NGOs, the extractive industries and community development: the case of NGO Labor in Peru
James Loveday Laghi and Oswaldo Molina, CIUP

Introduction to the case
This case study considers the process through which the civil society of Ilo - a city located in the southern part of Peru - guided by the developmental NGO Labor, became a real influence in the environmental attitude and corporate social responsibility of the Southern Peru Copper Corporation (SPCC), one of the main copper producers in the world. One of the high points of this case study is from 1992, when Labor and Ilo's Municipal government won a suit against SPCC in the Second International Water Tribunal in Amsterdam. This event, having exposed SPCC's negative environmental impact to an international forum, was a turning point in its social responsibility behaviour. Afterwards, the mining company started a coordinated plan lead by the Peruvian Government to accomplish a set of environmental standards to reduce its air and water pollution.

The type and extent of policy change
The Second International Water Tribunal allowed the international community to be informed about the polluting effects produced by the mining activities of world-renowned SPCC in the city of Ilo, and its apparent apathy regarding environmental responsibility in the development of this city. As a consequence, the policy changes adopted by the mining company and the government (both central and local) since then have allowed the continuous reduction of the extractive industries' pollution at the city of Ilo.

Some thoughts on the explanation of the policy change
The policy context
Soon after Labor was founded in 1981, and when one of its associates was elected to govern the city of Ilo, this NGO and the municipality established a good relationship that lasted for almost 20 years (until 2000), based on their common objective to empower the entire town vis-à-vis SPCC. This relationship, although not free from problems, was crucial in the promotion of environmental consciousness among Ilo's citizens and the municipality itself. In this way, Labor's developmental ideas were the starting point for the elaboration of the local government public policy options.

The ways CSOs tried to affect policy change (strategy and activities) and impact
Labor started to seek a global forum in which to present its pledges early in its campaign against SPCC. After the NGO and the municipality of Ilo took notice of the existence of the Second International Water Tribunal, they decided to present the case against SPCC regarding water depletion and pollution. On December 2nd 1991, soon after SPCC was notified (November 1991) that the Ilo's case was going to be treated at the Tribunal, the company signed the Acuerdo de Bases with the Peruvian State, which would be the cornerstone of SPCC's future compromise with the preservation of the environment in the region.

External influences
Although the Second International Water Tribunal did not have judicial enforcement powers, the trial process, having received important media coverage, worked as a reputational force that in the end helped to change SPCC's environmental attitude. The impact of this case made Shell sell their SPCC shares due to its negative environmental attitude.

This case was also covered by a top television programme in the Netherlands and broadcast during peak hours. It was also covered by important trade magazines in London, such as Metal Bulletin and Waterlines, as well as by other media enterprises in Spain and Germany. In the Peruvian context, the trial was closely followed by the most important local newspapers, such as El Comercio, Expreso and La República.

The nature of research-based evidence (content, source, reliability) and mechanisms used to get the evidence into the policy process
The evidence of air and water pollution produced by Labor's technical crew was crucial to support the case of the negative environmental impact SPCC mining activities were having in Ilo. Specifically, the technical studies proved that SPCC's apparently indiscriminate usage of the region's water resources was jeopardising not only agricultural activities but the water supplies of the town itself. The findings were so clear that during this process, the mining company approached the Peruvian Government to settle its environmental liabilities via a multi-stage programme designed to reduce air and water pollution in the region.

Lessons learned
The main lesson from this case study is how civil society can transform its welfare demands into public policy through conjunction of interests with the local government. In this respect, this case shows the importance of adequate political leadership in local authorities and financial support from international agencies to protect the CSO's environmental and developmental rights, especially if they are confronting resource-rich, mining enterprises.

In Ilo's case, the involvement of the global civil society proved to be crucial as local instances could not deal with its environmental dilemma. The Water Tribunal not only helped the local community to address the issues, but its results transformed this case into a blueprint for other Peruvian communities searching to improve their environment and for the Central Government to design better public policies to deal with these problems.

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