Corporate Social Responsibility

As a Governance Tool

In a Peruvian Mining Conflict

Catalina von Hildebrand

MSc. International Development Studies

Universiteit van Amsterdam

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MSc. International Development Studies

Thesis

December 2014

Challenges of Corporate Social Responsibility

As a Governance Tool

In the Peruvian Mining Conflict

Catalina von Hildebrand

<catalinavh@gmail.com>

10674322

Supervisor: Maarten Bavinck <J.M.Bavinck@uva.nl>

Second reader: Lorenzo Pellegrini <lorenzopelle@gmail.com>

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Acknowledgements

I would first like to thank Maarten Bavinck for his constant support and valuable time during the last six months, as well as Lorenzo Pellegrini for agreeing to be the second reader of this paper. I am grateful to my friends from the International Development Studies Master for their insightful conversations and constant support.

Very special thanks to my dear cousin Ruairí Ó hEithir for being so patient and meticulous in proofreading this work.

Estoy muy agradecida a mi tío Eduardo Llosa que me ayudo en desde el principio. A Andrea & a Jorge Ricaldi, gracias por siempre ayudarme en toda la logística. Gracias a Abel & Dani, también a Julio & Marcela por acogerme.

A los italianos y la gente tan amable de la MCLCP. Gracias a nuevos y viejos amigos en Cajamarca como en Lima.

Y sobre todo a las personas que me dedicaron tiempo para entrevistas y reflexiones. Finalmente a mi madre por su insider knowledge y observaciones criticas. A mon père pour mávoir aidé du décollage a látterrissage, merci pour cet enrichissant partage díntérêts.

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AI (Area of Influence) – The area the mine determines to be affected by the Conga project, the ADI (Area of Direct Influence) is also referred to as the first ring and includes eleven communities. The 21 communities in the second ring are known as the AII (Area of Indirect Influence). Further out, the area outside AI contains over 50 communities (See ANNEXES III & IV).

DRIT (Integrated Territorial Rural Development) – Strategy for CSR implementation in the area of direct influence, including 32 communities (ALAC, 2014).

EIA (Environmental Impact Assessment) – The purpose of conducting an EIA is to establish existing environmental conditions and to assess the potential impacts, which may be caused by the project within the area of influence of the project. It also aims to identify mitigation measures that will be needed to eliminate or minimize impacts to acceptable levels.

EITI (Extractive Industries Transparency Initiative) – A global coalition of companies, governments, and civil societies collaborating to improve accountable management of revenues derived from natural resources. Principles include prudent use of natural resources, making sure local citizens benefit, ensuring long-term revenue benefits, transparency, and accountability of a company´s relationship and agreement with the government, encouraging national and foreign direct investment (EITI, 2014).

FONCREAGRO (Credit Fund for Agroforestry Development)– A civil association which executes projects funded by Yanacocha aiming at improving dairy production and the quality of life of families participating in these projects (Yanacocha, 2014).

IFC (International Finance Corporation) – Financial branch of the World Bank, it advises private sector expansion in developing countries.

ICMM (International Council on Mining and Minerals) – Created to improve sustainable development in the mining industry, it brings together 21 mining companies as well as regional and national mining associations. Principles include ethical business practices, integration of sustainable development, respect for human rights and local cultures, improving health and safety performance, improving environmental performance, contributing to biodiversity conservation and integrated land use planning, encouraging responsible product usage and disposal and contributing to the social, economic, and institutional development of neighboring communities (ICMM, 2014).

MAS (Movement of Social Assertion) – This left-wing political party has won regional elections in Cajamarca for the second time on October fifth 2014. Its leader Gregorio Santos is currently detained on corruption charges. The party is recognized as a strong opponent of the Conga project.

MINAM (Ministry of Environment) – Its mission is to promote environmental sustainability in the country by conserving, protecting, recuperating, and ensuring environmental conditions, ecosystems, and natural resources (MINAM, 2014).

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MINEM (Ministry of Energy and Mines) – Its mission is to promote sustainable development of energy and mining activities by driving private investments in a competitive global framework while conserving the environment and facilitating harmonious relations within the sector (MINEM, 2014).

OEFA (Environmental Evaluation and Audit Organization) – This entity has the responsibility of verifying compliance with environmental legislation by all natural and legal persons. It also oversees the functions of assessment, monitoring, supervision, control, sanctioning powers and implementation of incentives in environmental matters (MINAM, 2014).

Rondas Campesinas – Self-defense peasant organizations initially in charge of public order. Over time, the groups have responded to institutional weakness and thereby assume a central role in communities (Huamaní et al., 1988).

TAN (Transnational Advocacy Networks) – Actors such as international NGOs, social movements, media, trade unions, and churches, among others, who plead for causes or for persons, often searching for policy change. Issues relating to human rights, the environment and indigenous people are examples of debates in which these networks operate (Keck & Sikkink, 1999)

Tierra y Libertad – This political party also opposes the mine. Even though it is smaller many support its philosophies, which are implicit in its name. One of the prominent leaders is the former priest, politician Marco Arana.

ZEE (Economic and Ecological Zoning) – Technical tool to characterize mainly physical and biological aspects of the territory. ZEE is necessary to determine possible activities that can take place in specific areas (MINAM, 2014).

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1. Introduction

Intuitively, the discovery of minerals in a country should contribute to poverty reduction. A positive aspect of resource-rich nations can be an economic boom following the attraction of foreign and national investment (Sagebien et al., 2008). In addition, finding resources and mining activities encourage social movements to start up and organize themselves, as it has in Peru (Bebbington et al., 2008a). Mining conflicts have consequences in various spheres including economic, political, and social. The environment of distrust that a mine can bring into communities can counter the positive social effect.

The abundance of natural resources can lead to civil conflicts, as tends to happen in developing countries where corruption is high and institutions weak (van der Ploeg, 2012). Weber-Fahr (2002) mentions links between social, economic, and political realms. The extraordinary income brought by mining prompts self-interest behavior that can lead to misguided decisions in public policies, public expenditure, and economic management. These can lead to a slowdown in economic growth. Furthermore, Pegg (2006) claims that mineral availability discourages productivity and reduces investments in non-mineral sectors.

For Karl (2007), the phenomenon of the resource curse is primarily political. Rosser (2006) blames local political and economic factors for the way resources are misused and lead to conflicts. While Arellano-Yangas (2008a) sees mining conflicts as economic and political threats to Peru, Bebbington et al., (2008a) claim that mineral exploitation has ambiguous effects on the quality of governance and economic growth and often causes social conflicts.

A mining conflict in Northern Peru, which has had repercussions in various spheres, is studied through the lens of a governability framework. One of the main challenges current president Ollanta Humala faces is encouraging economic growth while maintaining social inclusion (Peruvian Environment, 2011). In Peru the state does not always pronounce itself on matters related to the extractive industry, be it because of institutional weakness or lack of political will (Triscritti, 2013). This leaves room for companies to fill in the governance gap and take decisions regarding mining procedures. Corporate Social Responsibility (CSR) is a way to show responsibility and implement certain policies.

