Resource Conflicts

The efficiency and success of U.S. security initiatives in Latin America requires a thorough understanding of resource conflict and the state's role in managing it. International investments in mining and hydrocarbons in the Central Andes could potentially affect U.S. economic influence in those countries and have real implications for U.S. security presence relative to other world powers. Resource conflict makes it hard for the U.S. government to monitor extraction and production of strategic materials that are critical for the U.S. government to meet its defense needs and to achieve a favorable balance of power vis-à-vis other world powers through control over these commodities. This report examines how the regulations that structure the process of local community consultation affect the mining sector in Peru and the hydrocarbon extraction sector in Bolivia. By identifying commonalities in resource conflicts and analyzing how subnational institutions can predict the condition under which conflict arises, this research serves as a first stage in predicting, preempting, and resolving conflict more effectively. The findings in this report should matter to those concerned with the mechanisms by which new projects are reviewed and approved, including the degree to which a project's environmental and social impacts are anticipated and evaluated. In Peru, participation is limited to the procedural level; communities can voice criticism but lack authority to halt a project within the structure of those procedures. At the other extreme, Bolivian lowland communities are granted a high degree of input in new hydrocarbon projects; their legitimate leaders must approve projects in writing in order for companies to obtain the necessary licenses from the environment ministry. This report observes, paradoxically, that the more inclusive framework in Bolivia has led to a free ride for projects on the technical front: in the Bolivian hydrocarbon cases analyzed here, conflict has revolved around achieving dialogue with the state and companies and obtaining appropriate compensation for projects. In contrast, what initially appears to be an easier road for companies has actually triggered more oversight on the technical front in Peru. For Peru, the analysis has shown how the Environmental Impact Assessment has become a highly political process in which subnational actors prove critical in developing and approving the EIA and ultimately the mining project, in spite of regulations that formally limit local participation to empty procedures. Mining conflict has escalated to the point of triggering outside oversight and sometimes the cancellation of projects, stemming from community complaints about technical dimensions of projects.