Regulatory Frameworks, Issues of Legitimacy, Responsibility, and Accountability: Reflections Drawn from the PERCAN Initiative

Abstract

During the 1990s, the Peruvian mining sector was the object of a far-reaching process of liberalization which included the privatization of state enterprises and a series of measures aimed to attract foreign direct investment. Since 1992, the sector has received US$12 billion in national and foreign investment. In 2007, it represented 20 per cent of total foreign direct investment and generated 25 per cent of public revenue collected from corporate income taxes by the Peruvian government; 130,000 people are estimated to work in the mining sector. Since the 1990s, with the growth rate at 7.8 per cent as compared with the 4.1 per cent growth rate of the GDP, it is one of the fastest growing sectors. A large part of this activity is undertaken by foreign mining companies. Peru is at present the world’s second largest producer of silver, the third largest of zinc, the fourth largest of lead, the fifth largest of copper, and the sixth of gold. In 2007, mining activities represented 62 per cent of the total of Peruvian exports and 10 per cent of GDP (PERCAN and MEM, 2009, p. 1). Canadian mining companies are key actors in the Peruvian mining sector, particularly with regard to the exploration and production of gold (DFAIT, 2010).