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Why Colombia's mining sector hasn't lived up to its promise

Why Colombia's mining sector hasn't lived up to its promise

Posted by Juan Gavasa on August 06, 2014

Mining in Latin America has had an outstanding period of growth in the last two decades but is now facing many challenges. These challenges vary from country to country as well as region to region within each country.

Chile, which is regarded as the best example of a country that is very attractive for exploration and mine development, is also experiencing a pushback not only to mine development but other large projects in other sectors. In Chile, it is becoming harder to permit not only mines, but also hydro projects and even agro-industrial projects that are perceived as having a big environmental signature. This is a reflection of ever-greater social activism, which results in opposition to large mining projects. Because of the effectiveness of social media, it is now possible to apply strong pressure to slow or even stop projects.

Peru, the other big star for mining, has also experienced strong social agitation against mining in some parts of the country, especially in 2012, when the Puno area saw major community upheaval against mining activity and a shutdown of exploration in the area. This has been partly the result of Peru having undertaken a process of administrative decentralization, where decision-making has been devolved to the regions. This process of devolution was done very precipitously, with many of the regions ill-prepared for that role. This change of the political landscape, combined with much greater social activism of the regions, has resulted in strong mobilization of groups against mining in certain areas. In 2012, Peru enacted new legislation that established frameworks for agreement with communities to carry out exploration. Although more onerous than previous operating conditions, this did establish greater clarity in developing relations with the communities, and provided greater certainty of the obligations and allowed companies to go forward.

Illegal mining activities continue to be a major problem throughout South America, and the central governments have been trying to shut down such activities. In Peru, the government is trying to shut down illegal mining in environmentally delicate areas. This is a very difficult task, as it is estimated that about half a million people are now involved in illegal mining, especially concentrated in the very environmentally sensitive upper Amazonian basin. The Peruvian government is struggling to get miners to formalize their activities, which are not properly registered. Illegal mining is another matter, as this is done in areas such as the Amazon Basin Miguel Santillana (Miguel Santillana USMP). Peru has initiated a program of removing illegal and environmentally damaging small-scale mining activities and will probably require several years to achieve results.

Colombia has seen similar trends of opposition to mining as elsewhere in the region, however, because of the conflict with illegal groups, post-paramilitary offsprings, criminal groups and guerilla groups, many of the issues are much more complex than in Peru. Mining is resisted in part because it brings competing economic activity, development and state presence to areas were illegality has ruled the roost. Colombia has been in a situation of internal conflict for over 60 years, and this is just one of the many challenges that are direct outcomes of that conflict. The FARC, for example, seek land redistribution in rural areas, and a new state with Marxist ideology which would have a negative impact on mining opportunity and private investment.

The dynamics of the environmental movements against mining in Colombia, as elsewhere in the developing world, has for its origin a new phenomenon of social activism based upon perception that all large-scale mining is bad. They further support small-scale artisanal mining that contaminates the environment much more than modern and large-scale mining. They propose to protect the environment but do not have a strategy of sustainable development or do not endorse mining as a way of achieving such development. Whilst many environmentalists may have valid grounds for opposing specific projects, environmentalism is frequently used as a cover by Colombia's illegal armed groups to force miners from their areas of influence or to support left-wing political agendas.

This is what Don Lenihan, a senior associate at the Public Policy Forum in Ottawa, has called “wicked issues.” In his recent paper entitled “When the Policy Process Goes Public: Think Tanks in the Age of Complexity” in Policy Options (2011), he states that: ”This kind of interconnectedness between issues is spreading like a virus. It is a problem for governments because they don’t have adequate tools or processes to deal with it.”

He also notes that: “There is almost no discussion of the connection between rising complexity and the declining civility in political debate, though such a connection seems clear.”

The effect of this phenomenon is that governments are less and less able to influence situations through the normal process of governing to achieve sustainable development.

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