Challenge the present net value in benefit of future generations

Leer en Español: Perú: pasos agigantados hacia la economía sostenible

Cayetana Aljovin is the Peruvian minister for Mines and Energy. She’s creating history in Peru as she is applying the new law 30640, one that was created back in 2009 with the objective of protecting the environmental capacities of the South American nation and whose activation represents a shift in the development paradigm that is currently practiced in the region.

Law 30640 gives the Peruvian’s National Authority for Water (ANA) one year for the entity to establish clear laws and definitions on what is a principal drainage basin in the country.

The execution of the law will give the chance for ANA to declare the unfeasibility of certain mining projects in designated fragile areas with high environmental risk and whose long-term impact may result hard to measure or control.

What is a principal drainage basin?

A principal drainage basin is the source of water for rivers and channels that sustain the hydrologic equilibrium in the area as it’s the exchange point for organic material. They are important as they provide diversity in minerals from which other upper, median, or lower basins are fed.

The principal drainage basins are defined by the International Network for Intercultural Studies of Peru as a dynamic space over which no extractive activity should be held, as damaging their own functioning cycle leads to a full ecosystem imbalance that could damage plants, animals, and the possibility for human groups to access fresh water.

Who takes the worst part of 30640?

The greatest loser when it comes to the 30640 is the Conga megaproject, which is located 73 kilometers away from the city of Cajamara. The project wished to exploit copper, gold, and silver in two main deposits: Perol and Chalihuagon.

An environmental study carried by the local Authority for Environmental Investigation (EIA) was conducted by Robert Moran. The investigation concludes that the Conga megaproject never disclosed the total volume of water to be used in its lifespan and noted that there is no certainty whether the remaining water after drilling will be used for human consumption.

The major red flag comes from the finding that contaminated water must be collected and taken care of for a perpetual time-lapse after the extraction was completed, this cost was never disclosed. The new information permits a deeper analysis of the social and natural cost of the project to be carried on.

Consequences and opportunity

During the last annual meeting of the Peruvian mining association, most businesspeople objected the application of 30640 as it will discourage mining investments in the South American nation

In this creative destruction process, the aggregate loss of short-term income that companies will cease to receive by not mining on principal drainage basins will be strictly lesser than the long-term benefit of keeping sound sources of water plus the re-investment of mining funds in other productive capacities such as the agro-industrial economy.

The Peruvian agro-industrial market is rising at a significant rate; exports to South Korea have increased by 40% in 2017. There are plenty of profitable and sustainable options for the future of Peru and Latin America which are yet to be closely examined.

Latin American Post | David Eduardo Rodríguez Acevedo

Copy edited by Susana Cicchetto