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25. Reversing resettlement in northern Peru benefits local families
The La Granja copper project, in a remote mountain valley in the province of Chota in northern Peru, was acquired in 2000 and closed in 2002. Families who had been displaced by the project in the mid-nineties are now buying back their former lands on a time-payment plan, and income from the sales are funding the development of their community.
The La Granja mining concession was acquired in November 2000. A feasibility study concluded, in November 2001, that the project was not viable. A social and environmental closure program was developed, which was completed in December 2002.
The rural families in the area of the project, and the families who had been relocated away from the project area prior to our acquisition, were living in poverty. The prior relocation of local families was not compatible with World Bank guidelines, and relocated families were worse off than when they lived in the La Granja area. Families who continued to live in the area also suffered social and economic impacts from the project prior to our acquisition. The local schools and medical centre had been closed as a result of the presence of the project.
A socio-economic study of the earlier relocation process provided the basis for developing the initial social program. The primary concerns of the population were found to be health and education. As a result, the program prioritised reopening the schools and the medical centre. The Company paid the cost of operating the schools for two school years and the medical centre for a year, until agreement was reached for the government to reassume its responsibilities in these areas. Until the medical centre could be reactivated, free medical services were provided to the community by La Granja's medical personnel. They continued to supplement the activities of the medical centre until project closure was complete.
Once the decision had been made to exit the project, a risk assessment was conducted to support the exit strategy. The assessment focused on the environmental and social consequences of various exit scenarios and was highly effective in supporting the final plan of returning relocated people to the La Granja area and in re-establishing a self-sustaining support infrastructure through the development of a foundation. The steps taken to implement the plan included:
- an intensive consultation campaign in December 2001, involving meetings in La Granja and each of the areas where there were concentrations of relocated people
- subsequent ongoing consultations, resulting in some modifications to the plan
- sale of approximately 2000 hectares of land back to its relocated original owners or, where the previous owner declined to buy, to other community members (these sales took place at less than half the price that the Company had paid for the land)
- access to independent legal advice for relocated families before they made the decision whether to rebuy their former land
- transportation for families returning to La Granja
- free medical checkups for returning families
- creation of the Foundation for the Development of the Upper Paltic with NGO participation (The Mountain Institute) at the board level
- support to the community in establishing a development association in each of the four villages in the immediate area of project influence to facilitate community interaction with the Foundation
- a project by The Mountain Institute to build the community's institutional capacity and help it identify development priorities for the Foundation
- publication of user-friendly guidebooks on each aspect of the closure process (land sale, return process, environmental remediation, the Foundation)
- donation of all proceeds of the land sales to the Foundation
- provision of materials or livestock to help returning families re-establish their livelihood (to be repaid to the Foundation over ten years)
- donation of materials or livestock to families who decided not to rebuy their former land, to help them consolidate their livelihood in their new location
- rehabilitation of school and medical centre infrastructure
- negotiation with the Ministries of Health and Education, at national and regional levels, for the reopening of the schools
- strict local hiring policy for environmental remediation work, resulting in the temporary employment of more than 200 people.
Unsold land, and land in the village centres, has been donated to the community development associations; and much of the camp furniture and equipment has been donated to local institutions.