Minera Yanacocha, (”Yanacocha”) is the corporation that operates the Conga project (“Conga”). The American corporation Newmont is the company´s most important shareholder with 51% of the shares; the Peruvian mining company Buenaventura has 44% and the International Finance Corporation (IFC), a subgroup of the World Bank, owns 5% (Newmont, 2014; Yanacocha, 2014). Yanacocha is the largest gold mine in Latin America; furthermore, it is perceived as the first large mining company to enter Peru after privatization reforms.

Yanacocha is situated 73km from the northern city of Cajamarca. In order to access subsoil, the mine plans to relocate lakes to man-made reservoirs. As required by law, Newmont conducted an Environmental Impact Assessment (EIA) for the region. The Ministry of Energy and Mines (MINEM) approved the EIA in October 2010 and construction started. Many actors, including the Ministry of Environment (MINAM), the regional government of

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Cajamarca, some local governments local and international NGOs, and surrounding communities, oppose the project.

In order to map out the Peruvian context in which the conflict took place, I use the governability framework. It outlines a governing body that interacts with a system-to-be-governed, made up of a natural system and a social system (Bavinck & Kooiman, 2013). This helped in determining which stakeholders to interview. The groups of respondents are: the market (here represented by Yanacocha), the government, civil society, and the communities affected by the mining operation. The research focuses on the governing interactions between each stakeholder and, in particular, the relationship between the mining company and the social system. This is where CSR can be placed, since it is often used to encourage and monitor the interactions between a mining company and a local community (Zambrano Chavez, 2009).

The social conflict that followed in the region of Cajamarca caused five deaths and declarations of a state of emergency. Finally, it led Yanacocha to put the operation on hold in August 2012. Two years later, tensions still run high and the mine is making plans to restart its extension project. This makes Peru and, more specifically, the region of Cajamarca a suitable location to research what CSR programs are in place and their evolution after a conflict of this magnitude.

1.1.Rationale

De Echave and Diez (2013) claim there are two ways the private sector can contribute to development, one is through an influx of capital and the other is using Corporate Social Responsibility (CSR). The mechanism translates best as a company´s willingness to go beyond pure business and be responsible towards local communities. Spatial adaptations of CSR programs have received a great deal of academic attention; however, CSR adaptation through time seems to have been less researched. Programs in place should be flexible enough to adapt to local events in order to remain efficient. The following time-determined definition of CSR will be used: “Corporate responsibility, viewed as a temporal process, represents the ongoing tension gap between societal expectations expressed legally or through norms, and company behavior" (Rivoli & Waddock, 2011: 98).

Different actors, power structures, regulations, and communities would alter the nature and strategy of CSR. Literature is not extensive on the topic of CSR practices in emerging countries and the local perceptions of this relatively new practice (Frynas, 2006; Campbell, 2007). It has been determined that CSR is a dynamic and fast-changing concept; however, most studies focus on the internal workings of CSR within a company (Bolton et al., 2011; Putrevu et al., 2011; Shen & Benson, 2014). Furthermore, corporations and global initiatives underline the need for CSR to adapt to local cultures and values (Campbell et al., 2012, ICMM, 2014), but less importance is given to temporal adaptation. Research often concentrates on outcomes rather than the processes of CSR (Porter and Kramer, 2006). This research will look at how a mining company adapts its CSR programs when facing a two-year-long conflict.

Knorringa & Helmsing (2007) claim more attention should be paid to the impacts of CSR on societal issues it initially intended to solve. Mining conflicts are common in Peru and

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successful outcomes remain rare. Lessons learned and good practices can be drawn from each case. The case of Conga has created significant social disputes, which have been recognized internationally. Researching how the mine is handling the conflict and making decisions regarding its CSR programs can be a small step forward for countries in similar situations. The aim of the research is to find out how CSR programs adapted to changes after the Conga conflict.

1.2. Research Questions

The aim of the research is to find out how CSR programs adapted to changes in the Conga conflict. I want to find out how stakeholders understand changes afterthe conflict.

My research question is the following:

To what extent do stakeholders perceive changes in Yanacocha mine´s CSR since the Conga conflict in 2011 and 2012?

Sub-questions about context:

- What is the economic situation in Cajamarca?

- What is the current political context of the region, provinces, and districts? - What are the social issues present around the Conga project?

Sub-questions about the Conga conflict: - How has the conflict developed over time?

- What roles did the different actors play during the conflict and what are their interests? Sub-questions about CSR programs:

- What CSR programs took place, are in place and are planned for the Conga project? - How are they pursued?

Sub-questions about the process of CSR programs:

- How do the different stakeholders perceive CSR programs and the changes taking place? - How have CSR programs changed since the conflict started?

- To what extent has the conflict affected CSR policies and actions? 1.3. Peruvian Mining Sector

The Peruvian mining sector was privatized in the 1990s, since it attracted large amounts of foreign direct investments (FDI) (Slack, 2009). Between 2004 and 2009, a mineral price boom led the country into considerable economic growth and attracted additional investment in mining. Metals represent 55% of Peruvian exports and FDI reached $9,724 million last year (MINEM, 2014). Through macroeconomic policies, the governments in place managed to lower poverty from 54% of the population in 2002 to 23.9% in 2014 (“INEI: 491 mil personas”, 2014).

The region of Cajamarca and its capital share the same name; the region is divided into provinces (see figure 1). It is recognized as a mining center, including the Yanacocha mine and its extension, the Conga project. In total there are eleven exploration projects, and nine production units in the region (MINEM, 2014). The regional president is Gregorio Santos Guerrero. He strongly opposes mining operations in the region and has led a

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number of protests in recent years. Santos benefits from strong support from the rural population, which makes up about 70% of Cajamarca (De Echave & Diez, 2013).

Figure 1 – Map of Peru, Cajamarca & its provinces of C (for specific districts in which Conga project takes place, see figure 2)

(Source: adapted from BBC, 2006 & Info Regional, 2012)

The Conga project is located 29km east of current Yanacocha operations and 73km from Cajamarca. The two deposits, Perol and Chailhuagón, are rich in gold and copper. This mountainous landscape is located within the headwaters of five mountain lakes. In order to access subsoil, the mine plans to relocate lakes and wetlands to man-made reservoirs (Tarras-Wahlberg, 2012; De Echave & Diez, 2013). The capital cost of the project is calculated at $4.8 billion and provides almost 21% of Peruvian gold according to MINEM (2014), and as such it provides 5000 jobs and ensures economic growth (Triscritti, 2013). The mine has been operating since 1992. During these years, the company has periodically found itself in conflict with surrounding communities over issues such as land acquisition and purchase, mercury spills, extermination of fish, accusations of corruption, and project expansion disregarding communal arrangements (Scurrah, 2007). Similarities could be drawn between the Quillish conflict and the Conga conflict. Even though Quillish hill was declared a protected area, MINEM allowed Newmont to explore the area. Protests followed and the project has been on hold. In the case of Conga, dialogue tables were set up in attempts to resolve conflict but proved to be unsuccessful (Larkins, 2011; Scurrah, 2007; Zambrano Chavez, 2009). Tensions continue to run high between Yanacocha and the inhabitants of Cajamarca.

