Political Settlements and the Governance of Covid-19:Mining, Risk, and Territorial Control in Peru
Peru's response to Covid-19 has favored large-scale mining interests while constraining livelihood possibilities for artisanal and small-scale miners. Large-scale mining has been offered opportunities to reinforce its role in territorial governance and been freed of certain regulatory requirements. In this essay we identify a significant risk that the response to Covid-19 facilitates authoritarian forms of government as a legitimate form of rule.
political settlements, mining, artisanal and small-scale mining, Peru
on March 15, 2020, the President of Peru declared a national state of emergency restricting most economic activities in response to Covid-19. The next day, the president of the National Confederation of Private Business Associations (CONFIEP) questioned this measure: "It cannot be expected that mining camps will stop for 15 days" (Gestión, 2020, para. 1)1. The following day, the Ministry of Energy and Mines met with representatives of the mining sector, resulting in the exemption of mining from the state of emergency. This exchange revealed the political leverage of the mining sector as well as the government's limited room for maneuvering. Yet, while the government offered formal large-scale mining operations a lifeline, small-scale mining was not exempted and, in addition, all formalization processes in the sector were effectively suspended (MINEM, 2020). These diverging approaches lead to the main questions asked in this paper: how is the current political settlement affecting national responses to Covid-19, and how, in due course, might the pandemic influence the nature of this political settlement?
political settlements and mining in peru
The interactions between large-scale mining companies, small-scale miners and the national government are part of the fabric of Peru's political settlement. Political settlements reflect the balance of power among contending elites and excluded factions in society, leading to a particular set of institutions that distribute economic opportunities in line with this balance (Di John & Putzel, 2009). [End Page 215] Settlements are also accommodations of contending territorial projects that reflect different, sometimes opposed, perspectives on the legitimate organization of space (Bebbington et al., 2018). At the same time, settlements help fix narratives regarding social order and development. Peru's political settlement both builds and is supported by the idea that Peru is "a mining country" whose development depends on the promotion and defense of resource extraction.
These narratives of social order and development help stabilize ideas regarding what constitutes acceptable and manageable risk (Muller-Mahn & Everts, 2013). High magnitude events, however, can recalibrate these ideas and their intersections with strategies of territorial control. So, even if narratives of development in Peru have always balanced mining productivity with tolerable risk thresholds (as in "acceptable" levels of pollution, or "appropriate" management of tailings ponds near human settlements), they have been complicated by Covid-19 and the challenges it raises both for the mining economy and for human life and death. Contention surrounding appropriate ways of responding to Covid-19 embodies efforts to protect mining interests through a politics of scale in which contending actors seek to redistribute governance authority and capacity among the territories of the mining camp, regions, and the nation-state. Resulting efforts to produce distinct governable spaces of risk (see Watts, 2004) have the potential to expand the authority of mining companies while not necessarily reducing risk for different types of mining labor and the local population.
We argue that the Peruvian political settlement, which is based on the macroeconomic and fiscal importance of mineral resources, is protecting the continuation of large-scale mining operations even at the risk of Covid-19 contagion. The government needs to sustain fiscal revenue in order to finance emergency and medium-term responses to Covid-19, while mining elites do not want to compromise their business in the face of global recession. This response produces uneven geographies of risk in mining territories, underpinned by unique characterizations of the Andes and the Amazon as, respectively, isolated and unruly spaces. In large-scale mining camps, sustaining operations increases the exposure of wage miners and communities to Covid-19 and strengthens the hands of mining companies in controlling the governance of these spaces. In regions that depend on small-scale mining, the government's response creates pockets of economic vulnerability by limiting local populations' authorized options for economic subsistence under the state of emergency, with consequent risks of repression or infection. Across all territories, the possibility of authoritarian practices has increased.
responding to covid-19
The initial fifteen-day State of Emergency was subsequently extended and, at the time of this writing, most restrictions have continued through May. Given the implications for formal and informal employment, the government responded with a USD 28 billion emergency package, equivalent to 12 percent of GDP (WEF & BBC, 2020). [End Page 216] This fund includes direct cash transfers to support 3 million poor and extremely poor households as well as 780,000 casual workers. This response sought to offer livelihood support and encourage compliance with the quarantine. The deployment of the police, the military, and army reservists to enforce restrictions suggests that concerns for social order also drove the package.
In 2011, gold mining in Madre de Dios accounted for 68.4 percent of the region's GDP (INEI, 2019), rendering it not poor in terms of government classifications. Although this figure has since decreased due to police and military-led interdiction operations to eradicate illegal mining, with six districts of the region under state of emergency for more than a year now, many families complain that they have been excluded from the official lists of beneficiaries of the emergency package (Calloquispe, 2020a). Moreover, central government efforts to support mining formalization have also come to a halt due to the government's suspension of administrative procedures–a decision aimed at preventing public servants' exposure to contagion (Perú, 2020).
