Glencore Xstrata and corporate power in Peru


Aldo Orellana Lopez and Philippa de Boissière,

Date of publication: 
27 December 2014

A new wave of ruthless conquistadors has arrived in Peru, write Aldo Orellana Lopez and Philippa de Boissière – global corporations after minerals, oil, gas, timber, land … And instead of brandishing the Bible and the sword, they proclaim high sounding policies on environment and human rights, while co-opting police and politicians in their pillage of resources.

Since the arrival of the Spanish conquistadors some 500 years ago, Peru has witnessed several waves of foreign intervention by those looking to cash in on its mineral wealth.

In recent years there has been a notable intensification in extractive megaprojects in the region at the hands of foreign multinationals hoping to compensate for financial malaise and stricter regulatory frameworks in their countries of origin in the Global North.

Glencore Xstrata is one such modern conquistador, bringing environmental destruction and severe human rights violations in its relentless pursuit for natural resources.

Global Energy Commodities and Resources (Glencore) is dedicated to the sourcing and commercialisation of raw materials (metals, minerals, oil, coal, and agricultural products) from around the globe.

In 2013 Glencore merged with Anglo-Swiss Xstrata, propelling it to third largest mining corporation in the world. The mega multinational now has a presence in more than 50 countries, covering all five continents.

With more than $US232 billion in annual income, Glencore Xstrata breezed in at number 10 in 2014’s Fortune Global 500, the list of the 500 biggest corporations in the world by revenue.

Corporate capture of Peruvian politics

While Glencore Xstrata likes to position itself publicly as “one of the most responsible mining companies in the world”, on the ground its operations are directly driving a number of conflicts related to environmental contamination and human rights violations in countries such as Zambia, the Democratic Republic of Congo, Bolivia and Colombia, as well as in Peru.

Meanwhile, at the international level, Glencore Xstrata is actively pushing for the continued use of coal and fossil fuels which will only further exacerbate the impacts of climate change and aggravate conflict.

To legitimise the aggressive expansion of its destructive business model, Glencore predicts a future in which global demand will see fossil fuels make up 75% of the world’s energy mix by 2050. In other words: business as usual.

In order to protect and promote that vision Glencore Xstrata has not only embedded itself in industry lobby groups at the national level in countries like Peru.

It is also strategically positioned in an enormous global network of over 60 international lobbying organisations, with the intention of capturing climate change policy spaces and processes at all levels.

Peru’s Espinar Province: mineral rich, water poor

Nestled in the Southern Peruvian Andes is the province of Espinar, home to Glencore Xstrata’s Tintaya and Antapaccay mining projects.

The province has a population of over 60,000 people, mostly farmers. The one hundred plus lakes and four major river basins in the area are the region’s lifeblood.

Just as climate change impacts begin to take hold in the Peruvian Andes, the expansion of ever more ambitious mining operations – such as those Glencore Xstrata is pursuing – is putting extreme pressure on the most basic element of life: water.

In June 2012, in the face of intense and ongoing social pressure, the Peruvian government arranged for an official environmental and health assessment to be carried out in Espinar, downstream from the Tintaya and Antapaccay mines. The results released in mid-2013 proved the widespread existence of contamination.

The assessment found heavy metals such as arsenic and molybdenum in both the superficial and underground water.

It was also proven that 100% of people living in the communities directly affected by Tintaya are exposed to highly harmful arsenic, thallium, and lead.

Glencore Xstrata has continued to deny any responsibility. In January 2014 the corporation was fined 235,600 Soles (around US$80,000) by a local court for the presence of high levels of copper in local pasture land.

Small change for the corporate giant. According to the multinational the copper was “naturally occurring”, but investigations have since linked the contamination to Glencore’s infrastructure.

Disputes for control and management of water resources are set to worsen due to the rapid and ongoing melting of Andean glaciers. For mining expert José de Echave, Espinar is an area where the challenges of co-existence with mining are magnified by the onset of climate change impacts.

Despite this grim reality, the national government has continued to hand out mining concessions in areas on which communities depend for their fresh water sources.

Currently 50% of new mining projects are in the south of Peru, including the Espinar province, resulting in heightened community vulnerability and increased likelihood of further social and environmental conflict.

Public protection of private interests: The criminalisation of protest

Like many environmental defenders across Peru, the people of Espinar are no strangers to conflict. Speaking at an event at the People’s Summit in Lima, former mayor of Espinar Oscar Mollohuanca described how the communities impacted by Tintaya and Antapaccay are still reeling from the violent repression of protest in the region in May 2012.