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Figure 2 – Map of Conga operations over three districts, including reservoirs, water treatment plants, deposits, open pits and a processing plant. La Encañada is part of Cajamarca province; Sorochuco and Huasmín belong to the district of Celendín (for the area

of influence divided by rings see ANNEX IV) (Source: Proyecto Conga, 2011)

The operations of the Conga conflict are taking place in three districts (see figure 2). For a mine to be able to operate in Peru, certain steps are required by law. First, the mine has to obtain an exploration contract, as well as a permit for use of the superficial land. An Environmental Impact Assessment (EIA) must be conducted and handed in to the government. A social license must be acquired as well as a license for water use. Finally, an authorization to start (or re-start) mining operations after the exploration phase is

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necessary (MINEM, 2014). These permits and requirements involve different sectors including environmental, social, and fiscal. As Peru attracts various new mining investments, it is imperative to immediately address tensions between the different players and on different governing levels such as national, regional and local.

As required by law, Newmont conducted a new EIA for the region. The report was approved by MINEM in October 2010 and initial construction started (for important dates throughout the conflict see figure 3 and for a detailed timeline see ANNEX I). The local population worried about water scarcity and water pollution. A significant part of surrounding communities depend on water for irrigation and livestock. At first, a revision of the EIA was demanded but this soon escalated; Cajamarca´s regional government and various NGOs from all levels soon joined the opposition. Gregorio Santos led large strikes opposing the mining project (Triscritti, 2013; De Echave & Diez, 2013).

The central government did not reach a consensus as MINAM´s reviews of the EIA were dismissed by MINEM. In a public declaration in Cajamarca the president assured that the project would not resume. He then announced that Conga would continue on 16th November 2011. At this point, social unrest turned violent and Newmont had no other option but to announce publicly a temporary halt to its expansion project that same month (De Echave & Diez, 2013; Triscritti, 2013). For many, the month of November 2011 marks the beginning of intense conflict.

After the declaration of a state of emergency and the resignation of the prime minister (PM), an attempt to reach a solution came to the table. Three international specialists were appointed to assess Conga´s EIA. At that point negotiations would have been the most appropriate step however, Gregorio Santos did not take part in the effort. The experts deemed the Conga project viable, which brought additional protests. Violent clashes disrupted the region of Cajamarca. Confronted with a conflict escalation that brought five deaths, Humala declared a sixty-day state of emergency in July 2012. This time, Newmont announced that its project would be put on hold until 2014 (De Echave & Diez, 2013; Triscritti, 2013).

In a letter from December 2012, the mining company declared that they recognized their failures and understood the need to regain the trust of the people in Cajamarca (Newmont, 2014). This led to a perception study commissioned by Yanacocha. The opinions of surrounding communities are the best way to test whether the mine has indeed transformed those words into action. That is why four groups of stakeholders were asked about their perceptions of CSR change after the conflict.

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9 February: First EIA Delivery 25 October: MINEM approves EIA

6 October: Newmont declares 4 lakes will be replaced by reservoirs 28 October: First roundtable discussion

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16 November: Ollanta Humala declares “Conga va” 21 November: MINAM gives its comments on EIA 28 November: MINEM rejects comments from MINAM Vice-minister of Environment (Jose De Echave) resigns 4 December: Second roundtable discussion fails

6 December: State of Emergency declared in 4 regions

11 December: PM Salomón Lerner resigns, Oscar Valdés as new PM Valdés calls on experts´ opinion on project viability

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3-4 January: Strikes against Conga led by the regional government 17 April: Pundits declare Conga project viable

29 May: Mobilization in favor of Conga in Cajamarca

21 June: Clashes with police forces in Cajamarca & Celendin 3 July: State of emergency declared after first protests

3-5 July: Violent protests leave 5 dead in Bambamarca & Celendín 23 July: Valdés resigns, Juan Jimenez Mayor named as PM

3 August: State of emergency is extended in the three regions 27 August: Conga project postponed because of social conditions

Figure 3 - Short timeline of project Conga Conflict (Source: adapted from De Echave & Diez, 2013.

For a more detailed timeline see ANNEX I) 1.5. Outline

In the second chapter, theory on governability and CSR will be addressed as well as main events in the economic, political, and social spheres. Subsequently, in chapter three, the methodology used will be explained, along with limitations and ethical considerations. An empirical background of the mine, an overview of the Conga conflict, as well as the economic, political, and social dynamics will set the context needed to analyze the data properly. Chapter four on external dynamics applies to events occurring outside of the governing body, and events for which we do not have eyewitness accounts but rely on newspaper reports and other less bias sources. The chapter is also differentiated by time, presenting previous strategies employed by the mine. The analysis will divide the stakeholder groups into four separate units; one chapter will be dedicated to the mine and the government, the following to communities and civil society. This will lead to a discussion of the findings, a conclusion and, finally, recommendations.

2. Theory & Literature

In this chapter, the main concepts will be described. A governability framework and its components will be presented in order to apply it and define the governability of a post- mining conflict setting. Literature and previous research on CSR will be mentioned and then applied to the case of Yanacocha and its extension. Lastly, an overview of important changes that took place in Peru will be presented; the data acquired in the field will complete this section.

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2.1. Governability

In order to have a general understanding of the dynamics in the mining sector of Peru, a governance scheme has been laid out. Governability is “the overall capacity for governance of any societal entity or system” (Kooiman et al. 2008: 3 as cited in Bavinck & Kooiman, 2013: 12). It is further divided into three main elements: a governing system, a system-to-be-governed and governing interactions between these (see figure 4).

Figure 4 – Governability framework (Source: adapted from Bavinck & Kooiman, 2013) 2.1.1. Governing System, System-to-be-governed & Interactions

It is important to establish that “governance is beyond government” (Bavinck & Kooiman, 2013: 10). The government is no longer the sole authority as governance welcomes actors from different spheres such as the market and civil society. These actors carry out activities responding to the needs and demands of the general public. The researchers maintain that it is more effective to have various actors taking decisions. Four different groups of stakeholders can be demarcated: the market, the government, civil society and the social and natural system.