Emergency measures also affect the macro-economy. The quarantine has paralyzed at least 55 percent of the Peruvian GDP (IPE, 2020). Peru is also affected by the Covid-19 induced fall in the demand for minerals. Large-scale mining has been the principal contributor to the country's fiscal stabilization fund, created in 1999 to give the government spending capacities in the face of emergencies (Salas et al., 2018). This fund underwrote the S28 billion stimulus plan, a fact that mining interests have been keen to note. It was not surprising, then, that mining was quickly added to the list of essential economic activities permitted under the state of emergency.
The location of mining camps and the control that companies exert over them have been used as arguments in support of the continuation of operations. The Institute of Mining Engineers of Peru, one of the most important source of technical advice to large-scale mining, argued that mines should remain open because: "Most mining production units are found in remote and isolated places, and even those closer to cities present strict isolation systems to guarantee the execution of operations" (IIMP, 2020, para. 3). Peru's Prime Minister echoed this sentiment: "Mining activities are allowed but obviously under some parameters. First, they have to be enclosed, in total isolation. Second, they must follow rigorous protocols and be under constant supervision" (RTV, 2020). Yet the same decree that had the effect of paralyzing small-scale mining formalization processes is also preventing the effective inspection of large-scale mining. By early May, eight mining companies had employees or collaborators infected with Covid-19, a total of 264 cases, with 216 of these associated with Antamina Mining Company (Muqui Informa, 2020). The company had to stop operations following the identification of seven cases and the protest of miners.
Under Covid-19, the enclave nature of large-scale mining in Andean territories has been interpreted as an asset because it allows continued operations in conditions of isolation from broader society. This interpretation invisibilizes the fears of those who live [End Page 217] in and circulate through mining camps. In Amazonian regions, policy creates livelihood risk for small-scale miners by freezing their operations without offering alternative forms of economic relief, while also increasing the risk of violent confrontations. In each type of territory the uneven nature of state control and its "selective absences" (Szablowski, 2007, p. 27) create new risks for those who live and work there. Meanwhile the government attempts to compensate for its own lack of capacity to respond to these risks by delegating authority to companies or by giving new powers to actors who might be predisposed to use physical force to install order should protest emerge. We develop these two thoughts below.
three areas of concern
an even stronger role for large-scale mining operations in territorial governance
The state of emergency has the potential to enhance the territorial powers of mining companies in two ways. First, the government's response to Covid-19 has weakened its capacity to regulate economic activities. With administrative procedures suspended, the Assessment and Environmental Control Agency (OEFA), the Supervisory Agency of Investment of Energy and Mining of Perú (OSINERGMIN), and the National Labor Inspection Authority (SUNAFIL) have essentially ceased overseeing mining operations, and any efforts to foster processes of prior consultation with affected communities have been stalled.2 OEFA has even suspended the collection of the audit tax, its most important source of revenue for funding field inspections (OEFA, 2020). While some companies are merely maintaining basic operations, others have continued with extraction and processing activities, and it is in this context that Covid-19 has emerged in several mining camps. When additional mines resume full operations, past experience suggests that government will further weaken environmental regulations and tax obligations in order to stimulate the sector (Durand, 2016).
Second, in an effort to guide the subnational implementation of Covid-19 policies, the State has created space for mining companies to enhance their roles in territorial governance. By assuming state-like functions, companies have already profoundly reshaped lifeworlds in extractive regions. As government invites the private sector to be members of so-called "Covid-19 Regional Commands" (see below) and partners with them to deliver subnational Covid-19 responses, it widens opportunities for these company powers to implement their own territorial projects and to control regional actors who may oppose them, as evidenced in previous experiences of land-use planning (Preciado et al., 2015).
unchecked use of force in regions with mining operations
The Peruvian government has previously imposed states of emergency over mining territories, both to protect mining projects of national relevance and to eradicate smaller scale, unauthorized mining operations in areas of the Amazon. The deployment of military and police forces has at times led to [End Page 218] violent confrontations. While, to date, little of this has happened under Covid-19, the recent law exempting police and military actors from criminal responsibility, should the use of force lead to injury or death, raises serious concerns (ONU, 2020). Experiences during Peru's internal conflict point to the potential for human and civil rights abuse when large numbers of reservists, police, and soldiers are deployed without adequate or responsible oversight. Invocations of war to incite the collaboration of citizens not only reflect authoritarian predispositions shared by much of Peruvian society, but they also create legitimating space for militarized interventions and abuses.
