No investigation into Peru goldmine corruption

News|Bretton Woods Project|25 March 2002|update 27|url
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Nine months after a joint inquiry was demanded by a coalition of Peruvian NGOs and US NGO Project Underground, the World Bank Group's private sector lending arm, the IFC, has refused to investigate allegations of corruption involving one of its partners - US based Newmont Mining Corporation. The dispute concerned ownership of the controversial Minera Yanacocha gold mine in the northern highlands of Peru, which is the largest gold producer in Latin America. The project was a joint venture between the IFC, Newmont and a Peruvian company Buenaventura.

Newmont had been in a major legal dispute with the Bureau de Recherches Géologiques et Minières (BRGM), a state-owned French company, over ownership of the mine. Although the case was resolved in 1998, it attracted media attention again in January 2001, when a videotape released to the public showed ex-Peruvian President Fujimori's spy chief Vladimiro Montesinos pressuring a Peruvian Supreme Court judge that a vote in favour of Newmont was needed due to US diplomatic pressure. Peru's Supreme Court ruled that BRGM should sell its shares to Newmont.

On 30th January 2002, Project Underground received a letter from Joe O'Keefe - IFC's corporate relations manager - saying that after they reviewed the videotape and other materials surrounding the affair, they "concluded that there is insufficient evidence to continue investigating this allegation". Commenting on the IFC letter, Erica Etelson, Project Underground Staff Attorney, said, "the videotape of Montesinos was a smoking gun. What more evidence do they need before they're willing to investigate?"

Two further complaints about Yanacocha have resulted in the World Bank's Compliance Advisor/Ombudsman (CAO) establishing a dialogue process with the companies, NGOs, municipal bodies and leaders, provincial leaders, government agencies and others in the Cajamarca area to resolve issues. These include a mercury spill in Choropampa in June 2000 and more general concerns about the environmental, social, and economic impacts of Minera Yanacocha's operations.

IPS report

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Published: 25 March 2002 , last edited: 27 May 2010

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