The state can take on a more or less active role through either a mediating or a leading role; it can regulate, enable or bargain decisions (Kooiman, 2003 as cited in Bavinck & Kooiman, 2013: 16). Bavinck & Kooiman (2013: 16-17) also mention politics as a crucial part of the state realm, much like bureaucracy. The second realm is the market, an important entity in the governing process. There are various ways to define the role of markets. It can

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be seen as an efficient way to allocate resources and achieve self-governance, its competitive nature combined with cooperation from society can achieve better results, or instead it can use its power and position in order to obtain stable markets (ibid: 17). The last realm consists of the civil society; this includes NGOs, religious associations, social movements, the media and academic establishments. Civil society has developed within the governing system and has the facilitating role of channeling societal needs and accommodating those in the system (ibid).

Bavinck & Kooiman (2013: 18) discuss elements of governing which include images, instruments, and actions. Images represent ideas, visions, or judgments helping to identify the challenges in governance. Politicians, scientists and opinion leaders make use of these, either in a positive, constructive way or by confusing the population. Sets of instruments, or tools are available to make visions more tangible. These can include norms, taxes, regulations but also certifications. Finally, through actions, images, and instruments become concrete. At this point, societal action or inaction bears unknown consequences. The political realm as a support for social action should not be undermined, and, in turn, societal support gives way to political decisions.

The governing system has direct effects on the system-to-be-governed, which includes a natural system and a social system. These organisms differ from each other in diversity, complexity, dynamics, and scales. These features vary from one system to the other and influence it in a positive and/or negative way. It can help in establishing how complex a system is to govern. Additionally, these traits predict the uncertainty and unpredictability of a system (ibid).

Interactions among and between the governing system and the system-to-be-governed determine the dynamics of the system as a whole. They are at the core of the governability theory. Three modes of interaction can be distinguished: hierarchical, self-governing and co-governing. Hierarchical governing places the governments as the main actor; its decisions are accepted with little dialogue. This type of vertical management can be seen in the private sphere. Self-governance refers to self-regulation and self-organization of different actors. Co-governance allows for more horizontal movements, actors are interdependent and, as such, decisions are made jointly (ibid).

The researchers identified three different types of interaction. First, hierarchical governing interactions, best defined as the reflection of top-down management structure in the private sector. Likewise, most flows originate from the governing system towards the system-to-be-governed. Second, self-governance implies that entities can govern themselves. Complete self-governance rarely takes place; however, many actors and systems apply it to a certain degree. Finally, co-governance interactions; in this scenario, no one actor occupies center stage. Decisions are reached in a joint manner, as a collaborative effort. By involving stakeholders directly, it is hoped to obtain positive reactions, which are in line with the values of the broader population.

2.1.2. Governability in the Extractive Industry

In response to the resource curse concept mentioned earlier, the extractive industry often claims that poverty reduction has not improved because of governance issues and weak

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government (Bebbington et al., 2008b). Pegg (2006) labels it the ´governance curse´. Looking at mines in African countries, Campbell (2003) determines that while national governance is key, no amount of local governance is sufficient without fair legal and fiscal frameworks favoring development. Furthermore, Bebbington et al., (2008a) claim that mineral exploitation has an ambiguous effect on the quality of governance and economic growth and often leads to social conflicts.

The international company is frequently more knowledgeable about the mineral it extracts than the local government (Humphreys et al., 2007). That is why the Natural Resource Governance Institute created the “Natural Resource Charter” to serve as a guiding tool for governments and citizens of resource-rich nations (NRGI, 2014). It is not enough to find the resource to consider the country lucky; many learning stages lie ahead for the nation to really profit from its resources. The Revenue Watch Institute (RWI) published a Resource Governance Index measuring four components: the institutional and legal setting;

reporting practices; safeguards and quality controls; and the enabling environment (RWI, 2013). Out of 58 resource-rich countries observed, 80% failed to accomplish good

governance.

In a report on mining in developing countries, the World Bank claims ‘countries with substantial incomes from mining performed less well than countries with less income from mining’ (Weber-Fahr, 2002: 7). The volatility of mineral prices renders the economy of a country highly vulnerable. The lucrativeness of this sector encourages further investment, usually at the expense of investments in other areas, notably in agriculture. It also weakens the export value of non-resource products, a phenomenon known as Dutch disease (ibid; Bebbington et al., 2008b; Humphreys et al., 2007; Pegg, 2006).

The economic concentration on the mining sector leads to a small number of companies becoming more powerful. Humphreys et al. (2007) even claim the extractive industry can resume its activities independently of political processes in the country. Often, the few powerful corporations alter the political landscape, reducing competition in institutional design and policymaking decisions, while increasing bias and capture capacity (Bebbington et al., 2008b; Davis & Tilton, 2002). In Bolivia, policies regarding the mining industry define the larger political landscape of the country (Pellegrini & Arismendi, 2012).

Eventually, this can lead to high corruption rates and a lack of transparency given the extraordinary revenues from mining taxes or royalties. Unequal distribution of these mining royalties represents one reason socio-environmental struggles arise, along with access to resources, the defense of human and citizens’ rights, prior and informed consent of local population, territorial demarcation and governance (Bebbington et al., 2007; Davis & Tilton, 2002: Pellegrini & Arismendi, 2012).

Bebbington et al. claim that such conflicts have a creative potential, “historical experience would suggest that the consolidation of democratizing institutions is more likely to be a product of conflict and shifts in the balance of social power than an outcome of technocratic design, corporate philanthropy” (2008a: 973). According to Karl (2007), all stakeholders need to be involved to find a solution to this institutional and political issue.

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2.2. Corporate Social Responsibility

The private sector was given more importance than ever before during the UN World Summit on Sustainable Development in 2002. Private corporations and global institutions have embraced the mechanism of Corporate Social Responsibility (CSR) as a means of reaching developmental goals (Ministry of Foreign Affairs of the Netherlands, 2013; Newell & Frynas, 2007; Zambrano Chavez, 2008). It aims to contribute to sustainability in the economic, social, and environmental fields (Jenkins & Yakovleva, 2006). Globalization allows CSR to take center stage as trade liberalization has enhanced the role of transnational corporations. Coming from a neoliberal trend, CSR is independent from the state and calls for voluntary self-regulation (Utting, 2005).

Putrevu et al. (2011) acknowledge that the definition of CSR evolves continuously. They also declare that CSR is extremely valuable to consumers and stakeholders and will remain increasingly so in the future. The concept varies greatly from one domain to the other, in particular because it is a voluntary agenda (Slack, 2012). CSR “may mean different things in different places to different people and at different times” (Campbell, 2007: 950). In general terms CSR translates into a company´s willingness to go beyond pure business, to be proactive and involved in issues of social justice (Hilson, 2012).