When Xstrata and central government ignored local demands communities quickly mobilised, organising an indefinite strike. In response the government sent police to the province to contain the mobilisations and protect Xstrata’s infrastructure.

Over the days that followed police repression escalated, resulting in two civilian deaths and many more injuries, forcing the government to declare a state of emergency.

During the conflict several community leaders and local human rights defenders were arrested and subjected to abuse at the hands of police.

Mollohuanca was among those held for several days. He currently faces legal charges for ‘instigation’ and other ‘crimes’ that he allegedly committed. José de Echave claimed the corporation also behaved deplorably in the conflict, with police acting as their private security force.

Those claims have since been validated. In 2013 it was revealed that the Peruvian police signed a series of agreements with at least 13 natural resources corporations to provide them with paid private security, among them Glencore Xstrata.

Peruvian human rights organisations have asserted that these agreements facilitate the criminalisation of protest by allowing police to make arbitrary arrests, torture human rights defenders and journalists, and that they constitute a systematic abuse of power.

That the corporation has managed to build such a cosy relationship with state institutions is yet more evidence of its economic and political clout in a country that feels under huge pressure to bow to the demands of foreign investors.

Glencore Xstrata – meddling in Peruvian politics

Glencore Xstrata’s ability to embed itself within state institutions goes beyond (ab)use of the police force. In July 2014 the Peruvian government passed ‘Law 30230’.

This controversial bundle of economic reforms, referred to as the ‘paquetazo’, has facilitated massive environmental and social deregulation. The reforms, which effectively clear a path for further intensification of extractive industries in the region, carry the fingerprints of multinational corporate pressure all over them.

Glencore Xstrata is a member of Peru’s National Association of Mining, Oil and Energy (FUENTE), one of the most powerful industry associations in the country, made up of both national and international mining interests.

According to the Observatory of Mining Conflicts, FUENTE launched an intense media campaign running up to the approval of the paquetazo which asserted that the Peruvian economy was “slowing down” as a consequence of excessive regulation.

The campaign put pressure on the government to create a “climate of investment” that suited their interests. The same corporate representatives continue to push for additional policy changes that would further deregulate the Peruvian economy.

Coal before climate, profit before people

Like many Northern corporations operating in South America Glencore Xstrata not only has local influence in its many countries of operation, but also internationally – via a network of lobby groups working to protect and promote its interests at all levels.

Before merging with Glencore, Xstrata Australia was part of the self-proclaimed ‘greenhouse mafia’, a group that defends the interests of dirty industry and works to prevent Australia from implementing meaningful climate change policy.

Glencore is also a member of the influential Australian Industry Greenhouse Network (AIGN), a notorious fossil fuel lobby which has sent delegates to numerous UNFCCC COPs.

AIGN boasts of advising the Australian government delegation at the climate talks. Following such advice would see Australia reneging on its legal and moral commitments as a developed country to cut emissions while providing finance and technology to developing countries.

Worryingly Glencore is having considerable success within the UNFCCC, both by shaping Australian negotiating positions, and by using its lobby groups to create a climate-friendly narrative around fossil fuels.

A perfect storm of corporate misconduct

Frontline communities, such as those in Espinar, are finding themselves pushed into increased vulnerability as climate change bites into precious water resources already under stress from mega-mining activities.

With its global operations and well-oiled lobbying machine, Glencore Xstrata represents a corporate attempt at full spectrum dominance. To facilitate its minerals rush in countries like Peru Glencore Xstrata is not only co-opting state forces to repress resistance but also infiltrating national government, pushing for policies that serve its narrow interests.

The web of influence simultaneously extends to the international level, infiltrating delegation teams to the UNFCCC in a bid to ensure that climate policies do not put their extractive business model at threat.

Glencore Xstrata’s conduct signals the deeper systemic issues underlying the climate crisis. The impunity of such multinationals on the ground, and their successful capture of domestic and international decision-making spaces, needs to be challenged with action that is coordinated, strategic and based on strong links of international solidarity.


Aldo Orellana Lopez and Philippa de Boissière are co-authors of the report ‘Corporate Conquistadors: The Many Ways Multinationals Both Drive and Profit from Climate Destruction’.

This article is taken from the report ‘Corporate Conquistadors: The Many Ways Multinationals Both Drive and Profit from Climate Destruction’, published December 2014 by the Democracy Center, Corporate Europe Observatory and the Transnational Institute.