In some regions the government is explicitly delegating authority to military actors. The Covid-19 National Command was created under the authority of the Ministry of Health to coordinate the emergency response and foster the creation of the Regional Commands noted earlier. These Commands bring together representatives from public and private sectors, civil society, and other actors. While not the case in all regions, members of the military have been chosen as leaders of Covid-19 commands in Arequipa, Lambayeque, and Loreto, with the disagreement of the National Association of Regional Governments. The appointments have been justified on the grounds that regional governments have been ineffective in leading the emergency response. This nonetheless constitutes a military fix to political tensions that justifies increased military control: on April 16, the armed forces were officially integrated to the Covid-19 National Command.
Finally, high gold prices and the absence of alternatives to small-scale mining may also lead to increased risk and violent encounters. As local jobs in Madre de Dios depend on the mining economy, either illegal or informal, freezing mining without offering alternative incomes generates tensions. One miner has been killed in a confrontation with the military and the police for extracting gold in a forbidden area under the quarantine (Calloquispe, 2020b). For their part, Indigenous communities have sought to abide by the quarantine, closing community borders and applying careful vigilance (Santos et al., 2020). The government has responded poorly to their requests for assistance in protecting their territories against unwanted gold extractors, providing one more illustration that military force is being deployed to enforce the state of emergency rather than protect rights. Indeed, while Madre de Dios is constantly represented as a violent frontier where illegal interests thrive, national lawmaking suggests it might be better understood as a territory that political and economic elites sideline and subject to ordering by armed forces.
resource dependence: sticking to the path
Representatives of the large-scale mining sector have insisted that without their operations there will be no reactivation of the economy nor funds to fight Covid-19. That mining is the core of the national economy is hardly a new narrative, but Covid-19 offers it one more vehicle of expression. Yet the outbreak has made clearer than ever the fact that Peru's elites have long abandoned [End Page 219] investment in public healthcare services and that mining booms have done nothing to change this. Peru has one of the lowest levels of healthcare investment in the Americas. Mineral dependence has not fostered inclusive development (Burchardt & Dietz, 2014) nor built the public institutions necessary for such inclusion, and this has much to do with the asymmetries of power on which the country's political settlement is based (Bebbington et al., 2018). The government's response to Covid-19 once again understands social policy in terms of targeted monetary transfers rather than identifying opportunities to build equity-enhancing institutions. The narratives emanating from elite parties to the political settlements only endorse this approach.
Post-Covid-19 politics could look different if social protest channels dissatisfaction with this failure to use mining revenues to invest in public health. Indeed, there is some evidence that protest can lead to institutional change, even if many of these changes have been poorly implemented (Bebbington et al., 2018). However, as the political settlement's response to Covid-19 makes clear, any such protest will have to confront the narrative that, above all else, Peru needs to expand its extractive frontier in order to promote development understood as monetary transfers rather than institutional transformations. Protest would also have to take on new expressions under social distancing.
In this essay, we have examined how the current political settlement in Peru is responding to Covid-19. We argue that the political settlement based on large-scale mining, and the narratives of development and order that this settlement helps foster, are doing much to structure forms of Covid-19 governance. These narratives emphasize the need to prioritize large-scale mining as a motor of development, the capacities of mining companies in territorial governance, and the legitimate role of force in establishing social order. They recognize the value of protecting life, but always in balance with the need to protect productivity and taxable profit. Meanwhile, they cast small-scale mining territories as privileged, deviant, and unruly, and therefore in need of authoritarian order. These narratives, and the territories that they prioritize and vilify, reflect who are, and who are not, parties to the current political settlement. These reflections may also apply to other cases in Latin America (e.g., Colombia; see ARM, 2020).
In each of the instances explored—the mining camp, the region, and the national government—large-scale mining is being offered opportunities to reinforce its role in the governance of territories and livelihoods through new instances of risk management. Conversely, small-scale mining is sidelined by the political settlement, leaving mineral-dependent households facing uncertainty and precarious, violent, day-to-day struggles. Across all governable spaces we identify a significant risk that the response to Covid-19 facilitates "authoritarian governmentality" (Dean, qtd. in Watts, 2004, p. 53) as a legitimate form of rule.
There is a real possibility that Covid-19 will end up reinforcing mineral-resource dependence and the political settlement [End Page 220] that sustains it. Downstream of this crisis, demands for increased investment in public health and other social sectors will support arguments for the expansion of large-scale mining on the grounds that it is needed to finance public action. The mining-centered nature of Peru's political settlement could, however, change if societal indignation were to demand not only increased public expenditure but also equity-enhancing institutions that challenge the existing social and territorial balance of power.
We live in hope.
1. All translations from Spanish-language sources are by the authors.
2. SUNAFIL and OEFA have requested some information from companies. These actions do not imply the physical presence of the agencies.