Research on the incentives of CSR determined it can be subject to internal national pressure to attract investments, as well as external international pressure from global markets (Baskin, 2006; Bebbington et al., 2008a; Dashwood, 2012). This paper focuses on the process of CSR and not merely on its final result. Its dynamic process has mostly been studied as a mechanism within a company (Bolton et al., 2011; Shen & Benson, 2014). The impacts of CSR often focus on profitmaking or on consumer perspective (Burke & Logsdon, 1996; Orlitzky et al., 2003). Knorringa & Helmsing (2007) claim more attention should be paid to the impacts of CSR on societal issues it initially intended to solve.

Slack (2012) claims there is an important gap between what the corporation decides in its global headquarters, its decisions at the national level of a specific country, and the implementation of measures on the ground. It seems that distance and CSR activities are not positively related (Campbell et al., 2012). Hilson (2012) talks about a gap on a more conceptual level. Since many multinationals´ headquarters are in developed countries, CSR programs do not reflect the local realities in whose context they are supposed to be implemented. It is crucial that CSR adapt to local contexts, and for that it must give an opportunity to the local population to have a say in a program’s components.

A number of studies focus on CSR adaptation to local context (Campbell et al., 2012, ICMM, 2014). This research will look at the temporal dimension. Rivoli and Waddock (2011) are among the few who have studied this aspect and they noted a shift in CSR over time. Since it constantly changes in nature throughout the life cycle of a certain issue, CSR might not be profitable. The researchers claim that CSR activities are first unheard-of, inventive, or responsible and then become expected and even required. CSR rapidly raises expectations. The definition that best serves the purpose of this paper is the following: “Corporate responsibility, viewed as a temporal process, represents the ongoing tension gap between societal expectations expressed legally or through norms and company behavior" (ibid: 98).

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CSR must adapt over time and make sure it is flexible enough to adjust to a population´s expectations as well as local dynamics and events.

2.2.1. CSR in Mining

CSR in the mining industry concentrates on community relations and initiatives (Larkins, 2011; De Echave & Diez, 2013). It is often used to encourage and monitor the interactions between a mining company and a local community. In this industry, CSR is used to balance society´s demands, environmental protection, and profitmaking (Jenkins & Yacovleva, 2006). De Echave (2011) distinguishes between ancient mining and modern mining. CSR of the latter incorporates criteria such as sustainable development, investments, inclusion, continuous dialogue and consensus, transparency and respect towards local culture and habits, and, last, places the mine in the role of a proactive actor.

To implement the idea that CSR can fill in the governance gap, there are established initiatives encouraging more responsible behavior in the mining industry. The International Council on Mining and Metal (ICMM) aims to improve the mining and metal industry, and maximize their contribution to sustainable development (Slack, 2009). The Extractive Industry Transparency Initiative (EITI) aims for greater corporate transparency (Slack, 2009). Zambrano Chavez (2009) declares that the communication between a mining company and the local community often takes place through a CSR approach. It calls for mutual negotiation and participation.

Many scholars denigrate the role of CSR as a core principle of a corporation (Doane, 2005; Hilson, 2012; Newell & Frynas, 2007; Slack, 2012). Slack describes CSR as “window

dressing” (2012: 179) while Frynas (2014) claims the motivation to engage in CSR is purely for the company´s interest. Jenkins and Yakovleva claim mining companies use CSR "to justify their existence” through positive reporting (2006: 271). Doane (2005 as cited in Hilson, 2012) sees CSR as a public relations (PR) tactic backing business-as-usual. Misuse of CSR tends to happen for the most part in developing countries, since the government does not fully supervise all industry workings. CSR can also be seen as an incentive for business to proactively embrace environmental and community-related policies (Dahlsrud, 2008, as cited in Hilson, 2012). And, as such, extractive companies benefit from CSR policies, as they need a social license from the local country to start working (Porter & Kramer, 2006).

Previous researchers have reached bleak conclusions on the topic of CSR in the mining industry, inclining to indicate it merely exists because of the company´s own self-interest. Most research focused on the outcomes of such activities. Jenkins & Yacovleva (2006) conclude that CSR evolves within a mine as well as in the extractive sector as a whole; certain mines have more successful CSR. This research aims to look at the CSR of the same mine over time. If a mine is expected to adapt spatially, it should also adapt temporally, especially in regard to changes brought about by conflict. I am interested in how CSR can change and adapt to eventually improve situations. In this case, it means analyzing whether Yanacocha managed to turn the Conga conflict into an opportunity to redefine itself and its CSR.

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2.3. Changes in Conflict

Bryman (2008) notes qualitative research emphasizes process; therefore, the following section will mention changes that occurred in the mining conflict of the Conga project. They will be further developed and completed with the data acquired in the field, through documentation and discussions with respondents.

Epifanio Baca (2014b) lists problems faced by the mining sector that follow the scales in the commodity chain of mining. An increasing numbers of mining concessions generate social conflicts and must be revised. Powerful economic groups obstruct laws; while environmental norms and entities are weak, have little recourse, and weak political support. Finally, there is a lack of established social expenditure mechanisms. To be thorough, these changes will be divided into social, economic, and political realms.

2.3.1. Social Changes

In terms of social changes, a positive aspect of finding resources and, more specifically, mining activities, is the push for social movements to start up and organize themselves. “Rural development [is] co-produced by movements, mining companies, and other actors, in particular the state” (Bebbington et al, 2008: 2889). Scurrah (2007) also supports this view and mentions the rise of Rondas campesinas, self-defense groups of farmers in Peru and more so in Cajamarca. These groups have established themselves and become more relevant, recognized actors in the region than previously.

A negative consequence for a resource-rich country is that mining conflicts may create distrust and further divide civil society (Scurrah, 2007). Social trust is crucial, as it has been proven to correlate with additional variables, such as a having a positive outlook on governmental institutions and actively participating in politics as well as civic organization (Rothstein, 2011). The Conga conflict seems to have both of these outcomes.

2.3.2. Economic Changes

The most direct change at the community level is the employment the mine provides. Yanacocha promises employment with every project it undertakes. Another outcome for a resource-rich country can be an economic boom that is likely to benefit the country as a whole (Sagebien et al., 2008, ICMM, 2014). Indeed, Peru has gone through a “mineral boom” from 2004 to 2009. In that period, foreign direct investment (FDI) grew significantly. Through macroeconomic policies, the government in place managed to lower poverty since 2002; this year 23.9% of the population is considered to live in poverty (“INEI: 491 mil personas”, 2014). However, the central nature of the Peruvian state makes it difficult to efficiently distribute mining benefits (Arellano-Yanguas, 2011). Additionally, in the past year, minerals represented 55% of Peruvian exports making the country heavily dependent on the sector (MINEM, 2013: 12).

Mining royalties or canon minero, is a revenue-sharing mechanism in which a percentage of the value of the material extracted is transferred to the region. This seems like an advantageous situation; however, a study by Arellano-Yangas (2008b) concluded that conflicts are associated with canon transfers. This mechanism represents one way the private sector can participate in development. However Pellegrini and Arismendi (2012) argue that corporations make use of redistribution to gain access and approval from local

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populations. This infusion of large sums, decentralization efforts, involvement of citizens, and a higher level of collaboration change the nature of conflict to a more complex, multi-level, and multi-actor dispute. Arellano-Yangas (2008a) sees mining conflicts as economic and political threats to Peru.

2.3.3. Political Changes

The Peruvian state does not always pronounce itself on certain matters in the extractive industry; it is that institutional weakness that has trapped Peru in the current situation (Triscritti, 2013). Internal conflicts between different governmental bodies greatly undermine their status and power. MINEM and MINAM are known to clash on various issues, mining being one of them (de Theije et al., 2013; Triscritti, 2013). This leaves room for the mining companies to fill in the governance gap and take decisions regarding mining proceedings. CSR is a channel to implement certain policies showing responsibility.

Decentralization does not seem to be a solution as it relocates the resource curse to sub-national levels (Arellano-Yangas, 2008a). Regional governments are also weak in terms of structure, and prone to fragmentation and corruption. Regional leaders are numerous and do not associate with national parties; they follow their own political agenda. Some even take advantage of conflict situations to gain popular support (Revesz and Diez, 2006 as cited in Arellano-Yangas, 2008a). When looking at mining, all formal procedures and granting of licenses remain at the national level. It seems like the decentralization undertaken is null and void and that other institutional innovations are necessary.

Bebbington and Bury (2009) note that the prerequisites for such institutional innovations are social conflicts to create a demand for such change, along with a strong actor to translate the demands into actions. In the case of Peru, civil society is the actor. As such, the authors believe that conflict situations can bring more progress than older models imposed by central actors like the national Peruvian government. Instead of fearing and repressing conflicts, they should be used as an opportunity to improve and move forward.

3. Research Methodology

In this chapter, the main concepts from the theoretical framework will be placed in a conceptual scheme. Interview questionnaires will be available in an operationalization table, followed by the units of analysis, research methods, and sampling. The section will end with an overview of limitations and a discussion on ethics.

3.1. Conceptual Scheme

The paper focuses on governing interactions, looking specifically at the relationship between primary actors – the mining company and the communities. I wish to determine how dynamics evolve. At first, the mining company implemented its CSR programs in the communities. Afterwards, the communities responded by demonstrating against the project, representing the peak of the conflict. The project was put on hold; however, it is now crucial to observe how the mining corporation responded after the conflict. After all, CSR activities continue to be implemented in the communities.

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The government is another actor within the governing system; in this situation different components of the government seem to have different interests, sometimes even conflicting interests. In the case of Peru the ministry of environment (MINAM) and the ministry of energy and mines (MINEM) had different views on the validity of Conga´s Environmental Impact Assessment (EIA). Additionally, there is also a disaccord between different levels or scales, mainly between the national and the regional administration (Triscritti, 2013).

The second actor, the most central, is the Yanacocha mine. It must deal with the government in order to start a project. State weakness increases the chances of exploitation and leads to the firms filling in the gap by promoting more responsible and sustainable development (Sagebien et al., 2008, Triscritti, 2013). Additionally, the mining chain brings an additional scalar divide. Extraction is only one activity in the entire commodity chain. Baca (2014b) lists the activities: first comes prospecting and search permits; then exploration, development, and construction; up to the production and exploitation of minerals.

The last actor in the governing system is the civil society, which channels the needs and demands of the population into the government’s agenda (Bavinck & Kooiman, 2013). As such, it exerts pressure on the private sector to take an active role in the governance of the country (Sagebien et al., 2008). NGOs, research institutes, and the Church voice the opinions of the population with a wider view and understanding of the events and dynamics surrounding the issue of Conga.

As part of the governing system, Yanacocha and ALAC employees working on the Conga project were asked about CSR activities and strategies implemented post-conflict. Government officials and civil society respondents were asked more general questions accounting for external dynamics in social, economic, and political spheres.

In this case, the natural and social systems are very much interlinked as rural communities directly interact with and depend on watersheds, streams, and lakes. For the sake of simplicity, only direct actors are included in the scheme; the natural system within the system-to-be-governed is not depicted, even though its compromised existence is what triggered the Conga conflict.

The main actors within the system-to-be-governed were rural community members; they were questioned more specifically on how they experienced CSR programs over time. The scope of the research was limited to the area of influence drawn by Yanacocha (See ANNEX IV). There are differing interests, as some individuals might rely more on water for irrigation and would oppose the mining project, while others might welcome infrastructure and employment opportunities (Triscritti, 2013).

Keeping in mind the diagram is a simplification of a social system, the concept of time is crucial for this research and must be incorporated. The governability system has been represented three times, once for each interaction: first, implementation of CSR and strategies from the mine to various communities; then, protests from communities. Lastly,

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the third image shows the interaction this research focuses on: the response from the mine. The analysis is not focused on the response per se but rather on stakeholders´ perceptions of this response.

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Figure 5 – Conceptual Scheme (Source: Author) G O V E R N A B I L I T Y Local Communities

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3.2. Operationalization

Annex V represents the operationalization of the main concepts, separating the concepts, dimensions, variables, and indicators. The dimensions are mentioned in more detail in chapter two, the theoretical framework. Those represent the main CSR programs that the Yanacocha mine has established for the Conga project. The aim is to hear about individuals’ perceptions, roles and interests regarding the CSR changes since the conflict started. Respondents must feel free to narrate an experience or justify any views they might have on CSR programs. Time was also used as a variable. I asked what the situation was before the conflict and what is the situation nowadays (depending on the interview).

The interview guide drawn from the operationalization process was only valid when talking with communities or personnel from ALAC. Government staff and civil society did not know about the exact CSR programs operated by the mine. That is why interviews started with wider questions, included as ´Changes since conflict´, inquiring about social, economic, and political dynamics. This is crucial in order to fully understand the context. Minor modifications were made to the interview guide while on the field, mainly because of current events taking place, such as elections, and also an up-to-date version of CSR programs for the Conga area.

3.3. Units of analysis

The four groups of stakeholders are derived from the governability framework: a governing body made up of governmental actors, civil society, and the market (in this case, the mining company), as well as actors from the social system, represented by communities. Actors can be divided into primary actors (mine and communities) and secondary actors (civil society and government). Research took place in Lima and Cajamarca, in order to reach respondents from various domains and levels. In total, 45 interviews were conducted. Overall, six respondents from the government were interviewed, ten from civil society groups, and ten employed by either Yanacocha or ALAC (see ANNEX II for an interview list of all respondents). Data analysis chapters will be divided according to units of analysis.

The first research location was Lima—many organisations and corporations possess headquarters in the capital. Similarly, Yanacocha has its main office in the capital. In Cajamarca, regional government institutions as well as NGOs with local offices and on-the-ground employees of the mine were available. The communities accessed depended on the locations where CSR activities are being implemented. Communities lie within the three districts affected by the conflict: La Encañada, Huasmín, and Sorochuco. In total, 21 community members were interviewed: four from Huasmín, eleven from La Encañada, and six from Sorochuco (see ANNEX II for an interview list of all respondents).

3.4. Methods & Sampling

The data gathered is qualitative. In order to find out about perceptions and the way different persons understand the world, it makes sense to have subjective results (Bryman, 2008). As Denzin (2009) explains, some believe research is research, and there should not be differences in the assessment of qualitative or quantitative research. On the other hand, Lincoln and Guba (1985, as cited in Bryman, 2008) argue that a different set of measures, equivalent to quantitative research criteria, is necessary to make comparison possible.

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These criteria include: transferability (equivalent to external validity), dependability (parallels reliability), credibility (mirrors internal validity), and confirmability (translates as objectivity) (Bryman, 2008; Denzin, 2009).

The findings of this research are not generalizable for another location or another conflict but still constitute a base for some general suggestions on CSR changes. External validity— or transferability—suffers because of the concrete settings. Geertz (1973, as cited in Bryman: 2008) recognizes thick description explaining specific situations as an important contribution from qualitative research. As such, the next chapter will give an overview of past events in the social, economic, and political realms for the reader to have enough grounds to interpret the data analysis chapters.

Accepting multiple accounts of reality makes the credibility criteria crucial for the acceptance of the findings. Triangulation can be helpful; using additional data sources and methods increases the credibility of a research topic (Bryman, 2008). Reality is difficult to isolate since strong emotions are involved on the mining conflict. Both primary and secondary sources will be used. Data was collected through qualitative mixed methods, namely, semi-structured interviews and observations of group dynamics. Later, the data collected was transcribed and coded with the help of Atlas.ti software. Emerging themes were identified within each group of stakeholders and studied separately.

During my first month in Lima, I was able to interview four respondents from the mine, the government, and civil society. For these encounters, I met respondents at their place of work or at a café nearby. Similarly, I stayed a little over a month in Cajamarca where the additional 37 interviews were conducted. When meeting with employees from the mine or from ALAC, I always went to their office; the same applied to civil society and government officials. It was more complicated to reach community members; in the majority of cases I travelled to communities surrounding the mining project. In the beginning, I travelled with ALAC, then with a community leader, and finally with a government official. I met in a café or the public square with a few of the respondents who travelled to the city of Cajamarca (see ANNEX II for an interview list of all respondents). Without much guidance, the majority of cases respondents spontaneously covered the points I was interested in during the interviews. 3.4.1. Semi-structured Interviews

Bryman (2008) holds true that qualitative research perceives social life through a series of processes. Correspondingly, the aim of this research is to determine the process of CSR activities. In this sense, semi-structured interviews represent an appropriate data collection method. Respondents are able to share reflections on changes following the Conga conflict. These were held along with an interview guide based on the operationalization process and later used for coding and data analysis. The findings allow individuals and stakeholder groups to be positioned and contrasted.

The flexibility of semi-structured interviews will allow respondents to elaborate and prioritize certain events, as well as bringing in new ideas while keeping the interview within the sphere of interest. Since the interviews make use of individual recollection, it is key to redirect respondents whenever necessary. It must be noted that the degree of structuring

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of the interview will vary according to the respondents, and can very well resemble an unstructured interview, which Brugges (1984, as cited in Bryman, 2008) compares to a flowing conversation.

A flexible structure also permits the researcher to confirm or refute observations and introduce news and events taking place at the time into the ´conversation´. This type of triangulation method ensures higher credibility—or validity. Since some respondents might be reluctant to answer, one must be able to adapt the interviews according to the participant (Goodhand: 2000). Additionally Russel (2002) advises resorting to semi-structured interviews if it is unlikely to reach respondents for follow-up interviews. Since not all respondents live in one location, semi-structured interviews are the most suitable method.

3.4.3. Observation & Participant Observation

In addition to interviews with different stakeholders, I took notes throughout the fieldwork period and actively observed. Lynda Baker (2006) declares that observation is a complex research method. The researcher must play a role and use an array of techniques while maintaining a detached position as a researcher. Observation and participant observation are often used interchangeably. Spradley (1980) defines participant observation as a description of a culture. Many academics have tried to define roles on the spectrum ranging from complete observer to complete participant (Baker, 2006).

The continuum by Spradley (1980) starts with nonparticipation, which translates as no level of involvement. Then comes passive participation in which the researcher is merely a witness. Moderate participation requires keeping a balance between participation and observation. A researcher can be involved in active participation meaning he/she adopts the local culture in order to reach a higher level of understanding. Finally, the other extreme of the continuum consists of complete participation, entailing a full integration of the researcher into the population studied.

I attended a number of conferences on the topic of mining in both research locations, as well as presentations by ALAC foundation in my first days in Cajamarca. In those phases of observations, my role would have been as a passive participant. However, it soon changed as I started attending smaller group events, such as an anti-mining gathering in a northern district of Cajamarca. I attracted curiosity and was introduced as the Dutch representative. For the main part of my research in Cajamarca, I fulfilled the role of a moderate participant.

3.4.4. Sampling

Sumner and Tribe assert that the choice of sampling depends on the generalization claim (2008: 106). As mentioned previously, factors make this research context-specific and thus place it at a low generalization level. Crucial aspects to take into account are limitations in the field, as the researchers mention practical conditions also determine which sampling method is the most applicable. As a starting point, the NGO where I previously worked put me in touch with a number of relevant actors. Previous connections also allowed me to access specific players.

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After my first interview, I had two more contacts; snowballing sampling worked well in both locations and for all stakeholder groups. Many of the actors involved in mining CSR know each other. To a certain extent, a purposive sampling method was used as I intended to interview a variety of actors within each stakeholder group. For example, when reaching respondents in civil society, government, or in the mining sector, I tried to choose persons with different titles or from different department/organisations.

At first, I wished to choose community respondents according to a purposive sampling, for example, interviewing every nth house in the community. However, most community respondents were reached through previous contacts and some because of convenience. In general, an external person entering the community must identify themselves and the reason for their visit to the local authorities. This limited the sampling possibilities as authorities assigned who could be interviewed.

Marshall (1996: 523) talks of convenience sampling as being the easiest one and the least rigorous as well. Still, he claims there is an element of convenience sampling in many qualitative studies. Furthermore, purposeful sampling, which he refers to as judgment sampling, seems to be the most common method. Researchers select respondents that will be the most useful in answering their research questions. It is key to reach respondents, who might have a large network, or respondents who might have an explicit experience, or even respondents whose views radically diverge from the majority.

3.5. Limitations

Time is an important constraint as I wish to measure a process change after the conflict period. Two months is a short period to collect sufficient and complete interviews, and, in some cases, to contact respondents more than once. However, my knowledge of Spanish and prior contacts in Peru were an advantage. In the field, individual accounts and recollection are the most useful. There is a risk of unconscious association of unrelated events as these take place in an extended timeframe, which could lower the research reliability.

In terms of confirmability (objectivity), an important bias lies in the strong polarization of the Conga mining conflict (De Echave & Diez, 2013; Triscritti, 2013). When talking to a wide variety of actors, it can be challenging to remain neutral in the eyes of all. Additionally, as Goodhand describes when dealing with research in conflict zones, “Research [which] occurs within an intensely political environment […] is unlikely to be viewed by local actors as neutral or altruistic” (2000: 12). Especially in communities, people did not feel comfortable sharing information. More generally, a strong limitation is conducting research on conflict. It is difficult to distinguish facts from judgments.

Reliability is weakened by the specifics of the Conga mine situation; Peru has never had such an intense or long-lasting mining conflict. My specific social role also makes it more difficult to replicate the research. Peruvian nationality and a command of Spanish allowed me to make respondents more comfortable. Since I did not live in the country, they often assumed I was not informed about the situation, and went on to explain their views. I often explained myself, saying: “I am talking with everyone NGOs, communities, the church, the mine, government officials, so I can understand the situation”.

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A crucial point to keep in mind is the order of access. Since there are tensions between different groups and individuals, the order in which I contacted them had to be well planned. This is of higher importance in Cajamarca and smaller communities. However, it is difficult to control who is available and when, especially in a short time span. Omitting a respondent because of the order of access was not an option. I tried to interview respondents from the mine or from ALAC first, and then reach government officials and civil society organisations, and lastly interview community members.

Accessing certain of the respondents was one of the most difficult tasks. In terms of reliability, sufficient respondents were contacted from each of the four stakeholder groups. However, the respondents available in each might not be the most relevant. Being in the field without any ties to an organisation has its benefits and its pitfalls. I managed to stay ´as neutral as possible´, but also had to find respondents and create a network in a short time.

The ´area of influence´ extends to three districts; I was only able to travel to La Encañada and Sorochuco. I had been to the district of Huasmín with ALAC but wished to reach it by myself, not stepping out of a truck from the mine. There were rumors about community members overturning a mine truck carrying gifts in Huasmín. I was advised by one of the respondents not to inquire about CSR in that area. Even though I was able to talk to a few inhabitants of the Huasmín district in the city of Cajamarca, there might be a reliability issue in terms of accessibility.

Similarly when I travelled to Sorochuco, I was not able to go to communities without a permit from the regional governor. Instead, he called five community leaders to his house in the main village. The majority of respondents from Sorochuco come from communities situated in ring III, outside the area in which the mine conducts most of its CSR activities. It was challenging to inquire about CSR efforts when most of ring III did not experience many interventions by the mine or the government for that matter.

3.6. Ethics

Jonathan Goodhand (2000) reflects on ethical issues when conducting research in conflict zones. He concludes that research might do more harm than good. In this specific case, since the conflict is latent, it is of the utmost importance to be sensitive and aware of the possible repercussions of the research. Focus groups were not organized to avoid the possibility of provoking conflict. Asking about CSR efforts in communities that did received minimal or no assistance from the mine felt insensitive at times as it might have disclosed programs they were not aware of. However, most respondents had a firm position regarding CSR, and, overall, I believe my research did not cause any great disturbance. Similarly, recording interviews was only possible in about half of cases. One community member agreed to be recorded; as the next two refused, I stopped asking and used paper and pen. When dealing with sensitive information, it is key to adapt the interview and also know when to stop, to “appreciate the value of restraint” (Goodhand, 2000: 14). In this regard, interviews differed from each other. Respondents might not want to immediately talk about the mine´s efforts, be it in a positive or negative manner. Often the starting

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topic was the conflict itself and then CSR processes or the mine´s attitude would be mentioned.

Respondents were informed about the aim of the research. The information will be treated anonymously and will not be disseminated to other actors. As the research aims to describe the opinions and experiences of different groups of stakeholders, respondents should not feel threatened. Confidentiality was promised to all before starting the interviews, although a few of them claimed they did not mind. However, for the majority, the guarantee reassured them and allowed them to express more than they might have initially. I expected government officials and employees of the mine to be more concerned about anonymity but it turned out community members were the most apprehensive. All respondents will receive a one-page summary of the findings translated into Spanish. Many seemed more committed knowing this. I made sure they did not perceive this interview as merely an extractive practice. It is a bit complicated to draw the line as an external party is often asked to help financially. I could not provide them with funds or help them in operating heavy machinery. What I could try to do is to inform people about the conflict and the position of each stakeholder. France and Germany seem to be committed to this issue as some organizations assist events and invite community members to Europe. In The Netherlands, however, the Conga conflict is not a highly recognized issue. This argument helped me a lot, I was encouraged and invited to continue my research.

4. External Dynamics

As mentioned by Geertz (1973, as cited in Bryman: 2008), a detailed account of social reality where research is conducted permits contextual understanding. Frequently, the opinions and behavior of respondents seem more logical when the specifics of the environment in which they operate are clarified. Qualitative research highly values contextual description.

This chapter provides an overview of Yanacocha´s history in Cajamarca as well as its CSR activities, followed by a summary of the Conga conflict (for a detailed timeline see ANNEX I) and finally social, economic, and political context and dynamics. Through the accounts of respondents as well as secondary sources, the necessary background will be described. 4.1. History of Yanacocha

Yanacocha is widely considered to have been the first mine of its size in Peru. Initially, in the early 1990s, Yanacocha expected its project to last five to seven years and thus established a short-term vision. With limited time and resources, CSR was designed using the so-called assistance-based model. Basic necessities in rural areas of Cajamarca were identified. The main priority was providing access to drinking water to prevent diarrheal diseases and malnutrition. Electrification programs followed and then programs related to agricultural productivity. The latter aimed to maintain activities carried by local farmers and increase production and profitability.

As the operation advanced, the unexpected amount of gold and copper found meant the project would last at least twenty years, generating more production, additional revenue

Challenges of corporate social responsibility : as a governance tool in a Peruvian mining conflict

Challenges of Corporate Social Responsibility

As a Governance Tool

In a Peruvian Mining Conflict

Catalina von Hildebrand

MSc. International Development Studies

Universiteit van Amsterdam

MSc. International Development Studies

Thesis

December 2014

Challenges of Corporate Social Responsibility

As a Governance Tool

In the Peruvian Mining Conflict

Catalina von Hildebrand

<catalinavh@gmail.com>

10674322

Supervisor: Maarten Bavinck <J.M.Bavinck@uva.nl>

Second reader: Lorenzo Pellegrini <lorenzopelle@gmail.com>

Acknowledgements

Table of contents

1. Introduction

2. Theory & Literature

3. Research Methodology

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